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TCTA: Further Disclosures relating to the Delay in the release of TCTA's 2018/19 Annual Financial Statements
Trans-Caledon Tunnel Authority (TCTA)
WSP4 (LHWP) ZAG000020009
WSP5 (LHWP) ZAG000020017
As established by Notice No 2631 in Government Gazette No 10545 of 12 December 1986, and revised by
Notice No 277 in Government Gazette No 21017 of 24 March 2000 (the Notice of Establishment).
A Schedule 2 Public Finance Management Act No. 1 of 1999 (PFMA) entity.
FURTHER DISCLOSURES RELATING TO THE DELAY IN THE RELEASE OF TCTA’S 2018/19 ANNUAL
FINANCIAL STATEMENTS
TCTA’s SENS Announcements of 30 August 2019 (titled: Delay in Completion of TCTA’s 2018/19 Audit and
Annual Financial Statements); 2 October 2019 (titled: Update on the Delay in Release of TCTA’s 2018/19
Annual Financial Statements); and 31 October 2019 (titled: Further Update on the Delay in the Release of
TCTA’s 2018/19 Annual Financial Statements) have reference.
Noteholders are notified of the following with regards to further disclosures TCTA has made since 31 October
2019 regarding the matter of the delay in its Annual Financial Statements (AFS).
Several lenders requested the following information, which TCTA made available to them:
1. The quantum of borrowing that could potentially view the current AFS situation as an Event of Default
relative to total borrowing
2. TCTA’s cash on hand and liquidity situation.
3. Updated timelines with regards to the expected resolution of the matter, and
4. Updates with regards to the processes with the FSCA and JSE regarding the missed deadline (31
October) for submission of the AFS.
TCTA believes that the answers to these questions are of relevance and interest to the Noteholders and to
all the lenders.
1. The amount of debt affected by the AFS Delay:
TCTA’s debt falls under the following categories with regards to the requirement for AFS and the
consequences of a failure to deliver AFS:
Category 1 AFS are required, but failure to provide AFS is not a specified Event of Default (EoD) in
itself. However, agreements have “failure to comply with obligations assumed” which can
make failure to provide AFS an EoD.
Category 2 No mention of AFS, but agreements have:
• In the Opinion of the lender…,
• Material Adverse Change, or
• Cross Default
clauses that could allow the lender to follow lenders who have declared an EoD in
demanding repayment
Category 3 No mention of AFS and there does not seem to be any other way within the agreements
that would allow the lender to declare the AFS matter an EoD or to follow lenders who do.
As at 31 October, TCTA’s debt within each category and arranged by project, is:
Project
millions of rands Category 1 Category 2 Category 3 Totals
Vaal River System Water Resources Development Projects (VRS)* 3 750 - 9 550 13 300
Berg Water Project (BWP) 337 190 - 527
Vaal River Eastern Sub-System Augmentation Project (VRESAP) 3 225 113 275 3 613
Mooi-Mgeni Transfer Scheme phase 2 (MMTS-2) 1 431 - 311 1 742
Komati Water Scheme Augmentation Project (KWSAP) 311 929 - 1 240
Mokolo Crocodile Water Augmentation Project Phase 1 (MCWAP-1) 80 1 265 - 1 345
Total TCTA 9 134 2 497 10 136 21 767
* Incorporating the Lesotho Highlands Water Project (LHWP) and Acid Mine Drainage (AMD)
In total, R11.6 billion of debt is potentially affected by the AFS delay and R10.1 billion is unaffected.
2. TCTA’s cash and Liquidity Situation:
Projects are in a generally healthy liquidity position and, based on current projected expenditure, the earliest
any project would require funding would be February 2020.
Cash & Cash relative to Projected Expenditure
millions of rands Equivalents – projected date of depletion of cash
Vaal River System Water Resources Development Projects (VRS) 2 494 After 31 March 2020
Berg Water Project (BWP) 42 13 March 2020
Vaal River Eastern Sub-System Augmentation Project (VRESAP) 244 11 February 2020
Mooi-Mgeni Transfer Scheme phase 2 (MMTS-2) 332 13 February 2020
Komati Water Scheme Augmentation Project (KWSAP) 152 After 31 March 2020
Mokolo Crocodile Water Augmentation Project Phase 1 (MCWAP-1) 629 After 31 March 2020
*assumes no cash inflows from tariff revenue or loans or transfers
3. Updated timelines regarding completion of audit and release of AFS:
The situation remains as stated in the 31 October 2019 SENS Announcement (paraphrased below):
The Auditor-General South Africa (AGSA) is expected to resume the TCTA audit on 15 November. The
AGSA has stated that audit work will take approximately three to four weeks to conclude, depending on the
extent to which the adjustments made to the AFS presented to the AGSA on 21 October require additional
audit work. Following the completion of the audit process, the audited AFS will be submitted to TCTA’s Board
and then to the Minister of Human Settlements, Water and Sanitation before they can be released publicly.
Given this, TCTA believes that the AFS are unlikely to be released before the end of December 2019.
3. Updates with regards the FSCA and JSE deadlines:
FSCA: On 30 October 2019 TCTA requested a further extension (of the deadline which had been extended
from 31 August 2019 to 31 October 2019) from the FSCA. On 6 November 2019, the FSCA granted an
extension to 31 March 2020.
JSE: In terms of paragraph 1.7 of the DLR, TCTA can make written representations to the JSE as to why
the JSE should not suspend its notes after 30 November 2019. The deadline for submission of such
representations is 14 November 2019. TCTA is in the process of finalising its submission.
TCTA will update Noteholders promptly when there are further developments regarding the matter.
Nyiko Mageza, TCTA Sponsor +27 12 683 1334, nmageza@tcta.co.za
Media Queries - Wanda Mkutshulwa, Head of Communications +27 12 683 1378, wmkutshulwa@tcta.co.za
11 November 2019
Date: 11/11/2019 02:01:00
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