SANRAL's R7bn loan from BRICS requires clarity
OUTA is concerned that SANRAL has taken out another R7bn loan, thereby entrenching itself deeper in debt.
The loan was granted by the BRICS New Development Bank (NDB) and announced on Monday but still requires ratification by the board.
SANRAL already has a sizeable interest-bearing debt of R47 billion.
"What the public requires is transparency on why this loan is needed, especially in light of the fact that the NDB statement says this funding is being applied to the National Toll Roads Strengthening and Improvement Programme,” says Wayne Duvenage, OUTA’s CEO. “As far as we are concerned, funding for tolled roads comes from the collection of tolls on those road networks and we would like to know if this funding is going toward the GFIP bonds (for e-tolled roads) or other SANRAL-managed toll roads that are supposed to be self-funding. We don't believe these funds are being allocated to the concessionaire tolled routes (N3TC, Bakwena and TRAC) and would be extremely concerned if this was the case.”
The NDB statement says that the R7bn loan is issued in rands and guaranteed by the SA government. “The Project is designed to improve key national roads in South Africa with the objective of reducing transportation costs in the country. The scope of the Project includes rehabilitation of the pavement for the existing toll sections of national roads, construction of additional lanes to widen such roads, and rehabilitation of related infrastructure, such as bridges and intersections,” says the NDB.
This indicates that some of the funding may be for routine maintenance of existing toll roads, which OUTA believes should be covered by the existing toll collections. When it comes to the 187km Gauteng e-toll freeway route, we are all aware that SANRAL’s e-toll scheme has failed dismally to fund the debt and has resulted in a bailout from Treasury and reshuffling of Department of Transport funds.
What is required is clarity around the extent and use of Treasury and other bond funding, and the allocation of these funds to manage SANRAL’s debt and finance specific road projects. This has been a significant problem with our SOEs in the past in that the use of funding from the various income streams, be it Treasury, lending institutions or other revenue collection mechanisms, very often lacks clarity and transparency, leading to greater public mistrust in Government’s use of taxpayers’ money.