Toll roads

[Martinco]

An email I got today....................this is starting to make some sense !

[AndyD]

Speculating by buying SANRAL bonds before the finalisation of the processes in the tolling system then pushing the toll system through regardless of it being untenable, wouldn't this fall under insider trading laws as well?

[Dave A]

It's bonds, not shares. Not sure there's much of an "insider trading" effect, other than some reassurance that SANRAL woud be able to pay the coupons.

[Faan]

I was just wondering how much truth is in this story:

"The IFP said today that it was shocked to learn the real reasons behind government's push to ensure the controversial Gauteng e-tolling project succeeds.

It is reported today, that the Public Investment Corporation - an investment manager for state institutions - has bought R17 billion in SANRAL bonds. 89% of this investment is made-up of the Government Employees Pension Funds.

"Finally it is clear why government wants to save this project at all cost, despite it being unfeasible and despite it receiving so much public resistance. These types of cover-ups were prevalent during the apartheid regime, but never could one have imagined such a huge cover-up in our post-democratic dispensation," said Narend Singh MP, the IFP's spokesperson on Finance and on the e-tolling project.

It is now clear that there are huge economic issues at stake. If the tolling project fails, Government will not only have to bail-out SANRAL, but it will also have to bail-out the civil servants' pension funds as well.

"It is clear that Government finds itself between a rock and a very hard place," said Singh.

He added, "This matrix that we find ourselves in now is totally untenable, especially since the pensions of ordinary citizens are at stake. Government has misled the public. We believe that this might possibly be one of the biggest post-democratic era scandals to date. I will raise this matter at the next possible opportunity at Parliament, as the taxpayer deserves answers on this matter," concluded Singh."

[Nickolai Naydenov]

http://www.gepf.co.za/Documents/Media%20-%20e-tolling%20-%20GEPF%20sets%20the%20record%20straight%20-%20final.pdf

You may read this official post which has been confirmed by various sources. So it turns GEPF holds 50% of SANRAL's Bonds. Funny part is that the government issued a Regulation 28 last year that governs the way investments are done for retirement. For example an individual can't invest more than 75% in equity, not more than 25% in property however the two together can't be more than 90% and etc., the reason for this is yo mitigate the risk of individuals investing at high risk for retirement. Now they talking they've invested so much money in bonds, I wonder what would happen if the etolling doesn't take off, then this 15.7 billion will be lost, that tells me that the government does as they please regardless of the consequences for its people, some useless selfish government employees decide how to run our country with our money and we have no say in it. It disgusts me.

[Dave A]

I feel the need to stress there is a difference between bonds and shares. In fact, last I knew, part of the retirement fund tax break deal is that a percentage (minimum 50% is it?) must be invested in bonds. Or has all that changed?

I'm also wondering if the fuss is aimed in the right direction in this. Just what has this R15.7 billion (in SANRAL bonds) been invested in? I ask because I understood the crowd that had been awarded the etolling contract were the folk that put up the mega bucks that had to be recouped.

[Nickolai Naydenov]

I feel the need to stress there is a difference between bonds and shares. In fact, last I knew, part of the retirement fund tax break deal is that a percentage (minimum 50% is it?) must be invested in bonds. Or has all that changed?

I'm also wondering if the fuss is aimed in the right direction in this. Just what has this R15.7 billion (in SANRAL bonds) been invested in? I ask because I understood the crowd that had been awarded the etolling contract were the folk that put up the mega bucks that had to be recouped.

Yip there's a difference between bonds and shares, I was just trying to prove a point that government controls how we invest our money, but they don't take into consideration SANRAL as high risk because if etolling doesn't take off how are the bonds gona be paid back to the investors?

With regards to the 15.7 billion it is bonds. Basically the foreign company invested into sanral and owns actual shares while bonds are printed papers sold at a price with guaranteed return in certain period of time. So what happens is they want to raise money but don't want to sell equity in the firm so they sell bonds, in other words they borrow money and pay it back with interest. The government does this all the time, when they need to raise money they sell bonds which are considered safe investment, however I have completely different view on bonds, but that is a long story. Anyway I hope I cleared up what I meant lol...

[Dave A]

Erm - does anyone know what the capital contribution was of the shareholders then?

[Nickolai Naydenov]

I think it is the R40 billion that our government has to pay back

[Justloadit]

now it cost R40billion, the original figure bandied around was R22billion or did I hear incorrectly?