Tag: funding

E-Tolls: Makhura admits system failure

In his State of the Province address on Monday, Gauteng Premier David Makhura acknowledged that the highly contested e-tolls system in Gauteng has been a failure. Makhura’s comments follow a number of years of resistance to the multibillion-rand e-tolls project by civil organisations and motorists.

“It’s loud and clear for all to see that e-tolls have not worked,” Gauteng Premier David Makhura said during his State of the Province address.

But it’s not the first time that Makhura has admitted that the e-tolls system was ill-conceived.

Delivering his 2017 State of the Province address, Makhura said: “We are mobilising resources for public transport infrastructure in ways that will ensure that we do not commit the same mistakes done with the e-tolls. We can’t build roads and only later inform citizens that they must pay. In fact, there will be no new e-tolls on our new roads.”

He added: “I must admit publicly, as I did last year, that all the efforts we have made through the advisory panel have not led to the resolution of concerns of Gauteng motorists regarding affordability. We have tried our best. The ultimate solution can only come from national level. We will continue to engage in order to represent the interests of our residents.”

On Monday, Makhura again admitted that e-tolls had failed and that the implementation of the system had increased the cost of living for many motorists and commuters in Gauteng.

Drawing from Ramaphosa’s envisaging of a “new dawn” in the country, Makhura said: “The new dawn must also bring a solution to the protracted and unresolved problem of e-tolls. Accordingly, I will engage President (Cyril) Ramaphosa in order to find a new and more equitable funding model to support the continued expansion of Gauteng’s road network and public transport system. Please send me!” he said.

The Organisation Outdoing tax Abuse (Outa) said it was in total agreement with Makhura in calling for a new and more equitable funding model to expand Gauteng’s road network.

“The compliance rate of e-tolls, based on the South African Roads Agency’s (Sanral’s) own version in their 2017 Annual Report, is 29%. If this figure is correct, it is clear that the system has failed. SANRAL could not in more than four years succeed to ensure a higher compliance rate. If compliance on this scheme doesn’t go up to at least 85% the scheme will never survive,” Outa’s Transport Portfolio Manager Rudie Heyneke said.

Heyneke said OUTA would not back down on the issue of the unaffordability of e-tolls, and would further engage the Minister of Transport, the Presidency, and the executive on the matter.

He said the organisation was busy preparing a submission for the Minister of Transport and the Presidency, and would in the near future engage with the executive to show the negative impact e-tolls have on the taxpayer and on the Sanral budget and proposed alternatives.

The writing has always been on the wall. Apart from firm resistance from Gauteng’s motorists, the highest compliance level ever achieved was 40% in June 2014, according to information released by Outa. This was achieved at R120-million and around R140-million short of target.

“The collection costs and litigation costs are too high when measured against the revenue generated by e-tolls,” Outa said in a statement.

Sanral had argued in court that it could achieve a payment rate of 93% which would generate the R260-million required to cover the cost of the project and the R22-billion borrowed for the freeway upgrade project.

But none of Sanral’s targets has been reached despite aggressive marketing and offers of discounts of up to 60% to all e-toll defaulters to encourage them to settle outstanding bills. According to Outa, by May 2016 less than 2% of outstanding bills were settled while e-toll bills increased to over R2-million a month. The cost of administering the e-tolls were capped at R1-billion a year.

When the e-tolls system was about to be rolled out, motorists and taxpayers objected vociferously, particularly over a lack of proper public consultations prior to the implementation of the system. This outcry as well as warnings from civil organisations like Outa were ignored.

Outa Chairman Wayne Duvenage told Daily Maverick the organisation was pleased with the premier’s acknowledgement. Duvenage said the issue was not only a provincial matter, but also a national one.

“E-tolls were a bad decision,” Duvenage said.

By Bheki C. Simelane for Daily Maverick

The Public Service Association (PSA) has reacted furiously to the Public Investment Corporation’s (PIC) R5bn loan to Eskom calling it an “illegal transaction” which the union feel has “betrayed” workers.

“The PSA in the meantime is consulting with its attorneys to urgently look at declaring the whole PIC board illegally constituted after the due date of the 12 February 2018 given to the PIC to prove its board’s legitimacy,” the union, said in a statement on Monday afternoon.

The union, which represents around 200 000 civil servants has written to the PIC to complain that none of the unions sit on the PIC’s board, which they claim contradicts the PIC Act.

“If we are able to prove the appointment of the board was illegal… it will be only right that all the decisions they took are [also] null and void,” PSA deputy general manager Tahir Moapa told Fin24 by phone.

The PIC Act of 2004 states: “The Minister [of finance] must, when appointing the board, have due regard to the nominations submitted to him or her by the depositors.”

The PSA said that all parties agreed in principle not to use the R1.9 trillion in the public servants pension fund, to bail out state owned companies (SOCs), until there’s agreement that governance has improved.

“It is now clear, we cannot trust both boards to look after our members’ pension,” the union said.

Cosatu supports lifeline

The Congress of South African Trade Unions (Cosatu) differs with the PSA and supports the R5bn lifeline to Eskom, but with conditions.

“We agree to it but with the understanding that no jobs will be touched [at Eskom], Cosatu spokesperson Sizwe Pamla commented to Fin24.

Pamla added that newly appointed Eskom chairperson Jabu Mabzua cut jobs as part of a restructuring process at Telkom, when he took over as chair of the board.

He said that workers’ pensions should be used to ensure SOCs aren’t privatised, in particular the power utility as this would lead to electricity price hikes.

“We have to look at the bigger picture, the interest pf public servants should reconcile with workers broadly”, he said.

Cosatu represents around 800 000 employees in the public sector.

Pamla said they will continue with the process of trying to have worker representation on the board of the PIC itself, instead of just at the Government Employee Pension Fund (GEPF) level.

Both Cosatu and the PSA , in September 2017, objected to reports that the PIC would bail out the flailing South African Airways (SAA) and demanded that the level of union representation on the board, be improved.

The PIC on behalf of the GEPF, advanced the R5bn bridging facility to Eskom for one month. The loan will fund the company’s operations during the month of February 2018. But three other South African banks will also have to help Eskom out, the PIC stated.

Following Eskom request for assistance with its liquidity challenges, the PIC said it conducted its own due diligence and obtained approval in line with its mandate and corporate governance requirements.

By Tehillah Niselow for Fin24

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My Office News Ⓒ 2017 - Designed by A Collective


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