Sanral racks up R3.3 billion in “irregular” expenditure
The Democratic Alliance has revealed that South African National Roads Agency Limited (Sanral) recorded R3.3 billion in irregular expenditure for the 2012/13 financial year.
The state entity’s annual report was tabled in Parliament on Thursday (12 September).
Sanral has endured a prolonged delay in the implementation of its e-toll plans as part of a Gauteng Freeway Improvement Project (GFIP), thanks in large part to legal action taken by the Opposition to Urban Tolling Alliance (Outa) who claims that most road users opposed to such a system.
On 25 January 2013, the Constitutional Court granted Outa leave to take the matter to the Supreme Court of Appeal in Bloemfontein. The case is expected to be heard in September.
Ian Ollis, DA shadow minister of transport said in a statement on Thursday that Sanral had incurred R2.09 billion in irregular expenditure during the 2011/12 financial year.
Details of the irregular expenditure in 2012/13 include:
- R2.4 billion through a procurement model for routine road maintenance projects, without approval of the Minister of Finance and adherence to procurement regulations;
- R594.3 million expenditure on non-competitive bidding, approved by Sanral’s Contracts Committee without notifying the Auditor-General; and
- R233.1 million on supplementary agreements for newly incorporated roads, deviating from Supply Chain Management regulations.
“Sanral has repeatedly demonstrated that it views itself above the public by forcing e-tolling in Gauteng despite widespread opposition. The entity has now demonstrated that it also believes that it does not have to adhere to financial mismanagement policies and legislation,” Ollis said.
“Sanral is not above the law and should be held accountable.”
The DA said it will request that the portfolio committee chairperson, Ruth Bhengu, summon Sanral’s board chairperson, Tembakazi Mnyaka; Sanral CEO, Nazir Alli; and Transport Minister, Dipuo Peters, to Parliament to explain a lack of financial and legal compliance.
Last week, credit rating agency Moody’s Investors Service downgraded Sanral’s credit rating and placed it on review for further downgrade.
The decision was driven by the deterioration in the company’s cash flow, Moody’s said.
“This cash-flow strain has arisen from the prolonged delay in the realisation of e-toll revenue earmarked to repay Gauteng Freeway Improvement Project (GFIP) related debt, and casts doubt on the company’s financial health in the medium term,” it said.
Moody’s downgraded Sanral’s long-term issuer ratings to Baa3 (global scale, local and foreign currency) from Baa2, and to A3.za (South African national scale) from A2.za.
Sanral, the ratings group noted, has acquired debt of R20 billion to finance the GFIP, with 50% of the debt guaranteed by the government.
“Sanral’s debt stock has substantially increased to an estimated R36.2 billion as at 31 March 2013, up from R6.2 billion in 2007, mainly due to GFIP,” Moody’s said.
More on Sanral and e-tolls
No e-tolls in a DA-governed Gauteng
Sanral dismisses DA e-toll claims
R381 million to track down e-toll transgressors?
Sanral’s e-toll advertising budget soars
Sanral seeks R1.48 billion from banks
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