The South African National Road Agency (Sanral) has blamed Covid-19 and uncertainties of e-tolls in Gauteng as toll revenue dropped from R4.3 billion to R3.7 billion in 20-21 financial year.
In its annual report tabled in Parliament, Sanral said the lockdown period played a significant impact on the R570 million revenue loss.
It also noted the issues around the future of e-tolling in Gauteng as some want them scrapped.
“Management has acknowledged that the toll portfolio has liquidity concerns due to uncertainties on the continuation of the Gauteng Freeway Improvement Project (GFIP). The 201km representing the GFIP road network, represents less than 1% of national road network or operations,” reads the entity’s annual report.
Sanral noted that the government has indicated its preparedness to provide financial support to the GFIP while a solution was awaited.
“Sanral has therefore included a budgetary transfer of R3.2 billion per annum over the Medium Term Expenditure Framework (MTEF) ending 2022-23 financial year to cover the shortfall on e-tolls.
“Even though final approval of this additional transfer from Parliament is still awaited, based on past experience, management concludes that it is inevitable that it will be granted to ensure that the entity does not default.”
The report said the material uncertainties on the future of GFIP as a going concern were expected to be mitigated through direct government support and feasible sources of financing.
It also said the conventional toll plazas do not have liquidity or going concerns issues.
“The non-toll portfolio currently has a significant cash surplus of R27.2 billion, and is expected to remain cash positive well into the foreseeable future, due to the MTEF allocations and the spending patterns.
“As a single entity SANRAL has significant cash reserves and access to funds to remain a going concern into the foreseeable future,” reads the report.
Sanral also said its cash flow projections showed that cash reserves for the toll portfolio remained cash positive until February 2022.
“These cash flow projections showed an expected deficit of R1.5 billion from March 2022, but it excludes the expected additional grant of R3.2 billion, which has been budgeted for.”
The report said it was expected that Sanral will have positive cash flows until July 2022.
“Sanral has R8.7 million available under R31.9 billion government guaranteed.”
According to the report, although there were material uncertainties on the toll portfolio, there were no significant doubts about going concerns of Sanral as a whole after considering the potential mitigation actions and the significant cash reserves.
“The Board therefore supports management’s assessment that Sanral will remain a going concern in the foreseeable future.
“The Board is fully aware of the liquidity risk it faces in the short term and is actively engaging with government to resolve the matter.”