Kimi Makwetu, the Auditor-general, has warned that the continued impasse on Gauteng’s e-tolls has had a serious impact on the South African National Roads Agency (Sanral) and its ability to continue as a going concern. Sanral manages over 22,000 kilometres or roads across South Africa. Its inability to collect funding from e-tolls which form part of the Gauteng Freeway Improvement Project, is severely impacting the agency’s ability to upgrade and maintain its road network.
In its presentation to parliament on Tuesday, the auditor-general stated that the decision on a future-funding model for GFIP has still not been finalised. The delays in the finalisation of the GFIP matter has negatively affected the financial sustainability of Sanral which had an accumulated loss of nearly R15 billion as of March 2020. Sanral is now technically insolvent with material uncertainty that the agency can continue to operate in future,
“Sanral’s debtor’s impairment provision as a percentage of accounts receivable is still very high and increased from 90.6% to 94.8% which indicates that the recoverability of a significant portion of trade and other receivables (ie, e-toll fees) is in doubt. These events or conditions, along with other matter indicate that a material uncertainty exists that may cast significant doubt on the public entity’s ability to continue as a going concern,” Makwetu said.
Transport minister Fikile Mbalula in October said that his department is being impeded from rolling out new road infrastructure projects because of a lack of resolution around e-tolls. Mbalula said the Ramaphosa’s cabinet is set to finalise a new funding model for the project after receiving proposals from his department. In September Sanral said that the government needed to urgently decide on the future of e-tolls in Gauteng as the coronavirus cut its cashflow. “We’re having to scurry around to ensure our liquidity,” Sanral chief executive officer Skhumbuzo Macozoma said. Only 20% or users pay e-toll at this stage. If cancelled, Sanral’s debt related to the Gauteng Freeway Improvement Project will jump from around R40 billion to R67 billion. South Africa’s lockdown to curb coronavirus already cost Sanral more than R620 million.