The cut in SANRAL’s budget allocation this year is one reason why own revenue generation becomes more urgent.
The budget for the non-toll portfolio is received from National Treasury by means of an annual budget allocation. The toll budget is funded from the revenues collected at toll plazas.
The size of the national road network under the jurisdiction of SANRAL has been steadily growing with an initial long-term goal of extending it to 35 000km through the incorporation of 13 510km from provinces.
SANRAL has conducted research to assess the implications of the road transfers – it does not have the financial and human capital capacity to take over the management of such a large network. It has to be prudent regarding national road network growth, the provision of support to other road authorities and the incorporation of roads from other spheres of government.
The pressing need is to balance network growth against insufficient funds per kilometre required to maintain the network to an acceptable level.
The long-term strategy of SANRAL, Horizon 2030, proposes a review of the proposed road transfers from provinces from more than 13 000km to only 3 000km. This new approach will result in a more sustainable national road network of 25 000km with a stable budget per kilometre.
The agency’s current diversified funding strategy is informed by the prevailing funding policies of the National Treasury and the Department of Transport. This seeks to ensure an equitable allocation of public funds across sectors to achieve multiple objectives. This means road authorities are not likely to receive required funding allocations to effectively manage road networks. This results in different trade-offs and the use of alternative funding strategies.
The introduction of private finance in the form of state tolls and PPPs has proved valuable for SANRAL and allowed it to broaden the magnitude of the funding envelope and achieve more than it could, and much sooner, were it only reliant on the non-toll fiscal allocations.
Toll allows us to implement large projects when needed. This leads to greater economic benefits realised in the short term, as opposed to rolling much-needed projects out as and when funds are made available from the fiscus which delays the benefit felt.
SANRAL is now at a stage where opportunities for own revenue generation warrant serious consideration given the existing demands and constraints. Own revenue generation logically forms the final pillar of an integrated funding strategy that would seek to diversify funding sources and apply innovative funding solutions.