SANRAL kickstarts multi-billion rand road construction projects after Board approves Interim Preferential Procurement Policy

SANRAL kickstarts multi-billion rand road construction projects after Board approves Interim Preferential Procurement Policy

Pretoria, 29 November 2023 – The South African National Roads Agency SOC Limited (SANRAL) will today (Wednesday, 29 November 2023) resume procurement for road construction projects as 86 tenders are expected to be advertised. SANRAL’s Chief Executive Officer, Reginald Demana, has announced that the national roads agency is getting back to business after tenders worth billions of rands were stalled due to a legal impasse between SANRAL and some construction companies.

High priority tenders

Demana said as part of the retender process, SANRAL has reprioritised some of the less complex previously advertised tenders related to consulting engineer appointments and contractor appointments for asset preservation projects. These will be subjected to a shortened retender period to enable their closing by the 14th December 2023, thus enabling SANRAL to commence with tender evaluations during the December period so as to get projects back on track as fast as possible.
“We are making good on our promise to the road construction industry and the South African public that we would move as fast as possible to overcome the legal challenges to our Preferential Procurement Policy (PPP) and get the industry back on track,” said Mr Demana.

Why SANRAL is here
The readvertisement of tenders, scheduled to start from today, is the first step toward getting the road construction industry back to normal after all SANRAL tenders were cancelled following the SANRAL Board’s withdrawal of the Preferential Procurement Policy (PPP) which it had adopted in May 2023. The SANRAL Board announced on 24 October 2023 that it had withdrawn the PPP after several construction companies launched legal challenges against the policy.

The withdrawal of the policy was informed by SANRAL prioritising business continuity as it was clear then that with the mounting legal challenges, SANRAL could not put out any work to tender without attracting same. In the interest of avoiding protracted legal battles – which could easily derail SANRAL from fulfilling its core mandate of building and maintaining national roads – and ensuring that the construction industry continues to work, SANRAL Board’s decided to withdraw the policy while at the same
time committing the roads agency to move speedily to consult interested and affected parties on a proposed interim PPP.
It also needs to be said that following the Constitutional Court ruling of 16 February 2022, the determination of a procurement policy was firmly placed within the domain of the individual organs of state – something which in the first place gave rise to SANRAL coming up with the procurement policy that became the subject of court challenges.

Commitment to transformation
SANRAL has been at pains to emphasize that the withdrawal of the policy was no sign of capitulation. It was a pragmatic decision taken to ensure that the procurement of goods and services and service delivery are not interrupted. Themba Mhambi, SANRAL’s Board Chairperson, said: “Our democracy is underpinned by transformation. If there is no transformation, we will fail as a country and organisation. The only way to achieve equality is for SANRAL to make purposeful moves to expand wealth-creation opportunities among black businesses.”

Public participation process
Following the withdrawal of its PPP, SANRAL conducted a series of countrywide public consultation sessions during which numerous verbal and written submissions were made to the roads agency to consider in the formulation of its interim PPP. After considering the inputs of interested and affected parties during the public consultation process which ended last Tuesday, 21 November, the SANRAL Board yesterday adopted the interim policy (which is available on the roads agency’s website

“The SANRAL Board is satisfied that it has taken into account the necessary considerations for the adoption of the Interim PPP, with meaningful, targeted and deliberate consultations with interested and affected parties across the country. We have heard the cries for more aggressive transformation from black business and noted the objections and push-back from other fronts. We remain steadfast in our resolve to ramp up wealth-creation for black contractors, while at the same time being mindful of the importance of working with the big construction companies as we collectively develop South Africa’s economy,” said Mr Demana.
The roads agency started with the public consultation roadshows, which included both contact and virtual sessions, in the Western Cape and Northern Cape on 31 October 2023. It then hosted consultations in the Eastern Cape, Free State, KwaZulu-Natal, Limpopo, Mpumalanga, North West and concluded in Gauteng on Friday 17 November 2023, with written comments on the draft interim policy extended to 21 November 2023.

The public consultations were well attended and all oral input as well as the 162 written comments received were considered in determining the way forward, to enable SANRAL to move forward on the much-needed road infrastructure projects across the country.
The advertising and adjudication of tenders will continue whilst SANRAL will also be forging ahead in pursuit of a final Preferential Procurement Policy. This will require further consultation with the industry and SANRAL remains committed to giving effect to this process.

Public Procurement Bill
Meanwhile, SANRAL said it has taken note of the Public Procurement Bill deliberations currently unfolding before Parliament’s Standing Committee on Finance.

“The Treasury revisions and submissions on the Bill, in particular the measures through which an organ of state can provide for preference, resonate with SANRAL. These measures include setting aside specific contracts for preferred groups, applying a points system to provide for preference, using sub-contracting as a condition of tender, applying thresholds for local production and content, and making set-asides mandatory. Some of these elements were contained in our contested procurement policy. We hope the Bill will soon be finalized and we will all have a clear understanding of the broader framework within which we must procure,” said Demana.