During 2017/18 SANRAL undertook a total of 223 projects to build new roads, improve existing roads, and rehabilitate roads in a sub-optimal condition. These projects on non-toll and toll roads directly under the agency’s management involved a total of 848km of roadway.
The total number and value of new construction contracts awarded in 2017/18 were considerably lower than in the previous year. In 2016/17, a total of 172 new contracts were awarded with a combined value of R15.9bn. In this financial year, there were some delays in the awarding of tenders for the design of projects. The reason for the delays can be attributed to a technical process initiated by National Treasury during the course of 2017. The issues at stake related to interpretations of certain regulations contained in the Preferential Procurement Policy Framework Act (PPPFA).
Treasury has since provided clarity about the definitions of provisional and prime cost sums and how they were applied in practice. The resolution of this matter provides greater certainty to both SANRAL and the broader construction and engineering sectors.
As a result, the Agency expects to see more tenders for road design coming to the market in the coming weeks. As we erase the backlog this will also kickstart tender processes for the construction of roads.
The reasons for some of the delays other than the above delays in awarding contracts, range from additional construction work required for slope stability measures and safety reasons, to disputes that arose either in the labour relations field or with community role-players in respect of local sub-contracting. The last factor has become a substantial risk to construction projects in several provinces and sometimes poses a serious threat to the safety of contractors.
SANRAL is totally committed to the participation of local communities in road projects and has formalised this through project liaison committees, which are now a requirement for all projects. The agency is devoting more resources to managing local-level stakeholder relations with the objective of improving communication across all stakeholders.
In 2017/18, SANRAL recorded total revenue of R16.285bn (2016/17: R13.95bn). An annual grant from the fiscus of R15.9bn was received.
Total revenue realised across all toll routes managed directly by SANRAL amounted to almost R5.2bn in 2017/18.
SANRAL’s total expenditure for 2017/18 amounted to R26 523m, and 66% of this spending was related to non-toll roads. Spending was approximately 2.3% lower than in 2016/17.
As it enters the third decade of its existence SANRAL has produced a long-term strategy – Horizon 2030 – that reflects the dynamic nature of the organisation, and the changing developmental priorities of the country.
In a parallel process SANRAL developed a comprehensive transformation policy which was widely consulted across the country. This policy recognises the agency’s pivotal position within the construction and engineering sectors and the impact that SANRAL’s tender processes have on the growth of emerging enterprises owned by black South Africans, women and the youth.
But the Agency is also responding to the needs of broader society especially in the fields of education and training. It has developed productive partnerships with local universities to improve the quality of educational outcomes in critical subjects such as science, technology, engineering and mathematics.
Some160 students and 200 high school learners benefit from bursaries and scholarships.
SANRAL’s own Technical Excellence Academy in Port Elizabeth is enabling post-graduate engineering students to make a successful transition from the academic environment into professional careers.
The National Treasury will remain the primary source of funding, but SANRAL will also, increasingly explore opportunities for public-private partnerships.