Finance Minister Enoch Godongwana announced on Wednesday that a decision had been made to transfer Sanral’s R47-billion debt relating to the Gauteng Freeway Improvement Project (GFIP) to the national and Gauteng governments in a bid to resolve the long-standing e-toll issue.

In addition, the Gauteng provincial administration would assume responsibility for the cost of maintaining the 201 km of highway and associated interchanges, as well as any future investments.

The Gauteng administration, the Minister said, would have the power to decide whether the maintenance and any future investments would be funded through the existing electronic toll infrastructure, new toll plazas, or any other revenue source within their area of responsibility.

Godongwana announced that 70%, or R32.9-billion, would be absorbed by the national government, while the Gauteng provincial government would take on the 30% balance, or R14.1-billion.

He described the protracted uncertainty surrounding the GFIP as having had major negative implications for road construction in the country.

“We need to move on from the debates of previous years and find solutions to this challenge.

“To resolve the funding impasse the Gauteng provincial government has agreed to contribute 30% to settling Sanral’s debt and interest obligations, while national government covers 70%.”

He also used his Medium-Term Budget Policy Statement address to announce that government was proposing to make an initial allocation of R23.7-billion to Sanral to support it with its immediate debt commitments.

The money, he added, would be disbursed on strict conditions.

The decision to pursue a debt transfer, as well as to transfer responsibility for the roads back to the province, had been taken so as to improve Sanral’s balance sheet and enable it to “do what it does best, which is to build and maintain roads”.

He described as “political” the decision not to implement the user-pay principle, which had met with overwhelming resistance not only from motorists but also politicians, including the African National Congress in Gauteng.

The debt transfer comes as government moved to pursue a similar, but far larger, transfer of a portion of Eskom R400-billion debt.

Godongwana said details of that debt transfer would be announced in the February Budget.

The Organisation Undoing Tax Abuse (OUTA), which was initially established to fight against the implementation of e-tolls in Gauteng, described the MTBPS address as "a clear indication that the e-tolling of the Gauteng freeways will be halted".

"OUTA has fought for over a decade to bring an end to the failed e-toll scheme, which was a battle fought through courts, through official inquiries, across social media, in protests on bridges and outside government offices, through millions of unpaid e-toll bills and the defence by OUTA of thousands of summonses by Sanral chasing debt," CEO Wayne Duvenage said in a statement.

He described it as a "massive victory for civil society" and a "significant message to government never to ignore the voice and the power of the people".

Duvenage stressed, however, that ending e-tolls had two aspects: establishing the alternative funding solution for the GFIP, and the legal dismantling of e-tolls.

"The Minister of Transport, Fikile Mbalula, should now announce the way forward to legalise the situation for users of the Gauteng tolled roads.

"OUTA believes that Sanral and the Department of Transport must now retract the notices which declared the GFIP roads as toll routes, which enabled tolls to be charged."

Meanwhile, Sanral chairperson Themba Mhambi said the announcement provided certainty regarding the the GFIP debt and the e-tolling scheme in general.

“Not only does government’s decision provide clarity for the road-using public at large but it also means that Sanral has significantly greater financial stability."

Mhambi said the full details of the implications of the announcement by government will be considered by the Samral board and management and that a comprehensive announcement on the implications of the decision would be made at a media briefing next week. 

“The Sanral board also understands very clearly the Minister of Finance’s pronouncement that any financial support for state owned entities will now be accompanied by stricter pre- and post- conditions.

"As Sanral we shall abide by all the conditions government will set in respect of the funding to be advanced to us.

"We sincerely hope that all South Africans affected by the GFIP e-tolls can now move forward and support Samral in developing the best possible national road infrastructure for our country,” Mhambi added.