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Moody’s improves SANRAL’s outlook to stable

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Ratings agency Moody’s has improved its outlook on South African National Roads Agency (SANRAL) to stable from negative.

Moody’s says its latest rating action reflects government’s plan to provide additional financial support to SANRAL’s Gauteng Freeway Improvement Projects for the next three years.

Moody’s says the additional grant will enable SANRAL to fund its operating costs related to e-tolls, while the decision on the long-term funding model of the project is being reviewed.

“The change in outlook from negative to stable is good news; it’s not a fundamental improvement in the finances of SANRAL, it is mainly due to allocating more funds to SANRAL so it’s another bailout which doesn’t bode well for government finances because it means that SEP remain a burden on the fiscus,” says  Nedbank economist, Isaac Matshego.

 

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