The Electronic Toll Collection (ETC) will continue managing the e-tolling systems on Gauteng’s freeways on behalf of the South African National Roads Agency Limited (Sanral) until at least December 2019, as the State-owned roads agency works on a new tender.

Eight years after being established as a special purpose vehicle to supply and manage an integrated e-tolling system for Gauteng’s upgraded freeways, ETC, owned by Austria-based firm Kapsch hopes to have its contract extended until 2021.

Speaking to Engineering News Online on the sidelines of a tour at the firm’s Centurion-based headquarters, ETC CEO Coenie Vermaak indicated that Sanral was currently preparing a new tender document for the management and operation of the tolling system, to be issued early next year.

Sanral could not be reached at the time of publication for comment.

Vermaak believes it will be a “tough” tender process, as ETC is well versed in the processes, costs and overall systems and understands how the software works.

Further, he questioned whether many would bid for the project owing to the bad publicity surrounding the e-tolling system.

Vermaak also claimed that Sanral had already been granted approval by Treasury to extend the initial contract, which he believed, if granted to ETC, would provide the group further time to complete its new empowerment deal and further stabilise the sustainability of the system through several value additions.

ETC is currently in the midst of negotiating an empowerment deal that will transform the company into a fully black-owned firm.

“We are bringing on an [undisclosed] South African business partner,” he said, noting that Kapsch will likely sell a portion of its stake.

A partner has been identified and negotiations are at an advanced stage.

While Vermaak could not provide further details, he explained that the company could shed more light on the matter within the next month.

However, he assured that, despite rumours and the new deal, Kapsch would not be leaving the country.

The Austrian firm had lost hundreds of millions of rands, which many stakeholders said was unsustainable.

“We plan to make it sustainable,” Vermaak vowed, noting that a two-year extension would enable ETC to do just that.

ETC aims to create financial stability for the project through the introduction of value-added services and revenue streams that will improve the benefits for road users that are e-toll compliant.

These include the first phase of the Sanral mobile application, launched in October, along with other innovations in development such as a parking solution, access management solution and exploratory engagements with insurance companies, public transport providers and other governmental departments to find synergy and provide holistic benefits.

A ROCK AND HARD PLACE

However, while the contested e-tolling system remains challenged with mistrust and a lack of compliance, which could ultimately threaten Sanral's next phase of the Gauteng Freeway Improvement Project (GFIP), the tolling system is here to stay.

The consequences of switching off the gantries poses a risk too high for government to chance – an immediate R45-billion debt payback, which included interest, becoming the biggest government bail out South Africa would have ever seen, and almost certainly guaranteeing another rating downgrade.

Sanral, which has not been able to start Phase 2 or 3 of the GFIP owing to a lack of funding, had spent some R22-billion on the first phase, but debt interest has expanded this to between R40-billion and R45-billion.

“It will be a bigger bailout than South African Airways,” he commented.

Further, the lack of funding and noncompliance of the e-tolling system funding threatened future upgrades, new developments and freeway links under the GFIP, Vermaak said.

The fiscus cannot afford the funding and the fuel levy is a diminishing fund, while the user pays principle had been deemed fair and an accepted norm.

“There is no other way of funding this. Open road tolling is the only solution,” Vermaak highlighted.

ETC’s focus areas now included rebuilding trust and embarking on stakeholder management; ensuring ease of compliance with upgraded more customer-centric systems; and making it difficult not to comply, with 16 000 summons to be issued by December and a comprehensive debt recovery strategy in place.

There is also a need to empower and educate people and share information.

Lastly, it will seek out additional income generators for the assets.