Gauteng pays first GFIP e-toll instalment

The Gauteng provincial government (GPG) on Monday paid the first of five equal instalments of its agreed R12.9-billion contribution to historical e-toll debt.

Of the first R3.8 billion paid to National Treasury, R3.2-billion was allocated to historical debt and R546-million towards the R4-billion maintenance, according to Gauteng Finance and Economic Development MEC Lebogang Maile.

Subsequent payments will be made every June until the debt is paid.

In 2022, the GPG accepted its 30% debt contribution to settle the South African National Roads Agency Limited’s debt and interest obligations, with national government covering the 70% balance, for the scrapped Gauteng Freeway Improvement Project (GFIP) tolling initiative. By April 2024, the gantries were switched off.

In total, about R20-billion is required to be paid by the province towards the e-tolls: R12-billion is debt, R4-billion is interest and R4-billion is maintenance.

While the province will need to allocate a substantial amount of funds each year for the next five years to meet the repayment obligations, it will not borrow the required funds to pay down the debt, but rather, implement a host of reforms and measures to maintain a healthy fiscal environment that will be both sustainable and manageable in the long term.

“The implications of the e-toll debt require the provincial government to manage finances in a prudent manner while carefully balancing the service delivery needs of the citizens,” he said during a media briefing.

Gauteng Provincial Treasury has a five-year budget approach that will focus on introducing and implementing immediate, short-term and medium-term budget reforms over the 2025 medium term expenditure framework.

This includes maintaining fiscal discipline and credibility and impactful service delivery.

Gauteng Treasury will prioritise the reprioritisation of budgets, identify efficiency gains and make trade-offs to fund the government priorities.

Further, Maile said, provincial departments and entities will explore alternative sources of funding to supplement the existing constrained revenue streams and enhance fiscal sustainability over the long term.

Partnerships with the private sector, donor funding and developmental finance are among the possible alternative funding sources, with public-private partnerships with revenue-raising potential prioritised.

“As the MEC of Finance and Economic Development, I have emphasised to Gauteng Provincial Treasury that any approach to the market for funding should be premised on securing funding to finance strategic infrastructure projects, which have sound economic benefits to the province, create jobs, raise revenue and potentially provide an avenue to pay back the e-toll debt.”

“This approach is seen as more sustainable and will prove far more benefits to the citizens of Gauteng, with far more positive spin-offs than borrowing to pay a debt of e-toll.”

However, he said that the user-pays principle remains intact.

“We cannot compromise on the user-pay principle, [however] . . . there have to be consultations and the Department of Transport will embark on the process.”

The GFIP was the first of three phases to improve Gauteng’s freeways and there is still a need to fund the second and third phase of the project to improve the roads and prevent gridlocks.