Sanral facing financial challenges

This was said Sanral’s spokesperson, Mr Vusi Mona.

Mr Mona was responding to the statement released by Opposition to Urban Tolling Alliance (Outa) on Wednesday last week.

In a statement, Outa’s chairperson, Mr Wayne Duvenage, said that the delays of e-tolls in Gauteng have cost the agency. He added that Sanral has itself to blame.

“Besides a six month period when e-tolling was interdicted between April 29 and mid-September 2012, Sanral has been free to launch its plan. It proclaimed with vigour in the Constitutional Court in August 2012, that it could and would start e-tolling within weeks of the interdict being set aside. Ten months have now passed since that ruling in its favour and one has to ask why it has not launched as quickly as it said it would,” says Mr Duvenage.

He added that the e-tolls project is too complicated to launch.

“The authorities have underestimated the backlash from society, which is the result of arrogance, poor public engagement and a lack of transparency by Sanral throughout the e-toll debacle. The multitude of ‘after the fact engagement sessions’ have been meaningless talkshops with no change of heart displayed by them, other than to soldier on and spend millions of Rands on a wasted marketing campaign aimed at trying to convince society to buy into their ill-conceived plan,” he said.

He added that reports that Sanral is broke, are surprising.

“We are also surprised to read in the report of their funding shortages, a possible impact on maintenance of existing toll roads. What is happening to the funds collected from users along these routes, which are supposed to be used to maintain them? Treasury managed to find R5,7-bn in February 2012 to reduce the burden that Sanral had encountered over the e-toll matter, which at that stage, prior to the interdict, was already a year behind its initial launch date. We simply cannot see government allowing Sanral to fail. Its function is too important to allow that to happen and we trust this is not a red herring to try and garner society’s sympathy and support for e-tolling,” said Mr Duvenage.

He added that if government chose to fund the improvements of the Gauteng roads by fuel levy, Sanral would not be having financial challenges now. “Had government applied a 10c increase to the fuel levy in 2006 to fund the GFIP, when the road project was hatched, we would have raised over R17-bn to date. This would include the R5,7-bn allocated in February 2012, which would have covered the capital costs of the freeway. As a result, Sanral has wasted time trying to implement a grossly flawed plan to toll Gauteng freeways and we have lost an opportunity to reduce this debt. Its e-toll plan is grossly inefficient and simply too expensive, with hundreds of millions of Rands planned to go off-shore. It will never obtain the required levels of compliance from a society that has lost all respect and trust in Sanral,” Mr Duvenage said.

Mr Mona said that to say Sanral is broke, is factually incorrect.

He said that the agency operates two portfolios, toll roads and non-toll roads.

He said that only the toll roads portfolio has some financial challenges.

“The non-toll portfolio consists of funds from the national fiscus, received from National Treasury, to the amount of approximately R10-billion per annum. These funds are used by Sanral to manage its non-toll network which accounts for 84 percent, 16 584 km of the total national road network of 19 704 km. These funds are used for non-toll roads only and the agency continues to run its business as per usual with the funds received from the national fiscus,” Mr Mona said.

He added that the second portfolio accounts for 16 percent of the total road network and constitutes agency tolls which is 1 832 km and those run by concessionaires, 1 288 km.

“The agency tolls are financed through the capital markets by issuing bonds and the ones operated by the concessionaires are financed through private sector capital on a build, operate and transfer basis. Importantly, there is no cross-subsidisation of funds between the toll portfolio and the non-toll portfolio. There are no funding challenges with the agency’s non-toll portfolio,” Mr Mona said.

He confirmed though, that there are challenges faced by the toll portfolio.

“With regards to its toll portfolio, Sanral has almost totally depleted its available cash. Sanral is not able to fund itself through the capital markets under the present circumstances. It is for this reason that the agency has not been to the markets since October 2011. Notwithstanding our challenges on the capital markets we are grateful for the assistance from the commercial markets,” Mr Mona said.

He added that this has affected Sanral’s plan.

““If Sanral is to deliver on its mandate, it is vital that e-toll must go-ahead. It is disingenuous of Outa to blame the agency for trying to use the toll portfolio’s financial challenges to force the President’s hand to sign the Transport and Related Matters Amendment Bill. Sanral implements government policy. At this stage Sanral is awaiting the signing of the bill by the President. Thereafter, the Minister may conclude the process to publish the final regulations and notices. Once published, tolls will commence within 14 days of the date of publishing,” Mr Mona said.