The Gauteng provincial government is locked in discussions with the National Treasury as it struggles to meet its R15.9 billion e-toll debt obligations. While reaffirming its commitment to honour the current repayment arrangement, Gauteng is now appealing for flexibility in payment terms to ease the financial burden and redirect much-needed resources to urgent social services.
Province Committed to Repayment Agreement
Lebogang Maile, Gauteng MEC for Finance and Economic Development, emphasized on Sunday that the province remains committed to the existing Memorandum of Agreement (MoA) signed with the South African National Roads Agency (Sanral), the National Department of Transport, and Treasury. According to the agreement announced by Finance Minister Enoch Godongwana in the 2022 Medium-Term Budget Policy Statement, Gauteng is responsible for 30% of the e-toll historical debt, amounting to R12.9 billion, plus R3.3 billion in interest — to be repaid in five equal annual installments.
Maile stated that while there’s no new agreement in place with Treasury to amend the MoA, discussions are ongoing to explore revised payment terms that could provide the province with greater fiscal breathing room to address pressing social needs.
Major Payment Scheduled for 30 June
The provincial government is expected to transfer R5.47 billion to the Treasury on 30 June 2025. This includes the second installment of its e-toll debt obligation, alongside R2.099 billion earmarked for the backlog in maintaining the Gauteng Freeway Improvement Project (GFIP). The first payment of R3.8 billion — covering R3.2 billion in debt and R546 million for GFIP maintenance — was made in September 2024.
Gauteng also still owes R3.559 billion from its total R4.1 billion commitment towards GFIP maintenance, which aims to restore freeway infrastructure before Sanral resumes responsibility for ongoing maintenance through national funding.
Service Delivery Impact
Maile voiced concern about the significant impact these repayments are having on service delivery in the province. He stressed that the funds being directed towards debt servicing could have been used to improve critical infrastructure such as schools, clinics, and roads.
“If we weren’t paying R5.4 billion, we could have allocated R2 billion to fix potholes and R1 billion for malfunctioning traffic lights,” Maile said. “Instead, we only budgeted R300 million for potholes across all provincial roads — a fraction of what’s required.”
He added that Gauteng needs 200 new schools, but current funding only allows for the construction of 18. “Each school costs about R200 million. If we had access to R20 billion over time, we could significantly expand and improve our services,” he explained.
Treasury Covering Majority Share
National Treasury is covering 70% of the e-toll debt, with Gauteng responsible for the remaining 30%. Despite this, Maile noted that the province still faces immense financial pressure, particularly as it attempts to balance debt repayments with social spending in areas such as health and education.
“The fiscal environment remains tight,” Maile said. “Our existing budget is already stretched to maintain critical services. Nonetheless, we are committed to ensuring that debt repayments do not derail our priorities in social development.”
Fiscal Sustainability Measures in Place
To manage its financial obligations, the Gauteng government is pursuing several reforms and strategies aimed at improving fiscal sustainability. These include:
- Strengthening debt management practices;
- Enforcing spending discipline across departments;
- Enhancing compliance within supply chain processes;
- Increasing provincial revenue collection;
- Exploring new revenue streams and alternative funding models.
Maile outlined a five-point revenue enhancement strategy built around accelerating ongoing reforms, optimizing current revenue sources, improving collection systems, identifying untapped income channels, and adopting innovative funding models.
As Gauteng proceeds with its substantial e-toll debt payments, the provincial government continues to engage Treasury in hopes of negotiating more manageable terms. While the financial strain is evident — impacting essential services — officials remain firm in their resolve to honour commitments without sacrificing core social development objectives. The coming years will test the province’s ability to balance fiscal responsibility with the urgent needs of its growing population.
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