Sanral writes off R1.8 billion in unpaid e-tolls as unlikely to be collected

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The SA National Roads Agency (Sanral)’s integrated report for the year ended 31 March 2019 showed that it has disregarded over R1.84 billion in outstanding e-toll fees.

This action was taken due to Sanral’s assessment of how much money it could reasonably expect to make from motorists who have rejected the failed toll system.

The company’s revenue from e-tolls on the Gauteng Freeway Improvement Project (GFIP) has declined by 63% to R687.7 million, compared to R1.87 billion last year.

This large reduction can be attributed mostly to the agency’s change in accounting practices rather than non-payment, however. For the 2019 financial year, Sanral adopted IFRS 15 accounting practices, replacing the IAS 18 method used before.

Discounting this change in practices, the real decline in e-toll revenue was only around 0.4% – from R690 million to R687.7 million.

However, implementing IFRS 15 – which includes a five-step assessment of revenues owed, including customers’ intention to pay – has resulted in e-toll revenue of R1.84 billion being disregarded as it could not meet the new probability criteria.

Non-payment

Sanral raised an impairment of R10.04 billion on its e-toll business, and the company said it relies on government assistance to fund the programme.

“Due to the under-collection of e-tolls on the GFIP, government grants have become a significant supplementary source of funding for the toll portfolio,” Sanral said.

The agency received a R439-million grant from the government in addition to a R5.75-billion non-toll grant, which assisted it in addressing the shortfall caused by low e-toll payments.

“Even though a significant portion of Sanral’s debt is guaranteed by government, government has elected on several occasions to avert a default by providing funding to Sanral, pending the outcome of the e-toll decision by the Presidency. It is therefore fair to assume that government will continue to do so in the foreseeable future,” Sanral said.

Sanral said that until a resolution regarding the e-toll impasse has been passed, it’s e-toll portfolio will continue to be supported by government grants.

 

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