* Govt may have to widen expected 2012/13 budget shortfall
* Toll troubles affect other state firms borrowing plans
By Xola Potelwa
JOHANNESBURG, May 3 (Reuters) – South Africa wanted the
users of the heavily travelled highways in Johannesburg to start
this week paying for road improvements through tolls.
Instead, it may end up with a nearly $3 billion bill and
worries about financing for other major public works projects
meant to boost the economy after a bruising political and legal
battle put the toll plans on hold indefinitely.
The ruling African National Congress (ANC) faced almost
unprecedented protests from an unlikely coalition of labour,
business, economists and drivers who said the tolls were too
costly, would place too much of a burden on the poor and stoke
inflation in Africa’s largest economy.
Without tolls rolling in, the state road agency named SANRAL
may be forced to default on at least 20 billion rand ($2.58
billion) of debt unless the Finance Ministry steps in to pick up
the tab. The bill for the highway upgrade is more than what the
country pays each year to run its court system.
“If the government had to step up and meet its guarantee,
budget reserves would be fully consumed at the start of the
fiscal year,” said Peter Attard Montalto, an emerging markets
economist at Nomura, adding this could add another 0.6
percentage points to the deficit.
Other state agencies planned to use SANRAL’s model to tap
into bond markets to fund 300 billion rand in infrastructure
spending called for by President Jacob Zuma to grow the economy
and ease its chronic unemployment problems.
Continued…
