Treasury unlikely to give Sanral more cash

Ben Martins (Image: GCIS)

Transport Minister Ben Martins said in an interview with Business Day this week that he had not ruled out the possibility that the programme may need "some form of support" from the Treasury.

"I am not ruling it out completely. Obviously the first prize would be not to go to Treasury to ask for additional money," he said.

But Martins said he would have a clearer picture once he met Sanral's chief executive Nazir Alli to discuss finances with the agency, which falls under the Department of Transport. In February last year Finance Minister Pravin Gordhan allocated R5.75bn to Sanral to ease the pressure on the road agency's cash flow caused by the lack of toll revenue.

Sanral borrowed R20bn to fund improvements to roads under the Gauteng Freeway Improvement Project and is required to make regular payments to investors holding Sanral bonds.

Alli said on Monday (1 July) that the agency had been surviving on the R5.75bn - which had originally been meant to last until April this year - by delaying "major" maintenance work.

"We re-did all our sums. Sometimes you can postpone maintenance. The money we have will carry us to August," Alli said.

"What we have done is we have re-prioritised some of the major maintenance work across the portfolio," he said.

No direct approach

The National Treasury has not been approached for assistance. But Treasury spokesman Jabulani Sikhakhane said: "Such assistance would be hard, if not impossible, given the difficult economic environment which shows no signs of improving."

No date has been set for the implementation of e-tolling. Martins said the legislative process for the commencement of tolling had been completed and all the department was waiting for now was the assent from President Jacob Zuma before the final gazetting of the Transport Laws and Related Matters Amendment Bill.

The bill creates the legal framework for the collection of tolls and sets out the tariffs for the various classes of road user, as well as those who qualify for time-of-day discounts and exemptions, such as public transport operators. Tolling would be able to begin 14 days after the bill had been gazetted.

Meanwhile Alli said that Sanral "would probably" approach banks for additional funding

"We have not been issuing bonds. The market has been very clear with their message that they will not be lending us anything until the day that we can start tolling," he said.

Sanral has said that it expected to generate between R250m and R300m a month from toll fees once e-tolling started, but the agency has declined to say how long it will take for the system to reach this steady income level.

The money Sanral plans to borrow would be raised against the bonds it has issued under its global medium-term note programme - known as its GMTN programme - which are underwritten by a government guarantee. Ali said this money would be used to tide the agency over the first couple of months after the introduction of tolling while compliance builds.

"(The banks) will give us money on our GMTN, which is guaranteed," Alli said.

One of the central criticisms raised in the legal argument that has been made against the tolling plan is that there has been a lack of transparency around the e-tolling programme and too little consultation with the public.

Source: Business Day via I-Net Bridge