Cape Town - The major state-owned companies improved their capital spending over the past two financial years, spending 98% of their 2013/14 budgets compared to 80% in 2012/13, a report says.
Expanded infrastructure investments have led to a steady increase in the asset base of state-owned companies, from R517.8bn in 2009/10 to R903.6bn at the end of 2013/14. Over the same period, combined net asset value rose from R176.1bn to R274.7bn and interest-bearing debt levels from R203.4bn to R523bn.
Eskom and Transnet account for 79% of state-owned companies’ net asset value.
Capital expenditure plans will add R78.9bn to the debt of state-owned companies in 2015/16.
Revisions to budgeted borrowing for 2014/15 are due to an additional R21bn borrowed by the Development Bank of Southern Africa and the Industrial Development Corporation to meet their lending targets, and an additional R12.6bn borrowed by Eskom and the SA National Roads Agency Limited (Sanral) to close revenue shortfalls in the current financial year.
While most of the debt will be raised in the domestic market, the proportion of foreign debt is significant, averaging 36% over the medium term.
The major state-owned companies benefiting from government guarantees are Eskom (R350bn, of which R144bn has been used), Sanral (R38bn), the Trans Caledon Tunnel (R25.7bn) and SAA (R14.4bn). A guarantee is a commitment to take responsibility for a loan in the event of default; it enables the beneficiary to access funding that would otherwise be unavailable or to borrow at rates that reflect lower risk premiums.
During 2014/15 the government issued additional guarantees to SAA and South African Express Airways.