Business and Technology

South African toll roads make R529 million loss

The South African National Roads Agency Limited (Sanral) reported that between 1 April 2020 and 31 March 2021, toll roads in South Africa made a R529 million loss. Revenues from its Gauteng Freeway Improvement Project (GFIP), better known as E-tolls, also declined by 31.5% during South Africa’s first two waves of the Covid–19 pandemic.

“[GFIP] is the only Sanral toll route that receives a government grant to offset the discounts on tariffs instituted in response to public opposition to tolling on Gauteng freeways,” Sanral CEO Skhumbuzo Macozoma said in the agency’s annual report.

“Road users’ ongoing refusal to pay e-toll fees on the GFIP continues to have a negative financial impact on SANRAL,” Macozoma stated. Cabinet has yet to decide on the matter and we await direction in this regard,” Sanral said in its annual report that the inability to resolve the e-tolls debacle places significant pressure on its balance sheet.

This compromises the agency’s ability to source funding and exacerbates uncertainty regarding the future of road funding. While toll roads made a massive loss for Sanral, it posted a total annual profit of R380,782.Macozoma said that the R2.72 billion e-toll grant include R2.3 billion that the Minister of Transport—as Sanral’s sole shareholder—approved as a transfer from non-toll to toll operations to reduce the expected shortfall in collection of revenue.

Sanral’s annual report stated that revenue collection was also worsened by the impact of lockdown, but said it could not quantify this impact. It said the net loss it earned on toll roads was due to the declined revenue flow for toll roads and the overall cost reduction in operating them.

Financing costs make up the bulk of Sanral’s expenditure on toll roads. Sanral reported that nearly 45% of toll expenses go towards financing debt, as indicated in the chart below.

Sanral main sources of revenue Current year (2020/21) Prior year (2019/20)
Government grants: Non-toll R6.18 billion R6.55 billion
GFIP grant: Toll R2.72 billion R2.67 billion
Toll income R3.71 billion R4.37 billion
Investments R1.42 billion R1.48 billion
Other income (sundry, concession and rental) R1.58 billion R1.07 billion

Just over a quarter (25%) of expenditure is for road maintenance, while less than a tenth (10%) of its spend on toll roads went towards investing in new infrastructure (capital expenditure).The Organisation Undoing Tax Abuse (Outa) said there are very few options to consider for the future of e-tolls.

“The only alternative to e-tolls is for the GFIP bonds to be financed via National Treasury,” the civil action group stated. It advocated for the GFIP to be financed from the national fiscus, using regular tax revenue.

“Treasury has already allocated Sanral R10.8 billion for GFIP — around 51% of the freeway bonds for the overpriced upgrade,” it said This is on top of a grant of R70 billion between 2016 and 2010—a yearly average of R14 billion per annum—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,” said Outa.

Source: mybroadband

In other news – Actress and DJ Thuli Phongolo gets R18k in tips during a gig this weekend

Actress and DJ Thuli Phongolo received R18 000 in tips during a gig this weekend.

Thuli Phongolo

The DJ shared a video on her Instagram Stories where she is given the money while deejaying. Learn more

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