Finance DG: Sanral can manage six months

2012-05-08 16:01

Parliament - The embattled SA National Roads Agency (Sanral) can scrape by for the next six months in the absence of Gauteng freeway toll revenue, MPs heard on Tuesday.

"It is very important to understand that in the immediate term, anything up to six months, Sanral will exist and by scraping and removing resources that were intended for other purposes, and using them to make sure it meets its immediate financial obligations, that is going to be okay," finance director general Lungisa Fuzile said.

"But, only through major sacrifices and only for a very limited short time, as I've indicated, about six or seven months.

"Beyond that, the situation has got to be cleared, which is why the Cabinet process has been set in place with the idea to run very fast to reach the end of this thing parallel to the court process."

Fuzile was briefing Parliament's standing committee on finance.

Deputy Finance Minister Nhlanhla Nene declined to be drawn on whether a solution would entail a second, extraordinary allocation from National Treasury to Sanral.

"Let's cross that bridge when we come to it," he said.

In his annual budget, Finance Minister Pravin Gordhan gave Sanral a R5.7 billion windfall to help the agency service the debt on the R20bn Gauteng Freeway Improvement Project and bring down e-tolling rates.

However, Sanral's stability was dealt a blow on April 28 when High Court in Pretoria granted an interdict to suspend implementation of the project, pending a final review.

There were more jitters last week when it emerged that only half of the R15.7bn worth of its bonds bought by the Government Employees Pension Fund were government guaranteed.

Fuzile stressed that the government was committed to stepping in if Sanral failed to make payments, regardless of whether there was a formal guarantee.

"Sanral is very different from other institutions. Sanral has always had a strongly implicit guarantee. Essentially, the legislation that establishes Sanral is written in such a way that Sanral cannot be liquidated.

"In other words, when Sanral reaches a point where it cannot meet its financial obligations, government will have to step in, regardless of whether there is an explicit guarantee or not.

"The government can never walk away from Sanral's liabilities."

He said that by underwriting the bonds, the government had limited the debt costs and had hoped to pass this saving on to motorists in the form of lower tolls.

"With the guarantee, we wanted to make sure that the benefits of the guarantee will lower debt costs on the users of the roads.

"Prior to guarantee, Sanral would raise money at about 1.2 percentage points above the interest rate... but with the guarantee, Sanral has been able to raise money at amounts reduced by 0.6 to 0.7 percent in interest." Fuzile was cut short by committee chairman Themba Mufamadi who implored him not to make pronouncements on Sanral until a Cabinet committee appointed on Friday tackled the problem.

"Cabinet is seized with it.... Once the process has been done, properly co-ordinated and there are responses that we can share with everybody else, National Treasury can come back... and that will be the right moment to deal with the issue."

Opposition MPs objected strongly to Mufamadi's decision.

The Cabinet committee, headed by Deputy President Kgalema Motlanthe, has to co-ordinate all work around the freeway project and safeguard Sanral's financial stability.

  • Wayne - 2012-05-08 16:18

    "The government can never walk away from Sanral's liabilities." By that you mean our tax money will pay for their incompetence.

      clifton.andrews - 2012-05-08 16:24

      Yeah - we are going to foot the bill for the roads - no question there. But when the Sanral Ship sinks, at least we wont be paying double because of crooked collection fees.

      Nosiphom - 2012-05-08 16:39

      Exactly Clifton. We want to pay for the roads and not the administration of the payment system making Gijima rich!

      Arthur - 2012-05-08 17:14

      Just posting the link for anyone who might have missed it - proof the fuel levy has and always will be a better bet than Scamrals etoll system:

      Nick - 2012-05-08 18:09

      The roads must be paid for. Infrastructure development and maintenance in this country cannot be allowed to stall. Why have a company collect toll fees though? Why tolls in the first place?? There used to be a dedicated road fund fuel levy - which was ended in 1988 – well, simple – re-introduce it. It then becomes a simple accounting process – by having around 10c a litre – more, if necessary – even 15 cents a litre – being ring-fenced for the Gauteng freeways. Simple. And it must be a provincial fuel levy – ie Gauteng pays for Gauteng. Just as the W. Cape would have to pay for the W. Cape roads, if necessary. This additional fuel levy would supplement existing budget allocations from national and provincial Treasuries for road construction and maintenance. Crucial for special projects - like the GFIP. No collection costs, no gantry’s, no labour costs, no dividends and other rubbish etc etc etc. Every cent would then go to the actual cost of rebuilding the highways – NOT into the coffers of some ‘lucky’ company who’s won the tender to operate the tolls. What I find absolutely gob-smacking is that the whole discourse has ‘eluded’ this topic. Surely – surely – anyone can see that a simple additional fuel levy – would be the most cost-effective and direct way of paying for these roads. So why the silence?? Why has govt gone ahead and awarded a contract to some company to collect tolls?? Surely anyone can see this is a far more costly and ‘roundabout’ way of doing things??

      Nick - 2012-05-08 18:13

      @ Nosiphom - exactly - well said! :) By having an additional fuel levy - ring-fenced for this project - every cent would go towards paying for the roads themselves. And not going into the pockets of some tender buddies to get personally rich - at the expense of the people of Gauteng, our country for that matter!

      Konstabel - 2012-05-08 18:28

      The ANC is lying again, SANRAL is already receiving R5 Billion from the National Treasury this year which is more than they would have collected in tolls even if the toll fees were not reduced! With the reduced rate SANRAL predicted that they will collect only R1.2 billion which was less than the costs of operating the e-tolling.

      George - 2012-05-08 19:14

      Ringfencing is a problem for national treasury. They can't deal with the accounting complexities. Imagine that. No wonder the AG is about to commit suicide in despair at this cANCer circus.

  • colin.dovey - 2012-05-08 16:18

    I can smell the strong odour of real panic in the air from the ANC mess.....

  • Arthur - 2012-05-08 16:21

    Sanral you're going to have to use your 6 months to think carefully about how you're going to pull those tolls down and sell them for scrap - because NOBODY is interested in your scam, nobody will use your etags and nobody is going to give you a red cent.

      David - 2012-05-08 17:24

      Ok, to help SANRAL, i am willing to smash all their sign boards on the side of the road. Just me and a 10 pound hammer. No payment needed!

  • Speed.E.ZN - 2012-05-08 16:21

    The embattled SA National Roads Agency (Sanral) can scrape by for the next six months in the absence of Gauteng freeway toll revenue - and it can go for another 6 years and i wont contribute ANYTHING to it, GOVERNMENT CAN A FOR THIS ABORTION OF A FREEWAY SYSTEM!

  • Alan - 2012-05-08 16:22

    I still aint gonna be paying Tolls after 6 months boet!

  • wepener - 2012-05-08 16:24

    Could be South Africa's first major bailout. Suppose we will have to pay for SANRAL's mistakes one way or the other

      Nosiphom - 2012-05-08 16:51

      But at least we will not be paying for the heavy admin linked to e-toll. Lets just pay for the roads finish.

      Belinda - 2012-05-08 17:23

      @Nosiphom, we have already paid for the roads, again and again in taxes per litre of petrol and in annual car licenses.

  • Melusi - 2012-05-08 16:37

    we don't care!

  • Nosiphom - 2012-05-08 16:38

    "He said that by underwriting the bonds, the government had limited the debt costs and had hoped to pass this saving on to motorists in the form of lower tolls" Should have been NO TOLLS - you can pass on the savings to us and not make us pay.

  • Sean - 2012-05-08 16:41

    Doesnt minister Nene mean "We will double cross that bridge when we get to it "

  • ntunjab - 2012-05-08 16:43

    Next time don't count ur profits on us (S.A citizens) deal wit it Sbu Ndebele

  • Allen - 2012-05-08 16:49

    If they had made the toll at say 20c/km, noone would have minded. They would have taken longer to pay for the roads, but their greed got in the way. Serves them right!!

      Belinda - 2012-05-08 17:33

      20c is still too much. 5c fixed for 5 years and no more than 10% annual increase. Zuma wants R100 million in bribe money for his arms deal with British Aerospace and Saab (that's what the rush is all about)

      valcooperRSA - 2012-05-08 18:49

      Why not just increase licence fees WC pays much higher licence fees than rest of the there are plenty vehicles up there surely a small hike in licence could make a difference....maybe that's why we have such well maintained roads in WC and we don't pay tolls or extra levy on fuel. Most big companies in WC have their vehicles registered up country because it is so much cheaper.

  • Marick - 2012-05-08 16:50

    I read an article recently (if only I could remember where) that said the current Sanral set up will cost R1 billion per year purely to administer the project. If the tolls were replaced by a Gauteng fuel levy increase, it would cost R4 million to administer. That would be a R996 million savings. R996 million... saved. R996 million.

      George - 2012-05-08 16:58

      It takes a financial genius like you to help National Treasury work its budget. You are nominated as the next DG. Please accept. The incumbent should be following the hapless comical Ali soon.

      Arthur - 2012-05-08 17:09

      ... You mean R996 million loss for Ali the Snake and cronies.

      stefan.vanderspuy - 2012-05-09 14:31

      This makes one want to puke!

  • George - 2012-05-08 16:56

    They should refinance. At least we are not losing R80 Billion of completely unwarranted money (after the R20 Billion cost) as originally planned by SCAMRAL with the obvious approval of Treasury. You caused the problem. You fix it. And hands off the public's money. Live within your means.

  • Carry - 2012-05-08 17:48


  • Ina - 2012-05-08 17:49

    "With the guarantee, we wanted to make sure that the benefits of the guarantee will lower debt costs on the users of the roads." Just who do they think they are kidding? Never heard such a lot of bolony, when we were set to be fleeced with the toll fees.Just wondering in 6 months time if we will be expected to pay R3 + per km? To make up for lost time of course! The mind boggles!

  • Carry - 2012-05-08 17:50


  • valcooperRSA - 2012-05-08 18:42

    Will the GEPF keep them going .....If I worked for gov I think I would be asking some questions about my pension how safe and solid is it.....Maybe these guys should have asked where the funding was coming from in the first place I hope sanral dies a painful death.

  • Alan - 2012-05-08 19:56

    Lets hope that SARNAL goes bust and closes it's doors !

  • Alan - 2012-05-08 20:02

    I disagree with increasing the licence fees as half of Gautengs drivers (of other color) drive unlicenced vehicles Put it into PETROL then ALL have to pay !!!!

  • ian.d.samson - 2012-05-08 21:35

    Crocodile tears! The country did very well prior to SANRAL's existence and will be better off once SANRAL is closed.

  • stefan.vanderspuy - 2012-05-09 14:34

    They should stack the gantrys on top of each other and have one huge bonfire...SANRAL dead and buried, bad idea, bad mistake, don't ever even think of e-tolls again.

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