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Tuesday, July 23, 2024

Outa hopes Covid-19 hammers the final nail in the coffin of hated e-tolls

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The Organisation Undoing Tax Abuse (Outa) says the reduction in traffic on Gauteng roads because of the lockdown might finally spell the end of e-tolls.

Over the past few years the e-toll system, and its collection operator Electronic Tolling Company (ETC), have collected less than half the revenue they were contracted to, says Outa CEO Wayne Duvenage.

“This is the result of the successful citizen defiance campaign against the unpopular and irrational system. Gauteng’s e-tolls generated approximately R55m a month before the Covid-19 lockdown – just enough to cover ETC’s operating expenses, which meant that virtually nothing was left to offset Sanral’s bond repayments,” he says.

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“Outa estimates that e-toll collections have probably dropped to between R10m and R15m at most for April, which means that Sanral’s income from the Gauteng e-toll scheme will be well below the amount that ETC requires to manage the scheme.”

It means that for the first time since the implementation of the scheme, ETC will either have to dig into reserves to pay salaries and other costs, or Sanral will have to put taxpayer money into the scheme to bail it out.

“The decision to finally pull the plug on the failed scheme is now long overdue, and hopefully, with toll collections now below the ETC operations costs, the final decision to scrap the scheme is imminent,” says Duvenage.

“Sunk costs and political unwillingness have hampered the rational choice to do away with this system for far too long, and this unprecedented situation awakens us from the deep sleep of unconditional payment for services that are supposed to be funded by existing taxes.

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“To continue to run the ETC toll collections scheme after all these years of failure is merely throwing good money after bad,” says Duvenage. “We trust the minister of finance will soon pronounce the fateful and final blow to the e-toll scheme, bringing much needed financial relief to the handful of businesses and people who continue to make up the 20% of road users who pay their e-tolls.” TimesLIVE

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