The South African National Roads Agency Limited (Sanral) has received a shot in the arm after the BRICS National Development Bank (NDB) approved a R7 billion loan to the cash-strapped agency, payable in 15 years.
Sanral said on Monday that the loan would help to improve key national roads to construct additional lanes and rehabilitate related infrastructure, such as bridges and intersections.
NDB director-general at the African Regional Centre Monale Ratsoma said the loan did not replace existing loans.
“The loan is for both maintenance of roads and construction of new ones, bridges, etc. It will not be to refinance existing debt,” Ratsoma explained.
He added: “Unfortunately, we cannot disclose the details of the terms, but I can tell you that as a sovereign guarantee loan, it enjoys the best rates possible by the NDB in rand.”
The NDB board approved four infrastructure and sustainable development projects with loans aggregating to some $1.4bn (R20.3bn), bringing the NDB’s portfolio of 42 projects to a value of $11.6bn.
Last month, the NDB was assigned an AAA foreign currency long-term issuer rating with a stable outlook by Japan Credit Rating Agency.
Analysts said on Monday the loan facility would be used for new projects relating to existing toll roads as defined in Sanral’s project plan.
Futuregrowth listed credit and investment analyst Tarryn Sankar said the collection on non e-toll roads would be used to service this debt.
“This rating refers to Sanral’s international scale rating as assigned by Moody’s,” Sankar said.
“Sanral’s national scale rating is, in fact, A1.za, and its outlook was recently revised from negative to stable. We assign our own internal credit rating to Sanral. We are not in a position to comment on Moody’s assigned rating and the feasibility of raising funding on the basis thereof.”
The Organisation Undoing Tax Abuse (Outa) said yesterday that the loan would not solve the non-payments of e-tolls.
Outa chief executive Wayne Duvenage said the organisation was concerned that Sanral had taken out another R7bn loan, thereby entrenching itself into more debt with lending institutions.
“What the public require is transparency on why the need for this loan, especially in light of the fact that the statement says this funding is being applied to ‘National Toll Roads Strengthening and Improvement Programme.’
“As far as we are concerned, funding for tolled roads comes from the toll collection of those road networks and we would like to know if this funding is going toward the GFIP bonds (e-tolled roads) or other Sanral-managed toll roads that are supposed to be self-funding.
“We don’t believe these funds are being allocated to the concessionaire tolled routes (N3TC, Bakwena and TRAC) and we would be extremely concerned if this was the case, as these and Sanral’s own conventional tolled roads are self-funding,” he said. -BusinessReport