South Africa

Government greenlights e-toll debt bailout

South Africa’s National Assembly has passed the Adjustments Appropriation Bill and the Special Appropriation Bill, allocating funds to specific government initiatives while dealing with its portion of the South African National Roads Agency’s (Sanral) e-toll debt.

Finance minister Enoch Godongwana tabled the 2022 bills during the presentation of this Medium Term Budget Policy Statement (MTBPS) to Parliament on 26 October 2022.

Godongwana said that the Treasury was tabling the Special Appropriation Bill to provide additional funding to Sanral to allow for it to adjust its business model and try to restore its long-term financial viability.

Parliament noted that Special Appropriation Bill deals specifically with the public enterprise as well as matters of transport that are interconnected.

The bill proposes that R6.278 billion and R23.736 billion will be appropriated from the National Revenue Fund and be allocated to the Departments of Public Enterprises and Transport, respectively, for the 2022/2023 financial year.

The minister said the Treasury had allocated R23.7 billion from the national fiscus to settle Sanral’s debt. According to the Treasury, it would effectively bail out the national road agency in a 70/30 split.

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The R23.7 billion is planned to be used to pay off 70% of the debt, leaving the remaining tab to be picked up by the Gauteng government and its residents.

These changes to funding allocation have, however, raised the eyebrows of civil society organisations. The most prolific proponent against e-tolls, the Organisation Undoing Tax Abuse in South Africa (Outa), submitted to the government prior to the passing of these bills that the numbers are not adding up.

Outa said the Adjustments Appropriation bill includes a transfer of R3.740 billion for Sanral for the e-toll program, which was transferred to Sanral in July of this year and is now being regularised.

The Special Appropriation Bill now proposes a transfer of R23.736 billion, added the organisation.

Outa said that the actual debt of the agency is possibly inflated – measured by the government at R43 billion. According to Outa, the cost of the Gauteng Freeway Improvement Project (GFIP), which includes e-tolls, will be paid off by the province at R12.9 billion.

Outa added that the government had authorised grants to Sanral for GFIP, totalling R30.053 since 2011/12 – excluding the recent R23 billion transfer.

The organisation added that, by its calculations, the R43 billion quoted should not have exceeded R33 billion. CEO of Outa Wayne Duvenage said that while Sanral’s total debt may be just passed R45 billion, R43 billion cannot be attributed solely to GFIP.

“This suggests that something is fundamentally wrong with Treasury’s statement that Sanral now has R43 billion debt relating to GFIP,” he said. “The GFIP debt is not R43 billion.”

Further appropriations

The Adjustments Appropriation Bill provides for increases to allocations set out in the main Appropriation Act of 2022.

Under the bill, total in-year spending adjustments amount to R13 billion, inclusive of the total adjusted appropriations and adjusted estimates of direct charges against the National Revenue Fund (NRF), said Parliament.

Of the total adjustment, appropriations will look like the following:

  • R204.7 million for Denel and R101.56 million for the Land and Agricultural Development Bank
  • R7.24 billion in direct charges against the NRF
  • R5.93 billion towards debt service costs
  • R48.5 additional allocation for flood victims in KwaZulu-Natal
  • R618.82 million for skills levy and sector education and training authorities.

Read: The cheapest new cars you can buy from every brand in South Africa – starting at R157,000

Artmotion S.Africa

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