Bogged down by e-toll failure, Sanral gets more room to borrow

2017-10-25 14:59 - Matthew le Cordeur

Cape Town - Road agency Sanral has been given more wriggle room to borrow, amid an unwillingness by disgruntled motorists to pay e-toll fees in Gauteng.

“In response to public concerns about electronic tolling in Gauteng, Sanral introduced a lower-cost dispensation,” the mini budget states.

“However, collections remain lower than projected, making it difficult for the agency to service its debt.”

Government provided Sanral with a R38.9bn guarantee in its 2017 Budget to expand its toll roads portfolio and since then clarified the conditions of the guarantee.

“This gives Sanral more room to borrow under the guarantee and allows the agency to service all its commitments over the medium term,” the mini budget said.

“Over the long term, an improvement in toll revenue collection is needed to ensure Sanral’s sustainability.

“If government does not proceed with tolling to fund major freeways, difficult trade-offs will need to be made to avoid a deterioration in the national road network.”

During 2015/16, Sanral recorded total revenues of R11.6bn, down marginally from R11.7bn in 2014/15.

Over the medium term, government allocated R1.2bn to Sanral to compensate for the reduction in the standard toll tariff on e-tolls or the Gauteng Freeway Improvement Project from 60c to 30c per kilometre, and the halving of monthly caps.

“Some degree of uncertainty around Gauteng toll fees persists,” Treasury noted in its February Budget Review. “However, investor confidence has returned, as demonstrated by Sanral’s two successful bond auctions during the second half of 2016.

“It plans to borrow R35.5bn in the domestic market over the medium term in addition to its total borrowings of R48.8bn as of 31 March 2016.”

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