STATE-OWNED ENTERPRISES
KHAYA SITHOLE: Sanral shows user-pays model can fail
Until SA’s high poverty and unemployment are corrected, the taxpayer will remain the source of SOE bail-outs
SA’s economic crisis is probably best captured by the financial reports of state-owned enterprises (SOEs). The South African National Road Agency (Sanral) has just written off R3.6bn in uncollected e-toll fees. This was precipitated by the Prescription Act, which makes it difficult to collect debts that are long overdue. The Department of Communications recently indicated in Parliament that if all South Africans paid their licence fees, the SABC would be financially stable. Sanral and the SABC rely on the user-pays principle, in which the end-user is directly charged for the service. Public infrastructure projects of this nature essentially have two sources of funding — the taxpayer or the end-user. In instances where the taxpayer has to foot the bill, there is a perceived unfairness when the product benefits a specific group of users. Direct injections from the public purse are regarded as unfair to the "excluded" citizens. The end-user model alternatively targets those who directl...
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