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Sanral 'critically' in need of R1.5bn

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 01 Aug 2013
The agency is losing R200 million a month as its e-toll system is running, but not bringing in revenue.
The agency is losing R200 million a month as its e-toll system is running, but not bringing in revenue.

The SA National Roads Agency (Sanral) is in talks with banks for about R1.5 billion-worth of bonds, which it says will become "critical" within the next three months.

This comes as protracted delays in rolling out e-tolling on Gauteng's highways have left the agency cash-strapped, as it is still obligated to pay the company contracted to manage the already installed e-toll system on a monthly basis.

Project manager of the Gauteng Freeway Improvement Project, Alex van Niekerk, said yesterday that, while Sanral as a whole is not bankrupt, the agency needs R1.48 billion by the end of October to repay its bonds.

Sanral spokesperson, Vusi Mona, said last week that the agency had run out of options in the capital markets and would look to commercial markets for assistance.

Van Niekerk says Sanral is in talks with "a number of banks, but one in particular" for the cash it needs to repay bonds "for the foreseeable future". He says the "foreseeable future" is dependent on the commencement of e-tolls.

Sanral pays Gauteng's e-toll operator, Electronic Toll Collection - and indirectly Austrian toll company Kapsch TrafficCom as its major shareholder - R25 million per month, an amount Van Niekerk says can vacillate. This cost, he says, covers the operating costs of e-tolls, including the rental of e-toll kiosks across Gauteng, rates and taxes and e-toll maintenance.

Sanral spokesperson Vusi Mona says there is no way Sanral could go bankrupt.
Sanral spokesperson Vusi Mona says there is no way Sanral could go bankrupt.

He says Sanral is losing about R200 million per month with e-toll gantries being up and running, but not raking in revenue ("soft tolling"). As to when the system will go live and start bringing in the much-needed revenue ("hard tolling"), Sanral says it is cautious to give timelines due to the fact that it is now in president Jacob Zuma's hands.

Zuma still has to sign the Transport Laws and Related Matters Amendment Bill (e-toll Bill) into law, paving the way for the tolls to go live.

Damage to property

Mona says another problem that is exacerbating Sanral's financial burdens, is that of theft and vandalism. "This is not related to e-tolls as such, as all infrastructure providers in SA have to deal with the same issue, but it is a big problem."

The costs of theft and vandalism to Sanral, says Mona, go beyond the physical materials. "The actual cost of copper is small compared to what it takes to replace and repair the components that are damaged or stolen."

Alex van Niekerk, project manager of the Gauteng Freeway Improvement Project, says Sanral is in talks with one bank in particular.
Alex van Niekerk, project manager of the Gauteng Freeway Improvement Project, says Sanral is in talks with one bank in particular.

He did not quantify how much Sanral was losing to theft and vandalism on a monthly basis, but says it is becoming a major concern for the agency and will ultimately lead to increased costs across the board - down to the motorist. "It affects all South Africans."

Mona reiterated that Sanral as a unit is not bankrupt. "The non-toll portfolio, which constitutes 84% of Sanral's portfolio, is funded by National Treasury and is still healthy. Funding is guaranteed and paid to Sanral in trenches - so I don't see how we could go bankrupt."

He says recent media reports and "whispers" around the roads agency's financial health are unfounded and unfair.

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