The SA National Roads Agency has made bedfellows of implacable political opponents Cosatu and the DA.

The SA National Roads Agency Limited (Sanral) has managed to succeed where audacious others have failed: it has made bedfellows of implacable political opponents Cosatu and the DA.

The two were so opposed to the outrageous e-tolling system that they were planning to paint the highways and byways red and blue, marching together as one in their opposition to the unpopular road tax.

Now that Transport Minister S’bu Ndebele has ordered that the board of directors delay the implementation of the e-tolling system in Gauteng, will Sanral default on the loans it acquired to set up the system or is it going to pass the buck onto the National Treasury?

Now that things have gone belly up, how is the organisation going to convince investors that it can be trusted with their money?

Sanral rightly invited the wrath of business by the way it went about implementing the e-tolling system. It was clumsy and was a good lesson on how not to do things.

Sanral’s lieutenant, Ndebele, decided to retreat and told the organisation: “You are on your own now.”

The SA Chamber of Commerce and Industry (Sacci) and Business Unity SA (Busa) were rightly concerned about the intended toll.

Sacci said yesterday the postponement of the system would provide Sanral with an opportunity to reassess the methodology and cost of tolling in Gauteng.

It said: “Sanral should reconsider the cost of maintaining physical e-toll stores in relation to the utilisation of existing infrastructure in local service stations, post offices or supermarkets, much as is the case with the cellphone ‘pay as you go’ air-time system.”

Busa said it believed that an excellent opportunity had been created for a serious in-depth consultation on alternative modalities to finance the much-needed upgrading of roads.

Markets

Financial markets have become resilient to bad news. Stock markets fell in Asia yesterday after Standard & Poor’s (S&P) cut the credit rating of nine euro zone countries on Friday, including the coveted triple-A grades of France and Austria.

The Sydney Morning Herald reported Tokyo was 1.53 percent lower, Hong Kong lost 1 percent, Sydney slipped 1.17 percent, Shanghai gave up 0.68 percent and Seoul shed 1.34 percent.

However, the shock waves soon ran out of steam as the trading day moved westward. Even in South Africa, which saw Fitch Ratings change the outlook on the country’s BBB+ credit rating from stable to negative, the market rebounded.

The JSE all share index closed 0.8 percent up on the day at 33 205.01 points, from 32 927.4 on Friday. The rand strengthened to trade at R8.0895 to the dollar by 5pm, after weakening to R8.18 at Friday’s close.

European markets were calm, possibly reassured by an announcement from Moody’s Investors Service that it would not follow S&P’s move on France – at least for the moment. Though heads of a European Commission, European Central Bank and International Monetary Fund mission will head for Athens for talks on a second rescue package later this week, market concerns about the troubled euro member were on the back burner.

It is two years since questions about Greece’s sovereign debt first hit the headlines and markets are apparently resigned to its fate – default in one form or another.

And the sinking of the Italian cruise liner Costa Concordia occupied more media space than the actions of the rating agencies or the cost of European debt.

The shares of the parent firm Carnival fell 23 percent on the London Stock Exchange, according to Bloomberg. And the ship’s insurers may face total costs of about E405 million (R4.2 billion). page 18

AfriSam

It’s tempting to describe AfriSam as the Greece of the cement industry and in this context, to see the Public Investment Corporation (PIC) as Germany. And then to take the analogy a little further it might be tempting to liken the creation of debt-riddled, black empowered AfriSam to Greece’s entry into Euroland: both were extremely poorly thought through.

Of course, like all analogies, this one is flawed. AfriSam is fundamentally much sounder than Greece. Its debt problems were foisted upon it by a number of key decision makers who believed that the good times would continue indefinitely and that therefore using an excessive amount of debt to fund the purchase of an overpriced asset would work out in the end.

While some may think that it is easy to criticise in 2012 with the benefit of hindsight, the reality is that back in 2006/07 there were already concerns about the deal.

Similarly, Greece should not have been allowed into Euroland and probably would not have got in without the “help” of the likes of Goldman Sachs.

However, if AfriSam’s debt is “restructured” – to use that quaintly benign term so liked by EU executives – there is a good chance that it will enjoy a sound and prosperous future.

It is difficult to say the same about Greece, although a debt restructuring will certainly help it on its way.

Where the analogy takes most strain, is likening the PIC to Germany. Unlike Germany, the PIC is approaching this very difficult situation from an enlightened perspective and realises that in order to effect some sort of rescue, it, along with almost everyone else, will also take some pain.

Of course the precise amount of pain taken by the different players in the AfriSam saga may never be known, but it does seem likely that the Bunker Hills “investees” will not suffer too much.

Edited by Banele Ginindza. With contributions by Wiseman Khuzwayo, Ethel Hazelhurst and Ann Crotty.

The national government’s intervention in three provinces – Limpopo, the Free State and Gauteng – does not portend well for the future of provinces with the ANC having hinted in the past that their number could be reduced from nine or scrapped altogether.

The national government’s intervention in three provinces – Limpopo, the Free State and Gauteng – does not portend well for the future of provinces, with the ANC having hinted in the past that their number could be reduced from nine or scrapped altogether.

As James Lorimer, the DA’s co-operative governance spokesman, pointed out yesterday, the intervention highlighted both the state of collapse of the provincial administrations and the need to hold the political leadership accountable. “It is a massive vote of no confidence in the three provincial premiers,” he said.

In Limpopo, where the administration could not pay the November salaries, Premier Cassel Mathale should not be allowed to continue to occupy his position, Lorimer said. Notably Mathale is a supporter of ANC Youth League leader Julius Malema and is no longer at the top of President Jacob Zuma’s political pops, so to speak.

Five departments – those of education, health, treasury, public works and roads and transport – had been put under national government administration after the Limpopo reported a budget deficit of R1.5 billion.

MECs, department heads and chief financial officers would be replaced temporarily by acting national government officials, cabinet spokesman Jimmy Manyi announced.

Meanwhile, Gauteng, which has the biggest provincial budget, had to plead for money from the national government as its continued failure to control spending in the Health Department meant that the poor people of the province continued to suffer, Lorimer noted. The person to blame was Premier Nomvula Mokonyane.

National Health Minister Aaron Motsoaledi will lead the investigation and clean-up of the Health Department.

In the Free State, the provincial policy, treasury and roads and transport departments are under the spotlight. Lorimer said the man who should take responsibility for this was Premier Ace Magashule, but, like Mokonyane, he is a Zuma ally.

However, the future of Mathale has to be a matter of conjecture. The interventions may also be the first in a set of actions that will ultimately pull the plug on the provinces for good.

Profmed

The North Gauteng High Court’s judgment against Profmed Medical Scheme, ordering it to pay for post-hospital treatment for beneficiaries, could not have come at a worse time. Just two weeks ago the scheme faced deregistration threats from the Council for Medical Schemes (CMS).

Promptly after it indicated that it would be paying the prescribed minimum benefits in full at the invoiced price, the court dismissed its application to reject an order from the CMS compelling it to pay for the rehabilitation treatment of a beneficiary who was involved in an accident. The beneficiary, who was covered by the benefit rule 1E4 of the scheme option she was on, has fought a four-year battle with Profmed to recover physiotherapy treatment claims.

Although Profmed had decided to abide by the ruling of the registrar of medical schemes and made a payment of R60 000 for claims dating to 2007, claims for the two following years were never paid.

Disputes between members and their medical schemes over the payment of claims related to in-hospital and post-hospital treatment have recently caused members to lash out their frustrations on Hello Peter, a consumer rights website.

But the registrar and chief executive of the CMS, Monwabisi Gantsho, said it was difficult for the regulator to protect medical scheme members if they did not come to the CMS. “We rely on members’ complaints and if they don’t reach us there is only so much that we can do. It is critical that they approach us so we can protect them,” he said after sharing his excitement about the Profmed judgment.

The CMS said it received 5 617 complaints from scheme members in 2010. The number of complaints reaching its complaints adjudication unit has been increasing every year. Last year, 5 351 of the total complaints were resolved.

Airline taxes

Since tourism has been identified by so many countries as a provider of jobs and millions of people globally are earning a living from it in so many ways, it is hard to understand why it is being sabotaged by the excessive taxation of airlines.

These play an essential part in the tourism business and the airline industry seems to be doing more than most to reduce the pollution it emits.

Encouraged by the International Air Transport Association (Iata), airlines and aircraft manufacturers have been working together for years to reduce the amount of pollution caused by flying. Emirates airline drew attention to this on Sunday when it used a flight demonstrating the measures recommended by the Indian Ocean Strategic Partnership to Reduce Emissions to bring a delegation from the United Arab Emirates to attend the conference on climate change in Durban.

In addition to using one of the most fuel-efficient new generation aircraft, Emirates benefited from co-operation from air navigation authorities in seven countries to cut emissions of carbon dioxide by following the shortest possible route and conducting uninterrupted climbs and descents.

Several airlines, particularly Air New Zealand and Dutch airline KLM and including German airline Lufthansa and Virgin Atlantic Airways, have experimented with fuels based on plants, algae and waste. Yet governments have seen airlines as “cash cows” and subjected them to arrival and departure taxes.

The latest plan by the EU to compel all arriving aircraft to invest in a carbon trading scheme has drawn protests from other parts of the world on the grounds that the EU has no right to tax airlines for emissions outside its own air space. Hopefully, the bloc will change its mind

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Edited by Peter DeIonno. With contributions from Donwald Pressly, Londiwe Buthelezi and Audrey D’Angelo.