The lights from passing traffic stream pass a Sanral toll gantry on the N1 highway. Picture: Ihsaan Haffejee.

The plans of the SA National Roads Agency Limited (Sanral) to raise debt would depend on the agency’s business model and its leadership capacity, analysts said yesterday.

The state-owned company aims to resume the sale of debt in April after a 2011 auction failed because of delays in the implementation of electronic tolling, or e-tolling, in Gauteng.

“A roadshow will be conducted before we relaunch our auctions in April,” Vusi Mona, a spokesman for Sanral, said yesterday. “Investors are awaiting information on Sanral’s success in recovering the toll income from users as this will determine whether they invest further or withdraw their current investment.”

Lynn McGregor, a senior fellow at Stellenbosch University’s corporate governance unit, said investors’ appetite would depend on Sanral’s business plan going forward. “It really depends on whether they have a valid business plan.”

Investors would also look at the capacity of business leadership at Sanral, she noted.

“If I were an investor, I would also look at the capacity of the chief executive, the chairman, the minister which Sanral falls under and also the director-general of the department,” she said.

Furthermore, scrutiny of financial control would be prioritised, McGregor said.

Sanral finally rolled out e-tolling on Gauteng freeways last month after a series of delays caused by opposition from road users and trade unions.

The project, which remains unpopular among residents, automatically charges motorists using main thoroughfares between the cities and sends a bill through the post.

The proceeds from e-tolls since the system went live on December 3 last year are still being calculated.

So far, 963 420 vehicles have registered for e-toll accounts – a way for drivers to reduce the payable amount – compared with a target of 1.5 million, according to Sanral.

Azar Jammine, the chief economist at Econometrix, said the success of Sanral’s debt raising would depend on what happened between now and April following all the uncertainty that had been created over the company’s ability to raise money from e-tolls.

Jammine said it should also be noted that the Gauteng e-toll project was a very small part of Sanral’s business and investors would look at aspects other than this project.

FNB consulting economist Cees Bruggemans said Sanral must be confident that the market felt that its business model was functional and ready to raise debt and that it would be able to generate revenue and service its debt.

“It would be interesting to find out who will agree with that,” he commented.

Bruggemans added: “I think Sanral would offer debt above the market rate at this point in time, compared to what they would have paid before the e-tolls became an issue.”

Mona said Sanral was confident it could service its debt. “Even though the numbers must still be verified, from the initial indications we are satisfied that we are on track to meet our debt obligations.”

The company had R3.8 billion of debt maturing this year, he said.

Sanral is benefiting from an explicit guarantee from the Treasury on R31.9bn of borrowings for the e-toll project. The agency received a one-time amount of R5.7bn to fund a reduction in toll tariffs required to start the system.

“This was also done to ensure Sanral does not breach the approved debt limit of R59bn over the forthcoming years,” Mona said. “The guarantee does not have a maturity date, and the current debt curve reflects repayment in approximately 20 years, assuming no further expansions on the existing or new toll roads.”

Sanral upgraded Gauteng’s highways to ease transport constraints in the build-up to the 2010 World Cup.

While the roads agency was “heartened” by the public’s response to e-tag registration, the company had to deal with a cyber-attack on its online e-toll account management website, Mona said.

The security issue was resolved yesterday, he said.

“Some people may not like e-tolls but launching an attack on law abiding citizens, just because they registered an e-toll account, is appalling.”