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Sanral loses R14bn in project funding opportunities

CEO blames this on the e-toll impasse and doubts about Sanral’s viability.
Skhumbuzo Macozoma says Sanral is looking to tap into the Infrastructure Fund to be able to deliver on some of its projects. Image: Supplied

The impasse over the controversial e-toll scheme and doubts about the financial viability of the South Africa National Roads Agency (Sanral) resulted in the agency losing two key project funding opportunities totalling R14 billion.

Sanral CEO Skhumbuzo Macozoma said the agency lost the opportunity to obtain R7 billion each from the New Development Bank (NDB) and the Multilateral Investment Guarantee Agency (Miga) and expressed concern about the uncertainty over the future funding policy of Sanral.

“On the toll side, you are seeing some severely constrained capex programmes due to, of course, the anti-toll sentiment in our country,” he told a Consulting Engineers South Africa (Cesa) Infrastructure Indaba this week.

Read: Government must ‘bite the bullet’ and make a decision on e-tolls, says Sanral CEO

“The key question that tends to hold us back is a chosen funding policy for infrastructure projects in this country,” he added.

Macozoma stressed that road funding clarity is absolutely critical and a decision must be taken on this issue.

Bonds ‘will mature’

He said Sanral has not been to the bond market since 2016, which “is not good” but has had some successful private placements with investors who trust the agency and know its brand.

But Macozoma said the most important issue confronting Sanral on the toll side is that it has obtained a lot of money from bond markets and “at some point those bonds will mature”.

“We are entering an era where for the next three or four years there is going to be some big bond maturities, which means we need access to finance for us to be able to do that.

“The current uncertainty in terms of funding policy is not assisting and we need to be able to deal with that,” he explained.

Funding allocations

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said National Treasury had between 2016 and 2020 already allocated Sanral R10.8 billion for the Gauteng Freeway Improvement Project (GFIP).

It accounts for about 51% of the freeway bonds for the overpriced upgrade and is on top of another grant of R70 billion – an annual average of R14 billion a year – for the same period for non-tolled roads.

“This has been the solution being practised for the past number of years and should continue to remain, as the entire country benefits from Gauteng’s freeway upgrade,” he said.

Time is being wasted

Macozoma stressed that on the funding side, Sanral has “reaffirmed government as the major funder for Sanral being a Schedule 3A entity and we will not abandon that”.

“Are we going to use private finance to develop road infrastructure or are we not? Because we are wasting time. There are a lot of opportunities that are slipping us by because of this uncertainty.”

But Macozoma noted Sanral will to continue pursuing private finance “even in the face of criticism and rejection of the toll model” and has seen opportunities to generate its own revenue.

Read: Sanral moves transformation into top gear

He confirmed Sanral is looking to tap into the Infrastructure Fund to be able to access funding to deliver on some of its projects.

Macozoma said 14 Sanral projects were gazetted by Minister of Public Works and Infrastructure Patricia de Lille as the new strategic infrastructure projects (Sips) and Sanral also has projects in the previous Sips, including the N3 and N2 corridors.

Expertise to share

He pointed out that Sanral has also decided to share its expertise “as a targeted objective” with South Africans as well sub-Saharan Africa.

“There is quite a lot of experience we have amassed over the years that we have now put together into advisory capabilities that we are sharing with other roads authorities across our continent and beyond,” he said.

Macozoma said the future of Sanral is important because it manages a 22 253km national road network, with a collective asset value of about R413 billion.

“It’s an asset that you don’t want to let go of in the country and collectively it is said to be the single biggest asset that we own in our country,” he noted.

Macozoma questioned if Sanral will remain a 25 000km road network authority, as it projects in its Horizon 2030 strategy, or if it is “going to expand to 50 000km or 70 000km as other corners of our country are proposing because we seem to be the most geared to be able to deliver”.

Sanral’s mandate

He said the future of provincial and local municipal roads authorities needs to be determined. Regulatory bureaucracy also needed to be unlocked as it affects how Sanral executes its work – such as environmental, mining and National Treasury guarantee approvals – to “free” Sanral to be able to deliver on the mandate it has been given.

Macozoma added that Sanral has initiated processes to review its mandate because it believes there are certain limiting provisions in the Sanral Act.

“We’ve looked at the model that we use to support other road authorities to ensure that we are more effective in doing that and not creating a ‘Big Brother’ mentality that is going to lead to the further weakening of other roads authorities,” he said.

New funding mechanisms?

Duvenage said it will be interesting to see what Sanral’s new funding models or mechanisms are other than tolling.

He said Outa has a sense that Sanral does not want to cancel the e-toll scheme because it wants to use the National Transaction Clearing House (NTCH) to start allowing people to pay into an account to access parking.

Sanral issued a new tender in August 2019 for the operations and maintenance of an open road tolling system in Gauteng, a NTCH and a violations processing centre.

That tender was subsequently cancelled and reissued in 2020.

The NTCH is currently almost exclusively used for clearing e-toll collections for various toll operators and toll plazas.

Read: Sanral delays e-toll collections tender

But Sanral previously confirmed it is in the process of repackaging and expanding the function of its NTCH to provide a host of other mobility services, such as vehicle licence renewal payments, cashless parking, fuel payments and to use Sanral’s customer service centres for driving licence renewals.

Duvenage questioned how Sanral, whose mandate is to build and maintain roads on behalf of the state, can get involved in parking and work in Africa.

He said more transparency is needed when Sanral starts playing in these new areas.

“Sanral is not the Southern Africa or the Africa National Roads Agency. It is the South African National Roads Agency and it is a state-owned entity responsible to the South African citizens.

“It shouldn’t be going into Africa and, if it is going to, it needs to be a separate state-owned entity that the state must set up and motivate because this is not where Sanral, which we finance, should necessarily be going.”

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COMMENTS   19

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Outa as an organization would be stronger if it’s CEO, Wayne Duvenage were to just resign.

What has Outa achieved under Wayne Duvanage? Etolls continue to operate and Outa itself is nothing but talk and PR with zero action. The only thing they are good at is collecting donations!

In 2018, there was an exodus of directors, that were forced out of Outa, by Wayne Duvenage, for refusing to allow him, to run and operate Outa like a Dictatorship.

There were also allegations of mismanagement and bad governance. Along with forcing out several directors, Wayne Duvenage also forced out Ted Blom!

Wayne Duvenage claims that he is against “abuse of taxpayer funds”, but at Outa he was accused of allocating himself a salary of R160,000 a month without board approval!! All paid for by unsuspecting donars!

If you care about Outa, Wayne Duvenage, you will resign for the good of the organization.

That you Bell Pottinger? Been a while..

“EFF Commissar” is just “BigTime Bloemfontein Exec’s” other username.

OUTA cannot do anything more about e-tolls until SANRAL actually takes a motorist to court. And SANRAL hasn’t done that in 8 years because they know they will lose.

So there is nothing OUTA (or anyone) can do at present.

However, wasn’t the EFF going to burn down the gantries? “All talk and no action” much…?

The EFFers aren’t really getting good value from your trolling, are they? Whatever they’re paying you, is too much. Rather go do something you’re good at – smoke some nayope, perhaps.

Remember CODESA in the 1990’s?

“Conference Of Dictatorship Ensuring a Socialist Azania”

*lol*

OUTA has a annual report on their website:

In 2020/21 financial year they spent R26.6 million in employee cost.
The average headcount over the year was 44.
Their executive team is about 6 people and they have 4 non-executives on their board.
So average payroll per person was R604 545.

So lets say each executive gets paid a million a year.
That R16.6 million for the remainder of the employees (34 people who probably does admin, call center, cleaning staff, accounting, etc) gets about R488 235 on average

I don’t want to agree with EFF Commissar but it seems really plausible that Wayne draws R2 million in salary a year.
Not bad for the head of a non-profit org.

Who said crime does not pay? even if for the security companies!!

Noo, … can’t be. Hehehe

What is happening in SA is what RW Johnson predicted in his book, ‘How long will SA Survive?’.

The ANC, through their corrupt actions, have placed SA’s bonds and finances in an unsustabe situation.

“We can either choose a modern industrial economy or the ANC but we cannot have both.”

“Wayne Duvenage claims that he is against “abuse of taxpayer funds”. And he does so with little resources.

Strange, there is another well know Organisation with a prominent leader who claims the same thing publicly on a regular basis. (With mega resources)

The problem is that there is no real concrete evidence of this.

Both Government and SANRAL should have seen this coming tens years ago when they tried to implement e-tolls which met with resistance.
In the past ten years, what has both Government and SANRAL done about the problem?
Exactly Nothing except kick the can further down the road, and threaten motorists with manner of draconian measures and attempt to make us feel guilty over their Failure and Incompetence.
Well, I don’t feel the least bit guilty over resisting the attempt to extort more money from us Gauteng motorists.
This, like everything else our Government has touched, has turned to sxxx, and the ball is in their court to find an alternative method of funding, which should actually come from Existing tax sources, and not new ones, given that they have bled South African taxpayers dry, and squandered the money on Unsustainable and Corrupt Projects at ridiculously inflated prices, as well as squandering every opportunity they had over the past decade to fix the mess of their own creation.
Don’t expect us to feel guilty for your Gross Incompetence, Resolve your own problems, and while you’re on the subject of new projects, find money for those two before you fall further behind, and continue blaming everyone but yourselves.
A Suggestion would be that you start attaching assets of all involved in corrupt activities and act more fervently in prosecuting the Gupta’s and everyone else exposed at the Zondo commission to find the funding you need from the sale of their assets and recovery of cash.

Could it be that the same people that are against tolling in built up areas are also the ones that are against the injection mandates and passports? There is a common element of bullying in both issues. I suspect this is a root cause for discontent. Another root cause is corruption. Another one is incompetence. And another is telling lies. So many to choose. Never had it so bad.

“even in the face of criticism and rejection of the toll model”

Actually the criticism is that SANRAL breaks the law to bulldoze toll roads into existence. There are some toll roads that have high public acceptance and profitability like the Hugenot Tunnel and Chapmans’ Peak Drive.

If SANRAL just obeyed the law, consulted properly, and walked away when it was clear the public didn’t want a toll road, we wouldn’t have all this fuss.

I cannot think of an organisation more deserving of losing funding than SANRAL. It is an organisation that has operated without honestly consulting with its key constituency, i.e. the motorist, engaging in road construction with the clear purpose of earning money for itself and its foreign funders and not to maintain ALL our roads.

So, what happened now? Previously, I was told that I’m part of the minority not paying e-tolls. Now it transpired that it was all lies. So how do I, as a tax payer, know that you are not lying now, as you have a rich history of telling lies whenever your lips separate and/ or your fingers touch a keyboard.

BTW, what is happening to my fuel levy I have to pay so religiously? Can I believe you if you dare to answer?

So how much of this funding is to fund corruption and how much for the roads? From Outa’s comments it seems that the upgrade project in Gauteng was overpriced. And why are so many of the roads which weren’t upgraded tolled? Surely they had already been paid for?

What we forget is that Sanral needs the public to pay them directly. Reason being that the tax man uses money on road taxes and fuel taxes to plug so many other holes – that the road concession does not get enough money to maintain the roads.

End of comments.

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