Funding constraints for road construction worsened during the past financial year because of a downturn in the global economy and a stagnant local one. Both have dampened the outlook of the South African construction and related industries.
One of the greatest challenges to the sustainability of the roads agency, writes SANRAL board chairman Themba Mhambi in this year’s Integrated Report, is the gradual expansion of the national road network in a constrained funding envelope.
In addition, low levels of payment of e-tolls have led the Treasury to approve the reallocation of R5.75bn from the non-toll portfolio to the toll portfolio that resulted in a 27% reduction in expenditure in the construction of road infrastructure.
Mr Mhambi states that the agency sets an example of what government wants to achieve in the transformation of state-owned entities and the creation of a capable state. It achieved its 15th consecutive unqualified audit report and is working towards a clean audit for 2020/21.
Highlights include:
- 201 SMMEs benefitted from community development projects, all black-owned;
- targeted development of black industrialists;
- continuous strides to better reflect the country’s diversity in the staff complement;
- and a range of projects to transfer skills.
The Chief Executive Officer, Mr Skhumbuzo Macozoma, writes in the Integrated Report that the prevailing economic climate is compelling SANRAL to utilise existing resources during a lean period. “Our decisions during this time would determine how well we would be positioned to take advantage of opportunities when the financial situation recovers.”
The first priority was to keep the programme of construction on toll and non-toll roads moving forward with little delays and to protect road assets through essential road maintenance work.
It also prioritised stakeholder relations, consensus-building in the planning and construction of roads, facilitation of economic participation and achieving a balance between the rural and urban economy.
Mr Macozoma stressed that the agency’s black empowerment agenda meant that emerging contractors were actively involved in the construction industry, small businesses were favoured, often rural ones.
The constraints of lack of access to capital, difficulties in purchasing equipment and building expertise, were addressed by leveraging partnerships with important role players in the construction industry.
More than 70% of contracts went to black-owned companies, of which 25% were owned by black women.
During 2019 it ensured that there was no need to sacrifice its commitment to social justice and economic transformation in spite of fiscal constraints. This included its investment in human capital, road safety and the development of rural communities.