A RULING by the Constitutional court to overturn a high court’s April order blocking the implementation of electronic tolls (e-tolls) on Gauteng roads is credit positive for the South African National Roads Agency (Sanral), says Moody’s.

The ratings agency says ruling is positive as the roads parastatal can now begin collecting e-toll revenues, which are key to servicing the R20bn debt used to build the road.

"Implementation of e-tolls will alleviate Sanral’s cash tension and reduce its dependence on government funds," Moody’s said in a statement.

Sanral indicated it would start collecting e-tolls in approximately six weeks, after the Constitutional court made the ruling last week, allowing Sanral to begin the implemention of the e-tolls on Gauteng’s freeways.

Moody’s noted, however, that the ruling did not entirely resolve the e-toll saga, as the Gauteng Freeway Improvement Project (GFIP) awaited a full review by the courts in November.

The e-tolls have been widely opposed by business and motorists. Public opposition prompted government to reduce toll road tariffs and postpone the June 2011 implementation of e-toll collections.

"As of April 2012, delayed implementation and lower-than-anticipated tolls resulted in Sanral reporting a revenue loss of about R2.7bn, which is equal to 40% of its 2012 annual revenue," Moody’s said in a statement.

Finance Minister Pravin Gordhan announced new e-tolling tariffs in February following much resistance from business and civil society.

The new fees meant that drivers with e-tags on their vehicles would pay 30c a kilometre instead of the 66c announced initially.

Motorcycles using the freeway would pay 20c per kilometre, while trucks would pay between 75c and R1.51 per kilometre.

Government responded by providing the roads agency with R5.8bn in funds to compensate for the lack of e-toll revenue and to defray operating costs, including debt service payments on the GFIP debt, a large proportion of which government guarantees.

Moody’s said the GFIP was mainly responsible for the rapid surge in Sanral’s debt, which rose to R37.5bn or five times its 2012 annual revenue as of August this year, from R6.2bn in March 2007.

Moody’s downgraded Sanral’s rating to Baa2 from Baa1 in May due to negative pressure on the roads agency’s liquidity.

The rating agency noted that at the end of June, Sanral’s cash reserves and government’s funds totalling R7.1bn were sufficient to cover operating expenditures and short-term obligations, including debt service, over the next 16 months.