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South African National Roads Agency

Investor Presentation

February 2010

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Executive Management

Mr. Nazir Alli(Chief Executive Officer)

Ms. Alice Mathew(Company Secretary & Risk Officer)

Mr. Koos Smit(Engineering Executive)

Ms. Heidi Harper(Corporate Services Executive)

Ms. Inge Mulder(Chief Financial Officer)

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South Africa and SANRAL Overview

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SANRAL at a Glance

• Established in April 1998 by an Act of Parliament to operate South Africa’s national road network

• Mandate is to design, fund, maintain, operate and rehabilitate national roads:

–Toll and Non-Toll Network

• Responsible for expanding South Africa’s national road network from 7,000km (originally) to 16,170km (currently) and to 20,000km by 2010

• Manage approximately R18.5 billion of annual spend and toll road concessionaires

• Levy tolls for the purposes of funding the Toll Road Network

• SANRAL’s business consists of two separate operations, funded separately:

–non-toll roads funded by government allocations (no borrowings or cross-subsidisation permitted)

– toll roads funded and operated by SANRAL itself or through private concessions under PPP

–SANRAL maintains separate accounting records for Toll and Non-Toll related operations

Business Overview

Ownership 100% SA government

National Road Network 16,170 kilometres

Credit Ratings A3 (Moody’s)

Overview of Operations

Key Information

1,3141,2111,136969Toll

Revenue(ZAR million)

2006 2007 2008 2009

Non-toll 1,386 1,504 1,842 1,934

Toll as a % of Total

41% 43% 40% 40%

Total Revenues ZAR 3,249 million

Net Debt ZAR 12,130 million

Source: SANRAL

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Abu Dhabi Overview

Gross Domestic Product

ZAR 2,407bn / $313bn

Estimated Total Population

46 million

GDP Per Capita

Net Loan Debt 1 ZAR 690bn / $90bn

Credit Ratings A3 (Moody’s) / BBB+ (S&P)

Figures per the 2009/10 Budget, Q4 09 SARB Quarterly Bulletin and StatsSAUS$ figures assuming exchange rate of 7.68.

Medium-term estimatesRevised estimateOutcome

28.2

(7.3)

(1.5)

2009/10

33.2

(6.2)

2.9

2010/11

37.3

(5.0)

3.4

2011/12

22.7

(1.0)

2.5

2008/092006/07 2007/08 2012/13

Real GDP Growth (%) 6.0 4.9 3.6

Fiscal Balance (% of GDP) 1.2 1.7 (4.1)

Net Loan Debt 1 (% of GDP) 26.1 23.2 39.8

Source: S&P, National Treasury 2009/10 Budget Statement1. Net loan debt is calculated taking into account the bank balances of the National Revenue Fund (Balances of government’s accounts

with the Reserve Bank and commercial banks)

Overview of South Africa

• Commitment to sustainable macroeconomic policies and reforms

• Prudent and consistent fiscal management

• Political stability and transparent institutions

• Prudent monetary policy

• Well capitalised, well managed financial system with independent central bank committed to low inflation (3-6% target band)

• Anticipate ZAR 846bn of public infrastructure investment over next 3 yrs

• Moderate, though rising, debt burden

• Increasingly mature political landscape and continuity

• Social stability and cohesion

Overview

South Africa 2009/10 Budget Highlights

Key Economic Indicators

Current Account Deficit

Unemployment 24.3%

-4.3% of GDP

ZAR46,508 (2008)

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SANRAL’s Relationship with the Government

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Public Policy Mandate

• Established by an Act of Parliament as an independent operating company to operate South Africa’s national road network

• Established in terms of the National Roads Act of 1998 as a public company with a share capital within the requirements of the South African Companies Act

• Registered in terms of the Company Act of RSA

• Privatisation is not possible as by law the State is the only permitted member and shareholder

Functions and ResponsibilityEstablished by Parliament

SANRAL’s public policy mandate is unequivocally ensh rined in its mandate, governance structure and financial profile

• SANRAL is responsible for strategic planning with regard to South African national road system

– Finance, plan, design, construct, provide, operate and maintain national roads

• Government is responsible for overall policy for SANRAL and approves new projects, toll charges, Public Private Partnership (PPP) initiatives and provision of new debt

• SANRAL provides technical assistance to other countries upon request of Minister

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Strong Government and Financial Support

• Capital invested by the State (Government grants)

• SANRAL’s non-Toll operations are provided as a public asset of the Government, funded by the fiscus

• Toll road operations are funded in 2 ways:

– SANRAL’s own budget (11% of total, 1,778km)

– Financed by concessionaries through PPPs on a Build, Operate and Transfer (BOT) basis and are off-balance sheet (8% of total, 1,293km)

• Monies appropriated by Parliament from time to time to supplement other funding sources

• Borrowings from capital markets

• Other sources (rental income, investments)

Corporate StructureFunding

South African National RoadAgency Limited (“SANRAL”)

Executive Management

Board of Directors

Republic of South Africa(Department of Transport)

100%

SANRAL’s public policy mandate is strategically alig ned with that of the sovereign to implement the state’s infrastructure investment pro gramme

• Governed by a board of directors (8 members) of whom 7 must be appointed by the Minister of Transport

– Eighth member of the board is the CEO by virtue of office

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Integral to Economic Development

The creditworthiness of SANRAL is inextricably tied to that of the sovereign

• Key roles in the South African Government’s infrastructure spending strategy– Road network is an integral part of state infrastructure– Government’s aggressive upgrade of infrastructure is critical in raising the competitiveness of

South Africa and for sustaining high levels of productivity and economic growth– Clear public mandate and commitment to accelerate growth through AsgiSA (Accelerated and

Shared Growth Initiative for South Africa)

• Government guarantees– ZAR 6.0bn guarantees on all debt taken over at inception of SANRAL (no expiry) – including

notes in issue at the time– ZAR 31.91bn guarantee issued in 2009 to cover the next 4 years borrowing requirements, both

domestically and internationally

• No change in ownership structure expected in the medium to long term

• National Roads Act uniquely provides SANRAL with protection from liquidation– SANRAL may not be placed under judicial management or in liquidation unless this is

authorised by an Act of Parliament adopted specifically for that purpose– State may guarantee any loan raised by SANRAL

SANRAL’s Business and Projects

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Overview of SANRAL’s Road Network

National Road Network (km) Non-Toll State Toll PPP(BOT ) Total

Dual Carriageway 610 520 443 1,573

4-Lane Undivided 11 299 240 550

2-Lane Single 12,429 1,013 605 14,047

Total 13,050 1,832 1,288 16,170

% of SANRAL Network 81% 11% 8%

• SANRAL is conducting several large projects on the major economic arterials to support accelerated growth

• The largest project, Gauteng Freeway Improvement Project (GFIP), was launched by the Minister of Transport in October 2008

• In addition to new projects underway, the existing road network requires continuous maintenance

• To obtain optimal use of existing road space, SANRAL has increased the use of technology with innovative solutions such as intelligent transportation systems (ITS)

• SANRAL also aims to extend the use of electronic toll collections on all national toll roads. GFIP is the first project of this nature utilising an open road tolling (ORT) configuration

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Note: Standalone Projects Need > 5000 to be Toll Viable

National Road Network Traffic Trends

80% of freight moves on SANRAL’s road network

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Ageing road network system sustaining increasing tr affic volumes requires further capital investment to support growth in domestic economy

Improving Road Networks

Ann. Avg. Daily Traffic on National RoadsPavement Age on National Roads

0-5 Years9%

5-10 Years11%

10-15 Years18%

15-20 Years15%

>20 Years47%

0 - 5,00042%

5,000 - 10,00031%

10,000 - 20,00013%

20,000 - 50,00010%

>50,0004%

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Technology for Freeway Management

• Use of close circuit television (CCTV) cameras, enhanced communications, traffic detection and traffic information devices

• The system is continuously monitored at a network management centre

• Gauteng > 255km (SANRAL operated)• Cape Town > 145km (City operated)• eThekwini > 110km (SANRAL operated)

Intelligent Transportation Systems

• SANRAL is actively increasing the use of technology to optimise the use of existing road space by implementing electronic toll collection on all new and existing national toll roads

• Financed through user pay principle (tolls)• All the toll transactions will take place

electronically• No physical toll plazas• Tags (also known astransponder or On

Board Unit (OBU))

Open Road Tolling (ORT)

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Gauteng Freeway Improvement Project

• 3 Metropolitan municipalities • 9 million population• 2.2 million vehicles• Contributes 38 % towards SA GDP• Location of 2010 FIFA World Cup final• Extensive freeway system• High Congestion

– 80,000 to 200,000 vehicles per day for different freeway sections

– 5 to 7% annual growth over the past 10 years

• Limitations affect economic growth potential

Phase 1• Includes R1.2bn procurement of ORT equipment and services and is due to commence immediately• 185km at an estimated cost of R22 billion• Concentrates on existing freeways around Johannesburg, Pretoria and OR Tambo Intl Airport • Road construction to be substantially complete by May 2010 with tolling commencing in April 2011Phase 2 • 300km of road and is scheduled to commence in 2012 at an estimated costs (2008 ZAR) of R24

billion. • Project includes the supply, installation and operation of open road electronic toll (ORT) collection

systems and related infrastructure

Gauteng

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Capital Investment Programme

Year 2010/11 2011/12 2012/13

Allocation (ZAR billion)

6.84 8.76 9.53

USD billion 0.912 1.17 1.27

Medium Term Expenditure FrameworkToll Network Expansion

• N2 Tsitsikamma Toll Road (14km)

• N17 East Toll Road Extension (160km)

• Gauteng Freeway Improvement Project (Phase I: 185km)

• N1 South and R30 Bloemfontein –Kroonstad (195km)

• N1 Polokwane Bypass (6.5km)

• Mariannhill Extension (22km)

• Dube Trade Port Interchange

Total of ZAR 20bn required from 2010 to 2015 for cu rrent construction programme

Note: Assumes exchange rate of 7.5

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Current Concessions

• N4 East, Maputo Development Corridor – 471km (ZAR 3,196m)

• N3 Cedara, Heidelberg – 429km (ZAR 2,974m)

• N4 West, Platinum Highway – 382km (ZAR 3,330m)

Proposed Concessions

• N1/N2 Winelands Toll Highway (ZAR 2,580m)

• N2 Wild Coast Toll Highway (ZAR 9,500m)

• R300 Ring Road (ZAR 1,450m)

Capital Expenditure ProgrammeCurrent & Proposed Concessions

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Financial Overview

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Steady, Improving Performance

EBITDA (ZAR m)Revenue (ZAR m)

Net Profit (ZAR m)EBITDA Margin (%)

CAGR: 25.0% CAGR: 29.3%

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Steady Profitability in Operations

Non-Toll: Revenue (ZAR m)Toll: Revenue (ZAR m)

Non-Toll: EBITDA and EBITDA MarginToll: EBITDA and EBITDA Margin

NMNM

CAGR: 13.5%CAGR: 35.9%

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Strength of balance sheet is anchored by the ZAR 37 .9bn non-expiring government guarantee, comprising of the old ZAR 6bn guarantee and new ZAR 31.9bn government

guarantee

Government Guarantee Supports Position

Total Cash (ZAR m)Total Debt (ZAR m)

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Funding Strategy

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Funding Requirements

Gauteng Freeways - Phase 1; Existing Sanral Funded Toll Roads (incl. Polokwane Bypass, Huguenot Second Tunnel and N2 Tsitsikamma Ext); N 17; R30;PW V 3/N4; N3 Pmb to Dbn.

PROJECTED CUMULATIVE DEBT LEVEL AT 4% P.A. REAL INT EREST RATE

-50

-45

-40

-35

-30

-25

-20

-15

-10

-5

0

5

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

YEAR

RA

ND

(B

ILLI

ON

S)

Total

Gauteng Phase 1

Existing plus new (excl.Gauteng)

Existing

Gauteng

ENDOF FINYEAR:

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Self Funding Non-Toll Operations

5,766

7,4548,989 9,722

(2,031) (2,762) (3,104) (2,590)(3,731) (5,887)

Inco

me

Op

era

ting

Exp

en

ses

Ca

pe

x

Inco

me

Op

era

ting

Exp

en

ses

Ca

pe

x

Inco

me

Op

era

ting

Exp

en

ses

Ca

pe

x

Inco

me

Op

era

ting

Exp

en

ses

Ca

pe

x

(4,396) (2,564)

2010 2011 2012 2013

Non-Toll Operations

Minimal budget deficit on Non-Toll operations as ac tivities are wholly financed from government grants

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Funding the Toll-Road Network

• SANRAL’s business consists of two separate operations:

— non-toll roads funded by government allocations

— toll operations funded and operated by SANRAL or through private concessions under PPP

• SANRAL requires a sound and appropriate funding strategy to bridge the gap between demand and National Treasury allocations for the non-toll network

• A Loan Supportable by Revenue (LSR) methodology is applied to assess the feasibility and affordability of toll projects

— This is aimed at ensuring that debt can be supported by the toll income through the life of the route (including future maintenance capital expenditure)

• SANRAL plans to raise the core of its funding through the domestic capital markets where significant appetite remains for parastatal issuers

— SANRAL launched a non-guaranteed R10bn domestic medium term note (DMTN) programme in 2008 supported by a Moody’s rating of long term: Aa2.za, short term: P-1.za which was fully utilised during 2009

— A new government-guaranteed DMTN was launched in 2009 and is the back bone of the toll road funding programme

• However, in light of the volume of parastatal issuance likely in the South African capital markets, SANRAL has sought to diversify its funding base to include the following:

— International development finance institutions

• Funding was successfully secured from European Investment Bank in November 2009

— International capital markets

— Export credit financing

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Borrowing Limits and Guarantee

•Government has approved an increase in borrowing limit of R31.91 billion based on the ability of SANRAL to repay the borrowings out of toll fees collected

–This borrowing limit can be utilised for any form of funding raised by SANRAL up to a cumulative maximum of R31.91 billion

• In addition, the Government has agreed to guarantee the full ZAR 31.91 billion with maturities of up to 25 years commencing on 1 April 2009

•The annual borrowing limits are as follows:

–FY 2009/10: ZAR 12.33bn

–FY 2010/11: ZAR 12.31bn

–FY 2011/12: ZAR 4.05bn

–FY 2012/13: ZAR 3.22bn

•SANRAL will comply with the conditions of the guarantee in order to obtain required approval for new facilities from the Department of Transport and National Treasury - such approval will be a condition precedent for all ECA facilities

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SANRAL’s Debt Maturity Profile

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Conclusion

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Investment Highlights

•Privatisation is not possible as by law as the State is the only permitted member and shareholder100% government owned

•Moody’s rating of A3 is in line with that of the Sovereign, demonstrating strong sovereign supportStrong Credit Ratings

•Government has agreed to guarantee ZAR 31.91 billion of domestic and international debtGovernment Guarantee

•Expansive investment programme to support growth of road networkExtensive Capex Program

•Road network is an integral part of South Africa’s infrastructure and growth strategy

Essential to Economic Development

•Conservative and efficient funding strategyConservative Funding Strategy

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Appendix

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Macroeconomic Recovery likely in 2010The combination of cyclical domestic factors and the global recession has resulted in a deterioration of GDP growth. None the less, South Africa has been relatively resilient to the crisis with GDP growth expected at 2.3% for 2010.

The anticipated improvements are due to the country’s robust fiscal, monetary and exchange rate institutional framework and infrastructure growth.

Enhancing the country's ability to recover from the recessionary pressures is the fact that South Africa has a moderate debt burden, stable political institutions and practices prudent macroeconomic policies.

Gross Reserves have been steadily increasing and South Africa has low external vulnerability due to modest external debt service requirements.

GDP Growth

External Debt and Reserve

Fiscal Balance (% of GDP)Economic recovery is expected to begin in 2010 as imbalances in the economy start to ease and the effects of a counter cyclical fiscal stimulus are felt.

The positive structural transformation and mature institutions of South Africa combined with the government’s renewed focus on upgrading the country’s infrastructure, lay the foundation for ongoing growth.

5.60% 5.50%3.70%

-1.80%

2.00%

2006 2007 2008 2009 2010

13.6%15.2%

16.6% 15.7% 16.9%

25,61332,979 34,099

40,200 42,100

0.00%

5.00%

10.00%

15.00%

20.00%

2006 2007 2008 2009 2010

0

10000

20000

30000

40000

50000

Total External Debt (% of GDP)Gross Reserves ($mn)

1.2% 1.7%

-1.0%

-7.3%-6.2%

-5.0%

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

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Contact Details

SANRALDitsela Place1204 Park StreetHatfield, Pretoria 0083

PO Box 415Pretoria 0001

Telephone: +27 12 426 6000Fax: +27 12 362 2101

Nazir Alli, alli@nra.co.zaInge Mulder, mulderi@nra.co.za

Website: www.nra.co.za

Fraud Hotline: 0800204558