Cabinet to look into funding of Gauteng’s roads | Infrastructure news

Cabinet has said that an inter-ministerial committee set up to deal with e-tolling, “will move with urgency to ensure that South African National Roads Agency’s (Sanral’s) financial stability is not affected in any way.”

The committee, to be chaired by deputy president, Kgalema Motlanthe, will also “assess” the government’s response to Saturday’s North Gauteng High Court ruling, which put the brakes on Gauteng’s e-tolling project.

E-tolling was due to start on Monday on 185 km of highway in Johannesburg and Tshwane. The show didn’t get on the road after Judge Bill Prinsloo granted an urgent interdict to stop the project to allow a full court review to be carried out to determine whether it should be scrapped.

In the fortnightly Cabinet media briefing, Minister of Performance Monitoring and Evaluation in the Presidency Collins Chabane, said the committee would study the court judgement and look at all the legal obligations.

“The committee will meet with appropriate stakeholders in order to find constructive solutions and consensus on the outstanding matters,” the cabinet statement said.

The cabinet is clearly unnerved by the stalemate over the R20bn project.

“We’ll have to look at the impact on Sanral and the legal implication on our ability to service the debt. The infrastructure is there. You can’t dismantle it. You can’t revert to two lanes again….The debt exists. We have to find a solution, whatever the consequences may be,” Chabane told journalists.

While Chabane said the cabinet “was not looking at alternative funding at this stage”, the cabinet statement hinted that the government may look at other options to prevent the Sanral sliding into debt.

“The decisions that we make and the steps that all of us as South Africans now take regarding the future of the Gauteng Freeway Improvement Project (GFIP) will have serious implications for how we finance future infrastructure projects.”

Cabinet said the government had to guard against making decisions and taking actions that could impact heavily on its track record in the “prudent management of its finances.”

“Government has to act responsibly, ensure that it and the State-Owned Enterprises honour their financial obligations timeously. Government must also ensure that nothing compromises the huge infrastructure programme which is crucial for raising the level of South Africa’s economic growth and for raising the standard of living of citizens, especially the poor and unemployed,” the statement said.

Chabane and the ministers of transport, finance and public enterprises are on the committee that will try to find solutions to the ongoing debacle.

Finance Minister Pravin Gordhan, is expected to answer questions about the debt implications of the e-tolling saga when he appears before the Standing Committee on Finance on Tuesday.

DA finance spokesman, Tim Harris, says he’ll be hoping for some answers on Tuesday on how the GFIP will be funded.

“If National Treasury has to provide a backstop of taxpayers’ money for all of Sanral’s debt, there will be a material effect on the fiscal framework and key debt-to-GDP numbers.”

He said this raised questions about whether all debt issued by state-owned enterprises should be regarded as contingent liabilities for the national fiscus.

“If they do not, then almost R8bn worth of unguaranteed government pensions will be at risk, and questions will be asked of the creditworthiness of other state owned enterprises that have gone to the bond market.”

The campaign against e-tolling has ballooned, bringing many thousands of people on board and invoking tension between government and its alliance partners.

A few days ago, Finance Minister Pravin Gordhan, told a business symposium in the US that e-tolling had become “a populist cause” put forward by a “strange alliance of people”.

“There isn’t a single credible technical argument put forward to us,” he told the symposium.

“It’s a very odd alliance of Cosatu – our traditional leftwing movement – the Democratic Alliance and a whole range of people in the freight business.”

The debate over e-tolling sharpened further this week with allegations from Cosatu and the DA about impropriety in the way e-tolling tenders were awarded.

Sanral says it has welcomed calls for an investigation into the e-tolling tender process.

“We at Sanral have nothing to fear,” he said.

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