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):

Kapsch.net highlights in the 2014 interim report a 80 million Euro liability

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.

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  • mmmmTim

    It is stupid sensationalism and simply not true that pensioners are in any danger whatsoever of losing any money. The investment is government guaranteed, absolutely safe. The author should either check his facts or is deliberately lying, for either of which he/needs to be severely censured.

    • Not quite the case if you had checked your own facts. The Government Employees Pension Fund (GEPF) has a R15.7bn investment in Sanral bonds (this was back in 2012). The GEPF has about 1.2 million public servants as members and another 350K pensioners.

      While I agree that the GEPF has more than a 1 trillion invested in bonds and equities via the PIC (Public Investment Corporation), the Sanral bond has by now a poor credit rating and Moody’s has over the last few years downgraded Sanral.

      The fact is that only 50% (or roughly R8bn) of the GEPF’s bond investment was guaranteed by the government, as the other 50% was held by other private asset managers.

      Just four days ago, Moody’s published another rating downgrade (https://www.moodys.com/research/Moodys-assigns-negative-outlook-to-SANRALs-ratings-affirms-Baa3A3za-ratings–PR_316259) and Sanral’s debt will grow from 39bn Rand in March 2014 to over R45bn Rand by March 2015.

      Before posting comments about censoring, you could have saved yourself some embarrassment and checked your own facts.

  • mmmmTim

    Happy to discuss this. You are actually saying in your reply to me that the money that the pensioners have got their investments in the PIC, and as a result of that, not PICs subsequent investment in SANRAL, they are at risk. I agree. But in the article you claim that it is the investment in SANRAL that is putting them at risk, not true as I said. The PIC investment in SANRAL is 100% guaranteed by government, and that part of the pensioners funds are therefore at no risk regardless of what happens to SANRAL’s rating. In fact the next step down in rating will allow all bond holders the right to cash in their bonds, and that might cause some embarrassment to SANRAL, but it would not put the PIC investment at any additional risk at all.

    • I am looking at it from the following perspective: Yes, the government guarantees a 100% the Sanral investment of about 8bn Rand. At this point in time we can all agree that the current e-toll model (pay per gantry) does not work and has not been accepted. So the government with Sanral will need to repay the close to 40bn Rand debt for the e-toll system – this can be done either through a bail-out or by introducing an additional fuel-levy and paying of debt over 10-20 years.

      Either way, the 8bn Rand investment into Sanral e-toll by the PIC can be written off. It is quite naive to think that a “bail-out” of this magnitude will not have an effect on state pensions one way or another.