Treasury regulations stall Sanral 2017/18 project roll-out

05 November 2018

The South African National Roads Agency Limited (Sanral) has, in the past year, issued a total of 60 new contracts to the value of R4.9-billion for roadconstruction, it states in its 2017/18 integrated report, presented to Parliament in October. However, this was significantly lower than in the 2016/17 financial year, because of the technical interpretation of the new National Treasury procurement regulations, which delayed the issuing of new contracts.

“These issues have now been resolved and we have already awarded more than 50 new contracts since July,” says Sanral CEO Skhumbuzo 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 awarded in 2017/18 is the construction of a mega bridge across the Mtentu gorge, one of two mega bridges that will form part of the N2 Wild Coast Highway. Also included were a R115-million project to extend the road network and improve roadsafety near Kimberley, as well as improving 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. Contracts to the value of more than R3-billion were awarded for road rehabilitation and maintenanceprojects, of which about 60% went to small, medium and micro black-owned businesses.

Sanral manages a 22 000 km road network. The agency’s report indicates that revenue from non-toll operations – which comprise 87% of Sanral’s business – grew by 4% during the period under review, to R9-billion. Non-toll is funded entirely by the fiscus through allocations from the Department of Transport. Sanral’s 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), however, decreased by 4.83% year on year. During the 2017/18 financial year, Sanral received R463.5-million from government as a GFIP grant, while a further R1.9-billion was transferred from the non-toll grant to address the shortfall resulting from low e-toll payments.

Macozoma says 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 maintenanceof the national road network. 

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