But the roads agency's success in recovering e-toll income from users will impact investor sentiment.
The South African National Roads Agency (Sanral) plans to resume the sale of debt in April after a 2011 auction failed because of delays implementing e-tolling in Gauteng, the country’s most populous province.
"A road show will be conducted before we relaunch our auctions in April," Sanral spokesperson Vusi Mona wrote in an e-mailed response to questions on Wednesday. "Investors are awaiting information on Sanral's success in recovering the toll income from users as this will determine whether they invest further or withdraw their current investment."
Sanral rolled out e-tolls, or electronic tolling, in Gauteng after a series of delays caused by opposition from road users and trade unions. The country's commercial hub includes the cities of Johannesburg and Pretoria. The project, which remains unpopular among the province's residents, automatically charges motorists using main thoroughfares between the cities and sends a bill through the post.
The proceeds from e-tolls since the system went live on December 3 are still being calculated. So far, 963 420 vehicles have registered for e-toll accounts – a way for drivers to reduce the payable amount – compared with a target of 1.5-million, according to Sanral.
"Even though the numbers must still be verified, from the initial indications we are satisfied that we are on track to meet our debt obligations," said Mona. The company has R3.8-billion of debt maturing this year, he said.
Sanral is benefiting from a R31.9-billion explicit guarantee from the South African treasury on borrowings for the e-toll project. Sanral received a one-time amount of R5.7-billion to fund a reduction in toll tariffs required to start the system.
"This was also done to ensure Sanral does not breach the approved debt limit of R59-billion over the forthcoming years," said Mona "The guarantee does not have a maturity date, and the current debt curve reflects repayment in approximately 20 years, assuming no further expansions on the existing or new toll roads."
Sanral upgraded the highways to ease transport constraints in the build-up to the 2010 Fifa Soccer World Cup, which South Africa hosted. While the roads agency is "heartened" by the public's response to e-tag registration, the company had to deal with a cyber attack on its online e-toll account management website, said Mona. The security issue was resolved on Tuesday, he said.
"Some people may not like e-tolls but launching an attack on law-abiding citizens, just because they registered an e-toll account, is appalling," said Mona. – Bloomberg