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The South African National Roads Agency is not raising more debt in the bond market and is relying on its budget and loans from development finance institutions to fund future road projects, CEO Skhumbuzo Macozoma told journalists on Tuesday.
Macozoma joined Transport Minister Blade Nzimande at a briefing about the agency's key infrastructure projects in relation to the objectives of the economic stimulus package.
Nzimande shared with journalists several "shovel-ready projects" to be undertaken by Sanral to improve road infrastructure and create jobs in the near-term. In the past financial year Sanral completed road infrastructure and maintenance projects to the value of R521m in the Eastern Cape. The agency also upgraded roads.
Looking ahead, Sanral intends for the R3.5bn budget on the stimulus package to unlock a further R13.1bn investment for road infrastructure, Nzimande said.
Macozoma said this means Sanral will supplement the R3.5bn with R9.6bn from its conventional budget – allocated by Treasury – to support projects up to the value of R13.1bn.
For the 2017/18 fiscal year, Sanral was allocated R15bn and of this R8bn was allocated towards maintenance and the rest for capital projects. This year R21bn has been allocated. Over the next three years, Treasury's total allocation to Sanral is R67bn, Macozoma said.
Raising debt
Responding to a question about whether Sanral is still approaching the bond market for borrowings, Macozoma said that the moratorium placed by its board, preventing it from doing so last year, had been lifted.
"There was period where board took a resolution to stop issuing bonds in the bond market, that was informed by our financial position at the beginning of last year. The projections of our going concern was uncertain," he said.
"Towards the end of last year, the position improved and the board rescinded the decision to actively play in the bond market. Although we have approval from the board to do so, we are currently in engagements with private investors to see if we can secure funds through that vehicle," he explained.
Moloto Development Corridor
Among the projects to prioritise is Moloto Road. A total of R3bn has been set aside to upgrade the Limpopo and Mpumlanga sections of Moloto Road.
Further, a Moloto Development Corridor will be established - it is envisioned to link road to commuter rail. Nzimande said that government would look to fund the corridor from various sources, as there is no money to fund rail.
There had been talks that funding would come from the Chinese investors, but Nzimande said government would not limit its choices to the Chinese.
"There is also the African Development Bank as a matter of interest to which we can also turn," he said. The Development Bank of SA is another option.
Nzimande stressed that Moloto Road is a priority as the current road is not sustainable.
Sanral is also looking to secure R4.2bn in funding from the Brics New Development Bank for a new carriageway to be constructed on the N1 between Kranskop and Polokwane.
