The SA National Roads Agency (Sanral), which has been crippled by Gauteng drivers’ refusal to pay controversial e-tolls, could face difficulties staying in business unless the issue is resolved, auditor-general Tsakani Maluleke has warned.
Sanral’s e-tolling project, launched in 2013 as part of a drive to improve the road network in Gauteng, has for the most part been a failure as a result of low levels of compliance by motorists.
The cash-strapped agency, which is tasked with maintaining SA’s road network, has had to shelve several projects as it also cut spending on repairs and maintenance.
The tolls, introduced in 2013 when evidence of rampant corruption during the Jacob Zuma presidency was being exposed, quickly became a focus of public anger and protests in Gauteng. They also became a source of political division within the ANC, with Gauteng premier David Makhura and former finance minister Tito Mboweni engaging in a public spat.
Lobby groups and trade unions opposed payment.
While Sanral received an unqualified audit opinion in the 2020/2021 annual report tabled in parliament last week, Maluleke flagged the accumulated loss of about R14.4bn by March 31 (slightly down from about R15bn the previous year) and expected credit losses of close to R10bn, as the company struggles to collect debt.
“Sanral’s funding strategy for the next 12 months relating to toll operations is dependent on positive developments to resolve the e-toll impasse by cabinet. These events or conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on Sanral’s ability to continue as a going concern,” Maluleke said in the report.
The cabinet still has to make a final decision on the e-tolls matter, which is set to be a campaign issue in the run-up to the November 1 election.
In 2019, Sanral decided to suspend pursuing e-toll debt amid low levels of compliance. Subsequently, the agency has struggled with low revenues and rising debt levels. Like several other state-owned entities, it has had to rely more on taxpayers to fund its operations.
It sank into deeper trouble when SA went into lockdown in 2020, resulting in a sharp drop in toll revenue, which it put at about R570m.
Revenue from non-toll operations was about R6.1bn for the year, down 5.7%. This is mainly as a result of slower spending on projects, which led to a lower allocation of the non-toll grant to revenue. Toll revenue was R3.7bn, a 15.2% drop.
The Sanral board said it is confident, however, that the agency will remain in business and funds will be available to finance future operations and settle liabilities and other commitments that occur.
“The board acknowledges that current assets are adequate to cover current liabilities,” it said in the annual report.
It cited total current assets of R31bn, compared with liabilities of about R22bn.
Sanral receives an annual grant from the fiscus, mainly to fund its non-toll road portfolio. During the year under review the government grant was R20.4bn, of which R3.1bn was allocated to toll projects.
The annual budget allocation is expected to increase to R21.6bn in 2022. It assumed that the government will continue to provide financial assistance for the foreseeable future.
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