Well let's see how they match up with what we know:
Hey guys, so I did a few calculations with regards to the numbers Sanral are lying about. We know that they're lying, but let's see to what extent they're defrauding us by:
I saw an advert in the August edition of Financial Mail where SANRAL claims that “less than 1% of road users will reach the cap of R450pm”. It goes on to explain the benefits of getting tagged, and that through “License plate recognition software they traced actual usage of the e-roads by 2.5million vehicles in Gauteng”. This “study” or whatever you want to call it came to the conclusion that “82.83% or road users will pay less than R100pm”
These figures seemed a bit optimistic in my opinion, and I started to wonder if it is in fact plausible?
For our convenience SANRAL has an online calculator. With this tool you can calculate your actual usage. I thought it would be a great idea to use this tool with a few examples of trips, to see if these quotes figures are at all realistic.
For the experiment I based all the travel times as peak times with a light vehicle, because lets face it this is when the most people use the highway, to and from work. Furthermore I added the distances between off-ramps calculated via Google maps for your reference. The cost calculated is per round trip with an E-tag multiplied by 20 working days per month (I also ticked the multiple trip box, apparently this gives a further discount). The figures in brackets are without an E-tag.
Light User: Travels less than 7km per one way trip.
•N1 William Nicol – N1 Rivonia, total distance 4.9km
R5.16 x 20 = R103.20
(R9.98 x 20 = R199.60)
•N3 Marlboro – N3 Modderfontein, total distance 5km
R8.95 x 20 = R179
(R17.30 x 20 = R346)
•R21 Bapsfontein – R21 Olifantsfontein, total distance 6.5km
R8.40 x 20 = R168
(R16.24 x 20 = R324.8)
Medium User: Travels less than 15km per one way trip.
•N1 Lynnwood – N1 John Vorster, total distance 14.8km
R11.82 x 20 = R236.40
(R22.86 x 20 = R457.20)
•N12 Barbara Road – R21 OR Thambo, total distance 14.2km
R20.40 x 20 = R408
(R39.44 x 20 = R788.80)
•N12 Gilloolys – N1 Buccleuch, total distance 14.7km
R17.9 x 20 = R358
(R34.60 x 20 = R692)
Heavy User: Travels less than 50km per one way trip (this is typically commuters that travel between PTA and JHB or similar).
•N1 Atterbury – N1 William Nicol, total distance 44.5km
R52.47 x 20 = R1049.4 – Flat rate of R450 will apply
(R101.44 x 20 = R2028.8)
•N1 Rivonia – R21 OR Thambo, total distance 31.1km
R21.66 x 20 = R433.20
(R57.34 x 20 = R1146.80)
•N1 Beyers Naude – N12 Kliprivier, total distance 24.9km
R25.91 x 20 = R518.20 – Flat rate of R450 will apply
(R50.10 x 20 = R1002)
The conclusion: I cannot help to think that SANRAL has underestimated our intelligence. By using available information and conducting a very simple experiment it is clear that this advert is nothing but a lie. Not even the lightest user, had a bill of “less than R100pm”. Maybe these figures were supposed to be vica versa and 82.83% will pay R450pm, and 0.63% will pay less than R100pm?!
Its funny that SANRAL thinks they can trick the general public with lies to make us buy E-tags. I for one will NOT support this system, they can go F*&K themselves!
So I've crunched the numbers even further with a very quick and dirty calculation that proves that they are lying.
Check this out:
Using Sanral's numbers, it would be impossible for them to repay their debt.
Their bonds are ten year issuances. They mature in 2020 (which is when final payment including all interest must be paid)
As you can see, using their numbers, they would have an annual shortfall of R9bn in this respect. They would default in their first 3 months of operation.
In fact using their numbers, it would take about 37 years for them to repay their bond investors. But they issued ten year bonds - they cannot extend this term whatsoever.
Ignore the theoretical margin in this one. We'll get to it next.
All of this assumes a 30% EBITDA margin, which is fair for any company. The likelihood of them operating at a higher margin than that is very slim.
Bottom line: Sanral are lying through their teeth.
Next lady for a shave:
Let's see what kind of margins and income they would actually have to generate in order to repay their debt (remember that this involves them repaying their entire margin towards their debt - no reinvestment in their roads, no maintenance of the roads, no profits effectively, and this is all before interest, tax, depreciation and amortisation which will erode a massive chunk of that margin as well).
So, using their figures, they would need to operating under the following conditions:
No costs whatsoever to their business. Nothing.
Even with no costs whatsoever, they're still short 10% income to repay their loan.
They'd need to operate on a 100% margin. So every cent they spend, they make double, effectively. In other words, they simply receive money and never spend it. Ever. And, they're still short 10% here.
So even in a world where they have no costs at all, do not pay tax, do not depreciate their assets, do not amortise anything at all - they still cannot repay their debt based on the numbers they submitted. Can you believe it? Not even in a world where every single road user goes and pays Sanral's creditors on Sanral's behalf to eliminate the cost element, do so on time, Sanral have no costs, nor maintenance at all. They still cannot repay their debt.
So let's see how much they would need to charge the average road user in order to repay their debt on time, working on a 30% margin which is reasonable, if not high for them:
So... every single Gauteng road user would have to pay R598 per month just for Sanral to repay their debt. And on time as well. That's an impossible 100% 30 day debtors book. And that doesn't take into account other elements like tax, depreciation, other interest, amortisation etc, and also means no road maintenance whastoever. This is a perfect world scenario.
So what can we conclude?
Sanral are a lying bunch of thieving bastards.
But wait, there's more. Let's actually factor in the other costs. Let's let Sanral work on a 10% net profit margin after absolutely everything:
Every single Gauteng road user realistically needs to pay about R1794 per month in order for Sanral to operate as a somewhat liquid business. Otherwise they will require cash injections in a massive way in order to stay afloat. So basically, e-tolls should be scrapped now. Nobody is going to pay R1794 per month just to drive on our own roads. This is simply not possible. It's absurd. It's ridiculous. It is quite clear that Sanral are stuffed as an organisation. If only half of road users pay their e-tolls, they'd have to be paying R3600 per month in order for Sanral to break even as a business.
So they're either going to cross-subsidise e-tolling with other projects (which I don't think is entirely legal or ethical) or paying e-tolls means paying money into a dead duck. You might as well burn your money in a big fire.
Spread this around to your friends and family. I'm tired of seeing them bandy about numbers as blatant lies. These numbers work back with what we actually know.
And what we know now, is that paying e-tolls is the WRONG thing to do, not only on moral grounds, but on financial grounds as well. Paying e-tolls will not cover their debt. It's time the government cut its losses and found other ways to monetise the gantries. Like average speed traps, perhaps? Or melting them down and using it for cabling infrastructure to connect SA properly?
