South African National Roads Agency Limited’s (Sanral) executives have taken home a cool R24 million in salaries and bonuses amid a R1.1 billion loss for the group in 2015.
In its year ended March 2015, Sanral reported total revenue of R11.7 billion, and other income totalling R404.3 million.
With operating expenses hitting R10 billion for the period, the group highlighted an operating profit of R2.08 billion. This was substantially more than a profit of R289 million in 2014.
Income from investments added R578 million to the profit pool; however finance costs related to interest on financial liabilities amounted to R3.72 billion, dragging the company to a R1.1 billion loss.
The company suffered a R2.3 billion loss in 2014.
Sanral is a not-for-profit state-owned entity, and is primarily tasked with building and maintaining the country’s road infrastructure.
However, the company still needs to aim for profitability in order to pay off it’s debts, at R90 billion – R68.5 billion of which is owed within the next 10 years.
The bulk of the debt is tied to capital market loans.
Executive remuneration amounted to over R24 million for the group.
Sanral CEO Nazir Alli’s total pay came to R4.032 million, including a base salary of R2.214 million (up from R2.016 million in 2014) and a performance bonus of R1.27 million. Pension and other contributions amounted to R548,000.
Other Sanral executives took home R16.3 million in total, including R2.6 million for Sanral CFO Inge Mulder, and R2.9 million for engineering executive JJ Smit.
Non-executive directors took home a collective R4 million.
Alli reached retirement age in August, and was due to resign as soon as a new CEO has been appointed.
E-tolls still a problem
In its report, Sanral lists e-toll revenues to the tune of R3.8 billion for the financial year, excluding discounts.
E-toll opposition group, Outa, has raised questions over the amount, however, saying that Sanral’s own numbers show that for the year only R1.04 billion in e-tolls have been collected – 27% of the amount.
“This implies that Sanral believes the difference of R2.8 billion is collectible from the public, which is highly unlikely, even at the implied 60% discounts indicated,” it said.
Sanral reported that 1.3 million e-tag holders were registered, which Outa points out was the same number reported for over a year. In the same time, E-toll revenues had halved, the group said.
Further, Outa highlighted comments by the auditor general which stated that, since the introduction of the revised e-toll fee structure, the project will continue and that uncertainty around the system has been removed.
Outa said that this implies that the scheme is now practical and able to collect the required revenue – which is simply not the case.
“If history is anything to go by (and it should be in this matter), compliance will probably never exceed 50% of the road users and there is no certainty of the scheme’s success in this regard,” Outa said.
“It has certainly failed as a user-pay mechanism and, on an international basis, similar tolling schemes generally fail at compliance levels below 80%.”