COSATU welcomes Nazeer Alli's resignation and condemns Moody's role

The Congress of South African Trade Unions welcomes the resignation of Nazeer Alli as Chief Executive Officer of Sanral. We hope that this marks the final end of the Gauteng e-tolling project of which he was the chief public spokesperson.

Alli refused to listen to the groundswell of opposition to the deeply unpopular plan to commodify our public roads and force residents pay huge amounts of money to travel on previously toll-free roads. He arrogantly tried to bully and blackmail motorists to register with Sanral and buy e-tags, which only made them even more determined to resist.

We call upon government to heed the call of the people, find better, alternative ways to pay off Sanral's debts and to fund future road construction and improvement schemes and announce the end of the disastrous e-tolling project.

COSATU also notes that credit-rating agency Moody's Investors Service has downgraded Sanral's global and South African-scale ratings, on the grounds that the delay in implementing e-tolling in Gauteng caused concerns over the road agency's medium-term financial sustainability.

The federation strongly condemns the role of credit rating agencies like Moody's and Standard & Poor's. They are supposed to assess creditworthiness, so that investors can better assess investment risks, but in practice, as this case shows, they have the effect of trying to influence the policies of sovereign, democratic countries by encouraging potential investors to invest or not invest in companies or even countries by either promoting or undermining confidence in them.

Financial ratings are an example of the malign influence of international capital, which seeks to elevate the profitability and sustainability of private business above all other considerations in determining what policies should be adopted.

This intervention by Moody's perfectly explains why COSATU objects to strongly to the commodification of our road network and other public services. It is an example of the way private capital subverts the democratic will of the people, which was so graphically demonstrated in the general strike of and mass marches 7 March 2012.

Moody's note that Sanral's losses will grow by an estimated R100 million each month that the delay in e-tolling continues and will gradually erode the company's cash buffer. They argue that a positive resolution of the issue could lead to a stabilisation of Sanral's financial position and prospects, but that conversely, Sanral's ratings could come under pressure in the event of an unfavourable resolution of the tolling issue, resulting in a further deterioration of its financial metrics and cash flows, and a downgrade not just of Sanral's but the SA's government ratings!

The final decision on e-tolling, as on any other important issue, must be determined by the interests of people of South Africa, not by some faceless individuals in England. Our public services must be run for the benefit of the public, not the profit of private companies and foreign investors.

This intervention by Moody's must not be used as an argument to try to reinstate the discredited e-tolls. The new Cabinet task team must not be diverted from the search for alternative models for bailing out Sanral and funding future road construction and improvements.

Statement issued by Patrick Craven, COSATU national spokesperson, May 8 2012

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