Toll profit remains classified

2013-12-01 14:00

Secrecy suggests ‘concealment’on the part of government.

South Africa’s three private concession holders for toll roads will collect at least R60 billion for the 30-year concession, but it remains a secret how much of this is profit.

The Mooi River toll plaza on the N3 between Johannesburg and Durban will collect R1.3 million in toll fees today alone, and about ­R45?million during December.

All three concession holders say they spend large amounts of money on the construction and maintenance of their roads, but they did not want to disclose any information about their toll incomes.

City Press’ sister publication, Rapport, asked Bakwena, which manages the N1 and N4 toll networks in Limpopo and North West, N3 Toll Concession (N3 to Durban) and Trans African Concessions (Trac, N4 between Pretoria and Maputo) about their finances.

On the basis of figures from the SA National Roads Agency Limited (Sanral) and the concession holders’ own traffic statistics, we have been able to make some calculations about incomes.

The calculations show:

»?Sanral’s 41 tollgates brought in R2.1 billion this year.

On the other hand, the three private concession holders manage 32 tollgates where the average fee is R8 more expensive than Sanral’s; and

»?If Bakwena, N3TC and Trac ­together collect as much toll money as Sanral annually, they will bring in a whopping R60 billion?in 30 years.

This calculation does not take into account any increased revenue from higher traffic volumes.

The three concessions end in 2031, 2029 and 2028, respectively.

According to Bakwena, its expenditures on highways under its control – which include construction, maintenance and financing of loans – amount to between R8 billion and R10 billion over 30 years.

Trac says the initial cost for the upgrading of its share of the N4 is R1.3 billion (in 1997 rand values).

Trac also spends around R90 000 per kilometre annually to maintain its 550km of the N4. That’s about R50 million per year.

“Nobody sees toll?roads as an opportunity to make large amounts of money. We offer our investors an opportunity to earn a steady growth in their investments,” says Graeme Blewitt, Bakwena’s CEO.

He says Bakwena’s shareholders are large investment and pension funds.

“The project’s annual income can unfortunately not be disclosed because Trac is a private company,” says Graham Esterhuysen, the concession holder’s CEO.

N3TC referred Rapport to ­Sanral. Sanral referred us to the companies themselves.

The spokesperson for Old Mutual, which, along with Australian investment bank Macquarie owns two investment funds that have shares in all three concession holders, said the funds were “unsure whether confidentiality clauses prevented them from discussing the information in (Rapport’s) questions”.

According to Sanral’s annual report, the income that concession holders are allowed to pay to their shareholders is restricted by several mechanisms. Exactly how is unclear.

Legal expert Professor Marinus Wiechers said the secrecy surrounding the toll issues indicates “concealment” by the government.

The government should “come clean”, Wiechers said.

And what about Sanral’s books?

In the past year, Sanral spent about R1 billion more on the routes than motorists paid for, and it had to obtain an extraordinary concession from the government worth R5 billion. Sanral also borrowed a further R5 billion from private ­institutions to finance its toll ­activities.

Sanral’s heads have every reason to smile.?The total compensation for Nazir Alli, Sanral’s CEO, rose by more than a million rand. He pocketed a total of R3 million. In 2011/12, his total compensation was R1.9?million.

Though the agency had fewer nonexecutive directors, the combined directors’ fees for the remaining seven directors rose by R2?million.

Sanral did not reply to Rapport’s questions about these increases.

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