Government provides billions to settle Sanral debt

Under a new Treasury plan, the fate of e-tolls and the Gauteng Freeway Improvement Project (GFIP) will be handed over to the Gauteng province.

Finance Minister, Enoch Godongwana stated that the national government would assume 70% of Sanral’s debt and the Gauteng government would assume 30%.

Sanral has been struggling to raise funds due to a massive debt hole in its book caused by non-payment of e-tolls.

Gauteng will cover the costs of maintaining the 201km and associated interchanges of roads under the new agreement, and any additional investment in the road will be funded through either the existing electronic toll infrastructure or new toll plazas, or any other revenue source within the area of responsibility.

Sanral will receive R23.7 billion this year to settle some its debt.

During his speech, Godongwana stated that the GFIP uncertainty was continuing to have a negative impact on road construction across the country.

“To resolve the funding impasse, the Gauteng provincial government has agreed to contribute 30% to settling Sanral’s debt and interest obligations while the national government covers 70%,” said Godongwana.

Mpho Modise, a National Treasury official, stated that the allocation was made to provide Sanral with financial stability and certainty until future phases of the GFIP are handed over to the Gauteng government, where the provincial government will decide how to fund the GFIP.

According to the annexure, Sanral will spend R61.8 billion that public entities will spend on infrastructure in the medium-term expenditure framework to build new road infrastructure and rehabilitate key transport routes serving the economy.

The annexure to the Medium-term budget policy statement were silent on the SA Post Office, which has struggled to pay over employee contributions to the medical aid provider, the SABC, and the SAA.

According to the budget annexure document, Denel will receive R204.7 million to reduce its contingent liabilities from its weak financial position and to assist if it is unable to complete its turnaround plan.

“Government allocated R3 billion in 2021/22 to cover capital and interest payments on guaranteed debt. In September 2022, as part of clarifying Denel’s future role in the economy, Denel and Armscor signed a memorandum of understanding covering defence equipment and operational requirements,” the annexure said.

Godwana stated that the R3.4 billion Denel was allocated in 2021 would be supplemented by R1.8 billion in non-core asset sales, realeasing a commited order book of R12 billion awaiting execution.

According to the annexure, Denel was implementing its turnaround plan and disposing of non-core assets to fund legacy obligations and immediate working capital requirements.