If Sanral is downgraded, it will be due to its own, not SA’s, financial woes
The South African National Roads Agency Limited (Sanral) has repeatedly expressed caution and fear of a credit rating downgrade to sub-investment level, one that has hung over its head for the past year or more. This time around though, Inge Mulder — Sanral’s chief financial officer — implies in her Business Day article (Another downgrade for SA would means another blow for Sanral), that Sanral’s looming downgrade might be the outcome of the nation’s recent sovereign rating downgrade, as opposed to Sanral’s own financial predicaments and management decisions. Even if SA’s sovereign rating remained above junk status, Sanral’s downgrade to sub-investment grade would probably have been inevitable at some stage this year, due to its rising debt, made worse by the failed e-toll scheme, of which the public owes about R11bn today. Sanral’s financial problems began in part in 2010, when it embarked on a plan to revalue its assets (predominantly its road network), thereby generating an attra...
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