E-tolls have not bankrupted us: Sanral

The South African National Roads Agency Ltd (Sanral) says that while non-payment of e-tolls has had a negative impact on its debt levels, it remains solvent.

On Monday, Moody’s Investors Service changed the outlook on Sanral’s issuer rating from stable, to negative, citing a decrease in its financial strength.

Moody’s also lowered Sanral’s Baseline Credit Assessment (BCA) to b2 from ba3.

“The non-toll portfolio, which covers 85% of the national road network, is healthy,” said Inge Mulder, chief financial officer of the national roads agency.

Mulder said that Sanral is not surprised by Moody’s downgrade.

“The ratings agency had warned at the time of the previous two ratings (July and November 2014) that any failure by Sanral to generate e-toll revenue leading to deteriorating cash flows and growing borrowing needs would lead to a downgrade.”

“We were ahead of forecast income at the time when the e-toll Advisory Panel was announced by the Gauteng Province,” the CFO said.

“Since then income has dipped appreciably and Moody’s itself makes a correlation between the increase in the non-payment of e-tolls and the decision by the Gauteng Province to establish a panel to assess the socio-economic impact of e-tolls – something that could have sparked speculation among the general public that the e-toll project may be abandoned.”

The agency said it will await the outcome of the process led by Deputy President Cyril Ramaphosa on e-tolling to provide policy clarity as well as the funding model for the Gauteng Freeway Improvement Project (GFIP).

“With policy certainty, we can devise a plan to repay our debt which should improve our rating,” Mulder said.

Sanral operates two portfolios – toll roads and non-toll roads.

The group said that the non-toll portfolio consists of funds from the national fiscus, an amount of approximately R10 billion per annum.

These funds are used by Sanral to manage its non-toll network which accounts for 85% of the total national road network of 21,403 km. “There are no funding challenges with the non-toll portfolio. It’s business as usual,” Mulder said.

“The second portfolio accounts for 15% of the total road network, and constitutes of agency tolls (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,” Mulder said.

More on Sanral

E-toll non-payment hits Sanral hard

Sanral on standby to implement e-toll changes

Sanral shutting e-toll shops


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E-tolls have not bankrupted us: Sanral