Sanral says it needs to ramp up funding
State-owned national roads agency Sanral says it has become clear that without further funding it cannot continue the growth trajectory and network expansion of the previous two decades.
State-owned national roads agency Sanral says it has become clear that without further funding it cannot continue the growth trajectory and network expansion of the previous two decades.
The agency cut its loss to R260.4m for the year to endMarch from a R4.96bn loss a year earlier. The improvement is attributable to a slight increase in government funding and a 12.4% jump in revenue from conventional “boom down” toll roads, while a nearly 14% cut in maintenance spending and lower finance costs cut expenses.
However, the sustained nonpayment of e-tolls in Gauteng continued to weigh on its results, Sanral said in its annual report. It made provision to write off R6.06bn of e-toll debt.
Sanral has two primary sources of income: nontoll roads funded by the Treasury; and toll roads funded by issuing bonds on the capital markets or through concessions to private sector consortiums.
Sanral spokesperson Vusi Mona said Sanral was making every attempt to collect the tolls owed to it, including through civil and criminal prosecutions.
For the first time, Sanral had to transfer R1.67bn from nontoll business to the toll road portfolio. This transfer came in addition to a special Treasury grant of R406m.
The spending cuts were worrying, said Chris Malikane, a development economist at Wits University. “The economy is in desperate need of a demand injection; Sanral should be one of the critical instruments in an economic stimulus through national road construction.”
Malikane said that about 70% of SA’s roads needed repairs, amounting to more than R70bn, and that 58% of the roads were gravel, providing an opportunity to roll out infrastructure that will boost productivity and create low-skill jobs.
Sanral’s funding challenges underscore the need for a new developmental financing model for state-owned enterprises to be considered “given the strategic and long-term nature of its investments. This is urgent because the decline in maintenance and repairs expenditures will lead to higher costs to the public in future.”