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Another unqualified audit report for SANRAL

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SANRAL achieved 32 out of its 37 targets related to corporate performance, which translates into 86% achievement.

The South African National Roads Agency (SOC) Limited (SANRAL) has received an unqualified audit opinion for the past financial year from the Auditor General (AG).

This was announced at an Annual General Meeting the Minister of Transport, Joe Maswanganyi, held with the agency in Pretoria on 30 October 2017.

The roads agency submitted its Integrated Annual Report to Parliament on 31 October 2017.

Quality corporate governance

Roshan Morar, Chairman of SANRAL’s Board, said the AG’s report confirms the quality of corporate governance and financial management at SANRAL.

Matters raised by the AG will be addressed as priorities and progress will be reflected in future integrated reports.

Morar said wasteful expenditure has been reduced in the past year, from R1.1-billion the previous year to about R425-million.

“Where required and as part of consequence management, disciplinary action was taken against responsible employees, and in two instances against service providers, and it was made clear that any deviations from good corporate governance will not be tolerated,” said Morar.

He added: “Understanding that some of the fruitless, wasteful and irregular expenditure emanate from events that precede the financial year under review, we have given management the instruction to eliminate these by the next financial year.”

Meeting targets

The agency achieved 32 out of its 37 targets related to corporate performance, which translates into 86% achievement.

For the reporting period, the agency awarded 172 contracts worth R15.9-billion for new works, rehabilitation and improvement, routine and special maintenance, and community development.

Out of this investment, small, medium and micro enterprises (SMMEs) earned R4-billion on contracts, meaning the agency directed almost 25% of its contract expenditure to SMMEs, of which more than half were black-owned.

SANRAL’s CEO Skhumbuzo Macozoma said the total value of contracts and its multiplier effect demonstrates government’s commitment to infrastructure development and SANRAL’s investment in the construction industry.

“While we are pleased with the investment we have made in SMME development, we think there is room for us to invest even more and that is what we are seeking to do through our draft transformation policy, which is currently going through a consultation process,” said Macozoma.

Results of SMME development

The investment has resulted in 4 247 people (which includes 1 690 women) being trained in road-building and other skills such as business management. Additionally, the investment led to the creation of an equivalent of over 19 000 full-time jobs, 11 242 of which were taken up by youth.

Two major projects – Moloto Road and the N2 Wild Coast Road – were launched during the reporting period. These projects are significant drivers of economic growth for the provinces where they are being implemented. In addition, these would further drive the development of SMMEs.

The integrated report follows an announcement by finance minister, Malusi Gigaba, during his medium-term budget policy statement that SANRAL has been provided with a R38.9-billion guarantee to expand its toll road portfolio.

This gives the agency more room to borrow under the guarantee and allows the agency to service all its commitments over the medium term.

Speaking at the AGM as the shareholder representing government, Maswanganyi expressed his satisfaction with SANRAL. “The work done by SANRAL is commendable. I am happy with how it has aligned its operations and delivered in accordance with government’s infrastructure development plan.

“Of course, I am alive to the challenges the agency has had with regard to its tolling portfolio, especially the Gauteng Freeway Improvement Project. I am planning a roads funding discussion with all provinces so that we can find solutions and thereafter take our proposals to Cabinet. I am intent on resolving this matter as soon as possible so that there is certainty and markets do not second guess us.”

R61 Road upgrade valued at R550 million completed

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A view of the Ngqeleni Interchange.

The South African National Roads Agency (SOC) Limited (SANRAL) has completed major work on the R61 mega-road infrastructure project in the Eastern Cape.

The R550-million Mthatha Sprigg Street to Ngqeleni Road infrastructure development and safety programme is also part of a master plan for tourism and other long-term mega projects in the Eastern Cape.

About the project

The project commenced on 16 September 2013 and was completed on 8 September 2017. The project consisted of the construction of a new 7.3km dual carriageway between Mthatha and the turn off to Ngqeleni.  The east bound carriageway was newly constructed, while the west bound carriageway entailed an upgrade of existing road infrastructure.

As a result of the new carriageway, six new bridges – one each over the Mthatha River, the Corana River, Sidwadweni River on Bernard Schultz Drive, an agricultural overpass bridge at Ngqeleni turn-off, and two new interchange bridges at the Ngqeleni turn-off – were constructed.

The dual carriageway at Corana with replacement houses on the left.

Two large agricultural underpass culverts were also constructed.

Mbulelo Peterson, SANRAL Southern Region manager, said: “The R61 Mthatha Sprigg Street to Ngqeleni turn-off project is one of several projects, each with different starting and completion dates in a mega-road infrastructure development and safety programme for the R61 which commenced in 2011, and which will be completed by 2020.”

Road users at SANRAL’s heart

The plan is to improve the safety of the road users and pedestrians through the closing of unsafe intersections, a new interchange at Ngqeleni turn-off and the construction of formalised and channelised intersections.

This is also an integrated road safety programme which aims to decrease the road hazards, which may lead to accidents and motor vehicle accident related deaths.

Many accidents on the R61 between Mthatha and Ngqeleni involve motorists hitting stray animals. Between December 2014 and January 2015, local traffic authorities impounded 266 stray animals including goats, cattle, sheep and donkeys.

To address the problem, SANRAL has constructed two agricultural underpass culverts as part of the R61 Mthatha Sprigg Street to Ngqeleni turn-off project.

Community development

The project has created work for 60 small, medium and micro enterprises (SMMEs), of which 48 were black-owned entities. There were 628 job opportunities created, of which 541 (86%) were male and 87 (14%) female and further broken down into 328 youth (52%).

“One of the successes is that the project has already injected a salvo of benefits to members living in villages from Mthatha to Ngqeleni,” said Peterson.

SANRAL delivered 31 new replacement houses to residents whose dwellings fell under the construction footprint and in the process eradicated poorly constructed structure homes. “The project has also brought meaningful initiatives of social development to residents and communities,” said Peterson.

Training and skills development initiatives also benefitted members of the local communities. Sixteen Walter Sisulu University students from the community also gained on-site experiential training in order to obtain their diploma qualification.

Local SMMEs were mentored in the construction of houses according to National Home Builders Registration Council (NHBRC) standards. They also participated in several courses, which include construction tendering, basic computer literacy skills, site administration and monitoring. The workers have been provided with, among others, road safety and environmental awareness training.

The project also links with other programmes including the conversion of Sprigg Street and Madeira Street in Mthatha’s Central Business District (CBD) into one-way system to help improve traffic flow.

Challenges along the way

The risks of working on the project included work that was carried out in a heavily trafficked and densely populated built up area, and within a confined construction zone involving the simultaneous construction of earthworks, structures, and the relocation of services. 

This, along with the interface between formal and traditional land tenure systems for land acquisition and relocation of communities have produced unique challenges, which SANRAL solved through proper planning and continuous stakeholder engagement.

The operation of heavy earth-moving equipment required and rock blasting in close proximity to residential and business dwellings also presented a special challenge.

Eastern Cape projects inject R30-million in SMME development

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The N2 is a national route in South Africa that runs from Cape Town through Port Elizabeth, East London and Durban to Ermelo. Its total distance of 2,255 kilometres makes it the longest numbered route in South Africa.

The South African National Roads Agency (SOC) Limited (SANRAL) utilised more than 200 local labourers from King William’s Town to work on a major road construction project, which is due to conclude at the end of November.

SANRAL has trained 26 CIDB grade one and two SMMEs on the first phase of the rehabilitation project of the N2 from Buffalo River to Breidbach and the R63 from Alexandra Road to Bhisho.

Six of these SMMEs were also directly employed on this project. Furthermore, a total of 21 SMMEs ranging from CIDB grade one to six participated in this project, with approximately R30-million being spent on SMMEs.

Mbulelo Peterson, SANRAL’s Southern Region manager, said: “SANRAL would like to express their gratitude to all motorists and residents for their understanding during the construction process, and their trust that the new improved road will result in safer travels for road users in King William’s Town.

“Already, SANRAL is receiving good feedback on the Hargreaves traffic circle with motorists commenting on the improved traffic flow.”

Phase two is the realignment of the N2 from the Bulembu Airport Road intersection to the Buffalo River Bridge, tying into phase one. “This project will include improvements in the horizontal and vertical alignment of the N2 and the construction of three new bridges, which will replace the current ones,” Peterson added.

Phase three will include the construction of the Breidbach underpass and partial construction of the Belstone interchange. “This system is designed to make travelling easier for travellers from East London to Bhisho,” he said.

Second phase

Phases two and three of the roadworks will start in mid-2018 and will run concurrently over a construction period of 30 months.

“It is envisaged that further opportunities for SMMEs will be created in the implementation of these phases, in line with government policy on empowering SMMEs,” Peterson said.

Progress Hlahla, SANRAL’s Southern Region project manager, said the construction went well and he looked forward to working on other phases. “I extend my gratitude to all government departments and private entities including SMMEs who participated in the realisation of phase one of this project, and [I] look forward to further partnering and intergovernmental cooperation in the implementation of phases two and three.”

An Asset to South Africans

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Matete Matete, Non-Executive Director at SANRAL, believes the agency’s commitment to empowerment is most reflected in its management of construction and maintenance contracts across the country’s vast road network. Many SMME’s received their first business contract through SANRAL.

The value that SANRAL adds to South Africa stretches way beyond its professional management of Africa’s most sophisticated primary road network. Since its establishment in 1998, the agency has earned recognition as a true national asset that contributes to the broader South African society and invests in communities through training, job creation, entrepreneurial support and empowerment programmes.

One of the country’s most talked-about future challenges is the need for skilled and trained human resources. The National Development Plan (NDP) notes that “education, training and innovation are central to South Africa’s long-term prospects”.

Without these core elements, the country will struggle to eliminate poverty, reduce inequality and create a more just society. SANRAL focuses much of its developmental resources on education and training initiatives designed to improve the quality of maths and science teaching.

The latest results of global study Trends in International Mathematics and Science show that South Africa still ranks low in maths and science, despite major improvements in recent years. SANRAL’s response is to support education programmes at schools, focusing on training and upskilling the educators who teach maths and science.

Partnership with universities

Through its partnerships with universities, SANRAL sponsors programmes that help bridge the gap between high school and tertiary education. Scholarships are offered to deserving learners and many of them have the opportunity to continue their studies through the financial support provided by SANRAL.

For the financial year 2015/2016 we invested R2.99-million in scholarships for 196 high school learners, up from R2.37-million and 172 learners a year earlier. Bursaries awarded to students in the engineering disciplines help to create a pipeline of new graduates who will, in future, design, build and maintain the country’s physical infrastructure. In the same financial year, we invested R7.5-million in 122 university students compared to 105 the year before. Fourteen were for post-graduate studies.

SANRAL’s Training Academy in Port Elizabeth offers graduate students the practical experience required to be registered as professional engineers.

Within the public sector, SANRAL has set the standards on how to attract, retain and manage highly sought-after talent. Through its human resource strategy, it has put in place mentorships and coaching programmes that encourage innovation, knowledge-sharing and careerlong development. Higher education bursaries went to 32 staff members, of which 23 enrolled for post-graduate studies.

A recent climate survey conducted by an external company showed that more than 95% of employees who responded found their jobs interesting and rewarding.

SMMEs grow through SANRAL

This commitment to empowerment is also reflected in SANRAL’s management of construction and maintenance contracts across the country’s vast road network. Many small and medium enterprises have received their first business contracts through SANRAL.

The experience they gain working with established contractors enables them to grow their business, create jobs and plough money back into local communities. SMMEs earned R3.56-billion in the last financial year. Importantly, our contract participation goals (CPGs) saw the development of 1 004 black-owned companies individually contracted to perform work to the value of approximately R1.9m.

An example of a recent project that exceeded the agency’s CPGs is the patch and reseal of the R58 between Burgersdorp and Aliwal North in the Eastern Cape.

The minimum prescribed contract participation targets for this project were 4% labour maximisation and 8% SMME/Black Enterprise (BE) utilisation. We achieved a labour maximisation figure of 4.81% and a SMME/BE utilisation of 8.79%.

On this project 458 640 hours were worked – equivalent to 190 people receiving employment. SANRAL is a valuable national asset.

Our national roads agency is about far more than roads; it contributes to the country’s growth and prosperity through every one of its activities – from the very big to the seemingly small.

An opinion piece by Matete Matete, Non-Executive Director at the South African National Roads Agency (SOC) Limited (SANRAL)

Adelaide and Fort Beaufort R63 Section upgrades completed

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Major works on this project included base, rut and surface repairs, sealing of cracks, sealing the surface with a new bituminous double seal along the rural section and an asphalt overlay through the Adelaide Town portion, replacing damaged fencing, and new road marking and studs.

The R49-million periodic road maintenance project on the R63 between Adelaide and Fort Beaufort in the Amathole District Municipality, Eastern Cape, by the South African National Roads Agency (SOC) Limited (SANRAL), has been completed.

Prior to the upgrade the existing surface was showing signs of chip loss as well as localised surface and base failures.

Mbulelo Peterson, SANRAL’s Southern Region Manager, said: “We are pleased to announce a durable, waterproof, skid resistant and all-weather road surface for motorists and safer conditions for pedestrians.”

Major works on this project included base, rut and surface repairs, sealing of cracks, sealing the surface with a new bituminous double seal along the rural section and an asphalt overlay through the Adelaide Town portion, replacing damaged fencing, and new road marking and studs.

Community development

As part of the community development part of the project, which reserved work packages for SMEs on lower CIDB gradings, Sanral also repaired kerbs and sidewalks, and constructed pedestrian walkways in Adelaide.

The road agency also constructed safe layby areas near the entrance of Fort Beaufort for vendors operating in the informal economy.

Peterson said: “Until the upgrade of this section of the R63, pedestrians were forced to make use of the surface road shoulder. Now, they have been provided with walkways which separates vulnerable roads users from the motorised traffic.

“A lack of proper periodic resurfacing would have resulted in the asset requiring expensive and premature rehabilitation. Our resurfacing programme will prohibit the ingress of moisture into pavement layers and as a result the life of this asset will be preserved.”

During the project, Sanral empowered and developed individuals from local communities through 12 training and skills development workshops with a combined value of R256 441,68.

The workshops included construction skills such as brick paving, kerb laying, and road marking as well as business skills such as enterprise development through tendering, among other things.

In terms of targeted labour employed, the youth and women empowerment participation goals achieved on this specific project, were 30% and 37% respectively while 80% of targeted enterprises participating were woman-owned enterprises.

A bridge to the future for Eastern Cape communities

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The Mtentu River bridge just outside Xolobeni.

Construction of the new bridge across the Mtentu Gorge on the Wild Coast will start in November, an initiative that will contribute to economic growth along South Africa’s eastern seaboard.

The N2 Wild Coast Road is being constructed as a national priority to improve the mobility of communities in the Eastern Cape and facilitate the movement of people, goods and services. The road, which includes two mega-bridges at the Mtentu and Msikaba gorges, is a national priority and is one of the 18 Strategic Integrated Projects designed to support economic development and improve service delivery in poorer provinces.

SANRAL awarded the tender for the 1.1km bridge to the Aveng Strabag Joint Venture. When completed the bridge will be one of the longest main span balanced cantilever bridges in the world.

Vusi Mona, SANRAL’s communication manager, says the Wild Coast Road “will be a growth engine for the Eastern Cape, both during, and post, construction.” It will cut down on travel time between Durban and East London, improve the safe movement of freight and connect communities that have been marginalised through apartheid planning to government services and commercial activities.

“The route will bring significant social and economic benefits to the area and act as a catalyst for local and regional development,” says Mona.

The N2WC road project will be a major job creator in an area with a very high unemployment rate. More than R400 million will be allocated to wages for unskilled and semi-skilled workers employed directly on the project and a further R1.5 billion will go towards local enterprises, contractors and suppliers of goods and services.

SANRAL’s R120-million community development and SMME training programme is providing local labour and local SMMEs with the necessary skills to optimally participate in the N2 Wild Coast Road project, says Mona.

New strategy will transform roads sector

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New horizon set for SANRAL’s long-term growth

Transformation in the construction industry has been taken major steps forward with the launch of SANRAL’s new guidelines to advance the broad participation of black-owned contractors and suppliers.

The new transformation strategy was highlighted by Transport Minister, Joe Maswanganyi, at a function in Rosebank, Johannesburg attended by representatives from the construction and engineering industries, the public sector and the media.

Minister Maswanganyi called for the accelerated transformation of the transport sector and to ensure the youth and women are actively involved in job creation and entrepreneurship development.

Skhumbuzo Macozoma, CEO of SANRAL, said it is committed to go beyond the minimum requirements for transformation set by existing legislation and the regulatory framework. SANRAL will, in future, use its procurement and supply chain processes to speed up transformation and break down monopolies.

“We play a critical role in the construction and engineering sectors and are keenly aware of the impact that our supply chain processes have on economic transformation, job creation and the lives of millions of people across South Africa,” says Macozoma.

The detailed strategy sets clearly defined targets for the participation of black contractors, professionals and suppliers in all projects commissioned by SANRAL.

The transformation policy was approved by the SANRAL board and will now be canvassed with stakeholders, including national and provincial government, the engineering and construction sectors, organised labour and existing suppliers.

Future contracts will set requirements for the utilisation of labour sourced from local communities and favour the procurement of locally-developed technology, materials and equipment.

The policy covers the entire spectrum of SANRAL’s procurement processes and throughout its business value chain. It proposes the following:

  • On capital projects SANRAL will only do business with companies that are at least 51% black-owned and with a minimum B-BBEE Level 2 rating
  • A maximum number of 15 tenders per year will be issued to a single company and contractors will be required to make use of SANRAL-approved sub-contractors
  • Similar provisions will be applicable to road maintenance projects and special attention will be given to the procurement of material from black suppliers
  • Concessions to manage and operate toll roads will only be awarded to companies with a 51% black ownership
  • The transformation policy will apply to all sub-contractors in the fields of real estate development, information communication and technology, finance and audit and professional services.

“We accept the responsibility to use our procurement and supply chain processes to transform the construction industry,” says Macozoma. “We are confident that it will be a catalyst for a much-broader-based participation of black-owned companies in the sectors.”

For more on the draft Transformation Policy, go to: http://www.stop-over.co.za/transformation-policy/?Session_ID=d9ba732792b0a617d2a517d4548c1932

New horizon set for SANRAL’s long-term growth

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SANRAL CEO - Skhumbuzo Macozoma

SANRAL’s new long-term strategy – Horizon 2030 – is a pro-active response to deliver on its vision as a national transport system that delivers a better South Africa for all.

Speaking at the launch of the strategy in Rosebank, Johannesburg on 29 September, the CEO, Skhumbuzo Macozoma, said it presents a new vision, mission and strategy to guide the organisation over the next stage of its growth. Horizon 2030 recognises the contribution a state-owned entity can make to build a capable and developmental state and drive economic development through the provision and maintenance of critical infrastructure.

Macozoma noted that the South African primary road network has grown in size from 6 500km when SANRAL was established in 1998 to the current 22 000km. The road infrastructure contributes to mobility, supports economic growth and provides access to opportunities for people across the country.

The future challenge is to manage the road network and ensure that it remains a catalyst for economic growth. In SANRAL’s third decade it will focus on long-term visioning, a review of network growth and concerted steps to deal with fair access to opportunities and the redress of past imbalances.

He said SANRAL’s success will be dependent on its ability to influence public perceptions and conversations about road infrastructure and streamline its internal processes to meet a number of challenges, such as:

  • its ability to maintain clean corporate governance and deliver an excellent service to stakeholders
  • ensuring roads receive an adequate share of public funding combined with a model that facilitates private financing of infrastructure
  • maximising the number of jobs created on SANRAL projects, especially for black women and youth
  • aligning SANRAL’s strategic planning with that of its stakeholders
  • contributing to road safety through the provision of safe roads and programmes that encourage safe behaviour among road users.

SANRAL will, in the coming months, conduct an extensive process of consultation with stakeholders in all nine provinces on the content of both Horizon 2030 and the new Transformation Policy. It will also establish a strategic implementation committee to monitor progress within SANRAL.

The launch function was attended by stakeholders and guests from government departments, provinces, the construction and engineering sectors and members of the SANRAL board. The Minister of Transport, Mr Joe Maswanganyi, delivered the key-note address. Other speakers included SANRAL board members, Ms Daphne Mashile-Nkosi and Mr Chris Hlabisa and the Acting Director General of Transport, Mr Mathabatha Mokonyama.

For more on Horizon 2030, go to: http://www.stop-over.co.za/horizon-2030/?Session_ID=383419ea21da1840086fa31af3a34bae

Work starts on Kimberley roundabouts

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The road network in and around Kimberley in the Northern Cape will undergo substantial upgrades after a decision by the National Treasury to approve R496m for the refurbishment of storm water systems in the Sol Plaatje municipality. This follows closely on SANRAL’s decision to upgrade three intersections outside Kimberley – a project which will create more than 100 job opportunities. Agreements between SANRAL and the main contractors on the road construction emphasises the requirement that training will be provided to all the people recruited to work on the project.

A bridge stitched

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Construction history was made on the KwaZulu-Natal north coast when Africa’s longest incrementally launched bridge was joined. The one kilometre long bridge at the Mt Edgecombe Interchange on the N2 forms part of major road construction undertaken by SANRAL to accommodate the growing volumes of traffic in the uMhlanga area north of Durban.