SANRAL CEO Skhumbuzo Macozoma has echoed Finance Minister’s passionate plea to South Africans to pay road tolls.
Following on Finance Minister Tito Mboweni’s backing for the user pay principle, Skhumbuzo Macozoma, CEO of the South African National Roads Agency (SOC) Limited (SANRAL) has sought to correct the “e-toll facts” given by Tshwane mayor Solly Msimanga.
A strong commitment to prioritise the country’s road network and a passionate plea to South Africans to pay tolls were important features of new Finance Minister’s first Medium-Term Budget Policy Statement.
This is necessary to restore a culture of payment in the country, instil confidence in investors and ensure sustainable service delivery.
He singled out the road network as a vital element that “supports growth and development” in an economy dependent on land transport.
The Minister committed to the user pay principle as “the most efficient and effective way to ensure that the direct benefits of services are paid for by those who use them”.
Macozoma said: “Paying tolls is the law until decided otherwise. We urge motorists not to listen to calls for an e-toll boycott – this is how debt grows until when it is time to pay, motorists will find themselves short on funds.”
Macozoma pointed out that the Tshwane Mayor’s “e-toll facts” were misrepresentations of the truth.
Facts vs Fiction
Msimanga: “R5.70 per litre of fuel and licence fees are not spent on road maintenance.”
Fact: The fuel levy and vehicle licence renewal fees accrue to the national fiscus and are not ring-fenced for allocation to SANRAL. SANRAL’s allocation from Treasury is not linked to the fuel levy or vehicle licence fees.
Msimanga: “93% of all e-tolls fees are leaving SA – only 7% is being used for maintenance of the road.”
Fact: The e-toll operator is only paid for services delivered on the electronic toll collection system, as per tendered rates. Maintenance is not linked to the operator’s fee.
Msimanga: “SANRAL has irregular, fruitless and wasteful expenditure of over R10bn.”
Fact: Regulations define “irregular expenditure” as “expenditure incurred where there was non-compliance with any law or regulation”.
In the case of SANRAL, in 63% of cases the term “irregular” is used because of a disagreement with the Auditor-General (AG) over the interpretation of “the lowest acceptable price”.
Neither the Public Finance Management Act (PFMA) nor the regulations provide a definition of what exactly “acceptable” means.
SANRAL applied a statistical model designed by the University of Pretoria to determine this value for every tender.
This was done to ensure sustainable pricing for SMMEs, who may otherwise be vulnerable to undercutting. This method was used for more than 11 years, during which there were no findings from the AG, nor complaints from contractors.
In 2013 the AG declared the model non-compliant with the Preferential Procurement Policy Framework Act (PPPFA). Once the AG declared this methodology “irregular expenditure”, it was immediately abandoned and the absolute lowest price was accepted.
Contracts already awarded based on this model could conclude because in all cases they represented good value for money. The contracts concluded in the 2017/18 financial year, but remain in the cumulative balance.
Msimanga: “The system is corrupt and SANRAL must be investigated.”
Fact: This claim is patently false. It has been publicly disproved many times. The former Public Protector, Thuli Madonsela, investigated SANRAL and there were no adverse findings. There were successive court actions. In no instance were there any negative findings on issues relating to governance at SANRAL and the e-toll project.
SANRAL has achieved its 15th consecutive unqualified audit, as was revealed in its annual financial statements. The report includes a concern with respect to the future funding of roads.
In the Medium-Term Budget Policy Statement (MTBPS) – released with the Minister’s speech – Treasury allocated R5.8-billion to SANRAL for 2018/19. This amount is shifted to SANRAL within the adjusted budget for the Department of Transport (Vote 35).
“To call this a bail-out is mischievous; 87% of SANRAL’s finances are healthy, with the 13% toll portfolio under strain,” Macozoma said.