The Road Freight Association (RFA) is “astounded” by reports that the SA National Roads Agency (Sanral) is looking to Brics’ New Development Bank (NDB) for a R7 billion loan to fund road infrastructure maintenance and development.
RFA chief executive Gavin Kelly questioned whether the roads agency was not already collecting sufficient revenue from road users and taxpayers to fund its road projects.
“The RFA is astounded by recent reports that Sanral is looking for a R7 billion loan from Brics; this points to the dysfunctionality that is rife in South Africa,” Kelly said.
“Is the revenue generated by the fuel levy, licence fees, business taxes and various permit and operational fees not enough? Of course it is – the real question is where have all those funds gone?”
Kelly was reacting to Sanral’s announcement on Tuesday that it had signed a R7bn loan agreement with the NDB to support its toll portfolio projects in the country. Sanral board member, Mahesh Fakir said the funds would be used towards “road infrastructure projects, with key road works such as upgrading our national roads, widening carriageways, building extra lanes, as well as many other aspects that relate to road infrastructure”.
Projects to be funded through the loan include the N3 Paradise Valley to Marianhill Toll Plaza, N3 Marianhill Toll Plaza to Key Ridge, N1 Zandkraal to Scottland, and the N1 Scottland to Winburg South project. These projects represent more than R12.7bn in investment, which will include logistical, safety, and mobility enhancements on key trade routes.
Kelly said the fuel levy had been originally created as a simple, least invasive manner of raising funds to build, develop and maintain the road network in South Africa.
“In the mid-1980s, a number of toll roads – driven through a mixture of concessions and state operations - were also added to priority routes. The fuel levy raises around R95bn a year, more than enough to deal with the requirements of road maintenance and development,” Kelly said.
“Unfortunately, the fund is not ringfenced for roads only, while there are also comments that funding allocated for roads is either spent elsewhere or returned, unused.”
He said the RFA was of the opinion “that there should be no reason to borrow more money”.
“Apply the funds raised effectively, efficiently and where needed from those who paid in the first place for good roads.”
Sanral CEO Reginald Demana earlier said the loan would become effective as soon as standard conditions had been met.
The balance of the borrowing limit, pegged at R16.5bn, not utilised by the NDB loan, will be used to raise funds in the domestic market, including bonds and syndicated and bilateral loans.
NDB vice president and CEO, Monale Ratsoma, said the bank was offering the loan denominated in local currency to provide “cushioning against currency fluctuations”.
