South African Road Network Condition, Needs and Funding

Louw Kannemeyer

South African Road Netw ork - 2016

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

SANRAL - 3,092 km of 21,946 km network tolled, representing 14 % of SANRAL

network, 0.5 % of the total and 2.0 % of the surfaced network of South Africa

Authority Paved Gravel Total

SANRAL 21,946 0 21,946

Provinces - 9 46,805 226,273 273,078

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

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

>R2 Trillion

World 64 285 009

1 United States 6 586 610

2 India 4 689 842

3 China 4 237 500

4 Brazil 1 751 868

5 Japan 1 210 251

6 Canada 1 042 300

7 Russia 982 000

8 France 951 200

9 Australia 823 217

10 South Africa 750 000

11 Spain 681 298

12 Germany 644 480

13 Sweden 572 900

14 Italy 487 700

15 Indonesia 437 759

16 Turkey 426 906

… … …

34 Dem Rep of Congo 153 497

45 Zimbabwe 97 267

54 Zambia 91 440

55 Tanzania 91 049

70 Madagascar 65 663

80 Angola 51 429

72 Namibia 64 189

98 Mozambique 30 331

104 Botswana 25 798

122 Malawi 15 451

148 Lesotho 7 438

161 Swaziland 3 594

173 Mauritius 2 066

193 Seychelles 508

1 449 720

Rank Country

Road

length

(km)

SADC Total

SANRAL PAVEMENT CONDITION - 2016

Type Year V-Good Good Fair Poor V-Poor

Length (km) 2016 3,696 8,940 7,629 1,139 86

% 2016 17.2% 41.6% 35.5% 5.3% 0.4%

1. Currently 1,225 km or 5.7% of SANRAL roads are in poor to very poor surface condition, which are well within the

international norm of 10% for well-maintained network.

2. This is largely due to the preventative maintenance first strategy followed by SANRAL, the impact of all preventative

maintenance on roads incorporated since 2012 is evident in 2016 condition results.

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100%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Nati

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etw

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%

Year

Overall Condition Trend

Very poor (OCI < 30) Poor (30 ≤ OCI < 50) Fair (50 ≤ OCI < 70) Good (70 ≤ OCI < 85) Very Good (OCI ≥ 85)

SANRAL PAVEMENT CONDITION TREND

Paved Provincial – 2013 V isual Condit ion Index

Type Year V-Good Good Fair Poor V-Poor

Length (km) 2013 8,104 18,016 25,064 13,946 4,355

% 2013 11.66% 25.93% 36.07% 20.07% 6.27%

Gravel – Provincial VGI 2013

Type Year V-Good Good Fair Poor V-Poor

Length (km) 2013 1886 9,331 34,993 56,737 37,394

% 2013 1.34% 6.65% 24.93% 40.43% 26.64%

Road Backlogs ?

Which Backlog: • Routine Maintenance – Potholes, Crack Sealing, Grass Cutting, Drainage ?

• Periodic Maintenance – Reseal/Overlays

• Rehabilitation/Strengthening – Reworking existing layers + new base

• Capacity Expansion – Additional Lanes

• Upgrading – Gravel to Surface Standard

• New – Brown/Green Fields construction

How do you Quantify the Backlog: • Roads in poor to very poor condition ?

• Using what criteria - VCI, IRI, Rut, Combination ?

• Using which limits – Is IRI > 4.21 not acceptable on surface road carrying < 250

vehicles per day ?

Need to carefully look at numbers

As you might be comparing Appels to Sharks

Strengthening/Regravel Backlog Scenario

Notes: 1. Based on actual visual condition data for 2013 for SANRAL and Provinces, and 2009

for Metros and Municipalities.

2. Based on length of roads in Poor to Very Poor Condition base on Visual Condition

Index.

3. The above backlog excludes backlogs related to periodic resurfacing of the network,

upgrade of gravel roads to surfaced standard, addition of additional lanes to alleviate

congestion and construction of new roads.

4. Also assumes that each road in poor to very poor condition will be economically

viable to strengthen / regravel (Traffic).

2013 Estimate (VCI )

% Length Cost % Length Cost Length Cost

SANRAL 11.36% 2 239 R 19 027 022 000 0.00% 0 R 0 2 239 R 19 027 022 000

Provinces - 9 22.26% 15 301 R 130 027 898 000 65.67% 94 131 R 18 826 140 000 109 432 R 148 854 038 000

Metros - 8 4.16% 1 658 R 8 290 000 000 8.48% 1 227 R 245 315 473 2 885 R 8 535 315 473

Municipalities 3.62% 1 363 R 4 089 000 000 28.54% 86 245 R 17 249 009 106 87 608 R 21 338 009 106

Total Backlog 20 561 R 161 433 920 000 181 602 R 36 320 464 579 202 163 R 197 754 384 579

Strengthening/Regravel Backlog: Roads in Poor to Very Poor Condition (2013)

Aut horit yTotalGravelPaved

Budget Requirement versus Allocat ion

Notes: 1. The estimated funding requirement to sustain the South African Road Network

is R65,8 billion (R2013) per annum. 2. To address the identified backlogs as follow:

a) strengthening for paved roads over 5 year period, b) re-gravel roads over 10 year period, c) gravel road surfacing over 10 year period, d) capacity expansion over 10 year period

will require an additional R23.3 billion (R2013) per annum.

3. Total Budget Requirement = R89,1 billion (R2013) 4. Allocation for Roads in 2014/ 15 = R49,7 billion (55.8% )

2013 Estimate (VCI )

Sustain Backlogs Total

SANRAL 21 403 R 12 189 580 000 R 12 877 984 000 R 25 067 564 000 R 11 916 947 000 47.54%

Provinces - 9 190 693 R 21 593 816 160 R 9 593 104 320 R 31 186 920 480 R 20 155 000 000 64.63%

Metros - 8 61 436 R 13 270 782 971 R 343 788 528 R 13 614 571 499 R 15 158 000 000 111.34%

Municipalities 344 556 R 18 779 265 100 R 480 374 700 R 19 259 639 800 R 2 533 000 000 13.15%

Totals km 618 088 R 65 833 444 231 R 23 295 251 548 R 89 128 695 779 R 49 762 947 000 55.83%

Maintenance Budget Per Year for 5 Years

2014/15Estimated Budget Requirement per Year

Aut horit yTot al

Net work %Allocation

BUDGET FOR ROADS

Notes:

Current Fuel Levy R2.85/ l for petrol (77.5% ) and R2.70/ l for diesel (22.5% )

* To be confirmed by treasury, no growth allowed due to vehicle technology impact.

* * Income collected by provinces and not ring fenced for roads only.

* * * Excludes indirect allocations made from DORA allocations by authorities or raised through rates and taxes at

municipal level.

Currently no additional budget available from Fuel Levy. Sustain - R65.8 billion (2013) will require an additional R 0.86 per litre of fuel = R3.71 Total – R89.1 billion (2013) will require an additional R 2.06 per litre of fuel = R4.91

Description

2013/14 2014/15 2015/16 2016/17 201718 2018/19

Income R 50 862 R 55 816 R 64 492 R 64 907 R 64 907 R 64 907

Fuel Levy (Estimates)* R 43 685 R 48 467 R 56 700 R 56 700 R 56 700 R 56 700

Vehicle Licence Fees (Estimates)** R 7 177 R 7 349 R 7 792 R 8 207 R 8 207 R 8 207

Direct Allocations*** R 52 372 R 56 532 R 60 078 R 63 942 R 67 020 R 71 045

National - SANRAL Non Toll R 10 497 R 11 917 R 12 497 R 13 490 R 15 481 R 17 127

Provincial - Road Maintenance Grant R 9 126 R 9 361 R 9 952 R 10 203 R 10 754 R 11 536

Provincial - Public Transport Operations Grant R 4 783 R 4 832 R 5 052 R 5 400 R 5 723 R 5 990

Provincial - EPWP Integrated Grant for Provinces R 356 R 349 R 357 R 402 R 424 R 448

Local - General fuel levy sharing with metros R 9 613 R 10 190 R 10 659 R 11 224 R 11 785 R 12 469

Local - Municipal Infrastructure Grant (15.6% Roads) R 2 533 R 2 533 R 2 604 R 2 327 R 2 495 R 2 635

Local - Public Transport Network Grant R 4 669 R 4 968 R 5 098 R 5 593 R 6 360 R 6 793

Local - Public Transport Network Operations Grant R 745 R 903 R 1 043 R 1 362 R 0 R 0

Local - Rural roads asset management systems grant R 52 R 75 R 98 R 102 R 107 R 114

Local - EPWP Integrated Grant for Municipalities R 632 R 595 R 619 R 664 R 716 R 758

Provincial - Roads Equitable Share Allocation R 9 366 R 10 809 R 12 099 R 13 175 R 13 175 R 13 175

Surplus/Shortfall R -1 510 R -716 R 4 414 R 965 R -2 113 R -6 138

MTEF Period (Rm)

National Treasury Direct Allocations / Equitable Share Allocations

Fuel Price Comparison (2016 Bloomberg)

Country

Gasoline

Price (R/l) Dec

Daily

Income

Annual

Litres/Driver

Affordability (%

of day wages)

Income Spent (%

Annual Salary)

Ranking

Price

Ranking

Affodability

Ranking

Income Spent

Venezuela R 0.03 R 12.84 454.53 0.23% 0.29% 1 1 1

Saudi Arabia R 3.36 R 762.23 965.66 0.44% 1.17% 2 3 27

Iran R 4.27 R 156.62 322.98 2.73% 2.41% 3 36 54

Egypt R 4.62 R 61.58 68.60 7.50% 1.41% 4 57 40

Kuwait R 4.81 R 992.35 1 057.51 0.48% 1.40% 5 6 38

Malaysia R 5.95 R 335.10 536.22 1.78% 2.61% 6 27 56

United Arab Emirates R 6.45 R 1 456.52 927.32 0.44% 1.12% 7 4 22

Nigeria R 6.45 R 70.15 55.93 9.19% 1.41% 8 58 39

Indonesia R 8.38 R 138.21 118.71 6.06% 1.97% 9 54 48

Russia R 8.73 R 374.48 333.10 2.33% 2.13% 10 32 51

Pakistan R 8.86 R 56.02 26.10 15.82% 1.13% 11 60 23

United States R 9.39 R 2 193.32 1 590.28 0.43% 1.86% 12 2 47

Colombia R 9.60 R 225.28 86.64 4.26% 1.01% 13 47 17

Mexico R 10.06 R 292.66 358.94 3.44% 3.38% 14 43 60

Philippines R 12.26 R 106.67 40.41 11.49% 1.27% 15 59 32

South Africa R 12.61 R 209.29 216.60 6.03% 3.58% 16 53 61

Canada R 12.81 R 1 578.65 1 236.54 0.81% 2.75% 17 9 58

Australia R 12.88 R 1 899.00 835.30 0.68% 1.55% 18 8 41

Thailand R 13.54 R 218.23 103.87 6.20% 1.77% 19 55 45

China R 13.75 R 299.45 37.14 4.59% 0.47% 20 49 2

India R 14.69 R 64.87 18.09 22.65% 1.12% 21 61 21

Bulgaria R 14.87 R 253.91 78.29 5.86% 1.26% 22 52 30

Japan R 15.16 R 1 301.94 432.00 1.16% 1.38% 23 14 37

Argentina R 15.47 R 449.71 167.75 3.44% 1.58% 24 44 42

Chile R 15.66 R 516.16 223.61 3.03% 1.86% 25 39 46

Poland R 15.79 R 442.21 128.96 3.57% 1.26% 26 45 31

Lithuania R 16.04 R 534.11 89.53 3.00% 0.74% 27 38 10

Brazil R 16.06 R 349.27 205.79 4.60% 2.59% 28 50 55

Latvia R 16.07 R 506.92 134.25 3.17% 1.17% 29 41 26

Czech Republic R 16.33 R 657.86 201.73 2.48% 1.37% 30 34 36

Estonia R 16.42 R 641.55 239.86 2.56% 1.68% 31 35 44

Romania R 17.12 R 337.22 82.48 5.08% 1.15% 32 51 24

Austria R 17.15 R 1 597.42 265.60 1.07% 0.78% 33 13 12

South Korea R 17.18 R 1 011.36 231.52 1.70% 1.08% 34 26 19

Luxemburg R 17.21 R 3 793.72 793.16 0.45% 0.99% 35 5 14

Hungary R 17.38 R 461.75 159.91 3.76% 1.65% 36 46 43

Cyprus R 17.72 R 839.73 413.00 2.11% 2.39% 37 30 53

Spain R 17.93 R 968.32 133.45 1.85% 0.68% 38 28 9

Slovakia R 18.44 R 596.80 142.50 3.09% 1.21% 39 40 28

Malta R 18.60 R 871.01 229.75 2.14% 1.34% 40 31 35

Slovenia R 18.62 R 766.06 309.56 2.43% 2.06% 41 33 50

Croatia R 18.89 R 429.88 179.36 4.39% 2.16% 42 48 52

Singapore R 19.22 R 1 912.21 215.44 1.01% 0.59% 43 12 6

Switzerland R 19.34 R 2 898.37 467.96 0.67% 0.86% 44 7 13

Ireland R 19.61 R 2 361.59 339.64 0.83% 0.77% 45 10 11

Germany R 19.86 R 1 517.29 297.89 1.31% 1.07% 46 17 18

Belgium R 19.88 R 1 487.36 143.40 1.34% 0.53% 47 18 4

United Kingdom R 20.07 R 1 386.00 278.53 1.45% 1.11% 48 22 20

New Zealand R 20.38 R 1 439.96 677.31 1.42% 2.63% 49 21 57

France R 20.74 R 1 381.45 135.53 1.50% 0.56% 50 23 15

Finland R 21.09 R 1 558.59 354.95 1.35% 1.32% 53 19 34

Sweden R 21.62 R 1 808.69 388.82 1.20% 1.27% 54 16 33

Greece R 21.81 R 648.04 325.39 3.37% 3.00% 55 42 59

Italy R 22.10 R 1 085.97 181.21 2.04% 1.01% 56 29 16

Denmark R 22.42 R 1 911.76 307.26 1.17% 0.99% 57 15 15

Netherlands R 22.81 R 1 620.68 318.21 1.41% 1.23% 59 20 29

Norway R 24.87 R 2 658.29 239.10 0.94% 0.61% 60 11 8

Hong Kong R 26.79 R 1 644.20 106.20 1.63% 0.47% 61 25 3

Affordability - Percentage of a

day’s wages needed to buy a

litre of fuel.

Income Spent - Percentage of

personal income spent each year

filling up. Fuel consumption are

based on UN data for motor

gasoline by road in 2013

Just comparing the price of fuel in South Africa to rest

of world, ranked 16th highest, result in the view

that room to increase exist, but when you consider the

affordability and income spent ranking that view

changes !

ROADS FUNDI NG

• Insufficient

• Current sources of funding – Fiscus (Fuel Levy/License) or Tolls • Resistance to Tolls, what other option then for funding ?

• Old (11 L/100km), New (6 L/100km), Hybrid (2 L/100km), Electric (0 L/100km) ?

• Old (R31/100km), New (R17/100km), Hybrid (R5.7/100km), Electric (R0/100km) yet they all use the same area of road space at a time

• Older vehicles (Poor) subsidising New vehicles (Rich)

• How do you fairly charge for road use going forward ?

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4 000 000

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8 000 000

10 000 000

12 000 000

14 000 000

16 000 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TO

TA

LS

YEAR

Petrol ('000) (-0,7%) Diesel ('000) Total Vehicles (32,9%)

SANRAL Major Expansion Projects

Project Initial Capital Costs (R’000 2014R)

GFIP Phase 2 (New Routes) R 25 768 840

GFIP Phase 3 (Upgrades) R 17 655 160

R300 Cape Town Ring Road R 4 861 600

N1/N2 Winelands (Planned PPP) R 9 316 100

N2 Botrivier to Port Elizabeth R 11 272 540

N2 Wild Coast (Ndwalane to Mtamvuna River) R 7 578 656

N2 Durban South (Prospecton) to North (Umdloti) R 7 847 000

N2 Richards Bay to Ermelo R 7 284 140

N3 Pietermaritzburg (Twickenham) to Durban (EB Cloete) R 15 777 205

N4/PWV3 extension Pampoen nek R 1 716 900

N12 Johannesburg to Klerksdorp R 2 731 700

N12 Benoni to Witbank R 811 840

R72/N2 Port Elizabeth to East London R 6 301 200

TOTAL R 118 922 881

Per Annum Requirement over 10 years R11 892 288

Note:

These capacity expansion projects was previously planned to occur through Tolls, if no longer possible, then SANRAL will require an additional R12bn per year for the next 10 years from other funding source (R0.60 per litre) .

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2008 2013 2018 2023 2028

Year

Ro

ad

Co

nd

itio

nWhat Is The Price We Pay – Government

Repair Cost = 1X /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)

1. SANRAL preventative maintenance first strategy allocates budget first or all 1X, then 6X and finally what remains to 18X.

2. Most provinces follow worst first strategy and allocates budget first or all 18X, then 6X and finally what remains to 1X.

Very Good

Good Poor

What Is The Price We Pay – Road User (Direct)

Distance Travel in 1 hour: Very Good = 100km vs Very Poor = 20 to 25 km Road User Cost – Fuel, Oil, Tyres, Maintenance, Depreciation, Accidents, Time, Cargo Damage

R 0

R 5

R 10

R 15

R 20

R 25

R 30

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ad

Use

r C

ost

s (R

/km

)

International Roughness Index (m/km)

Toll Class 1

Toll Class 2

Toll Class 3

Toll Class 4

Very PoorVery Good

Total Life Cycle Transportat ion Costs

Road User Cost is up to 90% of Total Life Cycle Transportation Cost

Very Good Very Poor

Total Logistics cost as a percentage of GDP

(8 th State of Logistics Survey 2012)

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

FRAUD HOTLI NE: 0800 204 558

Website: www.sanral.co.za