Running on empty: Huge debt takes heavy toll on Sanral
E-toll uncertainty renders its going-concern status as uncertain due to significant amounts owed to investors
The SA National Roads Agency’s (Sanral) status as a going concern is in doubt because of the significant debt owed to investors, transport minister Blade Nzimande says.
The agency, still struggling to generate cash from e-tolls, is one of the many state-owned entities that rely heavily on government bailouts. It has a government guarantee of close to R39bn.
Sanral needs at least R4.3bn for the next year to March 2019, of which R3.8bn is required to refinance maturing debt.
Earlier in November, Nzimande said the government had not made a decision to scrap e-tolls in Gauteng. That seemed to contradict the view of Gauteng premier David Makhura that they needed to be scrapped, and that they had no future in the province as long as the ANC was in charge. This e-toll uncertainty is also hurting collection.
In his medium-term budget policy statement in October, finance minister Tito Mboweni said the user-pays principle is fair if people want a properly functioning road transport infrastructure, and if Sanral is to be able to access funding from markets instead of relying on the Treasury.
Auditor-general Kimi Makwetu has also raised doubt about Sanral’s going-concern status despite the agency managing to cut its losses to about R260m in the financial year ended in March, from close to R5bn the year before.
In a reply to a question from an ANC MP in parliament last week, Nzimande said Sanral’s financial sustainability was healthy in all repects except for the e-toll portion of its business, which represents 1% of the total national roads.
“However, the e-toll uncertainty has rendered Sanral’s going-concern status as uncertain due to the significant debt owed to investors, which requires servicing,” said Nzimande.
“In order to circumvent either a qualified audit or an event of default, I have obtained the approval of the minister of finance to ‘un-earmark’ [R5.8bn] of non-toll funds to transfer to the toll portfolio. This will assist the cash-flow situation of Sanral for a period of 12 months from the date of the audit report,” the minister said.
Based on this support from the fiscus, he said the Sanral board has the confidence to approach the capital market in the near future to refinance some of its short dated bonds.
“I am engaging with the president and the minister of finance to find a lasting solution to the e-toll challenge, and it is my intention to have the premier of the Gauteng province involved in these engagements. What is important, beyond the GFIP e-toll challenge, is a need for consensus to be reached on how road infrastructure in SA will be funded going forward,” Nzimande said.