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Commercial Law news

Govt may face a R19 billion Sanral tolling-default bill

25 Apr 2012 09:42
The acting director-general of the National Treasury, Andrew Donaldson, said in court papers that tolling on the Gauteng Freeway Improvement Project (GFIP) must go ahead. He warned that if Gauteng tolls don't start on April 30, 2012, that will constitute a default, triggering the immediate repayment of the entire loan.
The government then might have to pay off immediately the full R19 billion it guaranteed in toll road debt, The Star reports.

Donaldson said the consequences for the country could be very serious. "The credit rating of (SA National Roads Agency Limited) Sanral in the money markets in the first instance will be severely affected [and, as a result,] the credit rating of South Africa, and therefore the government's ability to raise sovereign debt, would be in jeopardy." According to The Star, Donaldson said that if a country cannot raise funds because it has been downgraded, "it follows that it cannot meet some of its commitments, which in South Africa's case include such pressing needs as poverty alleviation and reduction of unemployment."

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