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South Africa’s National Highway Agency needs the government to decide on the future of electronic tolls in Gauteng province as the coronavirus slashes its cash flow, the Sunday Times reported.
“We have to run to ensure our liquidity,” the Johannesburg-based newspaper quoted Sanral CEO Skhumbuzo Macozoma as saying. “Until you solve the problem of electronic tolls, we will not get out of this quagmire,” Bloomberg reported, citing the Sunday newspaper.
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 said.
If canceled, Sanral’s debt related to the Gauteng Highway Improvement Project will increase from around R40 billion to R67 billion.
South Africa’s blockade to curb the coronavirus cost Sanral more than R620 million, the Sunday Times said.
Mixed signals
Government representatives have given contradictory accounts on the future of the electronic toll system.
Transport Minister Fikile Mbalula said in June that the controversial system has had an impact on the country’s ability to raise foreign capital.
Mbalula said that Sanral and other highway agencies have been negatively affected by the coronavirus lockdown in the country.
“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 ripple 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 whether ‘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 ”.
Gauteng Prime Minister David Makhura recently said that President Ramaphosa assured him that the system would be scrapped in favor of a more sustainable one.
“President Cyril Ramaphosa has assured me that a lasting solution has been found and that an announcement from the president is imminent,” Makhura said.
However, Finance Minister Tito Mboweni has said that electronic tolls will remain.
The electronic toll system has been extremely unpopular since its inception, and this has resulted in many Gauteng residents failing to pay their outstanding electronic toll fees.
Electronic tolls have a long and controversial history in South Africa since they were implemented in 2013 by the Austrian company Electronic Tolling Company (ETC), and it is unlikely that many South Africans will miss out on the seven-year experiment.
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