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The South African Roads Agency Limited (Sanral) has announced that it will write off R3.6 billion for the current financial year. The agency will also scrap e-toll debt older than three years.

Sanral announces new transformation policyAccording to The Organisation Undoing Tax Abuse (Outa), Sanral is was finding it extremely difficult to collect the Gauteng e-toll debt from motorists, with increased loss for the 2016/17 year at just under R5-billion. Outa says this loss was up from the loss of R1.2-billion Sanral posted last year, with the bulk of the loss of about R3.6-billion arising from the toll operations.

However, Sanral has said it will continue attempts to recover unpaid e-tolls by taking defaulters to court.

“We believe they’ve written down the punitive tolls down to normal e-tag toll rates and they’ve kept it for the three years and then they ignored all those under R500. That is the first chance of cleaning out, but it is a realisation and acknowledgement ‘that all the charges that we have been charging the public out there are not collectable, we need to start removing it from our books’,” says Outa's Wayne Duvenage.

“The scheme was well resisted by the public. And I think what they’ve done is now written off a substantive amount and they’re bringing down the outstanding debt with the realisation that in time this scheme is not going to work and they’re going to have to scrap it. So I think they’re going to take a couple of years to try and write off the remainder of the debt.”

According to Outa, the R3.6-billion was the equivalent of 50% of all toll revenue, or the trade receivables, for the first 15 months of Gauteng e-toll operations and is substantially more than the prescribed debt. Duvenage adds that four out of five motorists aren't paying e-tolls, and the scheme is simply not working. By scrapping the debt, Sanral is conceding failure, he believes.

However, Sanral CEO Skhumbuzo Macozoma went on the record saying that reports that the agency had written off debt were “incorrect”. “Non-payment of toll fees is an offence and this does not prescribe. Sanral has repeatedly stated that it is making every attempt to collect the debt, in other words, enforce its claim. It would not be prudent to write this amount off until it becomes clear it is not collectible,” he said.

“Sanral made a provision in its assessment of collectability in its Integrated Report as required by International Accounting Standard 39. Additionally, subsequent measurement requires an assessment of possible loss events in order to further impair financial assets, i.e. trade receivables. Significant financial difficulty of a debtor and default or delinquency in payments are considered indicators of impairment. Therefore, Sanral has not written off e-toll debt.”

Image credit: http://www.nra.co.za/live/content.php?Session_ID=2f98edd6eb08161625fc3ebd2387e6b2&Item_ID=5051

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