Toll levies and borrowings on commercial markets have been the main sources of finance for national toll roads managed directly by SANRAL. 

The South African National Roads Agency (SOC) Limited (SANRAL) has two distinct areas of business, the operation of toll roads and the operation of non-toll roads, which are funded in different ways.  

An annual grant from the national fiscus funds the development, upgrading, repair and maintenance of national roads that are not subject to tolling – 87% of the national road network.  

Toll levies and borrowings on commercial markets have been the main sources of finance for national toll roads managed directly by SANRAL.  

These constitute some 7% of the national road network. However, 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.  

In addition, there are toll roads – comprising the remaining 6% of the national road network – for which 30-year concessions have been granted to private companies.  

These companies, TRAC, N3TC and Bakwena, have concluded public-private partnerships with SANRAL for the construction, maintenance and operation of the relevant routes.  

Under these arrangements, the concession holders are responsible for raising capital for road construction, servicing this debt and funding all upgrades, rehabilitation and maintenance as well as operational costs. 

Toll revenue on these routes accrues to the concession holders. At the end of the concession period the roads are to be handed back to SANRAL and must comply with specified standards at the time of transfer. 

Annual income  

SANRAL recorded total revenue of R16 661–million in 2018/19. Overall, across the non-toll and toll portfolios, Government grants constitute the largest source of revenue for SANRAL, followed by toll fees collected from road users.  

The annual government grant for the non-toll portfolio amounted to R12.4-billion. For the second consecutive year, the authorities permitted SANRAL to transfer part of this grant (R5.7billion) to the toll portfolio to offset the substantial under recovery of toll fees on the GFIP.  

Government continued to make a special allocation for GFIP, amounting to R505-million. A portion of the non-toll Government grant is capitalised and deferred for future spending on multi-year road development projects.  

In 2018/19, this amount was R574,5–million. Conversely, a portion of amounts capitalised in previous years becomes available for capital projects each year and in 2018/19 this was R192,1–million.  

Revenue from toll collections decreased by 18%. The tariff adjustment on all toll roads, which is guided by the Consumer Price Index, was 5.58% for the year. 

Annual expenditure  

The effective reduction of the non-toll grant as a result of the transfer of a large portion of the grant to the toll portfolio had a marked effect on patterns of spending on the development and maintenance of the road network.  

Overall spending on capital projects and road maintenance decreased by 19% in 2018/19 from the previous year, and by a total of 22% over a two-year period.  

Non-toll spending saw a modest 6% year-on-year decline in 2017/18 with a larger drop (18%) in the current reporting period.  

This impacted especially on maintenance contracts for non-toll roads. Spending on toll roads increased by 5% year-on-year in 2017/18 but decreased by 22% in the current reporting period.  

Maintenance spending for toll roads remained constant while capital spending declined. 

The main categories of expenditure in the non-toll and toll portfolios present contrasting profiles. While road construction and maintenance represent nearly two-thirds of non-toll expenditure, these activities account for about one-third of spending in the toll portfolio.  

Three out of every 10 rand in the toll portfolio is committed to servicing debt raised to develop toll roads.