South Africa’s Economic Hub plans to scrap loathed freeway tolls

South Africa’s main commercial hub plans to halt the electronic tolling of freeways, a practice that has faced opposition from motorists since its inception almost nine years ago. 

“Whatever model we will use, tolling is not one of them,” Panyaza Lesufi, the premier of the Gauteng province which includes Johannesburg and Pretoria, the capital, told reporters on Friday. 

More details on when this will take effect will come after the provincial government meets with the National Treasury and the national Department of Transport, he said.

The state-owned South African National Roads Agency SOC Ltd., which operates the roads and has been driven to the brink of bankruptcy by non-payment of the tolls, was allocated 23.7 billion rands ($1.3 billion) in the National Treasury’s budget update last month to shore up its finances. Outstanding debts from the Gauteng Freeway Improvement Project stood at 43 billion rands at the end of March.

Mampho Modise, the Treasury’s deputy director-general of public finance, said in an interview with Bloomberg last month that Sanral’s responsibility for collecting the Gauteng tolls “contaminates” its ability to raise new funding in the market.

The tolling system has been a sticking point between the national government and provincial authorities for years. The Gauteng administration will cover 30% of Sanral’s debt and the national government the balance. The province will also have to pay the interest incurred on the freeway project and fund its maintenance, the Treasury said in a statement Thursday. 

While saying “direct road user charges are the most effective, equitable and efficient way to finance road infrastructure” the Treasury gave the province the option to continue imposing the tolls or scrap them if it could come up with other revenue sources.