Road Infrastructure Roll-Out

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The South AfricanNational Roads Agency Limited

• Road Infrastructure Roll-Out
• Presentation to the Portfolio Committee
• Wednesday 6 November 2002
• Cape Town

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Contents

• Network
• Strategic Objectives
• Challenges
• Non-Toll Roads
• Proposed 5 Year MTEF
• SANRAL Contribution to Poverty Relief
• Progress
• Toll Roads
• Concession Contracts

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(No Transcript)
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STRATEGIC NETWORK
KMS Existing National Road Network
7,200 Provincial Roads-Transfer Already
Agreed - Free State 760 -
Eastern Cape 850 - Western Cape
600 - Limpopo Province 1,950 Provincial
Roads-Transfer to be Finalised 8,640 TOTAL
STRATEGIC NETWORK 20,000
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STRATEGIC OBJECTIVES

• To provide and manage a sustainable National Road
  Network
• Minimise the cost of road transport
• Stimulate economic growth
• Promote Black economic empowerment and value for
  moneys
• Be sensitive to the environment
• Meet the needs of our road users and investors
• Inspire innovative and effective research and
  development

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CHALLENGES

• Capacity of delivery institutions (Private and
  Public)
• Use existing capacity within Govt
• Institutional fragmentation
• Network layout and responsibilities
• Development of Human Capital
• Within the Agency
• Within the industry sector
• Sources of funding

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Non-TollMTEF Submission 2003-05 (R Mill)

• 2003/04 2004/05 2005/06
• Baseline fm 2002/03 1,171 1,241 1,315
• Depreciation ZAR 117 124 132
• Border posts 62 47 5
• Traffic Control 180 220 200
• Network Expansion 325 880 1,650
• TOTAL 1,855 2,512 3,122

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PROPOSED 5 YEAR MTEF National and Provincial
Roads
Macro Impacts of Funding Levels
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PROPOSED 5 YEAR MTEF National and Provincial
Roads

• Ideal situation
• 5-10 poor to very poor condition
• Maintain rest between fair and very good
  condition
• Match to capacity
• Earmarked allocation for rural/community roads,
  /- R3 bn

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PROPOSED 5 YEAR MTEF National and Provincial
Roads

• National and Provincial road condition under this
  scenario

 
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PROPOSED 5 YEAR MTEF National and Provincial
Roads

• WHAT WE ACHIEVE
• Growth of backlog halted/slowed
• Rural (inter/intra village) roads boosted
  increase economic growth
• Many opportunities for jobs, SMMEs and ABEs
• Stabilise grow sector
• Retain skills
• Develop Human Capital

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PROPOSED 5 YEAR MTEF National and Provincial
Roads

• Rural (village) roads
• R150-300k/km to upgrade rural roads
• Labour 30-40 of construction in community
  pockets
• Every R100m/year on construction
• 513 000 684 000 person days on directly
  employed
• 300-600 km upgraded per year
• gtR3bn over 5 years
• 11,5 15,4 million person days over 5 years
• Upgrade 7500-15000km of rural roads
• Leave R670 R900m in rural economy over 5 years
• Excludes multiplier effect of 4 - 6

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PROPOSED 5 YEAR MTEF National and Provincial
Roads

• Immediate Strategy
• Use MTEF funds to build Govt and industry
  capacity
• Adapt spending to maintain good roads and prevent
  further deterioration
• Ring fence 10-15/year for rural (inter/intra
  village) roads for socio-economic improvement

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SANRAL CONTRIBUTION TO POVERTY RELIEF

• 107 Projects in rural areas
• R230 million allocated of R294 million
• Estimated employment 950 600 person days
• R51,6million on labour
• Skills development
• Types of project
• Weed eradication
• Nurseries for indigenous plants
• Roads safety projects (education, infrastructure)
• Roads and Bridges

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SANRAL CONTRIBUTION TO POVERTY RELIEF

• SDIs
• Lebombo Hluhluwe-Kosi Bay (85)
• St Lucia Wetlands Park (98)
• Total Investment R310,2 million
• 3900 Jobs created

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PROGRESS-TOLL ROADS
Funding of roads has always been a
controversial subject. This is not only true
from a fiscal point of view tax based revenues
need to serve a large number of disparate demands
but also from a road user point of view in
having to pay tolls. It is important to
note that the Agency manages approximately 80 of
its total network as non-toll roads. This places
a large financial burden not only on the Agency
but also on National Treasury. It is for
this reason that alternative funding instruments
be used and developed to address the
infrastructural needs of our country while at the
same time reducing the stresses on tax based
revenues.
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PROGRESS-TOLL ROADS

• We are mindful that the implementation of toll
  roads
• hinges on many political, economic and social
• concerns. They are not simply a matter of
  capital
• augmentation but also depend on such deeply
• embedded societal concerns, such as
• ? Equity
• ? Income transfer
• ? Environmental issues
• ? Attitude towards taxation
• ? Role of Government

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PROGRESS-TOLL ROADS
In terms of public sentiment towards toll roads
there is seldom a distinction drawn between
Agency toll roads and toll roads operated by the
private sector under concession agreement.
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PROGRESS-TOLL ROADS

• Extension to existing toll routes
• Route Kms Status
• N1 Great North 108 - Construction underway,
• completion due early 2003
• N2 Tsitsikamma 54 - Final environmental
  approval awaited
• N3 Mariannhill 86 - Process anticipated to
  commence mid 2003
• N4 Pretoria 71 - Construction commenced,
• completion expected mid 2004
• N17 Springs-Ermelo 170 - Pending
  proclamation of national roads

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PROGRESS-TOLL ROADS

• Proposed New Toll Routes
• (Additional information available in Horizon
  2010)
• Route Kms
• N1 Kroonstad-Three Sisters 671
• N5 Winburg-Harrismith 224
• N8 Kimberly-Maseru 374
• N12 Johannesburg-Three Sisters 901
• N2 Richards Bay-Ermelo 436
• N11 Ladysmith-Middleburg 349
• N12 Edenvale-Daveyton 27

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PROGRESS-TOLL ROADS

• Proposed New Toll Routes
• The feasibility studies are underway and the
  Public Participation Process is currently being
  designed.
• Please refer to Horizon 2010 for further
  details

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PROGRESS-CONCESSIONS

• Existing Concession Contracts
• Maputo Development Corridor (100)
• N3 Jhb to Cedara (95)
• Platinum (60)
• Total Investment R9.7bn
• Direct foreign investment R 1bn
• Jobs created - 10200

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PROGRESS-CONCESSIONS

• Works in the near future
• Wild Coast Development Corridor commences 2003
• N1/N2 Development Corridor in Western Cape
  commences 2003/2004
• Estimated Investment R3,8bn
• Estimate of Jobs 8000

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Proposal for sustaining expanded non-toll network
Proposed total network TOTAL 20 000 km NON-TOLL 13 200 km TOLL 4 000 km CONCESSION 2 800 km
(1) Current MTEF funding 2002 (5 300kms) 1 061 1 061
(2) Annual expenditure requirement, current toll concession network 725 370 355
(3) Annual expenditure requirement toll concession expansion 2 500 2 100 400
(4) TOTAL NATIONAL ROAD NETWORK ANNUAL EXPENDITURE (123) 4 286 1 061 2 470 755
(5) Total private sector contribution to annual expenditure requirement (public sector saving) (23) 3 225 2 470 755
(6) Reallocation of 65 of public sector saving (5x65) 0 2 100 -1 600 -500
(7) REVISED PUBLIC SECTOR FUNDING (16) 3 161 3 161
(8) Available for other uses (5-6) 1 125
Of the total saving to the fiscus, it is
proposed that 65 be consolidated into the
treasury funding of non-toll roads in order to
susin the expansion in the non-toll network and
the remaining 35 put to other uses.