Sanral faces financial dilemma
Pretoria – The future of Gauteng’s controversial e-toll
system is partly in the hands of a new directorate, which itself first needs to
learn how the South African National Roads Agency (Sanral) operates.
On Thursday Transport Minister Sibusiso Ndebele informed the
new Sanral board at its first meeting of the task
Half of the eight directors of the board chaired by
Tembakazi Mnyaka are newcomers, while three members are serving a second term. Chief
executive Nazir Alli is the eighth member.
These eight must make a recommendation to Ndebele about the
future of the e-toll system. This will take time, since they need to learn how Sanral operates on Thursday and Friday.
Over the coming week details regarding the Gauteng Freeway
Improvement Project (GFIP) and its funding model, which is based on toll fees
and the implications if the toll system is abandoned, will be explained to
The board’s first step was its announcement on Friday that
the toll system would not come into operation in February. Although it’s clear
that the board needs time to apprise itself of all issues, this step puts
Sanral under enormous pressure.
The agency is continually borrowing money on the open
market, and repaying it on a monthly basis. In September Sanral’s total
indebtedness was R31.5bn, R20bn of which had been spent on the improvement of the
envisaged Gauteng toll roads.
Every month Sanral holds bond auctions which raise an
average R300m. These auctions are generally twice oversubscribed, but in
September the auction was cancelled because investors got cold feet owing to
the uncertainty about the future of the toll system.
Sanral then cancelled further auctions until the
implementation of the tolling system. It had hoped that this would be in
February and that auctions could resume in March.
The absence of auctions in September, October and February
would mean a loss of R900m. Sanral does not normally hold auctions in November,
December and January.
By implication the March auction is off the table and there
is no indication when auctions will resume.
In terms of the initial planning, the e-toll system was to
have begun in April last year. Financial planning was aligned to this date.
Sanral is thus saddled with massive debt that has to be paid, but without a
Financial director Inge Mulder previously reported that Sanral
had sufficient money, if necessary, to pay off its debt up to the end of May.
But by June the money will be exhausted and Sanral will no longer be able to
The government will then have to intervene. This has huge
implications for market confidence in Sanral and South Africa, which could be
reflected in credit ratings.
The board has declared itself committed to meeting its
obligations to stakeholders – an apparent reference to the repayment of its
But it is not clear what value can be attached to this
assurance from a board that still does not understand the problems involved,
and which also gives no indication of how long it will take it to reach a
Matters on the board’s agenda indicate a possible
fundamental rethinking regarding Sanral. According to a statement by the board,
points of discussion include Sanral’s mandate, the Gauteng e-toll system and
future roadbuilding programmes.
Sanral currently has no answers for its investors. All that
remains is uncertainty – the one thing that markets detest.
Although the scrapping of the toll system will make road
users sigh with relief, it could sound the death knell for Sanral.
In the construction industry the agency is regarded as an
exceptionally effective project manager – and it is one of the few successful
For more business news in Afrikaans, go to Sake24.com.
This is excellent news to all citizens of SA.
It is essential that the pressure be maintained by motorists refusing to buy an E-Tag - this is all that it will take to bring this criminal scheme crashing down.
The SANRAL business model is based entirely on instant and cheap collection of tools by electronic means, and the e-tag makes that possible. Without instant and cheap collections, the entire system designed to fleece motorists like so many sheep to be shorn, simply cannot work and must be abandoned.
DO NOT BUY AN E-TAG!
DO NOT BUY AN E-TAG!
DO NOT BUY AN E-TAG!
Its a pity they never thought of informing the very people who they hoped would be paying back this debt, that is the South African road user of this hair brain scheme. They thought it would just be a given that the SA tax payer would be taken for a sucker yet again. As they say in Afrikaans "kry vir jou!"
So what are rates and taxes for?
If the plan was to pay 'congestion' taxes and then use the money to support an amazing public transport system then it would make sense in some ways. But as far as I know Gauteng is a shambles like the rest of the country in this regard.
But it isn't, it's just a tax to keep roads in order, something we pay for already in terms of rates, taxes and fuel levies?
Totally agree. Develop public transport infrastructure, make trains safer (in fact, get more trains), more buses, more affordable and SAFE taxi services (like those they have in the U.S. and Europe). Not only will this make it easier for tourists to get around, it will also make the roads safer, cut down on carbon emissions and give people a common excuse for being late for work.
My heart bleeds custard bunch of money grabbers, must be a few ministers really upset as there gravy coming to a halt.
SANRAL should have consulted the public BEFORE they decided that we should pay for their project (which should already be covered by rates/taxes and fuel taxes. Not to mention the taxes on purchasing a new vehicle.) I hope those thieves all end up begging on the streets.
Poor planning, no proper preparation, no proper consultation, too many "clever people" who was input in this project.
We need serious people to do serious work.....not people who are money grabbers OR there true aim is pocketing the money.....DID these people think about the people living in GAUTENG....????? DID these people think of the man in the street and the influence of the toll roads on them!!?? WE need a true leader or leaders in SOUTH AFRICA to make a difference to put a end to rubbish as this. We need leaders who are serious about governing and not miss-management.
Now the new guys have to learn how it works?????? !!!!!
When I lived in South Africa there was a TAX on every gallon of petrol purchased that was used for ROAD MAINTENANCE.
Have they scrapped this tax so that they need toll roads?
I doubt it.
There is no need for those toll roads at all.
Yip, the fuel levy is still here. This is their way of trying to procure more gravy for the train.
The incompetent fools in charge are trying to force it on the public. This is exactly what they wanted."Now we must or else..." Their heads must roll, yet always in such situations they are never held accountable.
After Joburg they will come for Cape Town, luckily our local government was fast to react and fight it before any building took place. To bad Jo'burg ANC is too busy planting trees instead of protecting its new up and coming black diamond business class. Seriously if your an entrepreneurship or work for a small business that makes heavy use of transport this is a death sentence.
It seems that SANRAL's principal business is that of a financier with road construction being an ancillary object. They have suppliers of materials and subcontractors, who've been tendered road construction contracts and who they owe R30 billion to, and they auction off bonds (which hopefully carry higher interest rates than the debt they're servicing) and earn income from random toll booths around the country. And they still need to learn how they operate? I don't think it gets much more complicated than that and the underlying details can be learnt on the job.
Is this announcement a ploy to make us feel sorry for not wanting to pay a cent for using the roads? They must not force their debt woes upon the taxpayer. Government should be using our tax money to issue tenders to SANRAL to improve the highways as it is infrastructure that government should be responsible for (in an ideal world, anyway).
Don't try to be cool with these guys Matthew. No amount of shouting, advice or even boycot will change them (government) from thinking that they are the little gods and that they are the best thing that has ever happened in South Africa.
The money is in Australia and that country has all the world's mineral reserves you can ever imagine. I say Sanral should simple not pay them and in fact rather ask them to come and dismantle and demolish these e-toll gantries because I will never pay for these tolls. Never! Not even in my sleep!!!!!!!!!!!!
Zakhele's second sentence sums it up well. SANRAL should be scrapped. People can't control their home finances, yet they are put on boards to control billions of rands of taxpayers' money. R31.5 billion in debt, where was the DG and minister of transport, fast asleep like Rip Van Winkle. It's time for a change in government, voters need to catch a wake up.
These auctions sound like a piramid scheme to me.Sanral can sell this white elephant to some other stupid country and return our tax money.The tenders should also be investigated,seeing that the whole contract was such a secretive buseness.
what waste of time and taxpayers money.
Can anyone please enlighten us on this "bond auction", and how/where sanral fits in
Give me R100 now. I shall grow your investment (annuity at compounding rate= (original cash plus today growth) times new growth rate) at rates slightly higher than Risk Free rates (what you would get if you just left your with the bank over the same period). After 10 years your R100 will be returned plus 25 Rands more. Had you left your money untouched on a fixed deposit at the bank over 10 years you would have gotten back your R100 back plus R19 more. Hence I am promising R6 more than the risk free rate market (bank, or under your mattress, etc).
So guys with money will buy bonds at the auction. There are minimum amounts that one can buy and normally only people with large cash reserves will afford to buy bonds at the auction.
Does it make sense now?
boet - what happened to the 900 billion rands (yep nine hundred billion rands ) collected for roads repairs in our petrol levy since 1994 under our rainbow rulers watch- it was never spent on roads - but seems to have been spent on jollie patrollie, graft, corruption, and tenderprenuership and executive jets for the toothless one, who looks like a shower, and his sidekicks.
Fact is that we already pay taxes and you didn't do an opinion poll on the people whom you planned to toll. If you had done an opinion poll you would have seen a vote for no toll gates and none of this mess would exist. Whoever approved this project should be held accountable for the required recoveries!
Can anyone please enlighten us on this "bond auction", and how/where sanral fits in
Sanral, you are also liable for hundreds of road deaths due to poor safety measures implemented during construction.....when will you actually finish your project. You do not know, do you? You will not receive a cent from me!
Does Sanral not owe the other toll roads in South Africa? Over the years income from these should have financed the new venture? I am lost
What I cannot understand is that the Sanral national non toll budget(includes salaries, upkeep of existing and building of new roads) for 2008-9 was R4,66 Billion, 2009-10 R6,52 Billion, 2010-11 R7,78 and 2011-12 R9 Billion. This is for the whole of SA. If taking into account that the National Treasury received R34 Billion in fuel levies last year, more than enough funds are available for the upkeep and building of roads. How could the Gauteng toll road upgrade cost R20 Billion for under 200km of road if the national Sanral budget for non toll roads in the whole of SA amounts to R9 Billion. These figures are from the Sanral website and National Treasury, so no thumbs sucking was involved. All this confirms that somewhere, not someone, but a whole herd of pigs are feeding at trough.
The truth be known is that the moneys from road tolls and fuel levies goes into the fiscus alloted to wherever Dept then the balance on politically expedient projects like grants.
KPMG or Deloitte needs to look at this very closely.
No one in Government will admit to their mistakes, and they just plough on and on until there are too many onboard for anyone to carry the can. This habit can be seen in all "Organs" of Government.
At Hugh, you're on the button.
I have absolutely no sympathy whatsoever. Apart from Government, SANRAL and the companies that stood to benefit, there was virtually no enthusiasm for the project from the motoring public whatsoever, and when faced with rolling mass action from taxi operators, SANRAL immediately back-pedalled, and promised taxi operators they would not have to pay any toll fees. They did little in the way of consultation with the general public. In the few meetings had, over the proposed toll gates at the Joostenbergvlakte bridge in Cape Town, time and again, they were backed into a corner, and simply refused to answer questions. It was quite clear they had little or no concern over objections by business owners in the area, to the location of the toll gates, and whatever counterpoints were raised, they very arrogantly brushed aside. As far as I'm concerned, they can find the SANRAL senior management, directors, and the ministers that approved the tolling projects PERSONALLY financially liable for any and all debts incurred by SANRAL!
If they had listened to the public's concerns and objections from the beginning, they wouldn't be in this position today!
Due to the fact that this is one of the last avenues to extort money from the public, whithout offending the masses, the Goverment tried its best!
Scrap it all. Sanral should die.
Just wanted to say a quick thank you to all the people boycotting the daft e-tag system. I live in Durban, but have no doubt that if it goes through in Gauteng, we're going to have it next. Please keep up the good work.
No meaningful way of raising capital, no meaningful way of deriving an income. These are the results of SANRAL's "blunder". They have effectively destroyed South Africa's ability to support its roads transport infrastructure or at the very least, put it in seriuous jeopardy. This is the price you pay for stupidity. Let this be a hard lesson. Govt should dissolve SANRAL and institute criminal proceedings against those in charge. Govt now needs to demand accountability and use the courts to enforce that.
This is too cute! The board members are appointed on the grounds that they do not know how Sanral operates. They will no doubt be paid handsomely for this qualification. I wonder if other qualifications include having ANC connections.
I know, right? There really isn't that much to learn about SANRAL's operations. Hell, even the Wikipedia page pretty much sums it up!
The chickens has finally come home to roost. The ANC should ask the Hon. Kulubuse Zuma to bail out SANRAL. Bye bye e-Toll bye bye.
Prediction: The bulk of the costs will ultimately be borne by the government. Yes indeed the taxpayer will always be around to bail the government out of its obligations. Good, this little exercise has rebounded in the face of our hero's like a bag of excrement.
Am I reading it correct, SANRAL has private investors... so that means that someone was going to make profit from the roads! So the toll money was going to end up in private pockets!
My understanding is that the investors were Austrian and all the toll was going to them (out the country)
Government is the sole shareholder of SANRAL and the Austrian company is just the financier of the expansion project. They are also the supplier of the e-tag technology for the gantries. I don't know why they couldn't just continue to auction off the SA treasury bonds to finance the project...
The Highwayman of old stopped their prey's Stagecoach, robbed the passengers and let them on their way, the new SANRAL highway robber has Government on their side wanting to rob all of what's left of their pay after taxes.
This is being done so Government is not seen as the Highwayman, but not all are fooled as Government forgot to wear a mask.
My question is: Who is going to pay the rent for all those kiosks and stores that Sanral have opened up in almost every shopping center?
Every other SANRAL project I have seen so far between JHB and PTA is a total flop (electronic signs, cameras, etc.) and was paid for with taxpayer's money. Why should we finance another flop ?? What has happenned to all the money derived from taxes built-in to the fuel price that are supposed to finance maintenance and expansion ? Why are virtually all other roads in a state of disrepair ??
It seems that both SANRAL and the government are little more than misappropriators of funds.
Very few thumbs down. Does that not indicate something?
Unless huge sums and splits were being paid to people in the right places for guarantees that there would be repayment assurance, this project would never have had enough attraction value to interest foreign investment.
With 3 times the traffic volume of the late '90's (in Gauteng anyway), the project also couldn't be staved off any longer. The Austrian company should sue the beneficiation parties (inside government and out), for fraud for misleading them on supporting a pathetic cause.
If government officials weren't so intent on the non-delivery elements of governing and partying, they wouldn't have been so intent on channeling the fuel levies for roads to non-road issues. It's always just been a slush fund for them though and they saw it as their money to do with as they pleased! Lets have a correction NOW!!!
Well the fact that there is a Make-over in the Board its a sign that the previous board was stupit and arrogant to have gone ahead with the implementation of the e-tolls amid objections from the public... SANRAL must be liquidated for the goverment to take us serious, we are tired of being milked left, right n centre
What about the user pays principle for all the money which they give away?
Free this, that and the other!
LET THOSE USERS PAY!
I'm from KZN, so my comments probably don't count. But looking in from the outside I think you Gautengers are taking advantage. We pay enough for tolls as it is in KZN, and no doubt e-tolling is on the way here. I agree with the user pays philosophy, and that e-tolling should commence. Road construction and maintenance is hugely expensive, and SANRAL are one of a very few working parastatals, so lets try to keep it that way, coz our population and no's of vehichles on the roads is increasing exponentially. The e-tags should be fitted to the vehicles licence. Each individual car licence would then be scanned when crossing through the e-tolls, but could also be scanned by the cops, thus helping with controlling the speedsters, and traffic rule violaters. Concessions could be offered according to usage, and the final tally would determine the payment of ones next licence disk. New technology could be applied to all new vehicles, where the e-tag microchip is built into the vehicle, rather than the plates or licence disk. In the interim Treasury need to step in and assist Sanral in carrying this burden, which motorists are only too pleased to take advantage of. You can't have your cake and eat it - Time to pay up!
We might be objecting, but the goverment will still sting us for their mess up! No forward planning, thought the public will just go along with their plans, like the vote!
what a load of crap
no meaningful income??? there's toll roads all over the country under their control bringing in hundreds of millions a month they can use that to pay off this loan