The South African National Roads Agency (Sanral), which has already raised R9,4-billion on the domestic debt markets since July and plans to raise another R12,2-billion by the end of March 2010, is in parallel funding discussions with several development finance institutions and export credit agencies in a bid to source competitively-priced finance for its R25-billion expenditure programme.
CFO Inge Mulder told Engineering News Online on Monday that as much as R2-billion could be secured from these sources, and that discussions were at a particularly advanced stage with the European Investment Bank.
Discussions were also under way with European and Asian export credit agencies in a bid to secure favourable facilities for the imported component of the Gauteng Freeway Improvement Programme, which made up about R20-billion of Sanralâ€™s R25-billion capital expenditure plan.
The agency had already prequalified two foreign-led bidding consortia for the open-road-tolling aspect of the project. The winner would be tasked with creating and operating an electronic-tolling system that would be able to garner information from either in-vehicle electronic tags, or vehicle number plates.
Gantries would have to be installed at intervals of 11 km along the 185-km toll route, with this infrastructure being critical to securing the revenue needed to pay for the six-lane highway, which had already been declared a toll road.
Tolling activity was expected to begin in October 2010 at a rate of 5c/km, but frequent-use discounts were being formulated.
The agency was also planning a retail bond offer, which would be the first to be listed on the YieldX, within the next three months. Some R50-million could be raised through its so-called â€˜HWAYâ€™ (pronounced â€˜highway) bond, which would offer an attractive return of Johannesburg interbank agreed rate plus 45%.
But, by far the bulk of the capital would be raised through a Domestic Medium Term Note Programme, through which the first money was secured on July 10 last year.
Some R13-billion was scheduled for raising between April 1, 2009, and March 31, 2010, with the first R1-billion having already been secured during April.
In fact, after the National Treasury, which was scheduled to raise R70,5-billion during the current fiscal year, Sanral would be the second-largest participant in the local debt market.
The other active State-owned enterprises (SoEs) would be power utility Eskom (R12-billion), freight logistics group Transnet (R6,6-billion), the Development Bank of Southern Africa (R6-billion), water utility the Trans-Caledon Tunnel Authority (R1-billion), and the Airports Company South Africa (R3,6-billion).
All told, government and the countryâ€™s six bond-issuing SoEs intended to secure nearly R114-billion by March 31 next year.
Sanral had six bond types, two linked to the consumer price index and four yielding fixed returns, maturing at 5-, 10-, 15- and 20-year intervals.
Mulder said that there was a strong appetite for the Sanral debt and that its spreads had actually narrowed from 235 basis points above government bonds in July, to between 180 and 185 basis points in April.
PUBLICATION: Engineering News
AUTHOR: Terence Creamer
DATED: 4th May 2009