The South African National Roads Agency (Sanral) says investor confidence in the agency has been negatively impacted by the uncertainty created by the Gauteng government's decision to set up an e-toll review panel.
The agency says in a statement that in the final auction for the 2014 calendar year, Sanral wanted to raise at least R500 million, as the next auction is only scheduled for February 2015. "Even though total bids of R765 million were received, the prices were much wider than the guidance and, therefore, only R415 million was allocated," says the statement.
"The lack of interest among investors was unfortunate, given the presentations made to the panel by the minister of transport, Dipuo Peters, and senior government officials over the past two days. The minister expressed strong support for Sanral, indicating the e-toll system in Gauteng will continue in terms of decisions taken by the Cabinet."
The roads agency states the result of this auction once again demonstrated the close relationship between government decisions and Sanral, as a government implementing agency.
"Investors are sensitive to policy uncertainty and they clearly communicated this today," says Inge Mulder, Sanral's chief financial officer.
"We trust that the strong endorsement of Sanral in the minister of transport's presentation to the review panel on Tuesday, and her assurance of government support to the agency, will reduce the levels of uncertainties in the future and draw investors back to future bond auctions," she said.
The next Sanral bond auction is scheduled for February 2015.
"We will continue to do our utmost best in ensuring that we produce and maintain roads, which are safe, [and] time and cost-effective to use," Mulder says.
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