The row over the funding of Gauteng’s toll roads has prompted Moody’s Investors Service to downgrade the long-term rating of the SA National Roads Agency Limited (Sanral). Moody’s said yesterday it had concluded a review started last month and had decided to cut Sanral’s rating to Baa1 with a negative outlook from A3.
The rating could be cut further if Sanral management failed to deal with the operational risks or if Moody’s downgraded South Africa’s sovereign rating, it warned. In November, Moody’s changed the outlook on the country’s A3 rating from stable to negative – implying the next move would be down.
According to Business Report, Sanral’s downgrade adds another chapter to the unfolding fiasco surrounding the Gauteng Freeway Improvement Project (GFIP), eroding South Africa’s credibility among international investors. It also boosts the cost to the government-owned road agency of raising capital.
