Ahead of SANRAL’s envisioned bond auctions on Wednesday 07/10/2015, the recent release of SANRAL’s annual report for the 2014/2015 financial year, contains a number of serious discrepancies and omissions. OUTA believes these pertinent matters need to be to disclosed to potential bond investors, who would otherwise be unfairly prejudiced by the information that appears to be craftily left out or framed in the report.
When one reads both the Sanral Chairman and CEO reports in the 2015 Annual Report, it is clear to OUTA that these paint an unrealistic picture of the real situation that the State Owned Entity finds itself in.
Mr Alli speaks of the decline in e-toll compliance since July 2014, as being directly attributed to Premier Makhura’s e-Toll advisory panel discussions. While this may have been partially to blame for some of the drop off, it is clear from Sanral’s own revenue trend graphs supplied to the media earlier this year, that their e-toll income had plateaued at R120m per month by June 2014, despite ongoing threats of criminal prosecution of motorists who defied the scheme. In other words, OUTA believes that Sanral’s e-toll compliance levels were never going achieve significantly more than that reached by June 2014, seven months after the scheme was launched.
Furthermore, OUTA believes that it was the Minister of Transport, Ms Dipuo Peters’ statement in Parliament on 18th July 2014, that the Government and Sanral would not be pursuing the criminal prosecution of e-toll defaulters, which was a bigger catalyst to the decline in e-toll compliance levels, than Premier Makhura’s e-toll impact announcement in the same month.
It is also strange to read Mr Alli statement in the report, that the same number of 1,3 million e-tag holders are paying for Gauteng’s e-tolls, which was also the figure used at the height of their compliance levels in mid-2014, despite the clear indication that e-toll revenues reduced by almost half – to an average of around R70m per month in the first half of 2015. The picture of 1,3 million e-tagged and paying motorists still driving on Gauteng’s freeways by the end of March 2015 or even mid 2015 (when the report was finalised) is extremely misleading.
The 2015 Sanral Annual report also indicated a healthy regulatory and operating environment for the management of Gauteng’s e-tolls, yet some five months after their announcement of the new dispensation in May 2015, which also mentioned (threatened) the withholding of vehicle license renewals in order to stimulate enforcement, none of these new dispensation mechanisms were in place by October 2015, and neither does it appear (from the recent Gazette 39130) that vehicle re-licensing will be impacted by the non-payment of e-tolls.
OUTA furthermore highlights other serious discrepancies or questionable accounting practices reflected in Sanral’s 2015 report, in that:
Sanral remains silent on GFIP civil suit against collusive companies
Another serious concern for OUTA, is the absence of reporting on Sanral’s previously noted intention of legal action against collusive construction companies, for overcharges on the GFIP. For whatever reasons, the risk committee also omitted to note this issue, which OUTA raises as a serious risk, as a potential class action is looming for Sanral, should they fail to introduce decisive and strong actions to collect the estimated R7 billion overcharge on the GFIP, which they wish to pass on as an odious debt to the public. This lack of transparent action will provide the public with increased rights to defend their non-e-toll payment actions and is a serious financial risk for Sanral.
OUTA will assess the Sanral 2015 Annual report in greater detail, for more discrepancies and questions which the SOE should provide answers to.