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Transport Minister Fikile Mbalula says his department is being prevented from implementing new road infrastructure projects due to the lack of resolution around Gauteng’s electronic tolls.
At a press conference on Thursday (October 1), the minister said that President Cyril Ramamphosa’s cabinet is ready to finalize a new financing model for the project after receiving proposals from his department.
Mbalula admitted that he thought the problem would have been resolved by now, but that the process has been affected by the Covid-19 pandemic.
“Now that we are reducing the blockade to level 1, we are prepared to accelerate the deployment of infrastructure projects and also to solve the problem of electronic tolls,” he said.
In September, the South African National Highway Agency Limited (Sanral) said the government needs decide urgently on the future of electronic tolls in Gauteng province, as the coronavirus slashes its cash flow.
“We have to run to ensure our liquidity,” Sanral CEO Skhumbuzo Macozoma told the Sunday Times.
Macozoma said that the decision to keep the system or eliminate it rests with President Cyril Ramaphosa’s cabinet. Only about 20% of users pay electronic tolls, the Sunday Times reported.
If canceled, Sanral’s debt related to the Gauteng Highway Improvement Project will increase from around R40 billion to R67 billion. South Africa’s lockdown to curb the coronavirus cost Sanral more than R620 million.
LAUNCH OF THE TRANSPORT MONTH OF OCTOBER
Minister @MbalulaFikile is here to monitor and accelerate service delivery and intervene where challenges persist.
The launch is happening in KwaZulu Natal. # OTM2020 https://t.co/LXxu1yIZkW
– Department of Transportation (@Dotransport) October 1, 2020
Mbalula previously said that the controversial system has had an impact on the country’s ability to raise foreign capital.
“Sanral not only suffered revenue losses, but delays in capital projects have also had an adverse effect. Sanral’s access to capital markets is limited as a result of a downgrade earlier in the year.
“You know that we are dealing with a very difficult issue in the country, which is electronic tolls. That has actually affected our ability to borrow in the bond market to favor Sanral’s position. “
He added that this had a knock-on effect on other capital projects, such as potholes and the development of the new Moloto highway.
“Those who borrow money say they don’t care if ‘the cat is black or white’ as long as the decision is made around electronic tolls. That is what gives Sanral certainty and its credibility to borrow over time ”.
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