The South African National Roads Agency Limited Declaration of Intent 2005 2008 - Creating wealth through infrastructure
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The South African National Roads Agency Limited
Declaration of Intent 2005 – 2008
THE SOUTH AFRICAN NATIONAL
ROADS AGENCY
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Creating wealth through infrastructure
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Head Office Postal Address Northern Region Southern Region Website
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� Ditsela Place P.O. Box 415 38 Ida Street NRA House www.nra.co.za
1204 Park Street Pretoria Menlo Park Southern Life Gardens
Hatfield 0001 Pretoria 72 Avenue Tip-Offs Anonymous Hotline
Pretoria South Africa Newton Park Toll-free Phone No.: 0800 204 558
Tel: +27 (0) 12 426 6200 Port Elizabeth Toll-free Fax No.: 0800 00 77 88
Tel: +27 (0) 12 426 6000 Fax: +27 (0) 12 348 1680 E-mail Address: sanral@tip-offs.com
Fax: +27 (0) 12 362 2117 Tel: +27 (0) 41 398 3200 Postal Address: Tip-Offs Anonymous®
Eastern Region Fax: +27 (0) 41 398 3211 Freepost DN 298
Registration Number 58 Van Eck Place Umhlanga Rocks 4320
1998/009584/06 Mkondeni Western Region
Pietermaritzburg Parc du Cap
Building 5
Tel: +27 (0) 33 392 8100 Corner Mispel Street/
Fax: +27 (0) 33 386 6284 Willie van Schoor Avenue
Bellville
Tel: +27 (0) 21 957 4600
Fax: +27 (0) 21 946 1630
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Produced by: Corporate Services
SANRAL, Pretoria
Tel: +27 (0) 12 426 6000
Fax: +27 (0) 12 362 2117
info@nra.co.za
www.nra.co.za
Editor: Connie Nel
ISBN: 0-620-35368-6
Design and Production: Bluprint Design
Tel: (012) 346 7788
bluprint@iafrica.com
www.bluprintdesign.co.za
The South African National Roads Agency Ltd.
Declaration of Intent 2005–2008
Table of contents
6 SECTION ONE – MESSAGE FROM THE CHAIRMAN 18 SECTION THREE – SANRAL’S CORE BUSINESS
6 Introduction 19 The National Road Network – Core Functions
6 Strategic Vision 19 Advantages of a Comprehensive Road Network
6 Financing Models 20 Developing the National Road Network
7 Public Private Partnerships
7 Community Development and Job Creation 24 SECTION FOUR – FINANCING THE NETWORK
7 Environmental Management 25 Funding Requirements for Non-toll Network
8 Major Achievements 26 Funding Requirements for Toll Network
8 Co-operative Governance 27 New Toll Projects
29 Unsolicited Bids
10 SECTION TWO – SANRAL: AN OVERVIEW 31 Expenditure Split
11 Vision and Mission Statement
11 Vision 34 SECTION FIVE – ROAD NETWORK MANAGEMENT
11 Mission 35 Introduction
11 Core Values 35 Pavement Age
12 Introduction 36 Asset Preservation
12 Background to SANRAL 37 Value of Asset Preservation
13 Strategic Tasks and Objectives 39 Slope Management
13 Corporate Governance 39 Safety Management
14 Legislation 40 Pedestrian Safety Management
14 Risk Management 41 Law Enforcement and Overloading
15 Fraud and Corruption Prevention 41 Incident Management Systems
15 Ethics Management 42 Intelligent Transport Systems (ITS)
15 Financial Resources 43 Maintenance
16 Funding Source for the Non-toll Network 43 Routine Road Maintenance
16 Funding Sources for the Toll Network 43 Periodic Maintenance
2 [ Declaration of Intent 2005 – 2008 ] Table of Contents
44 Special Maintenance 56 Information Technology 68 SECTION TEN – PERFORMANCE
44 Strengthening MEASUREMENT
44 Improvement 58 SECTION NINE – PERFORMANCE GOALS 69 Performance Measurement Framework
59 Statement of Performance Goals 70 Performance Indicators
46 SECTION SIX – SOCIO-ECONOMIC 59 Engineering Goals 70 Engineering
DEVELOPMENT 59 Incorporation of Provincial Roads 71 Financial Indicators
47 Black Economic Empowerment 59 Public Private Partnership Programme 71 Road Network Management
47 Procurement Policy 59 SANRAL Toll Roads 72 Road Systems
48 Developing Human Capital 59 Intelligent Transport Systems 73 National Road Development Index
60 Incident Management Systems 73 Socio-economic Indicators
50 SECTION SEVEN – ENVIRONMENTAL 60 Assisting Law Enforcement/Overload Control 73 Environmental Indicators
MANAGEMENT 61 Socio-economic Goals 74 Corporate Indicators
51 SANRAL’s Environmental Philosophy 61 SANRAL’s Community Development Programme
51 Generic Environmental Management Plan 61 Spatial Development Initiatives 76 SECTION ELEVEN – TOWARDS 2010
51 Objectives 62 Job Creation
51 The ISO 14001 Environmental System Standard 62 Social and Entrepreneurial Development 78 APPENDIX I
52 Agreements with Authorities 62 Educational Initiatives Policy of The South African National Roads
52 Amendments to the EMP 63 Environmental Goals Agency Ltd in respect of Unsolicited Proposals
53 Generic EMP for Routine Road Maintenance 63 Corporate Goals
53 Vegetation Study 63 Developing Human Capital 84 APPENDIX II
63 Corporate Identity Development The South African National Roads Agency Ltd
54 SECTION EIGHT – CORPORATE 63 Information Technology Corporate Environmental Policy
MANAGEMENT 63 Research and Development
55 Organisational Structure 66 Technology Transfer
55 Human Resources
56 Marketing and Communications
Table of Contents [ Declaration of Intent 2005 – 2008 ] 3
“For tomorrow belongs to the people who prepare for it today.”
– African proverb
4 [ Declaration of Intent 2005 – 2008 ] Creating wealth through infrastructure
[ Declaration of Intent 2005 – 2008 ] 5
SECTION ONE
Message from the Chairman
Introduction Underlying this mission was the recognition that
Financing Models
transport plays a central role in the economic
and social development of any country. This is
It gives me great pleasure to present this, our second Since the advent of democracy in South Africa,
also true for regions such as the Southern Africa
Declaration of Intent, which sets out the implemen- Government has sought to realign its public expen-
Development Community (SADC) and, indeed,
tation of The South African National Roads Agency’s diture and the financing of public services to redress
the entire continent.
(SANRALs) plan to further its endeavours in creating the imbalances of the past. Minister Trevor Manuel,
a stable transport infra-structure over the next in 1999, noted that “the curve that describes the
three financial years. The Declaration of Intent decay of inadequately maintained economic assets
follows on from SANRAL’s strategic vision, outlined Strategic Vision becomes dangerously steep if relative neglect
in Horizon 2010, our 10-year road infrastructure persists beyond a few years.”
programme. This strategy was devised against the background of
a required ultimate national road network of some Recognising the enormity of many demands on
It will be recalled that SANRAL was formed in 1998 20 000 km compared with the current 14 000 km, the fiscus and the advantage of constructive
as part of the newly elected democratic govern- in the face of budgetary constraints imposed by engagement with the private sector, SANRAL has
ment’s reorganisation of the transport sector for a National Treasury faced by pressing demands proactively sought alternative sources of finance
road infrastructure to play its rightful role in the for other priorities such as social reconstruction for road infrastructure and opportunities to reduce
creation of jobs; to promote social and economic and equalisation programmes. The problem was dependence on tax-based revenues. In this regard
transformation, sustainable growth and resource exacerbated by the fact that the existing road net- SANRAL has actively promoted the ‘user pay’
development. The mission entrusted to SANRAL work was being consumed rapidly with growing principle (toll roads) in developing both SANRAL
was to provide and manage a world-class, sustain- traffic volumes and deteriorating through wide- and concessioned toll roads.
able national road network as cost-efficiently as spread overloading. In addition, inadequate traffic
possible, in order to stimulate economic growth law enforcement and irresponsible driving had a
and improve the quality of life of all our people. negative impact on road safety statistics.
6 [ Section 1 ] Message from the Chairman Creating wealth through infrastructurePublic Private a world-class national road network to enhance in human development and capacity building, the
Partnerships our global competitiveness. In this pursuit, we provision of jobs and seeking to make projects
will be mindful of societal concerns encompassing sustainable in the long term. Overall expenditure
the many political, economic, environmental and related to these projects amounted to R 200,564,575
Public Private Partnerships (PPPs) have provided
social issues. for the period 2001-2005.
an opportunity to partner with the private sector
and SANRAL is now able to negotiate investments
in the improvement and preservation of the
Community Development Environmental
country’s road infrastructure assets for periods
well beyond Government’s three-year expenditure
and Job Creation Management
planning horizon. The reality is that no road,
Being at the forefront of job creation, SANRAL In addition, SANRAL has always been mindful of Our road infrastructure requires
whether existing or new, is ever paid for. By the
has been able to show a consistent record of job the fact that environmental management is a key
same token, there are no free roads, as roads are substantial investment and frequent
creation through innovative contractual obligations component of road infrastructure development.
either funded through general taxes or user fees.
and maximising the advantage of the multiplier In providing a sustainable road network that meets re-investment if we are to have a
effect of roads construction and maintenance. In the requirements of both people and the environ-
SANRAL has successfully completed a number of
world-class national road network
line with the principles of Government for Black ment, SANRAL continuously strives to find a balance
projects under its PPP programme, the combined to enhance our global competitiveness.
Economic Empowerment, SANRAL continues to between the economic and social benefits of road-
value of which is R9,7 billion. The National Treasury
raise the bar. based transport on the one hand, and the pro-
has supported the PPP programme. In the past, tection of the environment on the other.
SANRAL was responsible for the development costs As part of its overall ethos, SANRAL promotes the
associated with projects of this nature, but the concept of ‘community regeneration’ through all SANRAL’s commitment involves the development,
National Treasury has now offered to include these its projects; specifically its Community Development implementation and monitoring of an environmen-
costs as a portion of the total grants made to Programme. The expenditure under this programme tal management system on all contracts, thus
SANRAL. is aimed at adding value for the user of road infra- ensuring that development proceeds in a socially,
structure and improving access in the rural poverty environmentally and economically sustainable
Our road infrastructure requires substantial invest- nodes as identified in Government’s Rural Develop- manner.
ment and frequent re-investment if we are to have ment Strategy. The aims are to attack poverty, assist
Message from the Chairman [ Section 1 ] 7Major Achievements In addition, SANRAL recently was assigned counter-
Co-operative Governance
party and issuer credit ratings on the national scale
for South Africa. The ratings are for non-guaranteed
In celebrating more than a decade of democracy, In support of co-operative governance and in the
debt and therefore enable SANRAL to raise debt
it is apt to reflect on some of the industrial ventures interest of socio-economic goals, it is SANRAL’s
without the support of Treasury. SANRAL was as-
that were either shaped by, or contributed to our vision to consolidate the identified primary road
signed zaAA long-term and zaA1+ short-term
democracy. SANRAL has been instrumental in de- network and to secure the condition of national
status. These ratings were awarded after a full
veloping three of these projects, namely the N4 routes of strategic and economic importance –
investigation based on the normal rating mandate.
Platinum Highway, the N4 Maputo Development even more so now that our country has secured
The correlated international scale issuer rating for
the Soccer World Cup in 2010.
Corridor and the landmark Nelson Mandela Bridge
SANRAL is BBB+ on a local currency basis, indicating
in Newtown, Johannesburg.
that it is of investment grade, with the support of
To our outgoing board members, our sincere
The aim is to gradually build a the state guarantee, also on international com-
gratitude for your guidance, setting the benchmark,
The construction of the N4 Platinum Highway, parisons.
seamless transport infrastructure, and establishing SANRAL under the leadership of
together with the Maputo Development Corridor
our late Minister Omar. To our incoming board, a
which will spread across South (MDC), has realised our vision of a coast-to-coast True to its mandate, SANRAL is well underway to
warm welcome. We trust that SANRAL will continue
link (linking Mozambique to Namibia via South achieving targets set out in its Horizon 2010 doc-
Africa’s borders to other regions to deliver on the Millennium Development Goals
Africa and Botswana), and is regarded as a fore- ument. The building of roads, especially rural access
and will go from strength to strength under your
and the rest of the continent. runner to the fulfilment of NEPAD objectives. The roads, is deemed critical in providing people with
capable leadership.
MDC has proved that road infrastructure does jobs and assets required to build better livelihoods.
promote peaceful regional co-operation and good The aim is to gradually build a seamless transport
To our current Minister of Transport, Mr Jeff Radebe
neighbourly relations. The coast-to-coast link will infrastructure, which will spread across South
MP, SANRAL colleagues and industry counterparts,
also achieve these ideals and stimulate economic Africa’s borders to other regions and the rest of
thank you for assisting us in making a difference.
growth, as well as easing travel and transportation the continent.
To our road users and other role-players, thank you
between the two countries. for your support and feedback. We reaffirm our
commitment of providing you with the services
The Nelson Mandela Bridge, in turn, bears testimony you have come to expect of us.
to co-operative governance and South Africa’s
engineering and project management skills, LOT NDLOVU
innovation and ingenuity. Chairman
8 [ Section 1 ] Message from the Chairman Creating wealth through infrastructureMessage from the Chairman [ Section 1 ] 9
SECTION TWO SANRAL: An overview “ Little by little, a little becomes a lot.” – African proverb 10 [ Section 2 ] SANRAL: An Overview Creating wealth through infrastructure
Vision and Mission VISION MISSION CORE VALUES
Statement
To be recognised as a world leader in the We are a commercially driven organisation We will always act with integrity.
provision of a superior primary road network in committed to achieving its vision for the We are committed to service excellence.
southern Africa. economic benefit of the southern African Our people are our most valued asset.
community through: We subscribe to participative management.
We will be pro-active to the needs of our
• a highly motivated and professional team; customers and other stakeholders.
• state-of-the-art technology;
• proficient service providers; and
• promoting the ‘user pay’ principle.
SANRAL: An Overview [ Section 2 ] 11Introduction from National Treasury and as circumstances may network (currently 14 000 km) and to manage
warrant. As regards the toll road programme, the assets with an estimated value of more than R6,5
envisaged agenda still remains subject to issues billion (excluding land). (Replacement value is more
Flowing from the strategic vision of The South
related to Environmental Impact Assessments than R50 billion).
African National Roads Agency Limited (SANRAL),
(EIAs) and the Intention to Declare a Toll Road.
outlined in Horizon 2010, as well as the first
Declaration of Intent 2002-2005, this Declaration Since the advent of democracy in South Africa,
One of the fundamental principles in achieving Government has sought to realign its public expen-
of Intent – the second of the new millennium – has
our goals remains the preservation of our national diture and the financing of public services to redress
One of the fundamental principles as its basis the practical implementation of the goals
assets, and in so doing SANRAL will create the the imbalances of the past. Recognising the
and objectives of our vision to create a stable surface
in achieving our goals remains the necessary infrastructure platform and a demand enormity of many demands on the fiscus and the
transport infrastructure, i.e. road network in South
driven upgrade for a primary road network, which advantage of constructive engagement with the
preservation of our national assets, Africa. In support of co-operative governance and
will play its rightful role in sustainable social and private sector, SANRAL has proactively sought alter-
in the interest of socio-economic development, it
and in so doing SANRAL will create environmental development and economic growth native sources of finance for road infrastructure
is SANRAL’s vision to consolidate the ultimate iden-
of our country. and opportunities to reduce dependence on tax-
the necessary infrastructure platform tified national road network and to secure the con-
dition of national routes of strategic and economic based revenues.
and a demand driven upgrade for a
importance – even more so now that our country
primary road network, which will has secured the Soccer World Cup in 2010. Background to SANRAL SANRAL harnesses more than 600 person years
of core skills and experience in road development
play its rightful role in sustainable
This document thus deals with the projects and In line with Government’s commitment to transform and management within a highly motivated, pro-
social and environmental development objectives to be delivered within the next three the public sector, The South African National Roads fessional and passionate team of people operating
financial years. However, as the deliverables for Agency Ltd (SANRAL) was established in April 1998 out of its Tshwane (Pretoria) head office and four
and economic growth of our country.
non-toll roads documented herein are based on the by an Act of Parliament as an independent statutory regional offices located in Tshwane (Pretoria), Cape
projected allocations from the National Treasury, any company operating along commercial lines and Town, Pietermaritzburg and Port Elizabeth.
reduction or increase of the allocations will impact at arm’s length from Government. The purpose
on the envisaged programme. This document should of the company, which is registered in terms of The organisational diagram portrays the operational
therefore be regarded as a work in progress, the Companies Act – with the Minister of Transport philosophy of SANRAL – a philosophy that embraces
subject to revision with regard to the non-toll as the sole shareholder – is to maintain and the person as an individual, colleague and mentor,
road programme, depending on funds received develop South Africa’s expanding national road capturing the spirit of ubuntu and passion to serve
12 [ Section 2 ] SANRAL: An Overview Creating wealth through infrastructurethe road user of South Africa. We are a non- • Generate revenues from the development and continuous improvement.
hierarchal organisation with each person taking management of its assets; • To achieve international best practices.
responsibility for his/her own actions without it • Undertake research and development to en- • To encourage innovation in knowledge and
being detrimental to the collective. hance the quality of life of all South African practice.
citizens, with particular emphasis on their social • To research, discover and excel.
Fundamental considerations underlying SANRAL’s and economic well-being; • To market our solutions to road users.
strategic planning process are support for the aims • Advise the Minister of Transport on matters
and objectives of the Reconstruction and Develop- relating to South Africa’s roads; and
• Finance, plan, construct, provide, operate
ment Programme (RDP), as well as the New Partner-
and maintain roads in neighbouring countries
Corporate Governance
ship for Africa’s Development (NEPAD). To this end,
RDP and NEPAD considerations are factored into upon request from the Minister of Transport
SANRAL embraces effective and appropriate SANRAL embraces effective and
all infrastructural development, particularly in re- and in agreement with the respective countries.
corporate governance and acknowledges that it
spect of SANRAL’s procurement policies to address appropriate corporate governance
is the key to building institutional credibility and to
the imbalances of the past. A greater emphasis These are in line with the strategic objectives of
establish and sustain public trust. It is also essential and acknowledges that it is the key to
SANRAL, as defined in its strategic vision, i.e.:
has been placed on Black Economic Empowerment
in motivating organisational behaviour towards
(BEE) with the creation of opportunities for small, building institutional credibility and
• The management of a national road network being a good corporate citizen and to achieve
medium and micro enterprises (SMMEs), as well
the triple-bottom-line goals, which are to obtain to establish and sustain public trust.
ensuring best value for money.
as the provision of training.
• To continuously improve the efficiency of economic, social and environmental value. At the
business practices. heart of good governance is the attainment of an
• To maintain market confidence. even balance between the individual’s integrity
Strategic Tasks and • To carry out Government’s targeted programmes and his/her accountability. The ultimate goal is
Objectives to better the life of all citizens. nation-building – creating and increasing the wealth
• Safer roads for all. and human capital of South Africa.
SANRAL’s principal tasks are to: • To work in co-operative partnership with road
users, transport providers, relevant authorities SANRAL strives to reinforce the message that
• Strategically plan, design, construct, operate, and the private sector. corporate social responsibility is about acceptable
rehabilitate and maintain South Africa’s national • To be a good employer managing SANRAL’s corporate behaviour from every employee. The
roads in order to mobilise our economy; business efficiently and effectively and to seek tests of discipline, accountability, responsibility,
SANRAL: An Overview [ Section 2 ] 13fairness, transparency and compliance to legislation of SANRAL’s operations. In addition, SANRAL will the accountability for risk is the responsibility of
are applied within every realm of the business continue to develop generic service level agreements every individual.
within the organisation. with other road authorities such as the provincial
and local authorities for synergetic performance. In the pursuit of attaining effective risk management
In order to achieve its objectives, SANRAL recognises This would relate to issues such as law enforcement, within the organisation, SANRAL, facilitated by an
the importance of the following in the day-to-day overload control, emergency services and incident independent service provider, conducted a board
running of its core business: management among others. It is also necessary level assessment of its receptiveness and practice
to develop or expand current agreements or proto- of good corporate governance principles. This was
cols with other related authorities, such as Transnet, done within the context of the King II Report, the
LEGISLATION Telkom, Eskom etc. PFMA and the Protocol on Corporate Governance
in the Public Sector. The exercise revealed that
The compliance with all legislation The compliance with all legislation affecting SANRAL SANRAL’s governance structures and processes
and its business is a non-negotiable commitment RISK MANAGEMENT were in place, especially when benchmarked against
affecting SANRAL and its business is
by SANRAL to its stakeholders and the community other public and private entities in the South African
a non-negotiable commitment by in general. The South African National Roads The pro-active and uncompromising practice of economic environment that have been similarly
Agency Limited and National Roads Act, Act 7 of the principles of transparency, social responsibility assessed. But, more encouraging is the commitment
SANRAL to its stakeholders and the
1998, the Public Finance Management Act, Act 1 and accountability go a long way to bolster the of SANRAL’s strategy formulators and management
community in general. of 1999, The Employment Equity Act, Act 55 of sustainability of any organisation and SANRAL towards maintaining and raising corporate govern-
1998, the Labour Relations Act, Act 66 of 1995, recognises the dangers resulting from complacency ance standards within the organisation.
are but a few of the many Acts that guide and in this regard.
regulate the activities of SANRAL. As the next step, SANRAL has completed the pro-
The management of strategic and operational risk cess of enterprise-wide risk assessment. Manage-
SANRAL will seek the clarification/amendment of is one of SANRAL’s most critical priorities. It acknow- ment and colleagues were given the opportunity
certain issues included in current legislation, especial- ledges the importance of effective risk management to voice their concerns regarding the strategic and
ly those relating to the expansion of the national that is in line with its vision, mission and core values. operational risks faced by SANRAL. Key risks were
road network, with particular emphasis on the toll SANRAL has a strong and involved Board of Direc- identified and formally submitted to the Board.
sector. This is to eliminate the various ‘grey areas’ tors to direct and oversee risk assessment, with Mitigating measures in respect of the key risks
identified in legislation during the past seven years management driving the process. Yet, ultimately, identified are being actively pursued. This assess-
14 [ Section 2 ] SANRAL: An Overview Creating wealth through infrastructurement will be ongoing to ensure that SANRAL will blowing service, to facilitate reporting of incidences The objective of ethics management is to inculcate
continue to achieve its core objectives. Every col- of fraud and corruption. good and acceptable work ethics into the moral
league is and will continue to be entrusted with fabric of colleagues at every level within the organi-
personal accountability for his or her own risk ETHICS MANAGEMENT sation and thus embed these ethics within the
environment. individual and organisational culture. Each member
Corporate governance principles and ethics of the SANRAL team, from Board level downward,
is expected to demonstrate respect, integrity and
management guidelines revolve around human
FRAUD AND CORRUPTION excellence in service delivery to internal and external
behaviour. SANRAL accepts that, even with all the
stakeholders, and thus live out the ethical behaviour
PREVENTION risk management controls in place, it is imperative
that is required of all. The objective of ethics management
to recognise that the key to good corporate citizen-
In addition, SANRAL implemented a Fraud and ship is the behaviour of its people. Therefore, the
The aim is to encourage strong, high-functioning is to inculcate good and acceptable
Corruption Prevention programme with the values that underpin human behaviour are essential
work groups whose members motivate and trust
objective of protecting its revenue, expenditure, within the framework of any corporate entity. Under- work ethics into the moral fabric of
each other when faced with challenging situations.
assets and reputation from any attempt by any standing individual and collective values is critical.
This would in turn enable individuals to face critical colleagues at every level within the
person to gain financial or other benefit in an Our underlying interests and values drive our
issues, always remembering our core values, and
unlawful, dishonest or unethical manner. attitudes and beliefs. They determine our behaviour organisation and thus embed these
thus cementing our role in and contribution to
and ultimately our sense of corporate citizenship –
the welfare of our country. ethics within the individual and
The essential focus of such a strategy is the formali- our ethics in business, which could almost be
sation and implementation within the SANRAL solely responsible for the reputation of SANRAL. organisational culture.
environment of a culture of zero tolerance for fraud
Financial Resources
and corruption, a high level of fraud awareness, The ‘Code of Good Conduct’ included in the
and a management and control environment that Human Resources Policy and Procedures Manual The South African National Roads Agency Limited
makes it as difficult as possible to misappropriate sets out the core values that are applied in SANRAL. and National Roads Act, Act 7 of 1998, stipulates
assets or to succumb to corruption. They impose an obligation to act beyond the re- the funding resources available to SANRAL. These
quirement of the letter of any law or regulation. resources are also regulated in terms of the Public
As a deterrent against fraud and corruption, and It rather requires colleagues to embrace the spirit Finance Management Act, Act 1 of 1999, and
to facilitate reporting, SANRAL has also subscribed of fairness and honesty as a ‘way of life’. Treasury Regulations.
to Tip-Offs Anonymous®, an independent whistle-
SANRAL: An Overview [ Section 2 ] 15FUNDING SOURCE FOR THE NON- the expanded national network. Further expansions, FUNDING SOURCES FOR THE TOLL
TOLL NETWORK upgrading of existing roads and asset preservation NETWORK
remain constant challenges against this background.
The sole funding source for the non-toll national In terms of Sections 33(2) and 33(3) of The South
roads is the annual allocation received from the African National Roads Agency Ltd and National
general state budget, appropriated by Parliament Roads Act, Act 7 of 1998, the approval of the
through the National Treasury. The revenue pool, Minister of Transport and the concurrence of the
“... we must further consolidate the
however, is hard pressed to meet demands of all Minister of Finance are required for SANRAL to
practice of creating Public Private other public goods and services, resulting in fund- raise finance. The Public Finance Management
ing constraints for the expanded national road Act, Act 1 of 1999, Sections 66(3)(c), 70(1)(b) and
Partnerships (PPPs) and building network (i.e. newly incorporated provincial roads). 70(2)(b) also requires the concurrence of the
This added expenditure results in a redistribution Minister of Finance to that of the Minister of
Government/civil society cooperation,
of available funds with a potential adverse impact Transport.
to ensure that we utilise our collective on maintenance expenditure on the existing national
network. SANRAL, with the approval of the honourable
capacities to give further impetus to
Ministers of Transport and Finance, enjoys the
the overall development and The limited nature of this allocation has been support of a Government guarantee for the loans
identified as a key risk by SANRAL. Our road infra- raised from the capital and money markets. This
transformation of our country.” structure requires substantial investment and guarantee has been in place since the early 1980’s
frequent reinvestment if we are to have a world- and has been prudently used to expand and main-
Pres. Thabo Mbeki, February 2005
class national road network to enhance our global tain the national road network. The guarantee is
competitiveness. perpetuate with a limit of six billion Rand (R6 billion).
Throughout the country, more than half of the non- The envisaged programme might require an
toll road network is older than its design life. It is increase in this sum during the extention of the
imperative that, for the sake of the growth of South programme. The required increase – estimated to
Africa’s economy and social development, the be twenty billion Rand (R20 billion) – will be agreed
National Treasury allocates the required funds for with the National Treasury.
16 [ Section 2 ] SANRAL: An Overview Creating wealth through infrastructureCurrent sources of funding include the following: and in consultation with the Minister of Finance, Concession Toll Roads Credit Ratings
to raise funds by means of loans from any source
including the money and capital markets. Road infrastructure is also procured from the private It has always been an objective of SANRAL to re-
Toll Revenue sector through concession contracts. The conces- duce its dependence on the Government guarantee
SANRAL has issued medium-term and long-term sionaire is required to fund, design, build, operate and to better utilise the existing facility of six billion
The ‘user pay’ principle has facilitated the early bonds, secured by a state guarantee, into the capital and maintain the road for the duration of the con- Rand (R6 billion). To this effect, the recently acquired
implementation of a facility through private sector market. This funding is used for the initial construc- cession period. In this instance, the toll revenue credit rating, by an independent ratings agency,
funding on commercial grounds, not only for the tion of national toll roads and for their ongoing accrues to the account of the concessionaire. At of zaAA long-term and zaA1+ short-term provide
initial construction of the roads but for their on- maintenance and expansion. the end of the concession period (usually 30 years), an opportunity to seek non-guaranteed debt
going maintenance and expansion which usually the asset reverts to SANRAL free of charge in the instruments. The latter can be an array of securitisa-
exceed the initial construction cost over the life All toll-road projects funded through this instrument specified condition. tion, medium term note programmes, bonds, etc.
span of the road. are structured so that all private sector borrowings SANRAL will therefore continue to investigate
plus interest can be repaid within a 30-year time SANRAL has entered into concession agreements other innovative funding mechanisms.
The ‘user pay’ principle is now well entrenched frame. on three of its roads. These toll roads are financed
and the revenue received is used to improve the and maintained by private sector companies. No
road infrastructure, to service debt on the toll funding is undertaken by SANRAL for these projects
network and to ensure a well maintained road Private Sector Investments and they do not form part of the balance sheet.
network for the road user.
Public Private Partnerships SANRAL will continue to pursue this form of fund-
ing to ensure that the economic arteries of South
Capital Market Loans SANRAL has firmly established itself in the sphere Africa are not blocked. Three projects, to be con-
of Public Private Partnerships in terms of which cessioned, are currently in the development phase,
SANRAL Toll Roads innovative financial instruments are used to finance i.e. the N2 Wild Coast Toll Highway, the N1/N2
the maintenance, upgrading and expansion of the Winelands Toll Highway and the R300 Cape Town
Section 33(2)(a) of The South African National national network. SANRAL applies, inter alia, the Ring Road.
Roads Agency Limited and National Roads Act, Build-Operate-Transfer (BOT) model or variants
1998 (Act No 7 of 1998) entitles SANRAL at any thereof.
time, with the approval of the Minister of Transport
SANRAL: An Overview [ Section 2 ] 17SECTION THREE SANRAL’s Core Business “To be rich, build roads first.” – Chinese farmer, 1999 18 [ Section 3 ] SANRAL’s Core Business Creating wealth through infrastructure
The National Road Network – Core Functions The South African road network is broadly
classified in terms of the authorities primarily
responsible for the provision of such roads and
The figure below renders a graphic overview of SANRAL’s core functions.
its functionality. The classification is as follows:
New
• National roads – Roads providing mobility of
Other
national importance. These roads are usually
All Length associated with longer travelling distances at
high speeds with limited access and minimum
Add Capacity
interference to free flow of traffic. These roads
Manage Utilisation (ITS) are primarily provided for economic reasons
and to improve and support economic growth. SANRAL’s vision is thus to be
DEVELOP • Provincial roads – Roads providing access and
responsible for all national routes
mobility in a regional context. These roads
Environment usually form links between towns not situated of strategic and economic importance
along national roads.
Socio-economic Development – the national road network – a total
• Municipal roads – Roads providing mobility
Resources and access in urban areas. of approximately 20 000 kilometres.
• Rural roads – Roads providing mobility and
Policy/Standards
access to remote communities and areas,
National Road Network usually inter- and intra-village roads.
Certain provincial roads have been identified as
MAINTAIN part of the long-term strategic national road net-
work. The latter now relates to approximately 7 000
Protect – Overload Control
kilometres of national routes under the jurisdiction
Periodic Maintenance of provincial government which is required to be
Strengthening incorporated into the existing national road net-
SANRAL’s Core Business [ Section 3 ] 19work. SANRAL’s vision is thus to accede to the institutions and departments with no dedicated ment, rather than in terms of the class of road
request of various provincial administrations, in entity responsible for a holistic, integrated and that it should manage. In so doing, roads authorities
the short and medium term, to be responsible need responsive road network. will strengthen their position to lever-in private
for all national routes of strategic and economic sector involvement and to encourage private sector
importance – the national road network – a total It became evident that roads provision should be participation in new schemes or solutions.
of approximately 20 000 kilometres. In view of approached on a network basis, and schemes
the severe road funding constraints experienced justified, as appropriate, on the grounds of the Flowing from this, roads of major economic
by the provinces, SANRAL and the provinces have secondary benefits that stand to be generated. importance should thus form part of a primary
agreed to work together to declare identified This implies that, irrespective of the location of the road network managed by SANRAL, whilst
The main objective with a programme provincial road sections as national roads. road or its current or envisaged future standard, relevant authorities should manage other roads.
its function in the greater social and economic
to expand and maintain a comprehen-
context of the country should be the prevailing
sive road network is to facilitate, Advantages of a criteria. This, in turn, should determine the party
Developing the National
best able to manage it.
through the appropriate channels, Comprehensive Road Road Network
acceptance for the implementation Network It follows to reason that a roads authority such
The main objective with a programme to expand
as SANRAL, responsible for a network of primary
of a financing strategy for a new A sound balance between the social and economic and maintain a comprehensive road network is
roads, should be tasked with delivering the road
interests in roads provision is essential for ensuring to facilitate, through the appropriate channels,
road network expansion programme. infrastructure that links major economic and
that the gap between the disadvantaged and the acceptance for the implementation of a financing
social spatial programmes and developments on
economically advantaged sectors of society is strategy for a new road network expansion pro-
a national scale. Other road entities should take
reduced. Road authorities in the past have unwisely the process a step further and ensure that locally gramme. This is necessary in order to close or satisfy
differentiated between social and economic roads important spatial developments are linked to the funding gap between demand and National
in an attempt to motivate protected sources of both the primary road network and to the local Treasury allocations for the non-toll national road
funding and to assume responsibility for these roads. spatial development network. network, by illustrating:
This led to various inadequacies in the delivery of
infrastructure – responsive to both economic and SANRAL will therefore continue to promote the • The current condition of the non-toll national
social needs. Road provisioning and planning also concept that each and every roads authority should road network and the funding demand;
became compartmentalised resulting in various see its role in terms of needs that require fulfil- • Further deterioration of the non-toll national
20 [ Section 3 ] SANRAL’s Core Business Creating wealth through infrastructureroad network, should funding levels from the Table 1: Roads Incorporated in 2003/04 Financial Year
fiscus remain at the current level, and con-
Year Proclamation Length
Province Road
sequential financial and economic implications; Incorporated Date (Estimate)
• The reduction of the shortfall by the proposed Western National Route 2 sections 2, 3 and 4
2003/04 22/04/2003 150 km
Cape from Grabouw to Swellendam
toll road expansion and related funding plan;
N9 between Eastern Cape border 2003/04 22/04/2003 30 km
• A conservative financing methodology and and Middelburg
phasing strategy that will minimise financial R61 known as the N9 between 2003/04 22/04/2003 137 km
Eastern Cape border to Trunk Road
risk for both SANRAL and the National
Trunk road 49/1 also known as the 2003/04 22/04/2003 88 km
Treasury; and R61 between the intersections with
Eastern the N9 and N10
• Assistance in the establishment of a primary
Cape Trunk road 49/1-2 also known as the 2003/04 22/04/2003 145 km
road network, thus alleviating the pressure on R61 between the intersections with
the N10 and N6
provincial governments.
Trunk road 18/1 +R61 – intersection 2003/04 22/04/2003 220 km “The market is not attended from
with N6 to Umtata
In order to assist the provincial administrations, Various portions of the R61 forming 2003/04 22/04/2003 120 km
a single road.”
SANRAL has agreed to incorporate certain roads part of the N2 Wild Coast Toll Project
– African proverb
N5 Harrismith and Winburg 2003/04 22/04/2003 220 km
as part of the national road network. During the
N6 Bloemfontein to Smithfield 2003/04 22/04/2003 134 km
2003/04 financial year 2053 km of provincial roads
N8 Bloemfontein to Maseru 2003/04 22/04/2003 140 km
(See Table 1) were incorporated into the national
Free R30 Bloemfontein to Virginia 2003/04 22/04/2003 134 km
road network; followed by 1560 km of provincial State
Thabong link Road 2003/04 22/04/2003 11 km
roads (See Table 2) in the 2004/05 financial year. R34 between Odendaalsrus and 2003/04 22/04/2003 74 km
Kroonstad
P4/1 linking with P36/1 2003/04 22/04/2003 47 km
P154 Pretoria to Mpumalanga 2003/04 01/12/2003 130 km
Gauteng
Border
MR 439 2003/04 26/09/2003 180 km
KwaZulu- P678 between Pongola river and 2003/04 26/09/2003 93 km
Natal Mpumalanga Border, N2 Intersection
to Swaziland Border and P30
between N3 and N11
Total for 2003/04 2053km
SANRAL’s Core Business [ Section 3 ] 21Table 2: Roads Incorporated in 2004/05 Financial Year
Year Proclamation Length
Province Road
Incorporated Date (Estimate)
Routes R521 from Polokwane to Intersection with R523, North of Vivo then on R523 2004/05 07/05/2004 178 km
up to intersection with N1 at Masekwaspoort
R37 from Burgerspoort to Polokwane 2004/05 30/07/2004 142 km
R40, R526, R71 and R36 from Marite at Mpumalanga Border to intersection with N1 2004/05 22/10/2004 266 km
“When a road is good, it is used
at Bandolierskop
a second time.” Limpopo R71 from Polokwane to Tzaneen 2004/05 22/10/2004 89 km
R81 from Polokwane to Giyani 2004/05 22/10/2004 149 km
– African proverb N11 from Mpumalanga Border to RSA/Botswana Border (Martin’s Drift) 2004/05 22/10/2004 276 km
R510 from Groblersvlyt to 2004/05 22/10/2004 235 km
Monte Christo
R572 between Stockpoort to Tom Burke 2004/05 22/10/2004 95 km
Mpumalanga N17 - Gauteng Border to Ermelo 2004/05 6/01/2005 130 km
Total for 2004/05 1560km
SANRAL will continue with this programme. Roads still to be incorporated are reflected in Table 3 on the next page:
22 [ Section 3 ] SANRAL’s Core Business Creating wealth through infrastructureTable 3: Roads to be Incorporated
Year Year
Proclama- Length Proclama- Length
Province Road Incorpo- Province Road Incorpo-
tion Date (Estimate) tion Date (Estimate)
rated rated
N7 - Western Cape Border to Garies 2005/06 May 2005 35 km N2 - KwaZulu-Natal Border to 2005/06 Sep 2005 167 km
N8 - Free State Border to Groblers- 2005/06 Sep 2005 285 km Ermelo
hoop N11- Middelburg to Limpopo Border 2005/06 Sep 2005 125 km
Mpumalanga
N10 - Western Cape Border to 2005/06 May 2005 662 km N17 - Ermelo to Swaziland Border 2005/06 Sep 2005 139 km
(814 km)
Namibia Border R23 - Heidelberg to Volksrust 2005/06 Sep 2005 181 km
N12 - Western Cape Border to 2005/06 May 2005 491 km R37 - Nelspruit to Limpopo Border 2005/06 Sep 2005 157 km
Northern Cape
North West Border R40 - Barberton to Nelspruit 2005/06 Sep 2005 45 km
(2603 km)
N14 - Springbok to North West 2005/06 May 2005 634 km R 33 - Dundee to Paulpietersburg 2006/07 Sep 2006 116 km
Border
R34 - Vryheid to Empangeni 2006/07 Sep 2006 201 km
N18 - (R49) N12 to North West 2005/06 May 2005 50 km
R66 - Pongola to Gingindlovu 2006/07 Sep 2006 70 km
Border KwaZulu-Natal
R69 - Vryheid to Pongola 2006/07 Sep 2006 108 km
R27 - Western Cape Border to 2005/06 Sep 2005 446 km (688 km)
R602 - Ladysmith to Dundee 2006/07 Sep 2006 47 km
Keimoes
R56 - Staffords Post to Pietermaritz- 2006/07 Sep 2006 146 km
Gauteng N17 - Springs to Gauteng Border 2005/06 Dec 2005 118 km
burg
(273 km)
N7 - Cape Town to Northern Cape 2005/06 Sep 2005 400 k
N12 - Northern Cape Border to 2005/06 Sep 2005 330 km
Border
Gauteng Border
N9 - George to Eastern Cape Border 2006/07 Sep 2006 147 km
N14 - Northern Cape Border to 2005/06 Sep 2005 432 km Western Cape
N12 - George to Beaufort West 2006/07 Sep 2006 207 km
North West Gauteng Border (978 km)
R27 - Van Rhynsdorp to Northern 2006/07 Sep 2006 108 km
(1098km) N18 (R49) - Northern Cape Border 2005/06 Sep 2005 243 km
Cape Border
to Botswana Border
R60 - Swellendam to Worcester 2006/07 Sep 2006 74 km
R510 - Limpopo Border to Rusten- 2005/06 Sep 2005 93 km
R61 - Beaufort West to Eastern 2006/07 Sep 2006 42 km
burg
Cape Border
Free State R26 - Rouxville to Villiers 2006/07 Sep 2006 468 km
Total for Future Years 6767 km
SANRAL’s Core Business [ Section 3 ] 23SECTION FOUR
Financing the network
“Smooth seas do not make skillful sailors.”
– African proverb
24 [ Section 4 ] Financing the Network Creating wealth through infrastructureFunding Requirements Table 4: Requested versus Actual MTEF Allocations
for Non-toll Network Year (R’000)
Description
By incorporating the provincial roads into the de- 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
clared national road network, additional pressure
Budget Request 1 306 799 1 394 686 1 854 556 2 551 536 3 715 796 5 222 250 5 451 457
is exerted on SANRAL’s budget. Both the MTEF
budget allocations as per Table 4 and the requested Budget Allocation (MTEF) 873 612 1 061 06 1 170 556 1 440 78 1 756 479 * 1 901 060 * 2 476 112
funding do not reflect the required funds to re-
Budget Deficit 433 187 333 622 684 000 1 110 747 1 959 317 3 321 190 2 975 345
habilitate and maintain the above roads. It is thus
anticipated that additional funding will have to Cumulative Deficit #433 187 766 809 1 450 809 2 561 556 4 520 873 7 842 063 10 817 408
be procured in order to successfully service these
roads. Notes: * Anticipated allocations from National Treasury. # Cumulative prior year allocation deficits
To address the maintenance needs of national The impact of inadequate funding levels is further
roads, the procurement of adequate funds remains compounded by the fact that the cost of bitumen,
one of the biggest challenges SANRAL faces. Table which represents anything from 10% to 60 % of
4 illustrates the deficit between the requested the cost of a maintenance activity, has increased
budget allocations and the MTEF budget allocations dramatically. For example, the price of bitumen at
as per the Estimate of National Expenditure (ENE). the coast in January 1998 was R744/ton and in
January 2005 R1855/ton. This represents an in-
It is evident that the MTEF budget allocations crease of 249% over which SANRAL or National
reflect a substantial deficit when compared with Treasury has no influence. Unfortunately, due to
actual funds required. It is within this context that the volatility of the oil price, there seems to be no
SANRAL needs to preserve our national assets and respite on the horizon. The increase in the price
hence has developed a programme to address this. of diesel has a similar impact.
Financing the Network [ Section 4 ] 25Funding Requirements 5000
4500 4721
for Toll Network 4000 4214
3500
Although SANRAL proposes to extend its road
3000
network to approximately 20 000km and use 3045
2500
various financial instruments to achieve this, the
2000 2245
existing toll roads, however, still need to be
1500 1515
maintained and upgraded due to traffic growth.
1000
In addition, the debt on these roads has to be 1008 961 952
500 640 638
serviced in the face of rising costs. 158 189 190 421
0 335
0
31 Mar 02 31 Mar 03 31 Mar 04 31 Mar 05
To date, sources of funding included money Money Market Primary Loan Issues Structured Finance Secondary Market
“Real generosity toward the future
markets, primary loan issues, structured finance
lies in giving all to the present.” and secondary markets, as illustrated to the right.
– Albert Camus
Government guarantee utilisation for the toll In order to manage the existing toll road network,
network, as at 31 March 2005, is reflected below: the net borrowing requirements for the next five
years are estimated to be as follows:
5%
95% Table 5: Net Borrowing Requirements for the Existing Toll Road Portfolio
Financial Year 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010
Net Borrowing
As at 31 March 2005
Requirement
971 000 794 000 113 000 12 000 184 000
Utilised Unutilised (R’000)
26 [ Section 4 ] Financing the Network Creating wealth through infrastructureHowever, should one project be added to the current toll network, e.g. the Gauteng Network Scheme, These graphs, once again, illustrate the dynamic
this has a dramatic impact on the borrowing requirements, as illustrated in the following graphs: nature of SANRAL’s business and the need to
proactively manage its financial affairs.
Borrowing Requirements: Current Toll Network
500 NEW TOLL PROJECTS
400
The current programme, which forms part of
300 SANRAL’s strategic vision outlined in Horizon Twenty
464 Ten, comprises of the following:
200
310
100
Table 6: New Toll Projects
0
-86
-100 Planned Toll Projects (2005-2012)
2005/06 2006/07 2007/08
Initial Capital Works Expenditure (2004 Rand)
N1 Huguenot Tunnel - Second bore R 550m
Borrowing Requirements including Gauteng Network
N1 South and R30 Welkom - Bloemfontein (196 km) R 444m
1800
N2 Tsitsikamma Extension (14 km) R 199m
1600
1400 N3 Pietermaritzburg to Durban (Marianhill Toll Road) (85 km) R 881m
1200 N17 East Toll Road Extension (180 km) R 629m
1000
Gauteng Network (340 km) R 4565m
1660
800 1529 1420
N2 Knysna Toll Highway (23 km) R 519m
600
400 Various Bridges R 900m
478
200 390
TOTAL R 8687m
0
-6
-200
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
Financing the Network [ Section 4 ] 27Table 7: Required Funding for New Toll Roads
Financial Year 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010
N1 Huguenot Tunnel - Second Bore - - - 253 255
R30 Welkom to Bloemfontein - 150 295 345 100
N2 Tsitsikamma Extension - 100 100 - -
N2 Knysna Bypass - - 50 207 158
N3 Pietermaritzburg to Durban - - 120 300 312
N17 East Extension - 219 433 104 -
“When spider webs unite, they can
N2 Wild Coast Bridges - 75 310 310 236
tie up a lion.”
N1 Gauteng Province Network - 852 1,029 1,029 1,029
– African proverb
Magalies Toll Road Extension - 131 151 148 17
Total Borrowing (R million) - 1,526 2,489 2,696 2,107
Total Cumulative Borrowing (R million) - 1,526 4,015 6,712 8,819
Table 7 illustrates that SANRAL will raise an estimated R8 819 million over the next five financial years.
28 [ Section 4 ] Financing the Network Creating wealth through infrastructureForecasted Non-Toll National Road Network Condition When looking at these illustrations, the need for
R1 400 m/year Fiscus Funding for 8 400km – No New Toll Roads (Preliminary) furthering our toll road programme is clearly evident.
100%
Excellent The benefits of toll financing are numerous, e.g:
90%
• Motorists generally have the choice of using a
Non-Toll National Road Network
80% Good
toll facility or an alternative tax-supported route.
70%
Condition %
Fair In exchange for payment, the customer receives
60%
value in the form of savings, convenience, better
50% Poor
40% maintained roads and a reduction in vehicle
Very Poor operating costs. The result is less congestion
30%
20% for all drivers and enhanced mobility and
10% economic growth.
0% • Motorists are not taxed twice to use a toll
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
facility. Instead, they are given new road capacity
and are able to reduce the losses of time,
economic productivity and competitiveness
Forecasted Non-Toll National Road Network Condition wasted sitting in traffic each and every day. A
R1 400 m/year Fiscus Funding for 8 400km – With New Toll Roads (Preliminary)
toll road is funded by those opting to pay for
100% the use of the facility, whereas taxes are not
90% optional and are charged to everyone.
80% Excellent • Transport funding is always critical for growing
Non-Toll National Road Network
70% areas and areas in need of improvements.
Good
60% Typically, the demand for roads and bridges
Condition %
Fair
50% far outpaces conventional funding sources.
40% Consequently, toll revenues serve as a com-
Poor
30% plement to conventional funding sources and
20% Very Poor
releases fiscus funds for non-toll roads.
10% • Early project implementation has widespread
0%
economic spin-offs. Transportation capacity is
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
available to the driving public many years sooner
Financing the Network [ Section 4 ] 29than would otherwise be possible. funding, innovation, efficiency and skills. This policy The value of the Unsolicited Bid policy was shown
• Toll financing provides a dedicated revenue aims to encourage the private sector to propose during the feasibility study of the N1 Gauteng
stream to fund ongoing operations, mainte- self-funding road infrastructure projects (which are Network between Tshwane (Pretoria) and Johannes-
nance and improvements. identified within the strategic framework network burg. The study showed that this project was not
• Toll financing increases the attractiveness of by SANRAL) to SANRAL for consideration. Under financially viable as a wholly privately financed
road based public transport systems due to this policy regime, several exciting and attractive project, and will therefore be developed as a toll
lower vehicle operating costs, possible reduced projects have been proposed which SANRAL is road financed by SANRAL.
toll fees and shorter travel times. prepared to adopt and implement. The projects
listed below are in various stages of development.
“There really is no longer any excuse
UNSOLICITED BIDS Table 8: Proposed Concession Projects
for public sector managers who dilly-
The South African Minister of Finance, Trevor
dally in implementing their mandates, Proposed Concession Projects 2004 Rand
Manuel, is emphatic that, as a result of the Stan-
and no reason for the public sector dardised PPP Provisions, “there really is no longer The N1/N2 Winelands Toll Highway (142 km) R5.9 billion
any excuse for public sector managers who dilly-
to doubt government’s commitment The N2 Wild Coast Toll Highway (540 km) R7.3 billion
dally in implementing their mandates, and no
to this delivery path.” reason for the public sector to doubt government’s The R300 Cape Town Ring Road (68 km) R2.8 billion
commitment to this delivery path.”
– Trevor Manuel
In Public Private Partnerships of this nature, SANRAL
SANRAL has also developed an innovative policy
shares the costs associated with design and develop-
– titled “Policy of The South African National Roads ment work with the proponents of the unsolicited
Agency in respect of Unsolicited Proposals, May bids. All other costs, including initial construction
1999” (See Appendix ) – for dealing with initiatives and financial costs will be borne by the successful
identified by the private sector. This policy was tenderer. These projects will be procured on a build-
developed in view of Government’s strong commit- operate-transfer (BOT) basis, as successfully imple-
ment to develop and maintain infrastructure and mented on the N4 Maputo Development Corridor,
services in partnership with the private sector, the N3 Toll Road and the N4 Platinum Highway
thereby drawing on benefits of private sector projects.
30 [ Section 4 ] Financing the Network Creating wealth through infrastructureYou can also read
