Moody’s sees better outlook for Sanral due to state support
Moody’s Investors Service has changed the outlook for the SA National Roads Agency to ‘stable’ from ‘negative’
Moody’s Investors Service said on Friday that it has changed the outlook for the SA National Roads Agency (Sanral) to “stable” from “negative”, thanks to the government’s plan to provide it with more financial support.
Sanral’s e-tolling project has largely been a failure due to low levels of compliance from Gauteng motorists. As a result, the cash-strapped agency has had to shelve several projects due to a lack of available funds, and this has placed additional pressure on the country’s ailing construction firms.
Moody’s said that while it kept Sanral’s debt ratings unchanged, the outlook for the agency had improved.
“The decision to stabilise Sanral’s outlook reflects the SA government’s decision to earmark additional funding to support the Gauteng freeway improvement project (GFIP) in the approved 2019-2022 toll budget,” Moody’s said.
This move “re-affirms the strategic importance of Sanral” and the close financial and operational link between itself and the government.
In the 2019-2022 toll budget, another R2.2bn a year was set aside for Sanral to compensate for GFIP shortfalls.
“While ongoing opposition to the GFIP user-pay principle has resulted in weak cash flows from the GFIP, and the government decision on the future of the open-road tolling model has been delayed several times, this additional transfer will provide greater certainty over the [agency’s] medium-term funding plans and confirms the government’s tight control over Sanral’s operations.”
The government is yet to announce a decision on the long-term funding model for the GFIP.