Sanral e-Tolls – Kapsch.net is 1bn Rand out of pocket

Kapsch.net has just posted their interim results for 2014 which shows a 80 million Euro liability with Sanral which is the equivalent of 1,1 billion Rand (or like our president would say: 1000 and 1 million Brazilians):

In the board-presentation Kapsch has acknowledged that compliance in South Africa is “challenging”:

Work continues unabated on improving the profit situation in South Africa.

Over the last few months Sanral has quietly continued to close down e-Toll outlets in shopping malls and retail outlets and considering that Sanral requires over 200 million Rand per month to operate the tolling, the monthly income of about 100 million Rand has made it impossible for Sanral to settle any debt and the organisation is desperately raising new bonds to continue operation. Sadly, a large portion of the Sanral investment has been sourced from state-pension schemes which will leave many government workers without retirement income if the South African government continues to insist that pay-per-use is the right choice of servicing a defunct national road system.

Rating’s agency Moody’s posted another downgrade on 19th January 2015:

Non-payment of e-tolls has increased following a decision by the Province of Gauteng to establish a panel to assess the impact of e-tolls in doing business in the province, which sparked speculation among the general public that the e-toll project may be abandoned. This caused e-toll revenue collections to drop by 38% from July to November 2014, which in turn led SANRAL to revise downward its expected e-toll revenue for the fiscal year 2014-15 to ZAR907 million, against ZAR1.4 billion previously.

As e-toll revenue was planned to be the main contributor towards the reduction of borrowing requirements, as well as help improve cash flows, the lower than expected revenues will likely lead to an increase in SANRAL’s debt level. Moody’s anticipates that SANRAL’s debt will increase more than expected and reach ZAR44.1 billion by 31 March 2015, from ZAR39.6 billion at 31 March 2014.