EDITORIAL: Ring-fencing fuel levy for roads is an option
Sanral’s financial woes and drivers’ resistance to e-tolls show that the government needs to find a better way to fund road maintenance and expansions
It is never a good idea to pay debt with debt. The consequences will always be expensive and ruinous to one’s credit rating. Just don’t do it unless, of course, there is no other way. This is the dilemma faced by Sanral, SA’s state-owned national road agency. Last week, a day after the agency reported a much reduced annual loss of R260m from R4.96bn in the previous year, it said it would approach the capital markets in the first quarter of 2019 to raise about R600m. This amount, says Sanral, will be spent on capital projects in fulfilment of its mandate, so, technically, it is not raising debt to pay debt. But if the entity had been profitable it may have been able to fund new projects from cash generated — or at least in a better position to negotiate interest rates on new debt. But because Gauteng’s freeway users mostly refuse to pay e-tolls, Sanral is not profitable, and it now has a R6bn hole that has forced it to cut spending on capital projects and on repair and maintenance.
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