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Sanral’s total liabilities top R140bn

Accumulated loss at year-end hits R14.5bn.
Sanral is not only facing mounting objections to the paying of tolls, but is also facing mounting liabilities. Image: Moneyweb

The South African National Roads Agency (Sanral) has published its latest integrated annual report (totalling 368 pages) for the year ended March 31, 2021, which shows that its total liabilities are a gargantuan R140.4 billion (2020: R130.6 billion).

Sanral is not only facing mounting objections to the paying of tolls, but is also facing mounting liabilities. Cabinet has been tasked with making a decision on the future of the e-tolls scheme in Gauteng.

While cabinet dithers, the liability to be met steadily grows.

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

One would think that the major liability would be debt, sitting at R45.9 billion (2020: R47.8 billion). But no, there is a liability referred to as ‘deferred income’, which at the end of the financial year is R79 billion (2020: R68 billion), representing 56.3% of total liabilities (2020: 52.1%).

Deferred income is explained in Note 19 to the annual financial statements as consisting of “deferred government grants and advances from concession contracts”.

The prepayments on concession contracts “are deferred over the life of the concession”.

Sanral contract partners (concession contracts) act as an alternative means for long-term financing to operate and improve the national road network infrastructure. Costs are recovered through toll charges (though considering the e-toll impasse, it is more likely they are ‘anticipated to be’ recovered in this manner).

Read: Sanral delays e-toll collections tender

There are three concessions: the N3 Toll Concession, the N1/N4 Bakwena Platinum Corridor Concessionaire, and the N4 Trans African Concession.

Total debt

Sanral’s total debt at the end of the financial year is R45.9 billion (2020: R47.8 billion).

2021 2020
Financial liabilities at fair value R4.7bn R4.8bn
Financial liabilities at amortised cost R41.2bn R43bn
R45.9bn R47.8bn

IFRS 9 requires financial liabilities to be reflected at fair value through profit and loss, or at amortised cost.

The financial liabilities at fair value include a long-term capital loan and a short-term capital loan.

The financial liabilities at amortised cost comprise mainly long-term capital loans, including issued bonds, and a domestic medium-term note programme. Sanral has also entered into a loan facility agreement with the European Investment Bank, currently at R40.2 million (2020: R36.9 million).

The government has guaranteed the borrowings of Sanral to the tune of R31.9 billion.

Financial performance

Sanral made a profit of R380.3 million for the year to end-March (2020: R1.3 billion).

Other comprehensive income included an adjustment on a retirement benefit of R4.1 million (2020: R9 million), and a revaluation of land and property amounting to R8.3 billion (2020: R36.4 billion), bringing the total comprehensive income for the year to R8.7 billion (2020: R37.7 billion).

However, the accumulated loss as at the end of the year is R14.5 billion (2020: R14.9 billion).

Sanral’s revenue earned of R3.7 billion (2020: R4.4 billion) includes the government grant detailed below:

2021 2020
Toll revenue R3.7bn R4.4bn
Non-toll government grant R6.2bn R6.5bn
GFIP government grant R2.7bn R2.7bn
R12.6bn R13.6bn

The value for expected credit losses on toll debtors for days exceeding 365 was R9.6 billion on March 31, 2021 (2020: R9.6 billion).

Cash flow

The cash receipts from customers of R23.1 billion (2020: R23.4 billion) includes the unrealised portion of deferred income of R9.6 billion (2020: R8.5 billion).

The total cash at the end of the year of R29.3 billion (2020: R16.5 billion) has been tucked away in short-term deposits and repurchase agreements (repos).

Unqualified AG report, but …

The Auditor-General (AG) has given Sanral an unqualified audit report, but with findings.

The findings were however material.

According to the AG, Sanral’s accumulated loss of R14.5 billion plus the outcome of the e-toll impasse to be resolved by cabinet “indicate that a material uncertainty exists that may cast significant doubt on Sanral’s ability to continue as a going concern”.

Other material findings include:

  • Material impairments of R9.6 billion were recognised as a result of expected credit losses.
  • Irregular expenditure of R175.3 million was incurred in the year, due to non-compliance with procurement regulations; most of the irregular expenditure was caused by expenditure not approved by a duly delegated authority.
  • Investigations into fruitless and wasteful expenditure were not performed.
  • Sanral’s internal processes and systems did not prevent non-compliance with supply chain management legislation from occurring.

The Directorate for Priority Crime Investigation has been investigating offences perpetrated by various construction companies against Sanral since 2013.

Irregular, fruitless and wasteful expenditure

The opening balance of irregular expenditure as at April 1, 2020, was R11.9 billion.

During the year, the amount of R10 billion was condoned by National Treasury.

The current year’s irregular expenditure amounted to R175.3 million.

The major irregular expenditure in the year was R76.3 million (2020: R80.5 million) not approved by the delegated authority or National Treasury, and deviations not approved by the delegated authority or National Treasury.

Read: Sanral ‘unable’ to comment on dodgy R40m payments by e-tolls collection company

The truncated amount of cumulative irregular expenditure at the end of the year – quaintly referred to as irregular expenditure not yet condoned – is R1.4 billion (2020: R11.2 billion).

Fruitless and wasteful expenditure is R18.4 million (2020: R18.3 million).

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COMMENTS   37

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E-tolls are here to stay. There are toll roads in every country.

One example is the “eastern distributor” toll road in Sydney, that costs A$7.61 one way, for 6km. You also can’t drive across the Sydney harbor bridge, without paying a toll.

Any organization encouraging the non-payment of E-tolls, is just promoting a culture of lawfulness.

Not paying your E-tolls is a criminal act and using criminal rationalization, to justify it doesn’t make it less so.

E-tolls are a progressive taxation, that favours the poor. The people opposed to it, can afford to pay.

They should stop complaining and immediately sign-up for an E-tag.

“E tolls are hete to stay..”there are toll roads in every country”

Similarly corruption in SA is here to stay, sure there are till roads in every country, but they don’t have a useless corrupt ANC run Government..

Their parastatals work for the people, they don’t feed and enrich public servants who drool at the mouth every time a tender goes out

State capture is also stealing from the poor. EFF and VBS bank are thick as thieves also. Go figure Mr. commissar.

The shadow knows:

“Any organization encouraging the non-payment of E-tolls, is just promoting a culture of lawfulness.”

Couldn’t agree more. I fully support your contention that e-tolls are unlawful and that opposing them promotes the rule of law.

Come and arrest me pal. I have never paid etolls. I will never pay etolls. I will continue to complain about it. I will always rationalize against it. Any more suggestions?

There are no toll roads in Germany, shill. I’ve told you before: that nyaope you’re smoking is too strong, shill. Now go back to your shack.

Tell me where the money on the Jhb etolls goes to (every last cent) and I’ll sign up for tolls tomorrow.

But they won’t say, so I won’t pay

The politicians of this country think they own the country and can force people to pay for their corrupt tenders. Etolls = corruption. The people of Gauteng are not stupid. There is corruption written all over etolls, just like there is corruption written all over the SA government as a whole. The SA government has a major credibility problem. They are the ones that need to do the changing, not tax payers!

Wait until they link it to E-NATIS. That’s a treasure trove of money the Broke A** ANC has not gotten its’ grubby little fingers on (yet?) IT IS COMING. As I wrote years ago “WHEN THE GOVERNMENT WANTS YOUR MONEY THEY WILL GET IT !!! Buy the stupid tag.

Hey Effy – Got up early today ne !!
As you are so discriminate and limitless in your wisdom maybe a thought for you:
The difference between stupidity and genius is that genius has its limits.

Albert Einstein.

When you ilk pay for electricity then maybe we will pay for e-tolli

Never gonna pay

Just another ANC success story. True to form.

The worst part is that they don’t even feel embarrassed about it. Instead they simply blame other people or concepts like racism for their failures.

Nope. If there’s nobody accountable, theres nobody to feel embarrassed.

Staggering incompetence by the national government.

If you ever deal with Head Office and I did, you will find a bunch of people who don’t answer their phones and do nothing. I am reminded of the photo I took one day where they had all these SANRAL vehicles (about 20) on the side of the road in standby mode. I wonder where they all are??? I never see them on the highway?? Taxi’s now ????

Does this figure include sweeteners from Austria that they want back ?

Did you all see that little sentence mentioning “…irregular expenditure “..?
Mmmmm…..Also…
I have two vehicles, one driven by me and the other by my son. Neither of us live in Gauteng, but we both have very different itineraries that demand we drive the toll roads.My son a lot more than me. Both cars are registered on my name. I received an account from Sanral for both vehicles, and the amounts were IDENTICAL…..to the cent.

How many billions to fix the potholes?
If we assume the worst possible outcome for the public from every ANC play thing then what units of measure and multiplier should we use in order to quantify each negative impact. Do I hear US Dollars and billions? Hohoho.

The Austrians that tried to get the system working are long time gone.
A bit difficult if there are thousands of cloned cars on the road.

You would think a profit would be easy to come by if you had a monopoly! This Government can take a perfectly in demand product and run it at a loss eg Eskom . They are a special bunch !

It was financial pressure that eventually caused the NP to capitulate, and it will be this type of financial pressure that causes the ANC to capitulate or collapse, but one thing is for sure, we cannot have a modern industrial economy and the ANC.

The ANC cannot implement user pay systems in any of its municipalities, which means that user pay model in SA does not work.

The corrupt e-Toll project has allowed those elements of society, who have been loaded with the cumulative economic burden of non-payment for services in the townships, to do a proper civil protest.

The protest is against the ANC, not just e-Tolls per se.

Iron age, nomadic herdsmen skills not so useful here it seems, but there’s always Ubuntu .. & unicorns

What consequence is there for doing nothing, running up the debt, eventually letting most roads go to ruin, ala Eskom 2.0. The answer, nothing.

Therefore for us as individuals, you might as well live as an expat. Live local until it’s not pleasant/interesting anymore, rent in a gated estate, move around to where things function to an acceptable standard, work/earn local or offshore, and definitely invest globally in foreign currencies since you may not be living in SA in 20 years time.

I think you have nailed the future lifestyle of the SA middle class.

Tax payer boycotts do work. We’re largely happy to be taxed but we do expect a return for it. Very funny that the same people who shout it should be paid because “it’s the law” are the same ones who promoted ungovernability on the basis that the law was unjust until 1994 (they were but that isn’t the point)

I suspect that the main reason why the government refuses to make a decision on cancellation is that the Corrupt ANC’s politicians who received large bribes to award the contract and ensure its operation over decades, would be compromised by the Austrian principal if a decision was taken to close the system down, and may even have to repay the bribes, lest exposure.
Such is life in the third world!!

SANRAL’s liabilities of R140 billion, Eskom’s debt of R400 billion … add into the mix a murder rate of 58 people per day. In 2018, there were 240,000 new HIV infections and 71,000 South Africans died from AIDS-related illnesses. About 14,000 die in road related incidents. Unite 4 Mzansi – an initiative led by the South African Institute of Chartered Accountants estimates R1.5 trillion has been lost to corruption in five years.

So if this isn’t a failed state, then I don’t know what is.

… and I forgot the 40% unemployment/unemployable.

see failed states like lebanon for the future.

Expropriate the roads from sanral without compensation – problem solved? No, because who will ever invest in new roads again? So why do it with farms?

Same old story, collect from the payer to pay for this but steal it before paying.

Municipalities: sell electricity but never pay the supplier, sell water but never pay the supplier, buy anything because you are ANC but never pay for it.

Stone age brains.

Yes there are tolls in every country but they don’t take an existing road that has been there for 40 years, add one lane and then toll the whole road. Why did Sanral sneak the gantries in at night and not ask Gauteng motorists if they would be prepared to pay more to drive on a 40 year old road network? Because they knew what the answer would be. When was the law changed in SA that an existing road could be turned into a toll road. The addition of one or two extra lanes was inadequate in 2010 and even more so now.
In 2004 I drove over a bridge near Glasgow and paid at a toll booth. 10 years later I drove over the same bridge and the toll booths had been removed. A local told me that the bridge had been paid for so no more tolls. The N3 Toll Concession started in 1999 and the tolls just keep going up and up every year with no end in site. In 1999 the trip from Joburg to Durban took around 6 hours and it still takes about 6 hours and yet I’m asked to pay more.
I pay my taxes, my vehicle licenses and a fuel levy so why should I be asked to pay more and isn’t that “user-pay”?
Nazir Ali when trying to “sell” the E-toll concept said that we were all going to get to work quicker, we were all going to get home quicker, we were going to spend less on fuel, spend less on vehicle maintenance and spend less on tyres. Is anybody really getting any of those benefits? in 2007 it took me three quarters of an hour to an hour to drive from Randburg to OR Tambo and nowadays it takes me the same amount of time or longer. So what am I being asked to pay for?

One thing you forgot to mention etolls 1% of Sanrals toll roads but budgeted to bring in 38% of Sanrals toll income. So basically Gauteng was being asked to heavily subsidize the entire country.

One wonders if the ANC pays their e-tolls. If their non-payment of UIF contributions and employees pension contributions is anything to go by…..

Not sure people are understanding the deferred revenue correctly. One’d need to see the cash situation but it sounds like they received RBigNumber from Gov for a multi-year contract so the major portion of grant income is deferred and will be released to P&L through journal entries, not repayments.

The introduction of tolls on the main roads into Cpt will definitely enable tax revenue collection from the taxi industry and might just rehabilitate the rail system for public transport. Cape Town is the only large city in South Africa that does not have a toll system on the periphery of the city. It also has the worst peak hour traffic congestion based on size of the population.

End of comments.

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