The South African National Roads Agency SOC Ltd (SANRAL)

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The South African National Roads Agency SOC Ltd
(SANRAL)

• PRESENTATION TO THE
• PORTFOLIO COMMITTEE ON TRANSPORT
• 19 August 2014

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Contents

• Mandate
• Strategic Outcomes and Objectives
• Budget
• Projects
• Transformation
• Road Safety
• Finance
• Challenges
• Loss of Opportunity
• Discussion Points

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MANDATE

• Responsible for proclaimed national road network
• Toll and Non-Toll network
• Maintain, upgrade, operate, rehabilitate and fund
  national roads
• Levy tolls to service toll roads
• Advise the Minister on road related matters
• Create public value

As determined by Act No. 7 of 1998 - The South
African National Roads Agency and National Roads
Act, as amended
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SANRAL RELATIONSHIP TO MINISTER and DOT

• Minister (Regulator)

MoT

• Board

• Governance and Control

Chief Executive Officer

• Day to Day Business and
• Operations Management

• Planning, Design, Construction, Operation,
  Management, Control, Maintenance Rehabilitation
  of National Roads

SANRAL Staff
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• South Africa has the 10th Longest Total and 18th
  Longest Paved Road Network in the World
• Roads Represents one of the largest public
  infrastructure investments in most countries
• RSA Road Replacement Cost
• gtR2 Trillion

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South African Road Network - 2014
Authority Paved Gravel Total
SANRAL 21,403 0 21,403
Provinces - 9 47,348 226,273 273,621
Metros - 8 51,682 14,461 66,143
Municipalities 37,691 219,223 256,914
Total 158,124 459,957 618,081
Un-Proclaimed (Estimate)   131,919 131,919
Estimated Total 158,124 591,876 750,000
Un-Proclaimed Roads Public roads not formally
gazetted by any Authority
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Strategic (20,000km) and Primary (14,000km)
Network
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NATIONAL ROAD NETWORK (km)
Description Non Toll Agency Toll BOT Total
Dual Carriageway 610 520 443 1 573
4-Lane Undivided 11 299 240 550
2-Lane Single 17 662 1013 605 19 280
Total 18 283 1 832 1 288 21 403
of SANRAL Network 85 9 6
Total RSA Road Network Estimated to be 750,000 km
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VISION, MISSION AND VALUES

• Vision
• To be recognised as a world leader in the
  provision of a superior primary road network in
  southern Africa.
• Mission
• As the custodian of a public good, we are
  committed to the advancement of the Southern
  African community through
• A highly motivated and professional team
• State-of-the-art technology
• Proficient service providers
• Promoting the user pays principle.
• Core Values
• Excellence
• Proactiveness
• Participativeness
• Integrity
• Care
• EP²IC

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National Development Plan (NDP)

• By 2030 aims to
• Eliminate income poverty
• Community Development Programme
• SMME Development
• Reduce inequality.
• Develop Human Capital
• Enabling milestones
• Increase employment from 13 m in 2010 to 24 m in
  2030
• Establish a competitive base of infrastructure,
  human resources and regulatory frameworks

Blue SANRALs contribution
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NDP Critical Actions

• Public infrastructure investment at 10 of GDP
  (total 30 of GDP in 2030), financed through
  tariffs, PPPs, taxes, loans and focused on
  transport, energy and water.
• - toll roads
• Transport
• Upgrade the Durban-Gauteng freight corridor -
• - De Beers Pass (no new plazas)
• Build the N2 through the Eastern Cape
• Wild Coast
• Expand capacity of coal, iron ore and manganese
  lines
• Public transport infrastructure and systems,
  including the renewal of commuter rail fleet,
  supported by enhanced links with road-based
  services.

Blue SANRALs contribution
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GOVERNMENT 14 MTSF Priorities 2014 - 2019

• EDUCATION Quality basic education
• HEALTH A long and healthy life for all South
  Africans
• SAFETY All people in South Africa are and feel
  safe
• ECONOMY Decent employment through inclusive
  economic growth
• SKILLS Skilled and capable workforce to support
  an inclusive growth path
• INFRASTRUCTURE An efficient, competitive and
  responsive economic infrastructure network
• RURAL DEVELOPMENT Vibrant, equitable,
  sustainable rural communities contributing
  towards food security for all
• HUMAN SETTLEMENTS Sustainable human settlements
  and improved quality of household life
• LOCAL GOVERNMENT Responsive, accountable,
  effective and efficient Local Government system
• ENVIRONMENT Protect and enhance our
  environmental assets and natural resources
• INTERNAL AND EXTERNAL RELATIONS Create a better
  South Africa, a better Africa and a better world
• PUBLIC SERVICE An efficient, effective and
  development oriented public service and an
  empowered, fair and inclusive citizenship
• SOCIAL PROTECTION A comprehensive, responsive,
  sustainable social protection system
• NATION BUILDING A diverse, socially cohesive
  society with a common national identity

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DoT 6 OUTCOMES

1. An effective integrated infrastructure network
   that serves as a catalyst for social economic
   development
2. A transport sector that is safe and secure
3. Improved rural access, infrastructure and
   mobility
4. Improved public transport systems
5. Increased contribution to job creation
6. Increased contribution of transport to
   environmental protection

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SANRAL Strategic Outcomes Oriented Goals (Impact)

• Provide effective strategic road infrastructure
• Facilitate development, commerce, international
  trade
• Facilitate mobility people, freight
• Facilitate access community, tourism
• Job creation
• By the implementation of projects
• Transformation/empowerment
• Empowerment BBBEE
• Community upliftment
• Skills development training
• Educational support
• Universities/research, internships, bursaries,
  scholarships

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Strategic Objectives

• Manage the national road network effectively
• Provide safe roads
• Carry out Governments targeted programmes -
  Transformation
• Co-operative working relationships with relevant
  Departments, Provinces, Local Authorities and
  SADC member countries
• Achieve and maintain good governance practice
• Achieve financial sustainability
• Pursue research, innovation and best practice
• Safeguard SANRALs reputation stakeholder
  communication

Supported by an Annual Performance Plan with Key
Performance Areas to which are linked Individual
Performance Plans
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Non-Toll Budget (Rand 000)
Description Actual 2013/14 Budget 2014/15 Budget 2015/16 Budget 2016/17
Treasury Allocations 10 497 184 11 916 947 12 497 294 13 159 651
Adhoc Maintenance 38 583 112 533 60 085 46 809
Routine Maintenance 1 178 673 835 588 795 171 785 349
Periodic Maintenance 1 785 083 2 040 300 1 788 714 1 248 030
Special Maintenance 898 656 471 841 553 327 762 310
Strengthening 3 045 771 3 515 873 2 589 703 2 738 026
Improvements 2 325 508 2 541 411 3 443 991 4 888 657
New Facilities 714 589 1 583 667 2 285 534 1 904 476
Land Acquisition 21 578 15 000 15 000 15 000
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Toll Budget (Rand 000)
Description Actual 2013/14 Budget 2014/15 Budget 2015/16 Budget 2016/17
Total Income 3 481 612 4 102 102 5 171 629 5 557 617
Other Toll Income 2 327 612 2 531 602 2 808 849 3 145 347
GFIP 1 154 000 1 570 500 2 361 780 2 412 270
Adhoc Maintenance 14 110 2 198 12 980 8 500
Routine Operations 1 710 063 1 754 362 1 644 843 1 533 244
Periodic Maintenance 216 728 207 075 217 346 37 702
Special Maintenance 16 870 930 - -
Strengthening 114 356 190 329 360 947 288 798
Improvements 507 877 879 134 2 652 268 6 162 259
New Facilities 512 644 558 822 873 216 218 026
Finance Charges 3 502 766 3 315 000 3 636 000 4 167 000
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Contracts Awarded (2013/14)
Type of Contract Number Value (ZAR)
Non-Toll 116 6 990 832 285
Toll 30 1 227 785 302
Other 29 697 107 968
Total 175 8 915 725 554
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Pavement Age Trend
Please Note 76 of Network Older than Original
20 Year Design Life
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What Is The Price We Pay Government
Repair Cost X / km
Repair Cost 6X / km
(Ratio 16)
Good
Fair
Repair Cost 18X / km
(Ratio 118)
Poor
3-5 Years
Very Poor
5-8 Years
Please Note Typical Costs for 11.4m Wide Road in
Flat Terrain
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What Is The Price We Pay Road User
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SANRAL Condition Survey Vehicles

• Various condition parameters collected using
  SANRAL Road Survey Vehicles
• Roughness how bumpy is the road speed, wear,
  etc
• Rut Depth water pond on surface - safety
• Macro Texture assist vehicle tyre to drain
  water safety, noise
• Cracking how much water will get in -
  deterioration
• Deflection remaining structural life of
  pavement
• Alignment (DGPS) Speed, Fuel Consumption, etc
• ROW Video Road Signs, Section Measurements, etc
  
• Surveys at between 75 to 100 km/h

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KEY PRIORITIES FOR 2014/15

• Asset Management Systems for the timely
  maintenance of national roads
• Planned increase of national road network by
  incorporation of roads as requested by Provinces
• Good co-operative relationships with relevant
  government departments, provincial and municipal
  authorities sharing of asset management systems
  across jurisdictions
• Smooth implementation of e-Tolling in Gauteng
• Roll out of electronic toll collection lanes at
  current plazas for quicker flow of vehicles
• N1-N2 Wineland Toll Road (Western Cape)
• N2 Wild Coast Toll Road (Eastern Cape)

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MAJOR NON-TOLL PROJECTS

• Routine Road Maintenance 100 of Network
• Others Strengthening, Improvement etc.
• N1 Trompsburg Sydenham
• N2 Mt Edgecombe Interchange
• N2 Umgeni/Inanda Interchange
• N5 Vaalpenspruit - Winburg
• N8 Alexanderfontein Petrusburg
• N9 Wolwefontein - Colesberg
• N10 Baavians River Riet River
• N11 Ermelo Hendrina
• R23 Standerton Greylingstad
• R27 Niewoudtvie - Calvinia

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FUTURE PROJECTS CAPITAL INVESTMENT

• N3 Durban to Pietermaritzburg
• N12 Kimberley to Johannesburg
• N1 Ring road at Musina
• N1 Kroonstad to Winburg
• N1 Polokwane Eastern Ring Road

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CONCESSIONS CURRENT
N4 East Maputo Development Corridor 563 km from Pretoria to Maputo, Mozambique
N3 Toll Road 429 kms from Heidelberg to Cedara
N4 West Bakwena Platinum Corridor 385 km between Pretoria and Bela-Bela on the N1 and Pretoria and the Botswana Border
Private sector investments for three years
2012/13 2014/15 R 7.5 billion
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CONCESSIONS PLANNED
N2 Wild Coast Two court actions, both attacking validity of Record of Decision
N1/N2 Winelands Legal process with regard to environmental authorisation is current. Dispute with City of Cape Town

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MAINTENANCE

• Routine Road Maintenance all the time
• Repairing potholes within 72 hours
• Replace guardrails, sign posts etc.
• Grass cutting
• Patching
• Clearing up after accidents
• Fencing etc.
• Periodic Maintenance ( every 7 8 years)
• Special Maintenance

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TRANSFORMATION

• Overall Empowerment Rating Level 2 (2009/10)
• STAFF
• Board approved Employment Equity Plan to October
  2014. New 3 year EE Plan to be developed in
  2014/15
• Bursaries
• SKILLS DEVELOPMENT
• Scholarships
• Bursaries
• Internships
• Funding to universities Pavement/Transport
  Planning /Mathematics Science chairs

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Education Community Outreach

• SANRALs presence at national career expos and
  exhibitions
• Roadshows at secondary schools including
  presentations by community development
  specialists to schools
• Use of the database of the Department of Basic
  Education
• Attendance at university open days

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Support Tertiary Institutions
Chair in Pavement Engineering University of
Stellenbosch
Chair in Transport Planning University of Cape
Town

• NMMU
• 890 Grade 10 12 learners ICT
• 190 Educators
• 36 BSc Botany students

• University of Witwatersrand
• WTTP Grade 10-12
• 2013/14 42 learners

University of the Free State The SANRAL Chair
in Maths and Science

• University of the Free State
• BSc Physics 369 students
• ICT Grade 10-12 learners 1081
• Family Math Science Grade R-3 learners (7624),
  educators (155) student educators (474) parents
  (1171) from the Free State, Northern Cape
  Eastern Cape
• 1 Postgraduate Internship

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Skills development
BURSARIES 106 bursars qualifying in engineering
(and a few other) degrees, including post
graduate degrees 7 universities
SCHOLARSHIPS 177 scholars Grades 10 -12 Across 40
schools
INTERNSHIPS 196 interns training with 57
contractors across the country
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TRANSFORMATION CONTD

• CONTRACTORS
• SMME Development in Routine Maintenance Contracts
• 72 of work to black SMMEs
• 8 to other SMMEs
• 20 to managing contractor responsible for
• Empowerment
• Training
• Support

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TRANSFORMATION CONTD

• COMMUNITY DEVELOPMENT PROGRAMME
• Community based projects (generally safety
  related)
• Pedestrian bridges
• Walkways
• Roads
• Economic opportunities in rural areas
• Employment of women and youth is targeted
• Catalysts for opportunities such as tourism,
  hospitality industry etc.

• Total number of projects 42
• Budget R 1.03 billion
• Jobs to be created 5641

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SANRAL Road Safety Education and Awareness
Programme

• Education making road safety practical in
  schools
• 2013/2014
• - 1 410 educators attended workshops
• - 5 911 educators implemented road safety
  education in class
• - 416 739 learners received learning material
• Road safety art competition to test the
  knowledge of learners on road safety
• 1 281 schools were invited
• more that 5 000 entries
• Awareness
• Facebook page www.facebook.com/chekicoast 10 000
  followers
• T-shirt competition for students
• CHEKiCOAST SAVE A LIFE CAMPAIGN
• Radio and television adverts
• Radio adverts flighted on national radio stations
• Four television ads flighted on SABC, E-TV and
  selected DSTV channels

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Research Road Safety Behaviour

• 3 year longitudinal study of road safety
  knowledge, attitude and behaviour of different
  road user groups
• Involving 5 communities nationally
• Target user groups
• Grade 6 learners
• Educators
• Public Transport Users
• Research led by SANRAL - by Universities of
  Pretoria, KwaZulu-Natal and North West

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Research Road Safety Behaviour Contd

• General findings from Year 1
• General road risks identified speeding, drunk
  driving, disregard for rules, lack of
  infrastructure and enforcement
• Road safety perceived as important learning
  opportunity but only one learning opportunity
  per year
• Educators do not have confidence in learners
  road behaviour
• Road safety education does not translate into
  safe road behaviour
• Learners possess basic road safety knowledge
• Learners do not know about cycling or appropriate
  passenger behaviour on public transport
• Learners do not anticipate mistakes by other road
  users and so do not have behavioural control
• Educators encouraged to attend additional
  training which are not necessarily passed on in
  class to learners
• Study confirmed that public transport users had
  expected knowledge
• Year 2 will focus on attitude

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ROAD SAFETY PROJECTS (Sample List)
Location Project Description Status Design/ Construction Completion Date Total Budget
Eastern Cape Port St. Johns R 61 Pedestrian crossings, traffic calming measures,street lighting Construction October 2013 R 135m
Eastern Cape Nyandeni Local Municipality R61 Kerbs, sidewalks access roads will be upgraded to 4.5m wide surfaced roads. Construction May 2014 R109m
Eastern Cape Nyandeni Local Municipality R61 Pedestrian overpass/bridge Design Est. June 2015 R 7m
Dr Kenneth Kaunda and Tlokwe Municipalities N12 Cyclist and pedestrian facilities, provision of taxi lay byes and closing of all illegal accesses Design December 2013 R18m
Dr Kenneth Kaunda Districtand Tlokwe Municipality N12 Cyclist facilities, walkways as well as the safety of improvements of four intersections. Design Est. December 2014 R 15m
City of Johannesburg and Ekurhuleni Municipality. N17 Construction of pedestrian facilities (bridges and walkways) on National Route N17 section 1, km 55.4 and section 2 km 27.4 and km 30.0. Design Est. December 2014 R 37m
KwaZulu Natal Ugu District, Hibiscus Coast Municipality N2 Pedestrian facilities including a Cantilever Pedestrian Bridge across the Umzimkhulu River. Construction July 2013 R 11m
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NON-TOLL

• Funding Sources
• Grant from National Treasury
• MTEF submission in July of every year
• No borrowing allowed

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TOLL

• No cross subsidising

• Funding Sources
• Toll income
• Financing through capital market
• Government Guaranteed
• Non-guaranteed
• Public/Private Partnership
• Concessions
• Unsolicited Proposals
• Miscellaneous

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BORROWING CAPACITY

• Initial R6 billion guaranteed funding
• (SZ bonds)
• R0.73 billion N1 loan separate guarantee
• R26.91 billion guaranteed funding (HWAY bonds
  other)
• R15 billion non guaranteed funding (NRA bonds)

Total Borrowing capacity R48.64 billion
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Ratings June 2014

• Moodys
• Global Scale Issuer Ratings
• Long-Term Baa3
• Short-Term P-3
• Stable Outlook
• National Scale Issuer Ratings
• Long-Term A3.za
• Short-Term P-2.za
• Stable Outlook

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TOLL NETWORKBENEFITS OF TOLL FINANCING

• Early Project Implementation Economic spin-offs
• Releases Fiscus Funds for Non-Toll Roads
• Concessions (BOT) Sharing of Risk with Private
  Sector
• For Investors
• Long-term Investment
• Low risk as Government Guaranteed (to date)
• Improved Road User Benefits
• Time Savings
• Safety and comfort
• Reduction in Vehicle Operating Cost

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Toll vs Fuel levy

• Fuel levy has the following limitations
• Not ring-fenced and goes to general fund
• Fuel efficiency is an objective declining fuel
  levy
• Everyone pays regardless of use, incl the poor
• Toll
• Demand Management Tolling incentivise different
  choices, i.e. Public transport usage, ride
  sharing, time of day travel
• Urban sprawl is limited
• Pro-poor exempt public transport
• Users pay fraction of benefit received
• Government spends more than net receipts of fuel
  levy on road infrastructure

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GFIP USER TOLL COST
Category A2 (light vehicles) Actual (Audited)
Less than R100 p/m 82,83
Between R101 and R200 10,10
Between R201 and R300 4.03
Between R301 and R400 1,82
Between R401 and R450 0.63
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CHALLENGES

• Resistance to e-tolling on GFIP by interest
  groups
• Slow e-tag registration
• Resistance to user charge- N1/N2 Winelands, N2
  Wild Coast legal action
• Need firmly communicated message on toll road
  funding
• Delays in project related approvals from water
  affairs, provinces etc.
• Inadequate law enforcement
• Traffic rules
• Overloading by hauliers
• Enforcement in relation to electronic/open road
  tolling
• Driver behaviour road safety
• Reputational risk for SANRAL, DoT

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CHALLENGES CONTD

• Insufficient funding for timely upgrades and
  maintenance of the non-toll network
• Poor progress on SIP-1 and SIP-4 projects
• Insufficient high-level planning and
  co-ordination between inter-modal transport and
  the three spheres of Government

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LOSS OF OPPORTUNITY

• N2 Wild Coast Project
• N1-N2 Winelands Project
• N3 De Beers Pass

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DISCUSSION POINTS

• Future of private sector investment in funding
  road infrastructure toll road projects
• Improve inter-Government departmental
  co-operation

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Thank you!

• SANRAL
• 48 Tambotie Avenue
• Val de Grace
• Pretoria
• 0184
• PO Box 415
• Pretoria
• 0001
• Telephone [phone]
• Fax [phone]

Nazir Alli alli_at_nra.co.a Inge Mulder mulderi_at_nra.c
o.za Alice Mathew mathewa_at_nra.co.za
FRAUD HOTLINE [phone] Website
www.sanral.co.za