Govt mulls more money for Sanral

2012-05-31 17:25
Cape Town - Government is considering an appropriations bill to help Sanral meet payments on its R20bn debt, while Nazir Alli will "stay put" as the road agency's CEO, Deputy President Kgalema Motlanthe announced on Thursday.

Briefing the media in Cape Town, he said a failure by the SA National Roads Agency  to meet its debt repayments would have dire consequences for both it and the country.

"Government has to look at other ways of servicing that debt, which means taking away money from other allocations... hence the consideration of introducing this special bill to enable government to continue keeping Sanral in a healthy state of servicing the debt," Motlanthe said.

Sanral has borrowed and spent R20bn on Gauteng's highways, including the installation of an electronic tolling system, the start-up of which has been stalled by a court order.

Sanral has to repay a total debt, including interest, of R58bn over the next 24 years.

On April 28 this year, the North Gauteng High Court handed down an order preventing Sanral from levying or collecting e-tolls, pending the outcome of a judicial review.

Moody’s Investors Service subsequently cut Sanral’s credit rating status to Baa2 with a negative outlook.


Last week, Finance Minister Pravin Gordhan approached the Constitutional Court in a bid to set aside the court order halting e-tolling.

Gordhan regarded his request as so urgent that he asked Chief Justice Mogoeng Mogoeng to convene the Constitutional Court during its annual July recess to hear the application.

On Thursday, Motlanthe argued, as Gordhan did in his application to the court, that High Court Judge Bill Prinsloo had ignored the principle of separation of powers.

"We take the view that the court judge Prinsloo over-stepped the line in terms of essentially imposing a moratorium on the collection of fees, which has huge implications, because Sanral has contractual obligations," he said.

"If there is delay in payment, the period is reduced and so it creates very serious financial challenges to government as a whole." The deputy president - who chairs an inter-ministerial committee handling the Sanral matter - was flanked at Thursday's briefing by Gordhan, Transport Minister Sibusiso Ndebele, Public Enterprises Minister Malusi Gigaba, Minister in the Presidency Collins Chabane and Environment Minister Edna Molewa.

Cabinet appointed the special committee a month ago to co-ordinate the government's response to the court judgment and ensure Sanral’s financial stability was not compromised.

Gordhan told journalists that the appropriations bill under consideration would cover the period up to the end of this year.

R270m loss a month

He said Moody's estimate was that Sanral would lose R270m a month for each month toll fees are not collected.

"That could increase, if you take certain operational costs and so on, by some estimates [to] R500m to R600m per month.

"We could be looking at a period of between now to the end of the year, including any debt repayments that Sanral has to undertake, and we believe there is a payment due in January [next year] that will also have to be taken care of."

Gordhan said the additional appropriations would "try to take the next period, of possibly six months or so, and give both Sanral and its debtors the assurance that government is setting aside the money to meet the cash flow requirements of Sanral".

He emphasised that the budget deficit would not be increased.

"Let me say very emphatically... that nothing that we do is going to increase our deficit. Everything... will be within the current fiscal envelope.

"The deficit remains intact and we'll have to find the money in some other way. That would mean either raising user-charges, or taxes, or 'haircuts' in government, or whatever the case might be. We'll see what the best option [will be]."

Gordhan noted that Parliament would soon go into recess, "so when we come back, we'll have a better idea of whether we need the additional bill, where we're going to get the money from, and what are the amounts which need to be allocated to Sanral".

Motlanthe, responding to a question, re-affirmed Cabinet's decision to impose the e-tolling system.

Alli to remain CEO

"As of now, the decision of Cabinet stands."

On Sanral CEO Nazir Alli, who resigned a month ago, Motlanthe said he would remain in place.

"There is no search for a new CEO," he told journalists.

Asked if this meant Alli had withdrawn his resignation, he said Sanral's board had received the resignation, but Alli had proffered it in the belief that he was not contributing towards solving Sanral's problems.

"We received a letter of resignation... [but] indeed the problem did not revolve around him... So there was an understanding he stays put."

The board had still to formally deal with the matter.

Ndebele told journalists what Alli had been trying to do with his resignation was say: "If I'm the problem, I want to remove myself."

However, the government felt Alli was not the problem.

"So that [his resignation] is not on... So we need to continue, particularly in this [coming] period, because we need all the experience that we have... we want all hands on deck," Ndebele said.

In a statement later on Thursday, the SA Federation of Civil Engineering Contractors (Safcec) welcomed Alli's decision to withdraw his resignation.

"[Safcec] is looking forward to continue to working together with Sanral in a constructive manner in improving the road infrastructure of South Africa," it said.
Read more on:    sanral  |  kgalema motlanthe  |  nazir alli  |  johannesburg  |  tolls  |  transport

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