New programmes are being rolled out as SANRAL positions itself to play a defining role in the construction and engineering sector. 

The value of the South African National Roads Agency (SOC) Limited (SANRAL) to the South African economy through the provision and maintenance of a world-class primary road network will continue to grow with new infrastructure programmes being rolled out. 

Skhumbuzo Macozoma, SANRAL CEO, said: “We are well-positioned to play a defining role in the construction and engineering sector through our tender processes and the imminent completion of major projects that will help to grow both South Africa’s and the regional economy.”  

Integrated Report presented 

SANRAL’s Integrated Report for 2017/18 was presented to Parliament, and reflected the achievements and challenges of the agency, which is responsible for the management of the 22 000km national road network. 

Revenue from non-toll operations – which comprise 87% of SANRAL’s business – grew by 4% to R9-billion. Non-toll operations are funded entirely by the fiscus through an allocation from the Department of Transport.  

The revenue from conventional toll roads increased by 12.4% following a tariff adjustment in line with consumer price inflation and a 6.5% growth in traffic volumes. 

Revenue from the Gauteng Freeway Improvement Project (GFIP) decreased by 4.83% year on year. During the financial year SANRAL received an amount of R463.5-million from the government as a GFIP grant and a further R1.9-billion was transferred from the non-toll grant to address the shortfall resulting from low toll tariff payments. 

Macozoma said government’s commitment to the formulation of a comprehensive national policy on tolling will provide certainty about the future of toll roads and on the future funding model for the construction and maintenance of the national road network. 

In the past year SANRAL issued a total of 60 new contracts to the value of R4.9-billion for road construction.  

This was significantly lower than in 2016/17 because of technical interpretations of new Treasury procurement regulations, which delayed the issuing on new contracts. 

“These issues have now been resolved and we have already awarded more than 50 new contracts since July,” said Macozoma. 

“Our tender decisions have an impact on the engineering and construction sectors, and have wider implications for emerging enterprises, black-owned companies and start-ups that form part of the supply chains of larger engineering companies.” 

Among the new contracts that were awarded in 2017/18 were: 

• The construction of a mega bridge across the Mtentu Gorge. It is one of two mega bridges that form part of the N2 Wild Coast Highway, which will contribute to economic growth and job creation in some of the most impoverished districts of the country. 
• A R115-million project to extend the road network and improve road safety near Kimberley in the Northern Cape. 
• The improvement of three intersections near Olifantshoek and Kathu on the N14. 

Projects completed during the year include the widening of the R24 near Rustenburg, the realignment of the N7 near Clanwilliam in the Western Cape and a R567-million project to improve the N4 in Mpumalanga. 

SANRAL and transformation 

Macozoma said SANRAL strengthened its commitment to job creation, empowerment and the growth of black-owned enterprises with the adoption of a new Transformation Policy.  

The aim is to grow the share of work done by black-owned contractors beyond the statutory threshold, and to increase the participation of enterprises owned by women and the youth in the construction industry. 

Contracts to the value of more than R3-billion were awarded for road rehabilitation and maintenance projects – of which about 60% went to black-owned SMMEs. More than 3600 work opportunities were created – with some 57% of these positions filled by men and women under the age of 35. 

SANRAL’s expenditure on community development projects grew by 42% to a combined value of R367-million. These include training and skills development programmes that enable workers to improve their future job prospects. 

The agency has received an unqualified audit report from the Auditor General for the 15th year in a row.  

There was no fruitless or wasteful expenditure reported, although irregular expenditure to the value of R346-million was identified. The bulk of this can be attributed to the awarding of contracts that were not advertised for at least five working days. 

Macozoma said the Integrated Report highlights the quality of governance at SANRAL and its adherence to the standards set in the King IV guidelines. 

“The entire construction industry has endured a very tough year because of the economic slowdown. However, we are uniquely positioned to play a role in the new infrastructure initiatives announced by President Cyril Ramaphosa and are looking forward to contributing to an uptake in activities in the engineering and construction sectors,” he said.