Johannesburg - The South African National Roads Agency, which is facing resistance to a toll-fee plan on freeways around Johannesburg and Pretoria, said investors are reluctant to provide more funding as it runs out of cash after delays to the project.
“Sanral has almost totally depleted its available cash,” Vusi Mona, general manager of communications for the Pretoria-based state-owned company, said in an e-mailed response to questions yesterday.
“We’re not able to fund ourselves any further, due to investors not feeling comfortable with our risk profile.”
The electronic tolling system in South Africa’s Gauteng province, the main commercial hub, was due to start this month and has been repeatedly delayed after opposition from drivers, opposition parties, labor unions and car-rental agencies.
While the infrastructure is ready and available, Sanral still needs President Jacob Zuma to sign the relevant bill into law, enabling the company to go ahead with the project, Mona said.
Sanral borrowed 20 billion rand ($2.1 billion) to fund the Gauteng Freeway Improvement Project, some of which was completed before the hosting of the 2010 Soccer World Cup.
It has debt, including interest, of 65 billion rand and 1.48 billion rand of bonds which reach maturity at the end of October, according to data compiled by Bloomberg.
Yields on the company’s 7.16 billion rand of notes due July 2020 have jumped 95 basis points, or 0.95 percentage point, this year to 7.82 percent yesterday, compared with an increase of 98 basis points in similar-dated government debt.
The government in May last year said it guaranteed 56 percent of Sanral’s 37.9 billion rand principal debt at the time and is also liable for unguaranteed debt of 14.1 billion rand.
No Assistance
“We’ve requested further assistance,” Sanral’s Mona said, adding that the lack of funding is also affecting maintenance on existing toll roads.
The “government is not in a position to provide any further assistance, other than the guarantee.”
The National Treasury said it hasn’t been asked to provide more funding.
“Treasury hasn’t been approached for further financial assistance for Sanral,” it said in an e-mailed response to questions yesterday.
“Such assistance would be hard, if not impossible, given the difficult economic environment we’re in.”
The 2.2 million-member Congress of South African Trade Unions, the country’s largest labor grouping, has rejected the tolls and urged motorists not to pay, organising protests in Johannesburg and Pretoria earlier this year where groups of people intentionally drove slowly to stall traffic.
The government in October lowered the fees after the nation’s Constitutional Court overturned overturned a lower court ruling blocking the tariffs.
Project Losses
Finance Minister Pravin Gordhan is limiting spending growth for the next three years to rein in the fiscal deficit as slowing growth in Africa’s biggest economy amid mining strikes and a recession in Europe curbs exports and curtails tax revenue.
The National Treasury last year gave Sanral 5.75 billion rand to help pay for the improvement of 185 kilometres (115 miles) of highways around Gauteng.
Kapsch TrafficCom AG, an Austrian maker of road-toll systems that will collect the fees, posted three straight quarterly losses in the fiscal year ended March 31, partly because of delays.
The company said the project would boost revenue by more than 50 million euros ($66 million) a year. - Bloomberg News