Pretoria - The SA National Roads Agency (Sanral) suffered a loss of R2.8bn for the financial year to the end of March 2014 compared with a R1bn profit in the 12 months to March 2013.
Net operating profit before finance costs totalled R726.3m in the year to March 2014, compared to R4.7bn in the previous financial year.
“The loss was occasioned largely by delays in the implementation of the Gauteng Freeway Improvement Project (GFIP), which resulted in an increase in finance charges and a loss of revenue,” said Inge Mulder, chief financial officer of Sanral in a statement released on Wednesday.
Sanral said, however, that cash flows from the GFIP have exceeded the forecasted values and that registrations are well on track to ensure a sustainable collection rate in the first year.
Sanral finances, manages, controls, plans, develops, maintains and rehabilitates South Africa’s proclaimed national road network of 19 704km, recently increased to 21 403km.
Its two primary sources of income are non-toll roads, which account for 84% of the total national road network and which are funded from National Treasury allocations and toll roads, accounting for 16% of the total national road network, the funding of which is either through public private partnerships or from capital market borrowings.
In the year to March 2014, a total of R3.1bn was spent directly on toll roads, of which R1.2bn was designated as capital and R1.9bn as maintenance.
During the same period, R10 006,4 million (R9 489,7 million) was spent directly on non-toll roads – R6 105,4 on capital works and R3 901 million on maintenance.
The toll road business is funded through borrowings on the capital markets. All the bonds issued are traded on the JSE.
According to Sanral's directors the agency has been able to service its debt and maintain its toll routes during the past two years – "a period during which it was unable to tap the capital markets".
"In addition to its parliamentary appropriation, Sanral seeks other sources of finance to enhance the national road network – finance that can reasonably be recovered through user charges," said Sanral.
The directors indicated that public-private partnerships (PPPs) allow Sanral to negotiate investments through the diverse sources of funding available from the private sector to meet identified infrastructure and service delivery needs in a manner that is cost-effective and appropriately adapted to each particular project.
“The multiplier effects of expenditure on road infrastructure contribute to economic growth and social development through job creation and economic independence,” said Mulder.
On June 27, Moody’s changed Sanral’s outlook from “negative” to stable.
However, pending the effectiveness of debt collection on the GFIP, the Baseline Credit Assessment (BCA), which is based on the intrinsic financial strength of an entity, was moved down from Ba2 to Ba3.
- Fin24