PRESENTATION TO THE

PORTFOLIO COMMITTEE ON

TRANSPORT

Strategic Plan 2015/16 – 2019/20

Annual Performance Plan 2014/15

and 2015/16 – 2017/1814 April 2015

#1700170

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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

3

South African Road Network - 2014

Un-Proclaimed Roads = Public roads not formally gazetted by any Authority

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

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0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016

Kilo

me

tre

(C

en

tre

lin

e)

Year

Road Network Length

Future Incorporation

BOT Toll Roads

Agency Toll Roads

Non-Toll Roads

NATIONAL ROAD NETWORK GROWTH (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%

NATIONAL ROAD NETWORK (km)

Total RSA Road Network Estimated to be 750,000 km

Pavement Age

Please Note: 75% of Network Older than Original 20 Year Design Life

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Na

tio

na

l R

oa

d N

etw

ork

Le

ng

th (

Ca

rria

ge

wa

y k

m)

Year

Pavement Age Trend

>25 yrs 21-25 yrs 16-20 yrs 11-15 yrs 6-10 yrs 0-5 yrs

0

20

40

60

80

100

2008 2013 2018 2023 2028

Year

Ro

ad

Co

nd

itio

nWhat Is The Price We Pay – Government

Repair Cost = X / km

Good

Fair

Poor

Very Poor

3-5 Years

Repair Cost = 6X / km

5-8 Years

Repair Cost = 18X / km

(Ratio 1:6)

(Ratio 1:18)

Please Note: Typical Costs for 11.4m Wide Road in Flat Terrain

What Is The Price We Pay – Road User

Please Note:

Costs exclude

fuel, travel time,

cargo damage,

etc. components

0

0.5

1

1.5

2

2.5

1 2 3 4 5

Ve

hic

le a

dd

itio

nal

re

pai

r an

d m

ain

ten

ance

co

sts

[R/k

m]

Road Roughness [m/km]

6th Logistics Survey -2009

SANRAL Toll Roads

SANRAL Budget Need vs Allocation

R 0

R 5 000 000

R 10 000 000

R 15 000 000

R 20 000 000

R 25 000 000

R 30 000 000

2014/15 - Need 2014/15 -Allocation

2015/16 - Need 2015/16 -Allocation

2016/17 - Need 2016/17 -Allocation

2017/18 - Need

Ra

nd

s (M

illio

n)

Year

MTEF Basic + Strengthening + Expansion Requirement vs Allocation

Cost Centres Routine Maintenance Periodic Maintenance

Strengthening Strengthening Backlog Expansion

0

10

20

30

40

50

60

70

80

90

100

20

14

20

15

20

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20

32N

on

-To

ll N

ati

on

al

Ro

ad

Ne

two

rk C

on

dit

ion

(%

)

Year

Forcasted Non-Toll National Road Network ConditonR12bn/year Fiscus Funding for 18,283 km - NO New Toll Roads

Very Good

Good

Fair

Poor

Very Poor

Note:

The implication of No New Toll Roads and no additional budget (R11.89bn per year additional over 10years) from national treasury will be far reaching for the national road network and the road users. If thedecision is made that all the required Expansion requirements must be constructed over 10 year period,using the existing non-toll budget, since this approach will generate the best economic returns.The impact of this approach will however be disastrous on the condition of the rest of the non toll roadnetwork, since remaining budget available can only cover routine maintenance needs.

0

10

20

30

40

50

60

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80

90

100

20

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20

32N

on

-To

ll N

ati

on

al

Ro

ad

Ne

two

rk C

on

dit

ion

(%

)

Year

Forcasted Non-Toll National Road Network ConditonR12bn/year Fiscus Funding for 16,283* km - With New Toll Roads

Very Good

Good

Fair

Poor

Very Poor

Note:

The implication of allowing planned Expansions to proceed as Toll Roads or increasing allocation toSANRAL by additional R11.89bn per year over 10 years), will have far reaching positive impact for thenational road network and the road users. If Expansions can be funded through toll or increased non tollallocation to SANRAL, the length of non-toll network to be maintained using existing non-toll budget, willimmediately decrease by 2,000km, resulting in more budget being available to address maintenance andstrengthening requirements.

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National Development Plan (NDP)

By 2030 aims to:

1. Eliminate income povertyi. Community Development Programme

ii. SMME Development

2. Reduce inequality.i. Develop Human Capital

ii. Improve access to national roads

Enabling milestones:

1. Increase employment from 13 m in 2010 to 24

m in 2030

2. Establish a competitive base of infrastructure,

human resources and regulatory frameworks

Blue : SANRAL’s 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)

- Expand capacity of coal, iron ore and manganese lines

- Build the N2 through the Eastern Cape

- Wild Coast

- Public transport infrastructure and systems, including

the renewal of commuter rail fleet, supported by

enhanced links with road-based services.

Blue : SANRAL’s contribution

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MTSF: 14 Outcomes (2014)1. Quality basic education

2. A long and healthy life for all South Africans

3. All people in South Africa are and feel safe

4. Decent employment through inclusive growth

5. Skilled and capable workforce to support an inclusive growth path

6. An efficient, competitive and responsive economic infrastructure

network

7. Vibrant, equitable, sustainable rural communities contributing

towards food security for all

8. Sustainable human settlements and improved quality of household life

9. Responsive, accountable, effective and efficient local government

10. Protect and enhance our environmental assets and natural resources

11. Create a better South Africa, a better Africa and a better world

12. An efficient, effective and development oriented public service

13. A comprehensive, responsive and sustainable social protection system

14. A diverse, socially cohesive society with a common national identity

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Alignment With Minister’s Performance Agreement

1. Maintenance, Strategic Expansion, Operational Efficiency of

Transport Infrastructure: Through SANRAL’s non-toll and toll

projects on the national road network

2. SIP 2: N3 De Beers Pass - Draft EIR in public comment phase until

20 April 2015 (MTSF: SANRAL commences work in 2015)

3. SIP 3: Mthatha Airport: road infrastructure - roads leading to the

airport will be done by SANRAL (MTSF: Wild Coast - SANRAL

to have commenced construction of bridges in 2014 should funding

have been arranged. Progress held up by ongoing litigation)

4. Integrated National Transport Plan: SANRAL commits to assist in

the development of the Plan

5. Decent employment opportunities: Through SANRAL’s projects

and SMME empowerment

6. Comprehensive rural development: Through SANRAL’s projects in

rural areas and access to national roads through Community

Development Projects

7. Protect and enhance environmental assets and natural resources:

Through SANRAL’s environmental policies on projects

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SANRAL: Strategic Outcomes Oriented Goals Ensure an efficient, competitive and responsive national road

network

(MTSF Outcome 6: An efficient, competitive and responsive economic

infrastructure network)

Ensure improved road safety on the national road network

(MTSF Outcome 3: All people in SA are and feel safe)

Ensure improved rural access to the national road network

(MTSF Outcome 7: Vibrant, equitable and sustainable rural communities)

(MTSF Outcome 8: Sustainable human settlements and improved quality of

household life)

Ensure sound environmental management and sustainable practice

on the national road network

(MTSF Outcome 10: Environmental assets and natural resources that are well

protected and continually enhanced)

Ensure decent employment opportunities, transformation and

empowerment

(MTSF Outcome 4: Decent employment through inclusive economic growth)

(MTSF Outcome 5: Skilled, capable workforce to support inclusive growth path)

An efficient, effective and development oriented national roads

agency

(MTSF Outcome 12: An efficient, effective, development oriented public service)

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STRATEGIC OBJECTIVES

1. Manage the national road network effectively

2. Provide safe roads

3. Carry out Government’s targeted programmes –

Transformation

4. Co-operative working relationships with relevant

Departments, Provinces, Local Authorities and SADC

member countries

5. Achieve and maintain good governance practice

6. Achieve financial sustainability

7. Pursue research, innovation and best practice

8. Safeguard SANRAL’s reputation: stakeholder

communication

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Measures performance against targets linked directly to Strategic Objectives

1. Manage the national road network effectively

• Road condition indices

• Maintenance and capital projects kilometres

• SIP Projects

• Traffic information

• Environmental Management

2. Provide safe roads

• Projects in pedestrian hazardous locations

• Road safety audits in design phase

• Road Safety education programmes

ANNUAL PERFORMANCE PLAN

2015/16 – 2017/18 (Summary)

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3. Carry out Government’s targeted programmes –Transformation

• Empowerment through award of contracts

• Job creation

• SMME Development

• Development of Human Capital• Internal & External: employment equity,

scholarships, bursaries, internships

• Community Development projects

4. Co-operative working relationships with relevant Departments, Provinces, Local Authorities and SADC member countries

• COTO approvals

• Incident Management System across the country

• Co-operation between neighbouring countries –Botswana

ANNUAL PERFORMANCE PLAN

2015/16 – 2017/18 CONT’D

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5. Achieve and maintain good governance practice

• Prevention of Fraud and Corruption

6. Achieve financial sustainability

• Private sector investment index

• Expenditure efficiency – overheads

7. Pursue research, innovation and best practice

• Road Design software

• Pedestrian behaviour

8. Safeguard SANRAL’s reputation: stakeholder communication Road Design software

• Positive messaging

• Publications

• Stakeholder engagement

ANNUAL PERFORMANCE PLAN

2015/16 – 2017/18 CONT’D

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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 lanes at current plazas for quicker flow of vehicles

N1-N2 Winelands Toll Road, Western Cape

N2 Wild Coast Toll Road, Eastern Cape (MTSF –Commence 2014)

N3 De Beers Pass, Free State, KZN (MTSF – Commence 2015)

KEY PRIORITIES FOR 2015/16

University of Witwatersrand

WTTP Grade 10-12

2013/14 – 42 learners

TRANSFORMATION:

SUPPORT TERTIARY INSTITUTIONS

Chair in Pavement

Engineering: University

of Stellenbosch

Chair in Transport

Planning: University of

Cape Town

NMMU

ICT weekly sessions 202 Grade 10 – 12 learners

Exposure & school visits to ICT lab 1269 learners

190 Educators

University of the Free State

ICT weekly sessions 403 Grade 10-12

Learners (QwaQwa & Bloemfontein)

ICT 2 hour learning/revision sessions to 3 902 learners

Science education students 16

Family Math & Science Grade R-3&4 learners (6 607), educators (233) student educators (588) parents 1535 from the Eastern Cape. In total 4 547 parents from Free State,

Northern Cape and Eastern Cape

Support material to 11 495 learners

1 Postgraduate Internship

University of the Free State – The SANRAL Chair in

Maths and Science

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TRANFORMATION

Inclusion Mechanisms:

Conventional Projects

Contract Participation Goals:

Prescribed targets.

Labour Maximisation: 4% - 6% of tender

sum.

SMME/BE Utilisation: 8% - 12% of tender

sum.

90% of 8% – 12% must be black owned.

40% of 8% – 12% must be woman owned.

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TRANSFORMATION:

Inclusion Mechanisms:

Routine Road Maintenance Projects

Enhanced Sub-contractor Methodology

Main contractor typically CIDB grade 6 andupwards.

Main contractor executes 30% to 40 % of thework.

Sub-contractors typically CIDB grade 1 to 4.

Sub-contractors executes 60% to 70% of thework.

90% of SMME’s black owned.

40% of SMME’s woman owned.

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TRANSFORMATION:

Community Development Contracts

Labour and SMME Based Contracts

SANRAL contracts with Construction Manager (CM).

CM tenders for design, training, mentoring, management.

CM does not tender for construction of the works.

SMME’s construct 90% of the work, 10% large plant.

90% of SMME’s must be black owned.

40% of SMME’s must be woman owned.

40% of SMME’s must be youth owned.

All SMME’s /labour recruited from the local community.

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Non-Toll Budget (Rand ‘000)

Description Budget

2014/15

Budget

2015/16

Budget

2016/17

Budget

2017/18

Treasury Allocations 11 916 947 12 542 488 13 490 485 14 146 662

Adhoc Maintenance 112 533 204 503 115 705 79 240

Routine Maintenance 835 588 1 001 666 933 031 920 797

Periodic Maintenance 2 040 300 2 249 117 752 910 360 541

Special Maintenance 471 841 813 799 1 158 046 1 256 492

Strengthening 3 515 873 2 267 537 2 613 979 3 488 789

Improvements 2 541 411 2 816 492 3 396 123 4 217 714

New Facilities 1 583 667 2 502 731 3 501 553 2 714 100

Land Acquisition 15 000 15 000 15 000 15 000

Community

Development Projects

383 616 358 141 277 483 124 191

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Toll Budget (Rand ‘000)

Description Budget

2014/15

Budget

2015/16

Budget

2016/17

Budget

2017/18

Total Income 4 102 102 4 044 865 5 518 491 6 197 085

Adhoc Maintenance 2 198 16 566 17 986 27 420

Routine Operations 1 754 362 1 947 029 1 843 655 1 642 766

Periodic

Maintenance

207 075 225 068 365 912 143 179

Special Maintenance 930 111 266 31 850 40 000

Strengthening 190 329 334 252 367 904 215 407

Improvements 879 134 802 581 1 388 102 7 621 848

New Facilities 558 822 1 156 649 1 695 649 1 416 829

Finance Charges 3 315 000 3 401 000 4 047 000 4 647 000

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• Going-concern status of SANRAL due to uncertainty in GFIP e-toll project

• Need firmly communicated message on toll road funding

• Delays in project related approvals from water affairs, provinces, environmental affairs etc.

• Inadequate law enforcement:

• Traffic rules

• Overloading by hauliers

• Compliance in relation to electronic tolling

• Driver and pedestrian behaviour – road safety

CHALLENGES

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Insufficient funding for timely upgrades and maintenance of the non-toll network

Poor progress on SIP-4 projects in North-West Province

Insufficient high-level planning and co-ordination between inter-modal transport and the three spheres of Government

CHALLENGES CONT’D

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• Future of private sector investment in funding road infrastructure – toll road projects

• Co-operation with provinces with regard to the use of SANRAL’s asset management systems.

DISCUSSION POINTS

Thank you!

SANRAL

48 Tambotie Avenue

Val de Grace

Pretoria

0184

PO Box 415

Pretoria

0001

Telephone: +27 12 8448 000

Fax: +27 12 8448200

Nazir Alli alli@nra.co.a

Inge Mulder mulderi@nra.co.za

Alice Mathew mathewa@nra.co.za

FRAUD HOTLINE: 0800 204 558Website: www.sanral.co.za