Delay gives Sanral time to think

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The SA National Roads Agency Limited (Sanral) has managed to succeed where audacious others have failed: it has made bedfellows of implacable political opponents Cosatu and the DA.

The two were so opposed to the outrageous e-tolling system that they were planning to paint the highways and byways red and blue, marching together as one in their opposition to the unpopular road tax.

Now that Transport Minister S’bu Ndebele has ordered that the board of directors delay the implementation of the e-tolling system in Gauteng, will Sanral default on the loans it acquired to set up the system or is it going to pass the buck onto the National Treasury?

Now that things have gone belly up, how is the organisation going to convince investors that it can be trusted with their money?

Sanral rightly invited the wrath of business by the way it went about implementing the e-tolling system. It was clumsy and was a good lesson on how not to do things.

Sanral’s lieutenant, Ndebele, decided to retreat and told the organisation: “You are on your own now.”

The SA Chamber of Commerce and Industry (Sacci) and Business Unity SA (Busa) were rightly concerned about the intended toll.

Sacci said yesterday the postponement of the system would provide Sanral with an opportunity to reassess the methodology and cost of tolling in Gauteng.

It said: “Sanral should reconsider the cost of maintaining physical e-toll stores in relation to the utilisation of existing infrastructure in local service stations, post offices or supermarkets, much as is the case with the cellphone ‘pay as you go’ air-time system.”

Busa said it believed that an excellent opportunity had been created for a serious in-depth consultation on alternative modalities to finance the much-needed upgrading of roads.

 

Markets

Financial markets have become resilient to bad news. Stock markets fell in Asia yesterday after Standard & Poor’s (S&P) cut the credit rating of nine euro zone countries on Friday, including the coveted triple-A grades of France and Austria.

The Sydney Morning Herald reported Tokyo was 1.53 percent lower, Hong Kong lost 1 percent, Sydney slipped 1.17 percent, Shanghai gave up 0.68 percent and Seoul shed 1.34 percent.

However, the shock waves soon ran out of steam as the trading day moved westward. Even in South Africa, which saw Fitch Ratings change the outlook on the country’s BBB+ credit rating from stable to negative, the market rebounded.

The JSE all share index closed 0.8 percent up on the day at 33 205.01 points, from 32 927.4 on Friday. The rand strengthened to trade at R8.0895 to the dollar by 5pm, after weakening to R8.18 at Friday’s close.

European markets were calm, possibly reassured by an announcement from Moody’s Investors Service that it would not follow S&P’s move on France – at least for the moment. Though heads of a European Commission, European Central Bank and International Monetary Fund mission will head for Athens for talks on a second rescue package later this week, market concerns about the troubled euro member were on the back burner.

It is two years since questions about Greece’s sovereign debt first hit the headlines and markets are apparently resigned to its fate – default in one form or another.

And the sinking of the Italian cruise liner Costa Concordia occupied more media space than the actions of the rating agencies or the cost of European debt.

The shares of the parent firm Carnival fell 23 percent on the London Stock Exchange, according to Bloomberg. And the ship’s insurers may face total costs of about E405 million (R4.2 billion). page 18

 

AfriSam

It’s tempting to describe AfriSam as the Greece of the cement industry and in this context, to see the Public Investment Corporation (PIC) as Germany. And then to take the analogy a little further it might be tempting to liken the creation of debt-riddled, black empowered AfriSam to Greece’s entry into Euroland: both were extremely poorly thought through.

Of course, like all analogies, this one is flawed. AfriSam is fundamentally much sounder than Greece. Its debt problems were foisted upon it by a number of key decision makers who believed that the good times would continue indefinitely and that therefore using an excessive amount of debt to fund the purchase of an overpriced asset would work out in the end.

While some may think that it is easy to criticise in 2012 with the benefit of hindsight, the reality is that back in 2006/07 there were already concerns about the deal.

Similarly, Greece should not have been allowed into Euroland and probably would not have got in without the “help” of the likes of Goldman Sachs.

However, if AfriSam’s debt is “restructured” – to use that quaintly benign term so liked by EU executives – there is a good chance that it will enjoy a sound and prosperous future.

It is difficult to say the same about Greece, although a debt restructuring will certainly help it on its way.

Where the analogy takes most strain, is likening the PIC to Germany. Unlike Germany, the PIC is approaching this very difficult situation from an enlightened perspective and realises that in order to effect some sort of rescue, it, along with almost everyone else, will also take some pain.

Of course the precise amount of pain taken by the different players in the AfriSam saga may never be known, but it does seem likely that the Bunker Hills “investees” will not suffer too much.

 

Edited by Banele Ginindza. With contributions by Wiseman Khuzwayo, Ethel Hazelhurst and Ann Crotty.


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aNON, wrote

IOL Comments
08:44am on 18 January 2012
IOL Comments

my comment on this was not published so i try again! the austrian co [allegedly] pays a 'commission' to a middle man (agent) to secure the contract to e-toll. the agent [allegedly] pays bribes to certain officials. the money is [allegedly] channelled through a maze of virgin island, Gibraltar and other such 'shelters' before [allegedly] eventually finding its way to the 'family trusts' of the officials be they elected, deployed or job for pals. thus the cycle is completed. if the austrian co does not get paid for the 'job' all that 'commission' money just get gobbled up by the agent and the officials. this is [allegedly] the way anc does business and ensures the money sticks to its cadres. PROVE ME WRONG!!

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Anonymous, wrote

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08:14am on 18 January 2012
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SANRAL don't need time to think. They just need the SA treasury to pay the bonds taken out. The public have already paid for these roads that SANRAL wants to toll. Paid out of fuel levy, emissions tax and annual license fees. So stop trying to rip the SA public off SANRAL.

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Neil McCafferty, wrote

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07:59am on 18 January 2012
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Ultimately we can laugh this off as a total clusterfcuk by inept politicians. Why? Because nobody with any sense will pay. Like traffice fines, simply refuse to pay and pitch up in court as is your right ASk a thousand questions and see how the wheels of justice clog up. Rolling mass action by the taxpayers!! yeeehaahh

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Anon E Mouse, wrote

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07:38am on 18 January 2012
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I bet some South Africans involved with the negotiations and "upgrading" of the system thus far have already guaranteed a fat pension. They can now resign and retire already, even though the only income from the project has been unethical deductions from e-tag accounts for services not provided. These people, while benefiting financially, will never be held personally responsible. The Asset Forfiture Unit is leashed.

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Ringmaster, wrote

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07:31am on 18 January 2012
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The country is a circus, and the clowns are running the the show.

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George, wrote

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06:55am on 18 January 2012
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Through all of this...Cosato probably has the clearest view of a future outcome...their members should not pay for actual Road usage (toll system), neither their national members ( fuel levies), but pay the debt through the fiscus ( tax ) which can discriminate via adjusting the tax tables for highend earners SO ....guess who will be paying in the end...that famous group of previously advantaged South Africans!!!

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Frank Hartry, wrote

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07:38pm on 17 January 2012
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Good people. Through a fuel levy which has raked in billions of rands over the years, these roads have been paid for ten times over. Now some are suggesting an increase of the levy when this ANC led government is running rampant with its looting of taxpayers money. Yet another auditor's report has exposed the corruption. Its as bad as last year and yet none of the looters have been fired and no-one fired. Like Eskom with its electricity blackmail, Ndebele is inviting other costly alternative to the tolls even though every time we pay for petrol, we pay for the roads. Ndebele thinks we are plain dumb.

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Anonymous, wrote

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04:37pm on 17 January 2012
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@ MO - adding 5c to petrol or as has been reported before R10 to a car licence which would cover the costs is not an answer. Firstly because when have the ANC or any agency under them done anything that is even remotely logical? Secondly this would not allow the blatant fraud and corruption that the ANC stands for. They would not be able to randomly decuct funds at will from the tax payer, nor would they receive the massive kickbacks from foreign companies who see SA as an open breeding ground to steal and corrupt.

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MO, wrote

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03:39pm on 17 January 2012
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Why dont these DHeads just add 5c onto a litre of fuel in Gauteng, this will ensure that road users will contribute, visitors entering Gauteng pay a flat fee.Get the Sanral CEO to come see me,ummm Blue light brigade pay double,just in case they shoot or ride someone over.

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gatvol, wrote

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03:19pm on 17 January 2012
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The b*****s who hatced this scheme in the first place, without ever thinking about consulting the south african motorist and then hoping they would get away with it by implementing it in such a way as to appease the masses by exempting taxis and busses!should be dragged out of their little ivory towers into public spaces and be shot like dogs, just in case any other m...f....r gets the same idea in the future! bastards!!!

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mark, wrote

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03:01pm on 17 January 2012
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it also works in Singapore, however they have many alternative choices of routes and a fantastic public transport system that works so well you can set you watchclock on it.

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ADW, wrote

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12:34pm on 17 January 2012
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Nope, that is a misnomer. They use e-tolling extensively in the USA and Australia; see cities like NYC, Orlando, Melbourne etc. However, those cities tolled the freeways when they were built, SANRAL upgrading existing freeways and slapped tolls on them with minimal public-participation and stakeholder consultation. This is their downfall. You cannot expect urban-commuters to stop every 10km at a tollbooth to pay a collector; however, you also cannot unilaterally toll existing routes with minimal public input and few public-transit options.

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ET1, wrote

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10:21am on 17 January 2012
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Hopefully people will try to think in future before they implement such ridiculous ventures such as e-tolling, especially at the prices they wanted. It's a very slim hope, but hey, you have to take what you get...

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Gadaffi, wrote

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10:19am on 17 January 2012
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@GF - what a genius idea - having to stop on our highways in order to pay a toll....WTF

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Logs, wrote

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08:58am on 17 January 2012
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Sanral's CEO should resign. Pathethic leadership.

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GF, wrote

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08:56am on 17 January 2012
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What other country in the world successfully uses this imported Austrian electronic tagging system and who authorised SANRAL to go this route instead of using thousands of unemployed South African to operate toll booths which drivers would pay the toll for as they enter. If you Google E tolling or E tagging all you get is South African usage.

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