Sanral breaks silence over e-toll review

The South African National Road Agency (Sanral) has blamed Gauteng Premier David Makhura‘s talk of an e-toll review panel for the agency’s latest bond auction’s missed target.

Sanral said it only managed to raise R275 million in its latest bond auction, citing comments made earlier this week by Makhura relating to the future of e-tolling.

Speaking at the State of the Province address for Gauteng last week, Makhura announced that a panel will be set up to review e-tolling in the province.

“While we shall not promise easy solutions and claim easy victories, we must make it clear we cannot close our eyes to the cries of the sectors of our population who are affected by the cost of travelling across the province,” he said.

These comments, Sanral said, had an impact on investor confidence in the company.

“Earlier today, investor confidence was evidently impacted by the pronouncements of the Gauteng Premier, David Makhura, ahead of the South African National Road Agency (Sanral) July Bond Auction,” Sanral said in a statement.

The entity said it wanted to raise R500 million, but only received total bids of R465 million (wider than current prices) and issued R275 million at mark to market prices.

“The lack of interest was unfortunate given the positive announcement last week by Moody’s Investor Services, to change Sanral’s ratings outlook from negative to stable,” Sanral said.

“The result of this auction has once again demonstrated the close relationship between government and Sanral, a government implementing agency,” said Inge Mulder, Sanral CFO.

“Investors are sensitive to policy uncertainty and this was clearly communicated today, which overshadowed the positive announcement by the ratings agency, Moody’s,” she said.

“We will continue to do our utmost best in ensuring that we produce and maintain roads which are safe, time and cost effective to use.”

Moody’s noted that its decision to affirm Sanral’s ratings and change the outlook to stable from negative primarily reflected the evidence of good e‐toll collections related to the Gauteng Freeway Improvement Project (GFIP).

The next Sanral bond auction is scheduled for August 2014.

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Sanral breaks silence over e-toll review