The SA National Roads Agency (Sanral) has refuted the contention that levies collected from South African taxpayers for government's e-toll system will fatten the coffers of overseas business.
This comes in response to Austrian toll system company Kapsch TrafficCom's announcement yesterday that its loss-making days may be over, thanks to e-tolling in SA - and the Opposition to Urban Tolling Alliance (OUTA's) assertion that e-tolling is privatising the country's social infrastructure to offshore companies.
The roads agency says the figure Kapsch cited it would get in from SA's e-tolls (EUR50 million, or about R675 million per year) includes operational costs and the purchasing of the system hardware and software, which Sanral says will become its own asset.
Sanral concedes that Kapsch's posting of three consecutive quarterly losses in the year to March "were partly caused by the delays in SA".
Spokesperson for Sanral, Vusi Mona says Sanral awarded the tender to the Electronic Toll Collection Joint Venture (ETC), which offered a competitive tender that was over R2 billion lower than the subsequent offer.
"The shareholders of joint venture ETC are KapschTrafficom AB (a company incorporated in Sweden), KapschTrafficom AG (a company incorporated in Austria) and TMT Services and Suppliers Proprietary Limited (a company incorporated in SA)."
Mona notes that ETC, a local company, is the party contracted to design, build and operate the system.
"What must also be made clear is that all tolls collected on the Gauteng Freeway Improvement Project (GFIP) go to Sanral. ETC is paid for services rendered on a monthly basis, and the payment is strictly according to a bill of quantities as specified in the tender contract. Therefore, only dividends they declare may be paid to foreign companies, after income tax is paid in SA."
At the end of the day, he says, the money is paid for services delivered locally, and cannot be regarded as money that is leaving SA.
Delay casualties
Regarding OUTA's warning that public opposition will have dire consequences on SA's international credit rating, Mona says there are always concerns from credit agencies and international investors regarding any kind of instability in a country.
"Public disobedience may be regarded by them as such instability."
Mona notes that it is not only Kapsch that has been negatively affected by the delayed implementation of e-tolling.
"The Constitutional Court found in September last year that the delay had already cost R2.7 billion, 40% of Sanral's estimated 2012 toll revenue. Sanral's average monthly expenditure on the GFIP will amount to R601 million for the 2012/13 financial year."
Without tolling, he says, the amount has to be funded by the National Treasury.
Mona says credit rating company Moody's Investor Services has announced a two-notch downgrade in Sanral's credit worthiness rating. "Sanral had to suspend its marketing activities and limit the sale of its bonds to depress borrowing costs.
"That has meant that future growth of road networks could not be undertaken without Sanral's ability to raise third party funding. Parliament had to make a special appropriation of an additional R2 billion to meet [the agency's] current interest and cost liabilities."
Moody's has since recorded that, in order for Sanral's rating to be stabilised, there would need to be a positive resolution of the GFIP issue. Mona says this means the roads agency has to prove the required revenue to repay the debt can be achieved.
Mona says, had the interim interdict remained in place, "Parliament may have had to appropriate more money from the national revenue fund at the expense of all tax payers, even those who do not reside in Gauteng".
Ultimately, he says, without e-tolling, "everyone loses".
Utter exorbitance
OUTA, however, maintains that what it says is bold trumpeting of revenue figures on Kapsch's part, has unmasked e-tolling as "a government-assisted profits for a foreign based entity.
"If roadbuilding was funded from taxation, the gross waste of half a billion rand per year would on a private overseas company's services could be averted."
OUTA chairperson Wayne Duvenage says the scale of Kapsch's said earnings leaves no doubt about the reasons for the high costs involved in e-tolling, "making this the most expensive tolling system in the world".
"Figures in OUTA's possession indicate that the e-tolling system will collect total revenue of between R3 and R3.5 billion a year. Of this amount, approximately R1.5 billion a year will be spent on the actual process of collecting tolls, managed by Kapsch TraffiCom.
"This high percentage (almost 50%) of the cost to simply pay for the collection process is one of the key factors behind OUTA's opposition to the irrationality of the e-tolling system."
Mona has labelled this latest issue a political bandwagon. "Of course, everyone is now jumping [on the bandwagon] that once e-toll commences, all the collected monies will be going overseas. This is simply not true."
He says the harm and prejudice that will be suffered by other state-owned entities and SA at large - if markets and investors were to get a sense that SA's word in contracts cannot be taken seriously - is immense.
"This is where those who are opposed to GFIP and are spreading lies and distortions are doing a disservice to the country."
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