The South African National Roads Agency SOC Limited ... · The South African National Roads Agency SOC Limited ... THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED (SANRAL) STRATEGIC

Strategic Plan 2015/16 to 2019/2020/AM – OT612590 Page 1 of 111

The South African National Roads Agency SOC Limited

(SANRAL)

STRATEGIC PLAN

2015/2016 – 2019/2020


THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED (SANRAL)

FOREWORD BY THE MINISTER

STRATEGIC PLAN: 2015/2016 – 2019/2020

The national road network forms the backbone of

our transportation system, making it possible to

access both personal and economic needs and

to meet the mobility and socio-economic needs of

the communities, regions and nation as a whole.

As the responsible Roads Authority for the

management, maintenance, funding and

operations of the national road network, The

South African National Roads Agency SOC

Limited (SANRAL) has ensured that its strategic

planning processes are in line with Government’s

Strategic & Annual Planning Framework, which

emphasises on the outcomes oriented monitoring

and evaluation methodology.

To achieve Government’s outcomes, specifically the sixth outcome “to provide an efficient,

competitive and responsive economic infrastructure network”, SANRAL is committed

towards the provision of an effective national road network, operated in an environmentally

responsible manner. The concomitant benefits include the creation of decent jobs, skills

development and upliftment of communities including rural ones to ultimately make a

significant contribution to the creation of a better South Africa for all our citizens.

Synergistically, with effective delivery in terms of its mandate, SANRAL also delivers on the

Department of Transport’s outcomes of an “effective & integrated infrastructure network that

serves as a catalyst for social & economic development”.

Another important outcome is Outcome 3 where Government works towards all people in

South Africa being and feeling safe. SANRAL’s has an important objective aimed at

providing safe engineering national road infrastructure and educating road users with regard

to safe use of the roads.


SANRAL’s Strategic Outcome Oriented Goals and Strategic Objectives are the building

blocks towards achieving the aligned national objectives. As Executive Authority, the

Minister of Transport endorses this Strategic Plan and commits to monitoring the

implementation of the Plan and for an evaluation on an on-going basis to ensure effective

service delivery.

______________________

Minister ED Peters, MP

Minister of Transport

Executive Authority, SANRAL


OFFICIAL SIGN-OFF

It is hereby certified that this Strategic Plan:

Was developed by SANRAL’s Management under the direction of its Board and the guidance of the Minister of Transport;

Takes into account all the relevant policies, legislation and other mandates for which SANRAL is responsible; and

Accurately reflects the strategic outcome oriented goals and strategic objectives which SANRAL will endeavour to achieve over the period 2015/16 to 2019/20.

Inge Mulder

Chief Financial Officer Signature ______________________

Alice Mathew

Company Secretary Signature ______________________

Nazir Alli

CEO Signature _______________________

Dudu Nyamane

Chairperson, Board Signature _______________________

Ms ED Peters, MP

Minister of Transport

Executive Authority Signature _______________________


TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................................................... 5

LIST OF FIGURES .......................................................................................................................................................... 6

LIST OF TABLES ........................................................................................................................................................... 6

PART A: STRATEGIC OVERVIEW .................................................................................................................................. 7

1. VISION ............................................................................................................................................................... 7

2. MISSION ............................................................................................................................................................ 7

3. CORE VALUES..................................................................................................................................................... 7

4. LEGISLATIVE AND OTHER MANDATES ................................................................................................................ 8

4.1 LEGISLATIVE MANDATES ............................................................................................................................................. 8 4.2 POLICY MANDATES .................................................................................................................................................... 8 4.3 RELEVANT COURT RULINGS ....................................................................................................................................... 11 4.4 PLANNED POLICY INITIATIVES ..................................................................................................................................... 11

5. SITUATIONAL ANALYSIS ................................................................................................................................... 11

5.1 PERFORMANCE ENVIRONMENT ......................................................................................................................... 12 5.1.1 National Road Network Pavement Age .................................................................................................... 13 5.1.2 National Road Network Traffic Distribution ............................................................................................. 13 5.1.3 National Road Network Vehicle Kilometre Travel ..................................................................................... 14 5.1.4 National Road Network Overall Condition ................................................................................................ 15 5.1.5 National Road Network Budget Kilometre Trend ..................................................................................... 18 5.1.6 National Road Network Budget Requirement Scenarios .......................................................................... 19 5.1.7 Asset Management System ...................................................................................................................... 26 5.1.8 Expansion of National Road Network ....................................................................................................... 30 5.1.9 Transport Pricing ....................................................................................................................................... 33 5.1.10 Environmental Management and Sustainability .................................................................................. 33 5.1.11 Overload Control .................................................................................................................................. 34 5.1.12 Intelligent Transport System ................................................................................................................ 35 5.1.13 Traffic Data .......................................................................................................................................... 37

5.2 ORGANISATIONAL ENVIRONMENT ..................................................................................................................... 38 5.3 DESCRIPTION OF THE STRATEGIC PLANNING PROCESS ...................................................................................... 38

6. STRATEGIC OUTCOMES ORIENTED GOALS ....................................................................................................... 40

PART B: STRATEGIC OBJECTIVES .......................................................................................................................... 42

7. STRATEGIC OBJECTIVES ................................................................................................................................... 42

7.1 SANRAL’S 8 STRATEGIC OBJECTIVES ................................................................................................................... 42 7.1.1 Programme 1: Manage the National Road Network Effectively – Ensure An Efficient, Competitive And Responsive National Road Network ........................................................................................................................ 42 7.1.2 Programme 2: Provide Safe Roads - Ensure A Safely Engineered National Road Network ...................... 52 7.1.3 Programme 3: Carry Out Government’s Targeted Programmes: Transformation ................................... 63 7.1.4 Programme 4: Co-Operative Working Relationships With Relevant Departments, Provinces, Local Authorities And SADC Member Countries ............................................................................................................... 75 7.1.5 Programme 5: Achieve And Maintain Good Governance Practice........................................................... 83 7.1.6 Programme 6: Achieve Financial Sustainability ........................................................................................ 87 7.1.7 Programme 7: Pursue Research, Innovation And Best Practice ................................................................ 91 7.1.8 Programme 8: Safeguard SANRAL’s Reputation: Stakeholder Communication ....................................... 95

7.2 RESOURCE CONSIDERATIONS ............................................................................................................................. 97 7.3 RISK MANAGEMENT ......................................................................................................................................... 103

PART C .................................................................................................................................................................... 104


8. LINKS TO LONG-TERM INFRASTRUCTURE AND OTHER CAPITAL PLANS: ......................................................... 104

8.1 OVERVIEW OF 2015/16 BUDGET AND MTEF ESTIMATES ................................................................................... 104 8.2 ACTUAL ALLOCATION VERSUS REQUIRED ALLOCATION SUMMARY ................................................................. 110

9. CONCLUSION ................................................................................................................................................. 111

LIST OF FIGURES

FIGURE 1: PAVEMENT AGE ...................................................................................................................................................... 13 FIGURE 2: TRAFFIC DISTRIBUTION (CARRIAGEWAY KM) ................................................................................................................. 14 FIGURE 3: VEHICLE KILOMETRE TRAVEL DISTRIBUTION .................................................................................................................. 15 FIGURE 4: OVERALL CONDITION DISTRIBUTION ........................................................................................................................... 16 FIGURE 5: NATIONAL ROAD NETWORK OVERALL CONDITION 2013. ............................................................................................... 17 FIGURE 6: BUDGET KILOMETRE ................................................................................................................................................ 18 FIGURE 7: SANRAL IDENTIFIED EXPANSION PROJECTS ................................................................................................................. 21 FIGURE 8: MTEF BASIC + STRENGTHENING BACKLOG + EXPANSION REQUIREMENT (2014R) ............................................................. 22 FIGURE 9: USING EXISTING NON TOLL ALLOCATION TO FUND NETWORK EXPANSIONS ........................................................................ 24 FIGURE 10: FUNDING EXPANSION AS NEW TOLL ROADS ............................................................................................................... 25 FIGURE 11: SANRAL ASSET MANAGEMENT OVERVIEW ............................................................................................................... 26 FIGURE 12: STRATEGIC AND PRIMARY NETWORK STILL TO BE INCORPORATED. .................................................................................. 32 FIGURE 13 STRATEGIC MODEL ................................................................................................................................................. 39 FIGURE 14: FATALITY PREVENTION ............................................................................................................................................ 53 FIGURE 15: SAFER PLACE TO WALK/CYCLE ................................................................................................................................. 54 FIGURE 16: SAFER PLACE TO CROSS .......................................................................................................................................... 54 FIGURE 17: TRAINING & DEVELOPMENT MODEL 1 ...................................................................................................................... 68 FIGURE 18 J CURVE: FUNDING LEVELS ....................................................................................................................................... 88 FIGURE 19: HUMAN CAPITAL DEVELOPMENT FRAMEWORK ............................................................................................................ 98 FIGURE 20: SANRAL ICT STRATEGY ....................................................................................................................................... 101 FIGURE 21: SANRAL NON TOLL BUDGET REQUIREMENTS .......................................................................................................... 110

LIST OF TABLES

TABLE 1: CURRENTLY PLANNED MAJOR EXPANSION PROJECTS ................................................................................................. 19 TABLE 2: BUDGET REQUIREMENT SCENARIO SUMMARY (R’000) ............................................................................................. 22 TABLE 3: SANRAL NETWORK SUMMARY PER PROVINCE ........................................................................................................ 31 TABLE 4: SANRAL NON TOLL BUDGET REQUIREMENTS VS ALLOCATION ................................................................................. 111


THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED (SANRAL)

STRATEGIC PLAN 2015/16 – 2019/20

PART A: STRATEGIC OVERVIEW

1. VISION

To be recognised as a world leader in the provision of a superior primary road network in southern Africa.

2. 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-pay’ principle.

3. CORE VALUES

EP²IC

Excellence

Proactiveness

Participativeness

Integrity

Care


4. LEGISLATIVE AND OTHER MANDATES

4.1 Legislative Mandates

SANRAL has been established as an independent, statutory company in terms of the South African National Roads Agency Limited and National Roads Act, No 7 of 1998, as amended (SANRAL Act) to interalia, manage, improve, maintain the national road network – both toll and non-toll roads – as well as finance the toll roads. SANRAL currently manages a network of 21 403 km of roads throughout South Africa.

In terms of the SANRAL Act, SANRAL needs to produce a Strategic Plan for five years (Section 35). This Strategic Plan serves as the Business Plan.

SANRAL is a Schedule 3A public entity in terms of the Public Finance Management Act, No 1 of 1999 (PFMA). This Strategic Plan has been developed as per Treasury Regulation 30.1, issued in terms of the PFMA, and the Framework for Strategic Plans and Annual Performance Plans as released by National Treasury in August 2010.

SANRAL is registered in terms of the Companies Act, No 71 of 2008.

This document must be read in conjunction with SANRAL’s approved budget for 2015/16, the Performance Agreement (Shareholder Compact) with the Executive Authority and the Annual Performance Plan for 2015/16 – 2017/18.

The South African government, represented by the Minister of Transport, is the sole shareholder and owner of SANRAL.

4.2 Policy Mandates

This Strategic Plan has been developed in terms of SANRAL’s Strategic Planning Policy which was reviewed and approved by the Board, following a SANRAL Strategy Session involving the Board and staff in August 2014. The formulation of the SANRAL Strategic Plan was guided by the following Government policies.

The 1996 White Paper on National Transport Policy

The White Paper sets out Government's transport policy and is the "basis for transport to play a more strategic role in social development and economic growth". The White Paper's vision is to "provide safe, reliable, effective, efficient, and fully integrated transport operations and infrastructure which will best meet the needs of freight and passenger customers at improving levels of service and cost in a fashion which supports government strategies for economic and social development whilst being environmentally and economically sustainable".


The White Paper sets out a number of goals, including the following:

1. to support the goals of the Reconstruction and Development Programme for meeting basic needs, growing the economy, developing human resources, and democratizing decision making;

2. to enable customers requiring transport for people or goods to access the transport system in ways which best satisfy their chosen criteria;

3. to improve the safety, security, reliability, quality, and speed of transporting goods and people;

4. to improve South Africa's competitiveness and that of its transport infrastructure and operations through greater effectiveness and efficiency to better meet the needs of different customer groups, both locally and globally;

5. to invest in infrastructure or transport systems in ways which satisfy social, economic, strategic investment criteria; and

6. to achieve the above objectives in a manner which is economically and environmentally sustainable, and minimizes negative side effects.

Insofar as the funding of road infrastructure is concerned, the White Paper states the following:

“The primary road network should preferably be financed through a dedicated levy on fuel and toll charges. Innovative ways of securing finance for the development of road infrastructure will be explored. These include Build-Operate-Transfer (BOT) or Fund-Rehabilitate-Operate-Maintain (FROM) contracts which enable Government to obtain financing from private sources rather than spending taxpayers’ money.”

The 2006 Road Infrastructure Strategic Framework for South Africa

The Road Infrastructure Strategic Framework for South Africa is intended to be an embodiment of road policy in South Africa and a blueprint for roads development, planning and provision by all road authorities. It contains the principles that are embodied in sector and government level policies that seek to bridge the economic divide through the integration of the first and second economies i.e. emphasizing the need to maintain good quality strategic economic road infrastructure while elevating the profile of social infrastructure, promoting the integration of transport planning with broader economic and social spatial and land use planning and maximizing skills development and employment creation potential - while ensuring sustainability and harmony with the environment.

The document also acknowledges the funding gap that persists in the road infrastructure sector and calls for the appropriate use of the tolling/’user-pay’ tool to enable the provision of road infrastructure and capacity upgrades.


The 2011 National Development Plan (NDP) 2030

The vision of the NDP is that by 2030, investments in the transport sector will ensure that it serves as a key driver in empowering South Africa and its People, enabling:

Improved access to economic opportunities, social spaces and services by bridging geographic distances affordably, reliability and safely;

Economic development, by supporting the movements of goods from points of production to where they are consumed, facilitating regional and international trade; and

Greater mobility of people and goods through transport alternatives that support minimized environmental harm.

In addition, the Plan recognises “the issue of lack of infrastructure maintenance by all society (government, private big business and every individual of South Africa). We South Africans do not look after our assets very well; we have a mindset of buying or building new things all the time instead of maintaining what we have. We must change this mentality, whereby we see government, private business and every individual adopting a renewed mindset in looking after the infrastructure we currently have”. SANRAL’s philosophy has always been to maintain its assets first and only then allocate funds towards upgrades or new infrastructure.

The Plan expressly indicates that in the long term, users must pay the bulk of the costs for economic infrastructure, with due protection for poor households. The role of Government and the fiscus is to provide the requisite guarantees so that the costs can be amortised over time, thereby smoothing the price path. The State must also put in place appropriate regulatory and governance frameworks so that the infrastructure is operated efficiently and tariffs can be set at appropriate levels. For infrastructure that generates financial returns, debt raised to build facilities should be on the balance sheets of state-owned enterprises or private companies that do the work. Guarantees should be used selectively to lower the cost of capital and to secure long-term finance. Subsidies to poor households should be as direct and as transparent as possible

In addition, the Plan recognises that public infrastructure investment in the transport, energy and water sectors must take place at 10 percent of gross domestic product (GDP). Moreover, it is recognised that this should be financed through tariffs, public-private partnerships, taxes and loans.

SANRAL fully supports Government’s plans to accelerate growth, create decent work and to promote investment in a competitive economy.

The Medium Term Strategic Framework (MTSF) 2014 – 2019 which is the first five-year implementation phase of the NDP, is reflected in SANRAL’s Strategic Plan 2015/16 – 2019/20. This Plan is aligned to the MTSF, not only by time-frame, but also in terms of action and delivery priorities.


4.3 Relevant Court Rulings

SANRAL received favourable court rulings supporting the tolling of the improved national roads in Gauteng (GFIP) and using an electronic method of collection of toll fees. The Amendment Act to facilitate enforcement and to deal with violation effectively on ORT has also been passed.

Electronic tolling commenced on the GFIP on 3 December 2013, but has been under severe pressure due to non-payment of tariffs and resistance by certain interest groups. The uncertainty portrayed by the certain sections of Government regarding the implementation and enforcement of electronic tolling on the GFIP has not helped either and it is important that Government stands firmly behind its policy of ‘user-pay’ for economic infrastructure. Civil disobedience has been encouraged by organs of civil society and there has been a ‘wait and see' attitude among some, following the Gauteng Premier’s establishment of a Panel to review the e-toll system. It must be noted that provinces have no jurisdiction over the proclaimed national road network as confirmed by the judgement of the Western Cape High Court.

SANRAL is facing court challenges in relation to:

the construction and tolling of the N1-N2 Winelands Project in the Western Cape

the construction and tolling of the N2 Wild Coast in Eastern Cape.

4.4 Planned Policy Initiatives

To deliver on its mandate, SANRAL will continue with following key policies:

Asset Management Policy;

User Pay Principle;

Skills development policies – education, contractor/worker training on sites etc.; and

Policy to promote entrepreneurs – SMMEs and previously disadvantaged companies

Should there be any change in government policy towards SANRAL and its functions, the policy initiatives will be amended as necessary.

5. SITUATIONAL ANALYSIS

South Africa has overcome significant challenges over the past two decades and is a leading economy in Africa. It has the best developed transport infrastructure in the continent. Bold and far reaching interventions have been proposed by government to fuel economic growth, driven by the National Development Plan (NDP) 2030. The NDP aims to accelerate growth in the country and create employment, thus reducing poverty and inequality. The Medium Term Strategic Framework (MTSF) 2014 – 2019, Government’s Strategic Plan, details the actions to be taken by Government and


targets to be achieved by 2019, as a building block towards achieving the targets of NDP 2030, SANRAL’s Strategic Plan and Annual Performance Plan are guided by the NDP and MTSF.

The transport sector and the mobility it confers are linked to the level of economic output, employment and income within any national economy, impacting on the development and the welfare of the population. The importance of road transport in the South African economy are obvious when considering that as per the National Household Travel Survey and State of Logistics Report:

In 2013 Road Freight accounted for 87.9% of the total freight tonnage transported in South Africa; and

94.29% of the 35 million daily motorised person trips recorded in South Africa, are road based transport modes.

As a result, a key objective of South Africa is to ensure a sustainable transport sector which is efficient and provides economic and social opportunities and benefits that result in positive multiplier effects such as better accessibility to markets, employment and additional investments. When transport systems are deficient in terms of quality, capacity or reliability, they have an economic cost such as reduced or missed opportunities. Mobility is one of the most fundamental and important characteristics of economic activity as it satisfies the basic need of going from one location to the other, a need shared by passengers and freight. Apart from the direct cost of congestion on the economy (hours lost, productivity loss and higher vehicle operating costs), the social impact of congestion on society is probably the biggest concern. Commuters spend hours to get to and from work, many leaving in the early hours of the morning and returning late at night. The social impact of congestion cannot be calculated in monetary value, but manifests in the social health of families, the ability of parents to assist their children with homework, ensuring that they attend school, family time, etc. In addition to the social impact of congestion above, it also has negative environmental load, which cannot be ignored.

SANRAL is committed to the principles outlined in the national policy guidelines as previously mentioned, and is of the view that efficient and sustainable transport infrastructure is fundamental to the promotion of economic development, service delivery, good governance, social cohesion and improving the standard of living of all South Africans.

5.1 PERFORMANCE ENVIRONMENT

SANRAL has been established to plan, develop, finance, manage and maintain the proclaimed national roads of South Africa and this is where performance needs to be primarily targeted. SANRAL’s deliverables are guided by Government’s outcomes – both those listed in the MTSF 2014 - 2019 and by the DoT, in the area of road infrastructure.

The following key issues need to be noted in terms of the existing national road network under SANRAL’s jurisdiction.


5.1.1 National Road Network Pavement Age

The pavement age refers to the age of the road pavement since newly constructed or structurally strengthened. The typical pavement structural design life period used during the design of a flexible road pavement is 20 years, assuming that all required maintenance (Opex – operating expenditure) is done in a timely manner during this period. At the end of a pavement’s structural life, strengthening works (Capex – capital expenditure) have to be performed to restore or improve the structural integrity of the pavement. The pavement age of roads under the jurisdiction of SANRAL is summarised in Figure 1. The following needs to be noted from Figure 1:

Since the inception date of SANRAL on 1st April 1998, the pavement age trend observed is negative, with the length of network older than its original 20 year design life increasing from 3,500 km to 18,097 km currently – an increase of 417 %.

Currently 76 % of the network under SANRAL jurisdiction is older than its 20-year theoretical design life.

To address the above negative trend, major investments into structural strengthening/improvement (Capex) works are required.

Figure 1: Pavement Age

5.1.2 National Road Network Traffic Distribution

Traffic distribution refers to the percentage of the network for which the average annual daily traffic is within a defined range of vehicles per day. For the roads under SANRAL jurisdiction this is obtained from actual traffic data as measured with our network of over 800 strategically located traffic monitoring stations. The vehicle kilometre travel is summarised in Figure 2.

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It must be noted that since SANRAL’s inception, the network length carrying less than 5,000 vehicles per day has increased from 5,149 km to 15,906 km currently – an increase of 209 %. It would not be feasible to fund these sections of the national road network by the application of a user-charge. They will therefore remain totally reliant on funding from National Treasury.

Figure 2: Traffic Distribution (Carriageway km)

5.1.3 National Road Network Vehicle Kilometre Travel

Vehicle kilometre travel refers to the percentage of all vehicle kilometres that are travelled on the SANRAL road network in relation to the total network. For the roads under SANRAL jurisdiction the vehicle kilometre travelled is obtained from actual traffic data as measured with our network of over 800 strategically located traffic monitoring stations. For the remainder of South Africa’s road network the vehicle kilometre travelled has to be estimated based on total fuel sales in South Africa, on the assumption that the average distance travelled per litre of fuel/diesel is 8.7 km/litre by light vehicles and 3.5 km/litre by trucks. The vehicle kilometre travel is summarised in Figure 3.

The following needs to be noted from Figure 3:

Although in 2013 SANRAL’s network of 19,704 km only represented 3.2% of the 618,081 km proclaimed road network, it carried 30.3% of the annual estimated vehicle kilometres driven in South Africa.

Currently more than 70% of the long distance road freight in South Africa is transported on the SANRAL road network – once again an indication of the strategic importance of the national road network.

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Figure 3: Vehicle Kilometre Travel Distribution

5.1.4 National Road Network Overall Condition

Overall condition distribution refers to the percentage of the network for which the Overall Condition Index (OCI) is within a defined range between 0 (very poor) and 100 (excellent). For the roads under SANRAL jurisdiction this is obtained from actual condition data as measured with our Road Survey vehicle, and is an indication of the distress which is already visible on the road surface. The percentage of the network in each condition category is summarised in Figure 4, and geographically represented in Figure 5.

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Figure 4: Overall Condition Distribution


Since the inception date of SANRAL, the network length in poor to very poor condition has increased from 765 km (1998) to 2,354 km (2014) – an increase of 208 %. This is largely due to the incorporation of the remainder of the strategic road network from the provinces, and the current age of the network.

Currently 2,354 km or 11% of SANRAL roads are in poor to very poor surface condition, which is just outside the international norm of 10% for a well-maintained network. This is largely due to the incorporation of the remainder of the strategic road network from the provinces.

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Figure 5: National Road Network Overall Condition 2013.


5.1.5 National Road Network Budget Kilometre Trend

The budget kilometre trend refers to the amount of non-toll budget available per km of non-toll road that needs to be maintained. The observed trend for budget kilometre for non-toll road network under SANRAL jurisdiction is highlighted in Figure 6.

Figure 6: Budget Kilometre


Non-toll budget allocation for SANRAL increased from R652 million (R1,432 million in 2014R) in 1998/99 to R11,917 million in 2014/15 – an increase of 732% in 2014R terms.

However, when considering the budget kilometre trend including the impact of the incorporation of the remainder of the primary network, the allocation increased from R295,950/km (2014R) for 1998/99 to R651,805/km for 2014/15 – an increase of 120.2%.

Current budget kilometre levels are also way below peak allocations during the 1970s and mid 1980s when most national road network construction occurred.

With the incorporation of the additional network from Eastern Cape, North West and Limpopo, the future MTEF allocations currently specified do indicate a levelling off. More provinces may decide to transfer roads to SANRAL, in which case an additional budget allocation would have to be considered by Treasury.

The budget requirements as estimated by SANRAL are detailed in 5.1.6.

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5.1.6 National Road Network Budget Requirement Scenarios

The basic + strengthening backlog + expansion requirement refers to the amount of non-toll budget required to sustain the existing non-toll road network and allow for addressing the backlog in strengthening (roads with 5 years or less life) over the next 5 years, and to allow for the required capacity expansions or the construction of new roads in the congested areas of the network. This budget requirement is calculated using the following basic assumptions:

Routine Operation Cost (i.e. pothole repairs, grass cutting, litter removal, etc) = R 69,206/km/year;

Periodic Maintenance Cost (i.e. reseal or asphalt overlay) = R 2.082 million / km/ 10 years (10 % of network per year);

Strengthening Cost = R 8.498 million / km / 25 years (4% of network per year), and

Non Project Specific Costs (i.e. survey, land acquisition, salaries, etc) = 8 % of required budget

The above assumptions are based on actual average 2013/14 costs on the SANRAL network, and general industry norms for maintenance and life expectancy.

The additional amount required to address the capacity expansion is based on identified projects as summarised in Table 1, and illustrated in Figure 7. These constitute key elements of the expansion of the National Road Network amounting to R 118.923 billion (R11.89 b per annum over 10 years), based on current estimates.

Table 1: Currently Planned 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

N1/N2 Winelands 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 to North R 7 847 000

N2 Richards Bay to Ermelo R 7 284 140


N3 Pietermaritzburg to Durban 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

R300 Cape Town Ring Road R 4 861 600

TOTAL R 118 922 881

Per Annum Requirement over 10 years R11 892 288

Notes:

Table only includes expansion projects on routes currently under SANRAL jurisdiction.


h

Figure 7: SANRAL Identified Expansion Projects


The Basic + Strengthening Backlog + Expansion required budget compared to the currently allocated budget for the national road network under SANRAL jurisdiction is highlighted in Figure 8 and summarised in Table 2.

Figure 8: MTEF Basic + Strengthening Backlog + Expansion Requirement (2014R)

Table 2: Budget Requirement Scenario Summary (R’000)

Description 2014/15 2015/16 2016/17 2017/18

Funding Allocation R 11 916 947 R 12 497 294 R 13 159 651 R 13 159 651

MTEF Basic R 12 189 508 R 12 189 508 R 12 189 508 R 12 189 508

MTEF Basic + Backlog R 12 189 509 R 13 175 276 R 13 175 276 R 13 175 276

MTEF Basic + Backlog + Expansion

R 25 067 564 R 25 067 564 R 25 067 564 R 25 067 564

% Requirement Allocated

47.54% 49.85% 52.50% 52.50%

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Cost Centres Routine Maintenance Periodic Maintenance

Strengthening Strengthening Backlog Expansion


The following needs to be noted:

The current projected MTEF allocations will enable SANRAL to address the basic budget requirements required to sustain the national road network, and address the strengthening backlog) but not expansion requirements of the current national road network under its jurisdiction (no national road network increase assumed).

To address the basic requirements, strengthening backlog as well as expansion requirement of its current network SANRAL will require a minimum of R25 billion in 2015/16 and thereafter for 9 years, current allocations are only 50% of required budget.

Amongst the realities faced by SANRAL is that government allocations for road infrastructure are not commensurate with the optimum amounts needed for road infrastructure investment to maintain and expand the network. Demand for the expansion of the current national road network, both to relieve congestion in densely populated areas and to meet transportation demands in newly populated and rapidly growing areas, continues to increase. With the ceiling on consolidated expenditure introduced by National Treasury, SANRAL has the following options for funding the identified expansion projects:

1) The first option is to reprioritize existing non-toll allocations over a 10 year period from maintaining low congestion roads, resulting in delaying maintenance on an old national road network (76 % older than original design life). This will benefit the heavily congested sections of the network, but will be disastrous for the remaining non toll road network. As seen in Figure 9 below, with the current baseline allocation for national roads, the national road network would deteriorate from 11% to 47% of poor and very poor roads, from 2014 to 2024. This approach will be disastrous for road users throughout South Africa, and for the economy of South Africa.


Figure 9: Using Existing Non Toll Allocation to Fund Network Expansions

2) The second option is not to implement these expansions projects at all. As previously discussed mobility is one of the most fundamental and important characteristics of economic activity as it satisfies the basic need of going from one location to the other (access), a need shared by passengers and freight. Apart from the direct cost of congestion on the economy (hours lost, productivity loss and increased vehicle operating costs), the social impact of congestion on society is probably the biggest concern. When considering that approximately 90% of total transportation costs are road user costs, it becomes obvious why this option is also not viable solution for the South African economy.

3) The final option for SANRAL is to implement these projects using direct user charging i.e. tolls when improvements have a positive economic benefit/cost impact. SANRAL has been mandated by government to apply the “user-pay” or toll principle, which allows it to preserve and provide infrastructure sooner than traditional tax-based revenues would allow. This principle of "user-pay" was confirmed in the National Development Plan, where it aims to have public infrastructure investment at 10% of GDP funded through tariffs, loans etc. by 2030. This mechanism enables SANRAL to maintain a high-quality road network while contributing to improved road safety and generally shorter travelling time and distances, resulting in substantial savings on vehicle running costs and travel time. The implication of allowing planned expansion projects in Table 1 (approximately 2000km of roads) to proceed as Toll Roads, will have far reaching positive impact for the national road network and the road users. If the decision is made that all the required expansion projects can be funded through toll, the length of non-toll network to be maintained using existing non-toll budget, will immediately decrease by 2,000km,

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resulting in more budget being available to address maintenance and strengthening requirements. The impact of this decision on the remainder of non-

toll network is illustrated in Figure 10. This will also have far reaching positive impact for the road users, as 90% of total transportation costs are road user costs (fuel, tyres, accidents, depreciation, time) and for the economy.

Figure 10: Funding Expansion as New Toll Roads

Given the situation of limited funds through the fiscus and a growing infrastructure backlog, SANRAL promotes the ‘user-pay’ principle through selective tolling to augment the shortfall in funding. It is to be noted that 85% of the national road network managed by SANRAL is not tolled.

Allocations from National Treasury fund the non-toll network. There is a shortfall of funding and so SANRAL through its preventative asset management policy allocates the available funds to firstly ensure that all necessary maintenance is done on the roads, before any major improvements or new construction is performed. As a result, there is currently no maintenance backlog but there is a backlog in strengthening, improvements and new construction. Although the allocations for national roads have been steadily increasing (but not keeping up with the cost of construction), this increase is being utilised for the roads being transferred from the provinces to SANRAL.

Of the road network under SANRAL’s jurisdiction, 15% of the network is tolled. SANRAL has and will continue to regard the user as a key stakeholder and the affordability criterion is of paramount consideration, more especially in the case of South Africa where there are challenges of poverty, unemployment, lack of basic services, access limitations, an under-pressure tax base and problems of urban sprawl. Unaffordable transport can constrain people’s access to services and opportunities, and impose financial burdens on household budgets. SANRAL’s

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policy in dealing with the affordability challenge is to apply a tariff discount regime for the regular user, local commuter or the public transport operator. The applicable tariff must always be less than the value of the sum of the benefits to the user.

5.1.7 Asset Management System

SANRAL’s policy has always been and will continue to be to use its Asset Management System to ensure the optimum investment of scarce public funds in the provision and management of national road infrastructure, and where the funds will yield value for money, development and maximise returns to the user and broader society.

The Asset Management System of SANRAL is a well-established, documented system for the execution of the asset management activities in a planned and co-ordinated manner with the objective of identifying optimum strategies for providing and maintaining the national road network at an adequate level of service with the available funding.

The asset management system and the relationship between the various asset management principles and processes are shown in Figure 11: SANRAL Asset Management Overview. As seen, asset management encompasses much more than the computer systems required for managing the asset data and related algorithms, procedures and reports.

Figure 11: SANRAL Asset Management Overview

The main benefits of implementing and maintaining the asset management system include:


1) Improved financial performance - improved services, outputs, return on investment and reduced costs without sacrificing short or long-term organizational performance. This also leads to the preservation of asset value;

2) Managed risk – reduced financial losses, improved safety, minimized environmental and social impact and costs, resulting in reduced liabilities such as injury, accidents and related claims;

3) Improved service delivery – consistently matching the needs and expectations of the customer and achieving required service levels;

4) Corporate/social responsibility – improved ability to demonstrate socially responsible and ethical business practices within SANRAL;

5) Demonstrated compliance – transparent conformity with requirements and adherence to asset management standards, policies and processes;

6) Enhanced reputation – through improved customer satisfaction, stakeholder awareness and confidence;

7) Improved organizational sustainability – appropriate handling of short and long-term effects, expenditure and performance will improve staff job satisfaction and organizational morale; and

8) Continuous Improvement of the organization and its staff while achieving its vision.

To achieve the above, an intimate knowledge of the road condition, traffic, incidents and maintenance costs of the road network is required. This intimate knowledge is obtained through the following surveys conducted over the road network:

Road Condition: The condition of the National Road Network is monitored by SANRAL using the Road Survey Vehicles. These Survey Vehicles are equipped with various lasers, accelerometers, gyros, DGPS, 2D/3D digital video systems, 3D laser scanners which enable recording of various road characteristics whilst moving along with the traffic stream at speeds between 20 to 120 km/h. Recorded characteristics include roughness, rut depth, surface texture, surface cracking, deflection, horizontal and vertical alignment, road sign reflectivity, etc. SANRAL will ensure that the national road network is surveyed every two years in line with relevant COTO TMH 13 and 22 requirements.


Traffic Monitoring: These are electronic monitoring equipment that makes use of induction loops and other sensors installed in the road surface to monitor the movement of vehicles. Depending on the sensors used this determines down to individual vehicle level, their speed, their following distance and even weight on each axle (for stations equipped with weigh-in-motion sensors). SANRAL currently has a total of ± 800 monitoring stations scattered across the network, of which ± 200 are monitored 24 hours a day, 365 days a year. Traffic information is crucial for asset management decisions since road user costs contribute up to 90% of total transportation costs. SANRAL will ensure that the national road network is surveyed every 3 years in line with relevant COTO TMH 3, 8 and 14 requirements.

Structures Condition: Due to the nature of bridges, these are still best inspected visually by experienced inspectors. The primary objective is to establish the condition of bridges and major culverts on the national road network. This information is utilised for asset management decisions. SANRAL will ensure that the structures on the national road network is surveyed every 5 years in line with COTO TMH19 requirements.

Incidents: In addition to the above primary data items, information is also collected with regard to all incidents that occur on the network using the SANRAL Incident Management System. This information is spatially analysed to determine whether any link exists between engineering parameters and the occurrence of incidents. Where potential links are identified, this information is then utilised during asset management decisions.

Routine Maintenance: In addition to the above primary data items, information is also collected with regard to all routine maintenance expenditure (i.e. pothole repairs, guardrail repairs, drainage, etc.) which occur on the network. This information is spatially analysed to identify road sections with excessive maintenance costs, especially due to extensive patching. This information is then utilised during asset management decisions to identify appropriate remedial measures.

Through the above asset management system, and other non-modelled inputs, a 5 year rolling works programme is established. The roadwork activities within the


works programme are classified into the following works classes in terms of their frequency of application and the budget used to fund them as follow:

Routine Maintenance (OPEX): This includes day to day routine reactive activities such as guard rail repair, road sign repair and pothole patching - all activities which cannot be predicted. Preventative activities such as cleaning drains & culverts, vegetation control, litter collection, crack sealing, edge repair and shoulder re-gravel - all activities which can be

triggered based on frequent asset condition monitoring.

Periodic Maintenance (OPEX): These include periodically scheduled activities such as surface fog sprays/diluted emulsions/rejuvenators, surface seals, functional asphalt overlays < 50 mm in thickness etc.

Strengthening/Improvement (CAPEX):Strengthening increases the structural capacity of the pavement and typically includes insitu reworking of existing layers, addition of new granular base course layers or structural asphalt overlays >50mm thick. These improvements enhance the quality of service on a road, and typically include activities such as addition of climbing lanes, passing lanes, paved shoulders (>1.5m wide), additional lanes, intersection geometric improvements etc.

New Construction (CAPEX): This includes the complete upgrading of existing facilities i.e. upgrading of a gravel road to surfaced road, upgrading of an intersection to interchange, installation of Intelligent Transportation System technology, construction of a new bridge to replace an old defective bridge, as well as construction of a new road.

SANRAL follows a preventative maintenance first, life cycle asset maintenance strategy. Based on this approach SANRAL will allocate its available budget in the following sequence of priority:

1. Routine Maintenance;

2. Periodic Maintenance;

3. Strengthening/Improvements, and finally if budget is still available

4. New Construction.


MTSF Outcome 6, sub-outcome 3, has listed an action that there must be 5% annual increase in new, upgraded or rehabilitated roads. SANRAL commits to achieving that target subject to adhering to sound preventative asset management practise as discussed above and funding availability on the national road network.

5.1.8 Expansion of National Road Network

The Road Network study, conducted during the late nineties (1997/98) as part of the preparation for the creation of SANRAL identified the following networks:

Core Strategic Network: The most important roads in South Africa identified based on a list of criteria. Total length of network identified was approximately 9,200 km.

Secondary Strategic Network: Additional roads required to complement the Core Strategic Network and alternative routes (required in order to offer alternatives to overcome such occurrences as floods and to offer alternatives in areas where road density is very sparse). Total length of network identified was approximately 9,600 km.

Primary Road Network: Additional roads that act as the primary feeder network to the Strategic Road Network. Total length of surfaced network identified at the time was approximately 14,000 km.

The Core and Secondary Strategic Network were then combined to form the envisaged 19 000km Strategic Network to fall under the jurisdiction of SANRAL from 1st April 1998. In 2010 the mandate of SANRAL was further extended to also include the Primary road network, an envisaged 33 100 km network. The national road network under SANRAL’s jurisdiction grew from about 7 000 km in 1998 to 21 403 km in 2014 through the incorporation of existing provincial roads which form part of the identified strategic and primary road networks (Baseline).

For SANRAL to incorporate remaining portions of the identified strategic and primary road network, currently with provincial governments, the SANRAL Act requires the agreement of the Premier of the Province. SANRAL will continue discussions with relevant National Departments and Provinces with regard to the incorporation of the remainder of the strategic and primary network over the next five years. The total network per province is summarized in Table 3 below and graphically represented in Figure 12: Strategic and Primary Network Still to be incorporated.


Table 3: SANRAL Network Summary per Province

ProvinceSANRAL

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EC 4 550 0 315 4 865 3 293 26 391 29 684

FS 1 580 988 1 831 4 399 3 794 21 887 25 681

GP 659 243 473 1 375 2 955 1 832 4 787

KZN 1 324 780 1 395 3 499 5 077 22 228 27 305

LP 3 615 0 0 3 615 5 593 14 632 20 225

MP 2 411 137 1 165 3 713 4 069 8 506 12 575

NC 3 189 0 1 872 5 061 1 768 22 621 24 389

NW 2 599 130 86 2 815 4 960 14 700 19 660

WC 1 476 753 1 551 3 780 4 120 10 541 14 661

Totals 21 403 3 031 8 688 33 122 35 628 143 338 178 967

Strategic and Primary Network Remaining Provincial Network

Note: The remaining strategic and primary network are been managed by the provincial authorities.


Figure 12: Strategic and Primary Network Still to be incorporated.

Strategic Plan 2015/16 to 2019/2020/AM-OT612590 Page 33 of 111

5.1.9 Transport Pricing

Transport pricing must provide a value proposition to the user and broader society as a first step in building credibility and trust. SANRAL will continue to explore and seek technological advances or innovations that form the basis for providing a safely engineered road for the user, at least cost to the agency, thereby strengthening the value proposition for society when it comes to road pricing. It is a benefit to the user that SANRAL delivers high quality roads faster, cheaper, safer, with intelligent features and which are environmentally sustainable.

SANRAL recognises its role within the broader transport system which faces challenges which include insufficient funding, escalating costs, low capacity to address the problems, weak or absent mechanisms to enable the transport system to anticipate changes in demand, or to respond to changes in national goals and user requirements.

SANRAL will work with the Roads Co-ordinating Body and the Department of Transport to improve delivery on the various transport options available to the country.

5.1.10 Environmental Management and Sustainability

SANRAL recognises Environmental Management and Sustainability as a key component of road infrastructure development to achieve a shared vision for economic development and growth in South Africa in particular, and Southern Africa as a whole. SANRAL’s environmental ethos embraces compliance with national legislation, and provides a framework for continually improving environmental performance to go beyond compliance where appropriate. Through the environmental policy, SANRAL outlines specific commitments and reviews them as required through audits and ongoing monitoring.

SANRAL will continue to develop guidelines and plans for environmental management and update them in line with changes in legislation, improved processes, technologies and standards, as outlined below:

Generic construction Environmental Management Plan (EMP): The construction EMP is a dynamic document that will continue to be updated on a regular basis to ensure environmental compliance, general good practice and continual improvement in the environmental performance of SANRAL projects. The updates will also ensure that the EMP is compatible with any amendments to the National Environmental Management Act (1998) and its detailed regulations, and will cover road-related aspects such as the use of spoil areas and borrow pits, roles and responsibilities, audits, penalty clauses, etc.

Environmental Management Programme (EMPr): EMPrs are developed for specific projects that may have significant impacts on the environment. These are projects that are regulated through Environmental Impact Assessment (EIA) processes, and for which site or project-specific goals are set and detailed in the EMPr.


Routine Road Maintenance Guideline: This manual has been compiled to support various aspects of road management, and includes environmental best practice. The guideline provides recommendations and directives regarding invasive plant species, protected plants, pruning, grass cutting and burning. This manual will be supplemented by guidelines for specific vegetation types that will be developed on an on-going basis.

SANRAL will also continue to explore and exploit opportunities for reducing the carbon and physical footprint, and for contributing to national and global priorities such as Climate Change - Mitigation and Adaptation. Projects to reduce consumption of conventional electricity and to promote the generation of renewable energy for specific use on road infrastructure have commenced. SANRAL has also been increasingly recycling road-building material, thus reducing the need for new borrow pits and spending on commercial road-building material. These efforts will be pursued further in the future, taking advantage of the continuing technological advancements.

In this regard, contractors working on SANRAL projects will be required to quantify energy and other natural resource usage, in order to contribute to information requirements for recording a clearer picture of SANRAL’s environmental footprint. There will also be an increased effort on quantification, sorting and recycling of waste material collected from road reserves on a routine basis.

SANRAL will continue to pursue research and develop skills both within and outside the organisation and where applicable, to identify partnerships to assist in these efforts.

5.1.11 Overload Control

SANRAL will continue with its support for the national overload control strategy over the next five years through:

Upgrading and rehabilitation of existing Traffic Control Centres (TCC) at Heidelberg, Kroonstad, Senekal, Park Rynie, Mooi River Mantsole and N4 (East) TCCs during 2015/16. TCC coverage is extended to minimise the diversion routes available to overloaded vehicles. Construction of a new TCC on the N4 just east of Zeerust is to commence. SANRAL is exploring with Limpopo province the best positioning of a new TCC between Dendron and Vivo on the R 521.

Construction of a new TCC at Eteza on the KwaZulu Natal North Coast and at Kokstad

Intensification of partnerships with the public and private sector to ensure an efficient and cost-effective deterrent to overloading


Development of standards, protocols and systems for self-regulation under the Road Transport Management System (RTMS) initiative. The Road Traffic Management System is driven by the private sector, an industry led initiative, striving to develop greater loading compliance, vehicle road-worthiness and driver fitness in the road freight sector. It has the form of a Section 21 company and is managed by three directors and a Steering Committee of volunteer experts and interested parties, including SANRAL. Wherever consignors, hauliers and/or consignees have adopted the standards and have become accredited as being compliant, overloading has been dramatically reduced, accident numbers have come down and productivity has increased. Besides contributing its knowledge, SANRAL neither manages, nor funds the Section 21 Company, but is a beneficiary of the successes of the system.

Technological enhancements to improve overload control

Strengthening of co-operative agreements with law-enforcement authorities

Researching methods to improve the systems in order to reduce capital costs and operational costs for TCCs

Simplification of current legislation over the next five years in order to get better compliance due to better understanding and easier enforcement

5.1.12 Intelligent Transport System

SANRAL has deployed Intelligent Transport System (ITS) technologies as part of its network’s Freeway Management System (FMS) in Gauteng, KwaZulu-Natal and the Western Cape to improve mobility and safety on the roads under its custodianship. The Freeway Management System (FMS) currently covers 450 kilometres of roads. The system is being enhanced through a common traffic management software platform with enhanced capabilities and additional functionality nationally. The FMS will be expanded to include further greenfield sections of the network.

The FMS system software provides the following functionality:

Advanced Transportation Management System (ATMS) software, to provide real-time data to the road user and to serve as a common data repository for traffic data, incident data, reporting etc. for multiple applications.

Advanced Traveller Information System (ATIS) software, to distribute traffic information from the ATMS, field devices and external sources to the public using various means.

Computer Aided Dispatch (CAD) software, to enable operators and/or dedicated dispatchers to manage incident response fleets to support incident management.

For the next 5 years, SANRAL will be focussing on the following application areas:


1. Advanced Traveller Information Programme to improve real time information dissemination through various mediums such as:

Private sector agreements to encourage innovation and the development of value added applications; i.e. mobile applications and media outlets;

Leveraging off private sector data agreements to enhance SANRAL functionality;

Fostering public sector cooperation through automated system-driven support and systems interfaces.

2. Expansion And Optimisation Of The Freeway Management System (FMS) including:

Implement traffic demand strategies and active traffic management on existing FMS networks;

Identify “strategic corridors”, i.e. freight corridors, coal haulage corridors and other corridors to implement ITS;

Implement centre to centre links to existing FMS centres;

Implement centre to centre links with adjacent network operators and concessionaires.

3. Incident Management Systems

Improve incident coordination among incident response partners, which consider and effectively capitalize utilization of new technologies.

Alignment with and promotion of the national Road Incident Management System (RIMS)

4. Work zone Safety Management

Management of construction work zones through the use of strategically positioned devices for advance warnings, monitoring of non-compliance by work zones and real-time information dissemination of traffic conditions.

The use of technology to better monitor and manage traffic flow through and around work zones, minimizing the impact of work zone delays.


The use of ITS can facilitate traffic flow in and around work zones for both workers and road users. These systems can be used for queue management and merging control, speed management and enforcement.

Applications such as traveller information systems, ramp metering systems, intrusion alarms, queue detection and the use of event plans will ensure a more efficient traffic flow.

5. Pedestrian Management

The use of ITS technology to develop spatial plans of pedestrian collision data to establish trends and interventions through Engineering, Education and Enforcement interventions and maintenance of infrastructure.

6. Communication Infrastructure

Integrated network planning and implementation which will ensure a reliable telecommunication network.

The linking of the regional Traffic Management Centres which will also ensure a reliable telecommunications network

5.1.13 Traffic Data

Traffic data forms the basis of planning in SANRAL. Because it is important for SANRAL to have accurate traffic data for the entire national road network, it is covered by strategically positioned traffic counters. These are permanently located at various carefully chosen points on the network and are complemented by short term counters as and when required. As the road network grows, subject to the incorporation of roads, the locations at which further counters are required will be identified. During the 2014/2015 financial year, the outstanding permanent and short term counters will be installed. SANRAL is committed to expand the network of counters to ensure that there is data for all national roads.

SANRAL recently adopted new traffic monitoring specifications as well as new data formats. The specifications differ from the historical specifications in the sense that the only requirement for new contracts are quality data. New Service Providers have been appointed in 2014 and the next 5 years will be crucial to streamline the new specifications. New software was also developed in-house to manage and validate the data. Further development of the software will also form part of the success of traffic monitoring during the next five years. System Suppliers and Service Providers will also have to be accredited through Agrèment South Africa if they want to take part in future tenders.


5.2 ORGANISATIONAL ENVIRONMENT

The Minister of Transport appoints a Board of eight directors to guide and monitor the implementation of mandate by SANRAL. The Board includes a member representing National Treasury, appointed by the Minister of Finance. The CEO is a member by virtue of office and is the only executive member. The Board has appointed four sub-committees to assist it to ensure adequate and proper oversight.

SANRAL has a Corporate Office based in Val de Grace, Pretoria. There are four regional offices based at Bellville (Western Cape), Port Elizabeth (Eastern Cape), Pietermaritzburg (Kwa Zulu Natal) and Menlyn, (Pretoria, Gauteng) each led by a regional manager.

The executive team which is comprised of the Chief Executive Officer, Engineering Executive, the Corporate Services Executive, the Chief Financial Officer, the Company Secretary and Risk Officer and SANRAL’s four regional managers is responsible for the implementation of the various programmes to achieve SANRAL’s strategic objectives and outcomes.

SANRAL’s core function is asset management of the national road network – this includes procurement and supervision of various service providers to ensure implementation of projects identified through the Asset Management System. Procurement is through an open tender process. Consulting engineers are appointed to design and supervise construction of projects and contractors are appointed to construct the road infrastructure. The projects include capital expenditure projects, maintenance and community development projects. The projects are implemented in an environmentally and socially responsible manner with safety on sites being an imperative.

There are various operational and strategic clusters or teams within SANRAL to ensure efficient operations and knowledge sharing throughout the organization.

5.3 DESCRIPTION OF THE STRATEGIC PLANNING PROCESS

The strategic planning process commenced with SANRAL’s Strategy Session held in August 2014. The Board confirmed SANRAL’s six strategic outcome oriented goals and eight strategic objectives. The strategies and risks corresponding with these objectives and goals were discussed at the session. SANRAL’s goals and objectives are aligned to the Government’s outcomes particularly in the infrastructure area. In addition, the Board also considered the socio-economic environment in which SANRAL was operating.

Management then examined the budget available for allocation towards the strategies. This is determined by the MTEF (Medium Term Expenditure Framework), which is a submission made by SANRAL to National Treasury in July every year. Meetings are held with National Treasury and the Department of Transport to explain the budget requirement for SANRAL’s planned projects and other outcomes.


Other resource constraints such as personnel, information technology and materials were considered. The risks affecting implementation and delivery were assessed and managed on an ongoing basis. Performance measures against the objectives were also determined, with specific budget allocations towards the measures.

The first draft of the Strategic Plan was sent to the Department of Transport in August 2014. The second draft was sent in November 2014. The final Board approved version will be sent to the Minister of Transport at the end of January 2015.

SANRAL’s Strategic Model which encapsulates SANRAL’s strategy setting, risk management and performance management and reporting, in response to its Strategic Objectives is shown below.

SANRAL’S Strategic Model

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Figure 13 Strategic Model


6. STRATEGIC OUTCOMES ORIENTED GOALS

The following strategic outcome goals have been identified by SANRAL to ensure alignment with the goals identified by the Presidency:

Strategic Goal 1

Ensure an efficient, competitive and responsive national road network

Goal statement

Ensure an efficient, competitive and responsive national road network through the maintenance and expansion of the national road network (strategic and primary road network) to facilitate development, commerce, mobility and access

Justification

The need for an efficient road network is justified by the fact that 87.9% of the total freight tonnage and 94.29% of the 35 million daily motorised person trips recorded in South Africa, are road based transport modes.

Links Outcome 6: An Efficient, Competitive And Responsive Economic Infrastructure Network

Strategic Goal 2

Ensure improved road safety on national road network

Goal statement

Ensure improved road safety through well engineered national road network that contributes towards reduction in road related injuries and fatalities

Justification

Although the national road network of 21 403 km only represents 2.85% of total network of 750 000km, it carries an estimated 30% of all vehicle kilometres travelled in South Africa. A safer road transport sector will improve economic growth and minimise the pressure on the fiscus by lowering claims (e.g. Road Accident Fund)

Links Outcome 3: All people in SA are and feel safe

Strategic Goal 3

Ensure improved rural access to the national road network

Goal statement

Ensure improved road access to the national road network through well engineered access and non-motorised facilities along the national road network in rural areas.

Justification

Improved access and non-motorised facilities for communities along the national road network will unlock social and economic benefits and provide them with safe access to education, health and other social amenities.

Links

Outcome 7: Vibrant, equitable and sustainable rural communities. Outcome 8: Sustainable human settlements and improved quality of household life


Strategic Goal 4

Ensure sound environmental management and sustainability practices on the national road network

Goal statement

Ensure that responsible environmental management and sustainability are key components of all national road network maintenance and expansion projects to ensure compliance with national legislation, and provide a framework for continual improvement.

Justification Contributes to reduction in the carbon footprint. Enables the responsible and safe use of natural resources. Propagates appropriate plant species for use within the road reserve etc.

Links Outcome 10: Environmental assets and natural resources that are well protected and continually enhanced

Strategic Goal 5

Ensure decent employment opportunities, transformation and empowerment

Goal statement

Ensure decent employment opportunities through the implementation of maintenance and expansion projects on the national road network that promote transformation and empowerment through BBBEE

Justification

Although the national road network of 21 403 km only represents 2.85% of total network of 750 000km, expenditure on it maintenance and expansion represents in excess of 40% of all road related expenditure in South Africa. Decent employment and skills development are imperative to ensuring sustained economic growth, to improving the lives of citizens and communities and in the eradication of poverty.

Links

Outcome 4: Decent employment through inclusive economic growth Outcome 5: A skilled and capable workforce to support an inclusive growth path

Strategic Goal 6

An efficient, effective and development oriented national roads agency

Goal statement

Ensure good service delivery through a skilled workforce and adequate internal systems and controls.

Justification

SANRAL delivers critical national road infrastructure which must be supported by capable staff and leadership, good governance practice, supportive administrative systems and internal processes.

Links Outcome 12: An efficient, effective and development-oriented public service

The implementation of programmes to achieve SANRAL’s Strategic Objectives listed below will contribute towards the realization of the Strategic Outcomes Oriented Goals.


PART B: STRATEGIC OBJECTIVES

7. STRATEGIC OBJECTIVES

SANRAL is resolute in its commitment to effective service delivery with integrity. Its mandate is to provide a good national road network to facilitate mobility and access for the economy and all South Africans. In doing so, some of the additional contributions are empowerment and creating opportunities for emerging contractors and other SMMEs, skills development, job creation, research and development etc. To ensure that these are attained and managed effectively, SANRAL has identified eight strategic objectives which are detailed in this section.

7.1 SANRAL’s 8 STRATEGIC OBJECTIVES

1. Manage the national road network effectively

2. Provide safe roads

3. Carry out Government’s targeted programmes - Transformation

4. Build and maintain 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

The strategies in place to achieve the above strategic objectives and goals for the next five years are detailed herein.

7.1.1 Programme 1: Manage the National Road Network Effectively – Ensure An Efficient, Competitive And Responsive National Road Network

Purpose: Ensure an efficient, competitive and responsive national road network through the maintenance and expansion of the national road network (strategic and primary road network) to facilitate development, commerce, mobility and access.

The National Road Network

SANRAL’s business consists of two separate operations: toll roads and non-toll roads. The SANRAL Act stipulates a distinct separation in the funding and accounting of these operations.


(a) Non Toll Roads

Non-toll roads are funded by government allocations, through the National Treasury, and funds for these roads may not be borrowed or cross-subsidised from toll road income and vice versa. Of the 21 403 km of roads being managed by SANRAL, 85% of the network or 18 283 km are non-toll roads. The total Treasury allocation for this portfolio of roads is R12.5 billion for 2015/16 (R13.5 billion, R14.1 billion and R 14.7 billion estimated for the following three years respectively). It must be noted that all budget amounts for years beyond 2015/16 are only indicative as they may change subject to allocation changes from National Treasury for years beyond the immediate year ahead. 100% of the network is covered by full-time Routine Road Maintenance (RRM) contracts, for which R1 002 million have been allocated for 2015/16. Periodic and special maintenance projects and capital expenditure projects will also take place as scheduled and as per budget. The non-toll network is expected to grow should there be agreement from provincial authorities that some of the provincial roads be incorporated into the national road network. This will ensure that a greater part of the strategic and primary network is maintained and upgraded to suit national road infrastructure requirements.

Available funding for the national road network is decided in the context of other pressing demands on the fiscus. As a result, the current non-toll allocations (47% of requirement) are only sufficient to meet the network maintenance requirements and do not allow for any road expansion or new road construction projects. Current planned SANRAL road expansion projects over the next 10 years are expected to cost R118.9 billion (2014 prices). This means that SANRAL will need to an additional R11.9 billion per year, not currently allocated by National Treasury.

(b) Toll Roads

15% of the national road network or 3120 km is tolled. Toll operations can be divided into two types – those funded by SANRAL, and toll roads which are concessioned to private parties through PPPs (Public Private Partnerships). 9% (1832 km) is managed by SANRAL, and funded by toll income and borrowings from capital markets. The remaining 6% (1288km) is managed through concession contracts of 30 years.

The total toll budget for 2015/16 is R4.0 billion (R5.2 billion, R5.7 billion and R6.3 billion for the following three years). These amounts are for currently approved projects. As more toll projects are approved, the budgets will also increase. 100% of the roads are backed by full-time RRM contracts. Periodic and special maintenance projects and capital expenditure projects will also take place as scheduled. Toll tariffs are adjusted annually, per CPI, effective 1 March.

SANRAL is managing several large projects on the country’s major economic arteries to support accelerated growth. The N1 North and South, the N2 North


and South, the N3 Marianhill (PMB) and the N17 are among the major toll roads being managed by SANRAL currently. The N4 Magalies, N2 Tsitsikamma and the R30 are some of the other toll road projects. These toll roads have been contracted to toll operators to manage the toll route operations and maintenance, and are providing toll revenue to help fund the expenditure and required upgrades on this portfolio of toll roads.

In addition, the Gauteng Freeway Improvement Project (GFIP) Phase 1 was completed in 2011. Electronic tolling commenced on 3 December 2013, but has been under severe pressure due to non-payment of tariffs and resistance by various interest groups.

The project has not only brought relief to Gauteng’s traffic congestion but has also placed South Africa among world leaders in the provision of road infrastructure. GFIP Phases 2 and 3 are on hold – until a funding model has been agreed.

In addition to planned expansion projects, the following improvement/new construction projects are planned on existing toll roads:

N1 Dualing from Winburg to Kroonstad

N1 Polokwane Eastern Ring Road

N1 Ring Road at Musina

N2 Dualing from Mtunzini to Empangeni

Liaison with other departments for project related approvals will be done with the co-operation of the Department of Transport.

(c) Public-private partnerships (PPPs/Concessions)

In the case of the 1288 km of road managed by concessionaires, the right to receive the toll revenue as well as the maintenance cost and operations have been transferred to the concessionaire. The concessionaire has the obligation to maintain the road in a specified condition throughout the contract period. At the end of the concession period the rights and obligations are returned to SANRAL at no charge but the road has to be in a specified, good condition. The asset remains the property of SANRAL and therefore all improvements done by the concessionaire will reflect on SANRAL’s balance sheet as an asset.

The PPP programme will continue. The current three 30 year concession projects are:


Maputo Development Corridor (N4 East)

N3 between Heidelberg and Cedara

Bakwena Platinum Corridor (N4 West)

These have been ongoing since the past 12 – 15 years.

The N3 De Beers Pass Route (DBP), within the N3 between Heidelberg and Cedara, has been listed in the MTSF 2014 – 2019, Outcome 6, Sub-outcome 3, as a SIP-2 project to be implemented, with project commencement in 2015. It must be noted that the MTSF also states that the design and layout of the project must be directed by the DoT, the finalisation of which would be a requirement for the project to commence. This project is not expected to commence in 2015.The draft Environmental Impact Report was only published in December 2014 for public comment. This comment period ends on 20 April 2015.

The De Beers Pass Route (DBP) is being contested by the Harrismith community and the Free State Province, their concern being that Harrismith will be bypassed with the new road, adversely affecting its economy. The other concern expressed is that the route will have an adverse effect on the environment. These concerns are unfounded as the current N3 will still pass through Harrismith and deviations have been proposed around the environmentally sensitive areas. The DBP Route offers a safer alignment (especially for the heavy vehicles) and a shorter travelling distance. Moreover, the DBP route is already included in the current concession agreement and will be built by the concessionaire, with no cost to the State. SANRAL is working towards the implementation of this important project.

The two planned concession/state toll projects are:

N1-N2 Winelands Toll Highway: Tenders were invited for the N1-N2 Winelands project in 2010. Three tenders were received in November 2010 and were evaluated and the Preferred Tenderer was announced in October 2011. The project is under legal challenge by the City of Cape Town and has not commenced yet.


N2 Wild Coast Toll Highway: The N2 Wild Coast project received final environmental authorisation (Record of Decision) from the Minister of Water and Environmental Affairs in mid-2011. Discussions are ongoing with the affected communities. It has been listed as a SIP-3 critical infrastructure project in the MTSF 2014 – 2019, Outcome 6, Sub-outcome 3, with the project to commence in 2014 subject to the funding being secured. The project was expected to be tendered in 2012, but is currently also on hold due to the various stakeholder engagements and some legal challenges.

N2 Section

R300 to Bot River: 66km

N1 Section

R300 to Hex River Valley: 104km


Strategic Objective 1 Manage the national road network effectively

Objective 1.1 Asset Management

Objective Statement Ensure through the asset management system that the national road network is maintained in an economically optimal condition given the available budget.

Baseline Current condition of national road network and maintenance activities conducted

Justification The need for an efficient road network is justified by the fact that 87,9% of the total freight tonnage and 94.29% of the 35 million daily motorised person trips recorded in South Africa, are road based transport modes.

Links Strategic Goals 1, 2, 3, 5

Performance Indicators

Key Performance Indicators Annual Target 2015/16

Annual Target 2016/17




Smooth Travel Exposure: The proportion of travel undertaken each year on national roads with roughness less than 4.2 m/km.

>95% >95% >95% >95% >95%

Low Rut Exposure: The proportion of travel undertaken each year on national roads with rut depth less than 20mm.

>95% >95% >95% >95% >95%

High Texture Exposure: The proportion of travel undertaken each year on national roads with macro-texture more than 0.4mm.

>95% >95% >95% >95% >95%

Bridge Condition Exposure: The proportion of vehicles that travel over or under bridges with Overall Condition Index (OCI) higher than 80

>90% >90% >90% >90% >90%


Length (km) of Network under Routine Maintenance

21403 21403 21403 21403 21403

Length (km) of Network Resurfaced 850 900 900 900 900

Length (km) of Network Strengthened and Improved

400 450 500 500 500

SIP-1 Annual Maintenance of N1, N4, R33, R510, R511 and R520 National Roads to Lephalale (km)

885 885 885 885 885

SIP-4 Annual Maintenance of National Roads in North West Province (km) 2598 2598 2598 2598 2598

Risk Matrix

Identified Risks Risk Mitigation

Insufficient funding allocation from National Treasury

Ongoing liaison with National Treasury and timely expenditure of available funds

Project disruptions caused either by communities protesting on roads about general poor service delivery by Government departments or protest action by labour.

Maintain good relations with communities and encourage contractors to maintain good labour relations including timely and fair remuneration

Included in MTSF 2014 – 2019 and MoT Performance Agreement

SIP-2 N3 De Beers Pass: has not progressed as in MTSF (MTSF: DoT to direct design and layout and construction to commence in 2015)

Draft Environmental Impact Assessment report under public review for comment until 20 April 2015.


SIP-3 N2 Wild Coast Bridges: has not progressed as in MTSF (MTSF states that construction should have commenced in 2014 if funding secured). Prolonged legal action has delayed the project.

Ongoing liaison with affected communities


Strategic Objective 1 Manage the national road network effectively

Objective 1.2 Intelligent Transportation Systems (ITS)

Objective Statement Ensure improved mobility and safety on portions of the road network covered by the Freeway Management System (FMS - 450km) in Gauteng, KwaZulu-Natal and the Western Cape

Baseline There are currently over 450 kilometres of roads under SANRAL management which are equipped with ITS devices

Justification The need for an efficient road network is justified by the fact that 87.9% of the total freight tonnage and 94.29% of the 35 million daily motorised person trips recorded in South Africa, are road based transport modes

Links Strategic Objectives 1 and 2







Traffic information collection and dissemination on FMS (Freeway Management System) network

Collection of real time information on 50% (225km) of FMS network for design purposes

Collection and dissemination of real time information (expected travel times) on 100% (450km) of FMS network

Establishment of Centre to Centre links with 1 strategic stakeholder

Establishment of Centre to Centre links with 2 additional strategic stakeholders

Link the three SANRAL regional Traffic Management Centres to a SANRAL National Centre

Risk Matrix Identified Risks Risk Mitigation

Construction delays Penalties/Delay damages


Strategic Objective1 Manage the national road network effectively

Objective 1.3 Environmental Management and Sustainability

Objective Statement Ensure sound environmental management and sustainability practices; ensure on-going development of human capital, especially in light of changing environmental priorities.

Baseline There are currently 4 environmental persons and 2 interns. An additional intern is envisaged for the 2015/16 financial year. With the support of existing staff, the interns will be involved with the compilation of in-house application processes for environmental authorisation of selected projects

Justification Now that environmental legislation will allow undertaking selected impact assessments internally, it will enhance the EIA experiences of environmental staff, and of interns in particular. This may also prove to be cost-effective for small, low-risk projects with no significant environmental concerns.

Links Strategic Goal 4; Strategic Goal 5







Undertake 10 environmental applications in-house over the 5 year period and submitting them for external review and/or final decisions

Undertake 2 environmental authorisation applications in-house, submit for external review and/or final decisions

Undertake 2 environmental authorisation applications in-house, and submit for external review and/or final decisions




Risk Matrix

Identified Risks

Loss of staff/interns

Change in legislation

Risk Mitigation

Maintain the current number of staff (4) and interns (2) as a minimum.

Targets will be adjusted accordingly


7.1.2 Programme 2: Provide Safe Roads - Ensure A Safely Engineered National Road Network

Purpose: Ensure a safely engineered national road network through regular maintenance and safety related improvements and proved road safety related education at schools and at community level

SANRAL fully supports the Decade of Action (DoA) for Road Safety call by the Commission of Global Road Safety, and endorsed by the United Nations Road Safety Collaboration. This global drive to curb the carnage on the roads was officially launched in May 2011, and has the primary goal of reducing road deaths by half by 2020. In this the second half of the DoA, SANRAL will further intensify its road safety activities.

Based on the recommendations of the World Health Organisation’s World report on road traffic injury prevention, countries are encouraged to focus on the following five road safety pillars, namely:

Pillar 1: Road Safety Management

Pillar 2: Safer Roads and Mobility

Pillar 3: Safer Vehicles

Pillar 4: Safer Road Users

Pillar 5: Post-Crash Response

SANRAL’s direct sphere of influence relates specifically to the Pillars of Safer Roads and Mobility, Safer Road Users, and Post-Crash Response. For Safer Roads and Mobility we refer to road infrastructure interventions directly on the road network, for Safer Road Users we refer to our Road Safety Education and Awareness Programmes, and for Post-Crash Responses we refer to the rollout and operations of Road Incident Management Systems on the entire national road network, including the use of technology on the Freeway Management Systems deployed on the busiest freeways on the Western Cape, KwaZulu Natal and Gauteng Provinces. These are the main focus areas where we will continue to promote and improve road safety for all our road users.

This five year strategy also illustrates the continued trend of developing innovation and sustainable solutions to road safety challenges not only on the primary road network, but in South Africa as whole.

a) Pillar 2: Safer Roads and Mobility

South Africa relies heavily on road-based transport for the movement of people and goods. South Africa has a road network of approximately 750 000 km, the 10th longest road network in the world. SANRAL manages a road network of 21 403 km (2014), equating to approximately only 2,8% of the total road network, but yet carries approximately 26% of all traffic and 75% of all freight


movement in South Africa. These facts highlight the vital importance, and strategic role of a safe and efficient primary road network for South Africa.

(i) Safe Systems Approach

The important role of appropriate road infrastructure in promoting road safety is well researched. The United Nation’s DoA promotes the Safe Systems approach and encourages those that are responsible for the design and provision of the system (including the road environment) to share the responsibility for reducing the chances of a serious injury or death resulting from road crashes.

In countries that have demonstrated a sustained reduction in serious injuries and deaths due to road crashes, the Safe Systems approach of controlling and influencing energy levels that humans are exposed to, for certain crash types, have yielded positive results. See Figure 13 below highlighting fatality prevention potential for certain road upgrade types.

Figure 14: Fatality prevention

Understanding how the road network is exposed to specific road safety risk, as a function of crash type potential, is therefore important to help guide investment. SANRAL will therefore strive to modify its road its infrastructure to significantly reduce the chances of serious injury and death resulting from road crashes.

SANRAL acknowledges that non-motorised forms of transport such as pedestrians and cyclists, often have genuine needs to travel along or across


higher order high speed roads. SANRAL will where warranted, retrofit the road environment to provide (i) a safe place to walk/cycle and (ii) a safe place to cross.

Figure 15: Safer Place to Walk/Cycle

Figure 16: Safer Place to Cross

As part of its community development programme, SANRAL works to promote accessibility and mobility of non-motorised forms of transport, specifically pedestrians, by providing appropriate road infrastructure which focus on:

The construction of pedestrian/bicycle paths to safely accommodate non-motorised modes of transport.

Effective traffic calming messages at locations with pedestrian activity.

Strategically located pedestrian bridges where warranted.

Providing safe access to communities living next to the national road network through parallel service roads and safe crossing points.


This five year strategy also illustrates the continued trend of developing innovation and sustainable solutions to road safety challenges not only on the primary road network, but in South Africa as whole.

(ii) Road Network Assessments

Crashes are random by nature, and it is difficult to predict precisely where and when crashes will occur. However, SANRAL has developed a tool, Netsafe, which assesses and quantifies road safety risk as a function of specific road features and the road environment.

The road safety risk to road users is based on the design features of the road, as well as operational conditions on the portion of road network under review.

Road information and data is gathered by the SANRAL road survey vehicle and fed into the Netsafe algorithm.

Over the strategy period, SANRAL intends to calculate the Road Safety Risk and formulate Road Safety Risk Indices on the entire national road network, which will guide infrastructure and road safety investment yielding maximum return.

(iii) Road Safety Audits

During the process of road infrastructure delivery it is important to ensure that road safety is duly considered and integrated in all stages of infrastructure projects.

SANRAL intends to develop and implement a formal independent Road Safety Audit programme for projects at various stages of implementation.

There is a need to develop Road Safety Audit capacity and policy in South Africa, and SANRAL will pioneer the industry in this regard.

Furthermore, the development of Road Safety Audit capacity encourages design engineers to be sensitised to road safety needs in their designs in general, thus promoting a culture of road safety.

(iv) Hazardous Location Programmes

SANRAL will continue to identify and implement remedial measures at locations where crashes occur more frequently, specifically at locations where pedestrian activity is high. In many instances solutions are not only infrastructure or engineering based, but require close partnerships with education and traffic law enforcement entities to render a safer road environment.

SANRAL will develop a database of lessons learnt and share experiences of solutions which effectively address common road safety concerns.

Road Infrastructure for All Road Users


d) Pillar 4: Safer Road Users

SANRAL’s core business remains the delivery of high quality road infrastructure. The reality is that road users are not always vigilant and make mistakes, and road infrastructure can play an important role in providing a forgiving road environment that reduces the chances of a serious injury or death, in the event of a crash.

However, high rates of non-compliance and negligent road user behaviour will render even the most forgiving road environment unsafe. Furthermore, the lack of road safety education and awareness will breed unsafe road user behaviour. The ability to effectively change unsafe road user behaviour is therefore a much desired and sustainable approach to road safety.

Road safety education and awareness programmes have therefore been adopted by SANRAL as a sustained commitment, with the intention of influencing road user behaviour in a positive and ongoing manner.

(i) Targeting Pedestrians

In South Africa, a staggering 40 percent of road deaths involve pedestrians. SANRAL’s road safety education programme provides holistic solutions, embracing enforcement, engineering, education and social approaches. Interventions include community involvement, such as assistance to children walking to school, physical improvement of pedestrian routes, and enforcement measures known to be effective for prevention of pedestrian crashes, such as speed enforcement. The programme also provides training for officials, youth and community groups. These initiatives are supported by a multimedia education programme and partnerships with provincial and local government, as well as the private sector.

Over the next five years SANRAL will intensify and continue with its road safety education programmes in all nine Provinces.

The use of social media is playing an increasingly important and effective role in conveying road safety messages.


(ii) Road Safety Communication Campaigns

SANRAL’s mass communication road safety campaigns will, wherever possible, be integrated and aligned with National or Provincial Road Safety Theme Calendars.

SANRAL’s key mass communication road safety theme messages, are as follows:

Drinking and driving and driving/walking and texting - using radio and print. T-shirt slogan competition & activations on campus

Truck drivers – radio and print & activations at rest stops

Annual art competition on road safety for grade 1-12 and university students

(iii) Law Enforcement Partnerships

SANRAL will continue to seek and enhance road safety partnerships with law enforcement entities. Over the next 5 years SANRAL will intensify and support the roll out of technologies such as Automatic Number Plate Recognition (ANPR), with the aim of developing and deploying Average Speed Over Distance (ASOD) speed monitoring and enforcement projects over various parts of the national road network.

(iv) Research in Road User Behaviour

The good news is that many other countries have addressed the challenges that are currently being faced by South Africa relating to road user behaviour, from which good data can be drawn.

The less good news is that some of the problems here are embedded in deeper social and historical issues. More information is needed on these issues for the roads safety systems to be competent enough to make the changes which are necessary.

Research is required in:

understanding what influences road user behaviour and attitude,

road user risk taking behaviour, and more specifically pedestrian risk taking behaviour.

SANRAL will intensify research in this area and will continue to engage some universities to develop research programmes.


(v) Road Safety Education

Infrastructure provision alone cannot ensure a safe environment. Road safety education designed to bring about behavioural change has never been more critical and relevant. United Nations statistics on global road safety show that 92% of road deaths worldwide occur in developing nations such as South Africa. The most vulnerable road users are pedestrians, passengers, cyclists and occupants of buses and minibuses.

Improved road safety for all road users is a primary objective for SANRAL as it implements its mandate to deliver world-class road infrastructure and a safer road environment. The provision of safe infrastructure cannot be divorced from the need to provide road users with sufficient information and road safety training which is expected to result in changed behaviour.

Road safety education and training is a lifelong learning process and programmes should contribute to the development of appropriate attitude towards aspects of road safety behaviour. Formal Road Safety Education (RSE) is done at project level at sites identified by SANRAL’s Regional Offices. Sites are linked to road safety hot spots and community development projects. RSE is done for grades 1-9 and FET (Further Education and Training) colleges (grades 10-12). Road safety education has been offered at 1 172 schools.

The education programme offered by SANRAL conforms to the Department of Education’s Curriculum and Assessment Policy Statement. During workshops in the different educational districts, teachers are given road safety manuals and classroom materials as well as information on the importance of road safety education and the link to the national curriculum.

The following areas of road safety education are covered in the RSE material for grades 1 to 9:

Pedestrian Safety:

Basic road signs.

Crossing roads safely: crossing at pedestrian crossings and traffic lights; how to cross roads where no infrastructure is available and planning safe routes to school.

Passenger safety, especially using public transport.

Safe cycling.

Avoiding crashes by standing up to peer pressure and making responsible choices.

Teachers and learners received educational material covering the themes. SANRAL developed a series called Streetwise for learners attending grades 1 to 9.


The national school education curriculum does not make any provision for road safety education in the FET (grade 10 -12) phase. SANRAL identified this as a serious shortcoming since we believe that these learners on the brink of adulthood should receive education in road safety behavioural matters. A series of learning material has been developed by the University of Pretoria with guidance from SANRAL. These aim to prepare learners to be responsible road users.

(vi) Road safety awareness campaigns

With a strong message of “save a life” ChekiCoast is an imaginative campaign launched by SANRAL to promote road safety among younger audiences on campuses and schools in South Africa. It aims to change attitudes towards road safety among a new generation of road users and thus contribute to a reduction in accidents and road deaths on the country’s roads.

Making use of multimedia platforms such as Facebook, Twitter and YouTube, the campaign is designed to encourage responsible road behaviour among both drivers and pedestrians. It promotes the concept that roads are shared space and that users therefore share responsibilities to create a safe environment.

The younger generation is reached through creative video clips, music, artwork, comic strips, posters and T-shirt slogans which communicate safety messages in modern ways.

Launched in 2013 at various universities and schools, ChekiCoast – save a life, focuses on a number of core road safety messages which are especially relevant to the youth:

buckle up;

don’t drink and drive or drink and walk;

don’t text and walk;

be visible at night; and

keep a safe following distance.

The ChekiCoast Facebook page encourages social conversations about road safety issues among its followers. The core message is that everybody is accountable for improving safety on our roads and the page offers practical safety tips which can be shared with family and friends.

ChekiCoast has been rolled-out nationwide and widely advertised in the national print media and on campus radio stations. A T-shirt slogan competition was hosted online supported by communication campaigns via campus newspapers and radio.


During the December holiday period ChekiCoast was extended to national media especially through radio and TV campaigns.

The road safety messages are also interwoven into the storyline of the popular Supa Strika football-themed comic which is published in South African newspapers and in animated versions on electronic and social media.

Some of the country’s most popular musicians, entertainers and actors have thrown their weight behind the ChekiCoast campaign and SANRAL during activations on the campuses of tertiary institutions.


Strategic Objective 2 Ensure improved road safety on national road network

Objective 2.1 Road Safety Assessment of National Road Network, Implementation of Pedestrian Hazardous Location Programme, Conducting of Road Safety Audits and Road Safety Education

Objective Statement Provide a well maintained, forgiving and self-explaining road environment which encourages compliant and responsible usage by all road uses. Provide safe and appropriate infrastructure for pedestrians where required.

Baseline Identify, Investigate and Propose Remedial measures for 12 Pedestrian Hazardous Locations

Justification The need for improved road safety is justified by the fact that 87.9% of the total freight tonnage and 94.29% of the 35 million daily motorised person trips recorded in South Africa, are road based transport modes.

Links Strategic Goal 1; Strategic Goal 2







Identify, Investigate and Propose Remedial Measures for 12 Pedestrian Hazardous Locations.

Identify, investigate and propose remedial measures at twelve hazardous locations per year





Road Safety Audits completed for upgrade and/or improvement projects in the Project Detail Design Phase.

4 8 8 8 8


Road safety education and awareness programmes at selected educational districts in a 5km radius of the national network and linked to SANRAL construction projects

15 15 15 15 15

Risk Matrix


Insufficient number pedestrian hazardous locations identified.

Ensure quarterly monitoring of progress with respect to the identification, investigation and proposal of remedial measures at pedestrian hazardous locations

Insufficient number of road safety audits completed.

Ensure quarterly monitoring of progress with respect to the identification and percentage completion of road safety audits.

Strikes by educators Ongoing liaison with educational authorities and institutions


7.1.3 Programme 3: Carry Out Government’s Targeted Programmes: Transformation

Purpose: Enable transformation in the construction industry and in the communities affected by SANRAL’s projects through appropriate procurement policies and skills development opportunities and also internally through employment equity and career progression opportunities for employees.

7.1.3.1 Review of SANRAL’s Current Transformation Strategy

SANRAL’s current Transformation Strategy is high level and describes SANRAL’s general position towards Transformation. SANRAL has various transformation initiatives, programmes and projects which are far-reaching and are described in the paragraphs to follow.

To clearly define SANRAL’s philosophy and objectives towards Transformation, the Agency is currently reviewing its Transformation Strategy in order to develop a Holistic Transformation and Socio-economic Development Strategy and Implementation Plan. This Strategy and Implementation Plan is envisaged to be complete by August 2015 and aims to give clear direction to SANRAL’s employees, as well as to external stakeholders, that wish to participate in SANRAL’s Transformation and Socio-economic Development initiatives.

(a) Transformation in Context

Transformation is often interpreted, and mistakenly so, as changing an organisation’s demographics based on factors such as race, sex, age, level of education, and economic status. Although human resources is at the root of Transformation, it is important that Transformation be seen in its proper context and as it is intended. For a Transformation Strategy to be successful it should encompass much more than just addressing the demographic disposition of an organisation. It should address all of an organisation’s resources with the aim to develop the economy of the organisation, and the industry in which it operates, in a sustainable manner.

SANRAL’s Transformation and Socio-economic Development Strategy and Implementation Plan will therefore not only apply Transformation in its limited narrative, but will address all its resource components in a holistic manner to transform the construction industry into an economically sustainable industry, which benefits all its stakeholders including employees, service providers, communities served etc.

It is envisaged that the Transformation Strategy and Implementation Plan will facilitate the transformation of the construction industry into an environment with the following outcomes:


i) Well trained, competent and professional employees and service providers.

ii) Well-functioning, resourceful communities with a strong socio-economic capacity.

iii) A healthy competitive tendering environment for the construction industry.

iv) An industry and country with an enhanced, sustainable socio-economic isposition.

v) The application of best practice in developing and utilising all resource components.

SANRAL’s transformation ethos is driven by the values espoused in the Constitution of South Africa. SANRAL’s primary function supports efforts to eliminate South Africa’s legacy of inequality, to open up economic opportunity for all the people of the country, and to protect and conserve the nation’s rich environment. SANRAL embraces the idea advanced in the Freedom Charter that all the people shall share in the country’s wealth. Transformation must be people-driven and must be able to open up meaningful opportunities which will change the lives of all South Africans, especially the poor.

Transformation in SANRAL supports the values of human dignity, equality and freedom through the organisation’s support of projects and processes which empower South Africans; which result in the creation of new markets, opportunities and investments, and also new drivers for domestic demand. Above all, these projects and processes lead to the development of productive assets among the people. These assets include physical infrastructure assets such as roads and bridges,, and intangible assets associated with education, personal development, skills transfer, restoration of self-confidence and human dignity etc.

The transformation of small entrepreneurs, from job seekers to job creators, ultimately contributes to the eradication of poverty and creating an egalitarian society. This approach to transformation applies not only to SANRAL’s external programmes, but also to the way SANRAL conducts its business.


Transformation is therefore seen within the true meaning of these values such as human dignity, equality and freedom – and SANRAL’s actions, policies and programmes recognise these fundamental values and apply them to all citizens,.

Transformation must therefore be people driven and be able to open up real and meaningful opportunities which will touch and change the lives of all the people, especially that of the poor. Undoubtedly, transformation is a complex process and should be advanced in an integrated and coherent manner which is able to respond to changing needs and environments. For this reason, the empowerment of entrepreneurs who build viable and sustainable businesses forms an important part of transformation as these entrepreneurs act as agents of transformation – their work and consolidation of wealth result in their own economic independence and contributes to employment creation and the overall growth of the economy.

SANRAL can influence transformation in two spheres. The larger of the two is in the environment external to the organisation by its policy towards procurement dealing with external suppliers, contractors and service providers. The other, smaller but of no less value or importance, is the internal environment dealing with its employees through its Human Resources policy.

7.1.3.2 External Transformation: Socio-economic development

SANRAL supports a people-driven view of transformation. The goal is to empower communities, and to create new markets, new investments and new drivers of economic demand while developing productive assets among the people – including those intangible assets associated with education and knowledge. To this end, SANRAL promotes a range of initiatives to transform the economy.

7.1.3.3 Procurement policy

SANRAL’s procurement policy promotes Broad-based Black Economic Empowerment (BBBEE), supporting targeted training for historically disadvantaged South Africans to become economically independent and stimulating growth of targeted enterprises (SMMEs). In pursuing its mandate, SANRAL enhances the provision of basic services, builds capacity, acts as a catalyst for development in other growth areas, creates employment, develops small and medium enterprises, alleviates poverty and elevates the status of women and youth.

SANRAL unlocks opportunities for SMMEs via its (1) procurement inclusion mechanisms and (2) training and development initiatives.


a) Procurement Inclusion Mechanisms

SANRAL essentially has three types of projects, i.e. Conventional Road Construction Projects, Routine Road Maintenance Projects and Community Development Projects. In each of these three types of projects, specific procurement inclusion mechanisms are applied to enhance the utilisation of SMMEs. These inclusion mechanisms can be summarised as follows:

i) Conventional Road Construction Projects

For each project, labour and SMME Contract Participation Goals (CPG) are set. Depending on the nature of the project, between 4% to 6% of the contract value must be spent on targeted labour, while 8% to 12% of the contract value must be spent on the utilisation of targeted labour.

In addition to the above, 100% of the CPG percentages are earmarked for black owned and managed targeted enterprises with a CIDB contractor grading which ranges between CE 3 and CE6. 10% of the CPG percentages are earmarked for women owned and managed SMMEs.

In addition to setting CPG targets, SANRAL encourages larger companies to form joint ventures with small and medium-sized businesses.

Furthermore, on less trafficked roads SANRAL applies the “unbundling” of projects in order to reduce the size/value of the packages put out to tender so as to create the opportunity for smaller contractors to bid/tender.

A further consideration is to introduce a new type of vehicle, i.e. the structured joint venture where a tenderer has to enter into a joint venture with a CIDB grade 5, 6 or 7 contractor and state in the tender the aspects of the work that the partner will be executing on the project. This will then be closely monitored by the supervising consulting engineer.

It also provides opportunities for 8CE contractors to tender for 9CE contracts under certain conditions.

ii) Routine Road Maintenance Projects

In Routine Road Maintenance Projects an Enhanced Sub-Contractor Methodology or Targeted Procurement is applied. This methodology entails that a Main Contractor with a CIDB contractor grading of typically between CE6 to CE8 is appointed as the Management Contractor. The Main Contractor only executes 20% - 40% of the work, depending on the black equity of the contractor. The remainder of the work, i.e. 80%, is packaged and let to sub-contractors with a CIDB contractor grading which ranges between CE2 and CE6.


Once again, 100% of the SMME contract value is earmarked for black owned and managed SMMEs,

Recognising the opportunities to develop entrepreneurs through Routine Road Maintenance projects, SANRAL’s Enhanced Sub-contractor Methodology aims to produce the following outcomes:

The Main Contractor operates as a management contractor.

Low entry barriers for small contractors are maintained.

The small contractors are protected from exploitation.

Skills development, knowledge and systems transfer, and mentoring are enhanced

Support local procurement and maximise local labour

Fast track existing SMMEs with good potential for growth into the mainstream economy

The procurement process for the appointment of small contractors is conducted through a tender process which begins with a public advertisement. Each project provides for the employment of local labour and maximises the involvement of black owned SMMEs. Project liaison committees made up of representatives from SANRAL, the consulting engineer, the main contractor and the local community are established to oversee the operation of these projects and to promote active community involvement.

iii) Community Development Projects

SANRAL’s Community Development Projects are referred to as Labour and SMME Based Contracts. The Construction Manager does not tender for the construction work, but tenders for the provision of training, supervision, mentoring and administration of the work. Consequently, 90% or more of the work is executed by SMMEs and their labourers, thus ensuring that the community benefits optimally from the construction activities.

iv) Training and Development Initiatives on Projects

SANRAL facilitates the training and development of SMMEs under its construction contracts by providing specific payment items for the training of SMMEs in the pricing schedule of each project. This training includes technical, entrepreneurial and generic skills.

Although the principle for the training and development of SMMEs has been applied in Conventional and Routine Road Maintenance projects since SANRAL’s inception, there is now a more formal Training and Development Model since the advent of the Community Development projects. This Training and Development Model is illustrated in the figure below:


Figure 17: Training & Development Model 1

The training which is provided is determined by the type of project and the scope of works.

The training has both a theoretical and a practical component. Consequently learner candidates, who are labourers, SMME owners, and SMME supervisors, are subjected to literacy and numeracy testing prior to joining the programme.

7.1.3.4 Community Development Programme

SANRAL believes that its work should provide tangible benefits to communities – whether in the form of a safe road surface on a busy highway, or a bridge in a remote community to provide access to settlements, schools and clinics. SANRAL’s community development programme focuses on infrastructure projects which promote integrated transport and socioeconomic development in rural and urban areas, predominantly along the national roads.

The aim is to ensure that these projects are done in a way that complements national, provincial and regional growth and development strategies. At project level, the criteria include the improvement of pedestrian conflict points (known as hazardous locations), and access roads to improve quality of transport and community mobility.


An impact assessment tool based on demographic and geographic analysis is used to determine where to invest in community development. The initial prioritisation of projects is done according to a point evaluation system, taking into account the human development, road safety and socio-economic needs of the different communities or locations. Further consultation with communities and local and provincial governments determines project scope and priorities.

SANRAL’s community development programme emphasises creating access and mobility in rural areas along national roads. This programme will continue, striving to meet the following objectives:

Provision of facilities to communities living next to national roads in remote areas, generally having a positive impact on households in which women are the breadwinners

Poverty relief in communities living next to the declared national road network

Human development, including skills transfer and training

Job creation and community participation Development of SMMEs

SANRAL sees community development as a comprehensive strategy which addresses physical needs and enhances human dignity and self-sufficiency. The community development projects are directed to reduce poverty, vulnerability and economic marginalisation.

The budget for the programme for 2015/16 is R358M

7.1.3.5 Higher education

SANRAL also supports skills development through university chairs. It will continue to sponsor the Chair in Pavement Engineering at the University of Stellenbosch. The aim of this sponsorship is to promote the development of human capital and capacity building in Pavement Engineering by empowering students and practitioners through high-quality education, training and research, and through partnerships with recognised international institutions in the field of pavement engineering.

During 2011, SANRAL entered into an agreement with the University of Cape Town with a contribution of a once-off amount of R20 Million (Twenty Million Rand) for the creation of a SANRAL Chair in Transport Planning. The Chair will build skills in the broader transportation planning field.

SANRAL, in partnership with The University of the Free State (UFS) launched the SANRAL Chair in Science, Mathematics and Technology Education on the Bloemfontein Campus on 11 September 2014. This will help to improve the quality of teaching of these vital subjects at schools in the Province. It complements the university’s School Partnership Project (SPP) – a flagship initiative which addresses concerns about underperformance in South Africa’s


school system despite the fact that the country spends a greater proportion of the national purse on education.

SANRAL also partners with universities such as WITS (Johannesburg), Nelson Mandela Metropolitan University (Port Elizabeth) and the UFS to provide maths and science teaching and opportunity to work in laboratories to high school students and the teaching faculty of schools to generate and maintain interest in those subjects.

7.1.3.6 Internal Transformation

Internal transformation is attained through employment equity plans and skills development initiatives for employees. SANRAL actively pursues the attainment of employment equity at every level of business activity. In pursuit of this objective SANRAL will apply the principle of positive discrimination, always remaining within the bounds of the governing legislative framework. The need to attract and retain human capacity in technical and civil engineering fields persuades SANRAL to invest in skills development opportunities such as scholarships, bursaries, internships etc.

(a) The Employment Equity (EE) Plan

The EE Plan is a 3 year plan which is based on a SANRAL growth model. Improved racial and gender representation will take place within an organisational environment which is changing technologically and growing in terms of network size.

The current plan was approved by the Board in August 2014 – for the three year term from 1 October 2014 to 30 September 2017. This plan is dynamic, and is reviewed quarterly to take into account the changes within the organisation as well as changes within the market.

The EE plan is based on a SANRAL growth model. Improved racial and gender representation will take place within SANRAL, even as it grows as an organisation managing a growing network.

This program will continue into the future. The long term goal is to ensure a steady supply of suitably qualified and experienced engineers for roles within the Transport fraternity in both government institutions as well as the private sector. The programme is a tangible contribution to closing South Africa’s skills gap and building intellectual capacity within the built environment and particularly in the field of civil engineering and road management. The bursary scheme is aimed at firstly supplying SANRAL with future engineers and staff, and secondly, supporting the built environment in South Africa through the sponsorship and support of black students and women.

Annual targets are reviewed each year. The plans take SANRAL’s budget into consideration as well as the long term future plans of the organisation. The goals which have been set have taken the macro environment into account.


(b) Bursaries

A total of 85 bursaries are expected to be awarded in 2015/16. These numbers will expected to be retained annually over the next five years, with the budget at R95 000 per student.

The bursary programme is supplemented through an induction programme for new bursars, who are briefed about SANRAL’s activities. A buddy system intended to support students though mentoring, by existing SANRAL young professionals who are Project Managers, is encouraged. The mentors assist them with information required for their academic projects.

(c) Scholarships

The SANRAL Scholarship scheme, with a budget of R4 million, with 150 students for 2015/16, has been instituted for Grades 10, 11 and 12, in order to ensure that the pass rate for mathematics and physical science subjects is improved. The teachers will also be supported in such programmes. The aim is to support pupils in the sciences with a bias towards civil, electronic or transportation engineering. SANRAL intends to continue to award around 150 scholarships every year for the next five years.

All SANRAL scholars are expected to attend compulsory academic curriculum enrichment activities fully funded by SANRAL. This ensures that learners are assisted in challenging areas of the curriculum.

SANRAL continues to support the Centre of Science and Technology (COSAT) in partnership with The Science Education Resources Initiative (SERI). This initiative aims to provide an opportunity for learners to be equipped with knowledge and skills that are needed to study at tertiary institutions.

(d) Internships

SANRAL provides internships, as required by the curriculum, to engineering students to facilitate the attainment of their degrees and to provide them with work experience. This is done in co-operation with the contractors and consultants working with SANRAL. The number of internships facilitated is equal to at least 10 percent of SANRAL’s staff complement.

Vacation work and internships are aimed at providing students with internship opportunity to use the workplace as an active learning environment. The number of internships facilitated are around 110 per year with a growth of around 10% annually. It provides a feeder channel for staff requirements within SANRAL.

The budget for the internship programme is just over R14 million, with the amount growing by 10% annually.

(e) SANRAL Training Academy (TA)


The purpose of the SANRAL TA is to mentor and develop SANRAL graduates through a structured training programme to equip them with the necessary skills and competencies to enable them to register as professionals with the Engineering Council for South Africa (ECSA) within an accelerated timeframe.

Funding for the TA is provided by SANRAL. Graduates starting their careers in the organisation will get the benefit of dedicated mentorship and experience with design projects to fast track their skills development. This will enable skills development and allow them to take more responsibility until they can work independently. Capacity and knowledge is gained through forced time and attention in the design of rural and national roads. Information sharing and networking within and outside SANRAL with the aim of attaining professional registration is a major area of focus.


Strategic Objective 3 Carry out Government’s targeted programmes – Transformation

Objective 3.1 Transformation and empowerment

Objective Statement To empower service providers such as contractors and create access and mobility for communities along the national road network which require basic road infrastructure for access, mobility etc.

Baseline The current procurement policy and community development programme

Justification Infrastructure provision to vulnerable road users creates a safe environment for all road users. The community development projects are directed to reduce poverty, vulnerability and economic marginalisation.

Links Strategic Goals 1, 2, 3, 5







Percentage of RRM project spend contracted to SMMEs and black owned companies and in terms of Black ownership of the main contractor

>60% >60% >60% >60% >60%

Percentage of Non RRM project spend contracted to SMMEs and black owned companies and in terms of Black ownership of the main contractor

>35% >35% >35% >35% >35%

Jobs created on project (full-time) 20 000 22 000 25 000 28 000 30 000

Number of SMMEs working for SANRAL 800 800 800 800 800

Number of internships (Practical experience for under-graduate studies)

110 121 133 133 133

Number of external bursaries (tertiary) 85 85 85 85 85


Number of scholarships 150 150 150 150 150

Employment Equity Plan (EE Plan) Achieve annual targets as per

Board approved EE Plan

Achieve annual targets as per


Develop new 3 year EE Plan and achieve annual targets as per


Achieve annual targets as per Board approved EE

Plan

Achieve annual targets as per


Community development infrastructure projects in the four regions of SANRAL

12 projects in construction





Risk Matrix


1. Ongoing budget allocations from National Treasury to award projects

Ongoing liaison with National Treasury for allocation of the budgeted funds

2. Possible disruption of projects due to approval delays, toll project resistance and protests by communities or labour

Ongoing liaison with departments for timely approvals (water licences, environmental and mineral rights approvals and communications with affected communities. Labour issues to be dealt with through the Department of Labour.


7.1.4 Programme 4: Co-Operative Working Relationships With Relevant Departments, Provinces, Local Authorities And SADC Member Countries

Purpose: Establish and maintain co-operative working relationships with government departments for project related approvals and also with provinces, local authorities and SADC member countries for co-operative project implementation.

SANRAL needs to maintain good working relationships with departments such as Environmental Affairs, Water and Sanitation and Mineral Resources to ensure on-going compliance and timely implementation of projects through appropriate and timely approvals. It also needs to foster good relationships with the provinces and municipalities to ensure co-ordinated and co-operative implementation of projects.

(a) Environmental Relationships

SANRAL’s challenge lies in balancing environmental rights and obligations on the one hand, and the welfare of South Africans and the economy on the other. SANRAL will continue to adopt a consultative and transparent approach in these matters in order to meet the environmental obligations. Some of the key environmental management issues for the next five years are set out below.

SANRAL will continue to engage with the Departments of Water and Sanitation (DWS) to enable the timely issuance of water licences as applicable to projects. Currently there are substantial delays in the issue of these licences. SANRAL and the DWS have been working on establishing a Memorandum of Understanding (MoU) to streamline processes, but the Department has decided that a specific ‘General Authorisation’ for all State-Owned Companies may be the preferred option, with a risk-based component for SANRAL and each of the SOCs. SANRAL continues to liaise with the relevant officials in this regard. SANRAL’s Risk Matrix will be tested on a number of projects and presented to DWS prior to finalisation.

Department of Environment: As a result of on-going engagements in carrying out the principles of the Memorandum of Understanding signed in 2010, SANRAL continues to consolidate its position as a relevant and trusted partner contributing to new legislation, consultative forums and to the development of skills in the environmental field. Going forward SANRAL plans to engage other sub-directorates and to explore further means of exchanging skills and developing new skills between the entities. SANRAL is also looking at platforms to engage other players, particularly Environmental Assessment Practitioners (EAPs) in order to ensure a common understanding of environmental management issues affecting SANRAL projects.

Department of Agriculture, Fisheries and Forestry: In conjunction with the former Department of Water Affairs and Forestry, SANRAL has drafted a policy for the control of veld fires in the road reserves in line with the National Veld and Forest Fire Act (1998). The policy outlines SANRAL’s responsibility towards the Act, the most suitable location for fire breaks, the extent of


SANRAL’s participation with regard to fire protection associations, procedures to be followed during the burning of fire breaks, assistance to be provided to adjacent land owners and the procedure for obtaining permission for burning on SANRAL property. It is intended to finalise the policy with the Department of Agriculture, Fisheries and Forestry for inclusion in routine road maintenance contracts.

Department of Mineral Resources (DMR): SANRAL has signed a Memorandum of Understanding with the DMR which has simplified the requisite approvals with respect to financial provision. SANRAL will continue to liaise with the DMR on all relevant project related matters.

(b) Roads Coordinating Body / COTO Subcommittees

As an active member of the Roads Co-ordinating Body (RCB) SANRAL will finalise the updating of the following national guidelines over the next five years:

TRH 3: Surfacing Seal Design

TRH 4: Flexible Pavement Design

TRH 5: Statistical Concepts for Quality Control

TRH 8: Design of Hot-Mix Asphalt Surfacing

TRH 12: Pavement rehabilitation Design

TRH 13: Cementations Materials in Road Construction

TRH 14: Guidelines for Road Construction Materials

TMH 3: Traffic Axle Surveys

TMH 5: Sampling Methods for Testing Roads

TMH 8: Traffic Counting

TMH 9: Visual Assessments of Roads

TMH 10: Manual for As-built Records

TMH13: Instrumental Surveys of Road

TMH14: Automated Traffic Counting Standards

TMH18: Electronic Data Exchange formats

TMH 19: Structure Assessments Manual

TMH 22: Asset Management Guideline

COTO Standard Specifications for Road and Bridge Works


(c) Provinces – Traffic Control Centres, Enforcement etc.

Appropriate Service Level Agreements between SANRAL, the RTMC and the Provinces need to be developed to ensure sustainable and effective overload control countrywide. More innovative and inexpensive means of overload control continue to be investigated by SANRAL. Where requested by provinces SANRAL manages the project of upgrading or constructing new TCCs, on behalf of provinces and mostly funded by them.

(d) Local authorities – incident management services

The Incident Management Programme is a programme of Government aimed at addressing response and management of incidents on the roads, rail and other economic modes, (e.g. harbours, airports etc.). This is managed in conjunction with the emergency services such as fire, police and medical services. The RTMC is responsible for the operations.

Since 1991, the Department of Transport (DOT) has been the Authority charged with monitoring the efficient deployment of this programme in the country. Through its implementing agency SANRAL, DOT requires that Incident Management Systems (IMS) be deployed and managed throughout the country to address the 5 designated pillars, namely:

Structures, programme and protocols establishment and deployment.

Resource identification, allocation and management by sectors.

Harmonisation of communication and communication technology deployed among participating sectors.

Training, capacity building and public outreach through structured engagements within systems.

Reporting to address monitoring and evaluation of the Incident Management (IM) programme throughout the country.

SANRAL has been monitoring the deployment of the 5 pillars mentioned above to ensure efficiency and sustainable quality service delivery to the public. Thus far SANRAL has addressed legal requirements through development of 5 areas that did not exist pre-2012, i.e.:

Amendment of legislation to accommodate a clause that compels sectors to implement incident management. This amendment clause has been to the State Law Advisors and is scheduled to go through the Parliamentary processes by March 2015, after which is expected the Presidential signature and gazettes.

In the meantime, through the required structures prescribed by COTO, SANRAL has set a National Technical Committee (NTC) (all sectors affected and interested in the incident management programme have been nominated


to participate in this committee). This structure is a subcommittee of COTO and the current presidency and secretariat is SANRAL’s responsibility. In the next 5 years 2014-2019 SANRAL will ensure its functionality.

SANRAL, through its representatives and DOT are engaging sectors to formulate a national database of resources available in the country to deal with incidents. This will probably be maintained through the Department of Co-operative Governance and Traditional Affairs (COGTA) and DOT to ensure efficiency and availability of up-to-date data. This is expected in 2015/16.

Communication technology facilitating Intelligent Transport Systems (CCTV deployment, Variable Message Signs etc.) is currently being rolled out by SANRAL in major cities. It is envisaged that this programme will continue and other authorities which have road and rail network will deploy this programme to harmonise communication to responding sectors to incidents. 2015-2019 will see positive movement in this direction and progress reports will be generated through the NTC and COTO.

In 2006, SANRAL formalised incident management training programmes in line with SAQA requirements. This has been adopted by all sectors through consultation. Roll-out to registered colleges and institutions of higher learning for emergency, non-emergency and law enforcement colleges is ongoing. SANRAL is in the process of finalising the MOU with the Transport Seta to ensure seamless roll-out of this programme to all affected colleges. This is expected to gain momentum within the next 5 years. Capacity building on incident management is ongoing through SANRAL projects and will continue in the next 5 years. These are structured workshops conducted using learning material compiled by SANRAL and approved by TETA. A public outreach plan is being drafted to roll-out information to the public. This will be ongoing for the next 5 years and will be monitored.

The legislation prescribes that all authorities that are responsible for roads, rail and economic modes must ensure deployment of this IM national programme. DOT through SANRAL will encourage full participation and co-operation of other sectors and authorities. SANRAL is a leader organisation designated to collect and collate through its designated structures. The next 5 years will continue on that note. Each authority and sector will fund its own requirements.


(e) Co-operation between neighbouring (SADC) countries

SANRAL will continue with its active participation in the activities of the Association of Southern African National Roads Agencies (ASANRA) to promote harmonisation of policies and standards throughout the SADC region.

- Botswana

SANRAL is currently involved with a project to build roads including a bridge at the border posts between Botswana and South Africa. The MoU between the two countries was signed and construction commenced in 2013/14 and is expected to be constructed within the next two years.

- N4 – Maputo Development Corridor Toll Road

There is ongoing engagement between SANRAL and the Mozambican National Road Authority (ANE) (collectively the Implementing Authority in the Concession Agreement) at executive level to facilitate the smooth running of this private public partnership project.

(h) Strategic Infrastructure Projects

SANRAL is also closely involved in the Strategic Integrated Projects (SIP), which are listed in Sub-outcome 6 of the MTSF 2014 - 2019. This includes:

the development of SIP-1 projects (Unlocking the Northern Mineral Belt with Waterberg as the catalyst), the implementation of which has been delayed by regulatory approvals;

SIP-2 projects (Durban-Free State-Gauteng Logistics and Industrial Corridor) which are under stakeholder discussions relating to the funding mechanisms;

SIP-3 projects (South Eastern node and corridor development) – under stakeholder discussions, delayed environmental approvals and undergoing legal action; and

the co-ordination of the SIP-4 set of projects (Unlocking the economic opportunities in North-West Province), where there are implementation delays due to skills issues and misalignment of priorities among the implementers and funders.

The timely and successful completion of the above projects is dependent on other parties over whom SANRAL has no control. In addition there are various binding factors, inter alia, approval delays, legal action against projects etc.


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

Objective 4.1 Roads Coordinating Body /COTO Subcommittees

Objective Statement To ensure co-ordinated and co-operative development of national standards and implementation of projects.

Baseline Current COTO activities

Justification Updated National Standards are vital in ensuring uniformity of approach and service delivery through all spheres of government.

Links Strategic goals 1, 2 and 3



Annual Target 2016/17 Annual Target 2017/18

Ensure minimum of 2 annual meetings for each COTO subcommittee chaired by SANRAL

2 2 2

Revise following TRH/TMH guidelines through COTO sub-committee and submit for COTO approval.

TMH3, TMH8, TMH9, TMH13, TMH 14, TMH18, TMH19,

TMH22

TRH5; TRH13; TRH14 TRH3, TRH4,TRH8, TRH12,

Revision of the COTO standard specifications for road and bridge works

50% 100%

Risk Matrix


Active participation by various authorities in revision process

Meetings/Workshop Sessions

COTO Approval Delays Written pre-approval



Objective 4.2 Co-operation with SADC member countries

Objective Statement To build road infrastructure which is mutually beneficial to South Africa and a neighbouring SADC country

Baseline 25% construction completed in 2014/15

Justification SADC countries depend on South African ports for trade

Links Strategic Goal 1







Construction of Botswana Border Bridge (Notwane River)

75% construction completed

100% construction completed

Risk Matrix


1.Cost overruns due to fill material availability

2. Delays due to poor founding conditions or weather conditions

Design has been revised to reduce fill material requirement and looking for cheaper borrow pit on South African side

Will be funded from contingency amount or savings on the project



Objective 4.3 Incident Management Systems (IMS)

Objective Statement To address response and management of incidents on South Africa’s roads, rail, etc. through the deployment of Incident Management Systems (IMS) throughout the country.

Baseline There are currently over 450 kilometres of roads under SANRAL management which are equipped with ITS devices to provide information

Justification

The need for an efficient road network is justified by the fact that 87.9% of the total freight tonnage and 94.29% of the 35 million daily motorised person trips recorded in South Africa, are road based transport modes.

Links Strategic Goal 2







National Technical Committee to formulate national standards to harmonise communication of responding sectors to incidents and to produce 4 IMS reports for COTO

Production of 4 COTO reports on IMS nationally.





Risk Matrix


None identified


7.1.5 Programme 5: Achieve And Maintain Good Governance Practice

Purpose: Ensure that SANRAL functions on good governance principles with adequate risk management and zero tolerance to fraudulent and corrupt activity.

(a) Corporate Governance

SANRAL fully subscribes to the governance principles of transparency, social responsibility and accountability as embodied within the Protocol on Corporate Governance in the Public Sector and the King III Code of Corporate Governance. In addition, SANRAL places great importance on compliance with the requirements of the various legislation governing its conduct, such as the SANRAL Act, No 7 of 1998, the Companies Act, No. 71 of 2008, the Prevention and Combating of Corrupt Activities Act, No 12 of 2004, the Public Finance Management Act, No. 1 of 1999 and its Treasury Regulations and the Promotion of Administrative Justice Act, No 3 of 2000.

With core objectives such as the effective management of the nation’s primary road network and the achievement of financial sustainability which requires the maintenance of service provider and financial market confidence, SANRAL’s Board and staff embrace effective and ethical governance principles. The Board formally acknowledges that the values of integrity and service excellence be pursued in all its decisions and activities.

SANRAL has set up a governance framework for its Board. The duties of the Board include those of care, good faith, loyalty, full and effective control over the company, provision of direction regarding policy and strategy matters, monitoring risk management, organizational performance, communications and sustainability.

The Board is ultimately responsible and accountable to the shareholder for SANRAL’s performance and for good corporate governance. The annual Performance Agreement, signed between the Minister of Transport and the Board spells out the principles, performance indicators and targets based on which SANRAL’s performance is measured. The Board Charter, Committee Charters and the Directors’ Code of Conduct set out the mission, conduct, duties and responsibilities of the Board and Board Committees. The Board and its Committees have affirmed their commitment to these terms of reference in the execution of their responsibilities during the course of their tenure. There are four Board Committees currently to support the Board in its oversight and monitoring role. These include the Contracts Committee, the Audit and Risk Committee, the Assets and Liabilities Committee and the Social, Ethics and Transformation Committee (SETC).

SANRAL’s zero tolerance for unethical behaviour is reinforced by a code of good conduct applied within the organisation.


Corporate governance adherence within SANRAL is measured annually either by a Corporate Governance Review including a Board evaluation or an elaborate Board Evaluation exercise conducted by independent service providers.

(b) Risk Management

The management of strategic and operational risk is a priority, and the Board has ultimate accountability for risk management within the organisation. SANRAL maintains a risk register, the product of the continuous evaluation of current risks and the identification of new ones by the Risk Cluster. All employees are encouraged to be alert to risk exposures in their area of work and to express their concerns relating to the strategic and operational risks faced by the company. SANRAL will continue the use of an electronic Risk Management System, to maintain and report the risk registers.

(c) Prevention of fraud and corruption

SANRAL is keenly aware of the dangers of fraudulent and corrupt activities in its field of operation. SANRAL has adopted a fraud and corruption policy with the objective of protecting its revenue, assets and reputation. There is zero tolerance towards any proven fraudulent activity. The aim is to communicate this message to business and the public at large.

To help in this endeavour, SANRAL subscribes to a fraud hotline service operated by an independent service provider. This free service is available to anyone, within the organisation or outside, to anonymously report suspected wrongdoing.

All reported cases will continue to be investigated either internally or externally as the circumstances require.

An annual Governance, Risk and Compliance (GRC) roadshow is conducted at all SANRAL offices, to create / maintain awareness among all employees of the risk exposures faced by SANRAL and the potential for susceptibility to incidents of fraud and corruption. This roadshow also gives an opportunity to all staff to share their concerns and contribute to the management of risks within their respective areas of responsibility.

(d) Internal audit

SANRAL has outsourced its internal audit function to ensure a professional service capable of monitoring internal controls, systems and procedures within the business. In line with supply chain management regulations, this service provider is rotated every three years. The Contracts Committee may approve that the service provider serve for five years.

(e) Performance Agreement with the Executive Authority


An annual Performance Agreement is signed with the Minister of Transport, SANRAL’s Executive Authority. The annexure to this document, the Annual Performance Plan, documents the key performance measures and targets to be attained by SANRAL in its attempts to achieve its strategic outcome oriented goals and strategic objectives. It also establishes a transparent and accountable working relationship between SANRAL and the Executive Authority.


Strategic Objective 5

Achieve and maintain good governance practice

Objective 5.1 Good governance

Objective Statement

To be an effective public entity run on good governance principles

Baseline The current governance, risk and compliance policies

Justification SANRAL provides critical national road infrastructure and must be run based on ethical, sound business principles and must be governed and managed with integrity to ensure effective service delivery

Links Strategic Goal 1, 6

Performance Indicator

Key Performance Indicators






Fraud Hotline Reported incidents to be investigated and action to be taken as appropriate

Reported incidents to be investigated and action to be taken as appropriate




Risk Matrix


Top management reduces emphasis on good governance

Ensure that the tone for good governance is set by the Board and Management. Ongoing awareness of risk exposures including to fraudulent and corrupt behaviour at any level within and outside SANRAL


7.1.6 Programme 6: Achieve Financial Sustainability

Purpose: Ensure that SANRAL achieves financial sustainability for timely and effective implementation of projects

SANRAL’s business consists of two separate operations: toll roads and non-toll roads. The SANRAL Act stipulates a distinct separation in the funding and accounting of these operations.

(a) Non Toll Roads

Non-toll roads are funded fully by National Treasury through annual allocations. SANRAL cannot borrow to fund this portfolio and cannot budget for a deficit.

(b) Toll Roads

15% of the national road network or 3120 km is tolled. Toll operations can be divided into two types – those funded by SANRAL, and toll roads which are concessioned to private parties through PPPs (Public Private Partnerships). Concessioned roads (6% of the network) are funded by the concessionaires. The toll roads managed directly by SANRAL (9% - 1832 km) are funded by toll income and borrowings from capital markets.

Toll Funding: Although toll funding is solely obtained through the private sector, government has provided an explicit guarantee for a portion of SANRAL’s borrowings. This assists in the reduction of borrowing cost. However, the sources of funding are limited and should therefore be planned carefully to ensure that the guarantee is optimally utilized. Additionally SANRAL also has borrowing capacity without the government guarantee to access additional sources of funding domestically.

When accessing funds for toll roads, the following intentions are pursued:

to reduce the cost of borrowing; and

to lengthen the maturity of the funding to match the life of the underlying asset, i.e. the roads. This has to be balanced against market conditions to ensure the lowest borrowing cost but also considering the refinancing risks.

The following funding sources have been identified:

Domestic Medium Term Note (DMTN) programme – continuation of the issue of the HWAY (guaranteed) bonds at the monthly auctions. The total auction amount is determined by the cash requirements and liquidity buffer requirements. This funding method was resumed in April 2014 following the commencement of electronic tolling in Gauteng, and SANRAL has been able to obtain funds under the guaranteed HWAY bond programme. Investors' appetite to lend money to SANRAL as well as the price they're willing to pay is very sensitive to any uncertainty created by pronouncements of government


officials or wavering on the "user-pays" policy. Auction results have clearly indicated this trend during the past 3 years. This increases the risk of SANRAL’s ability to source funds and on South Africa’s credibility with the investor community, hence the exclusive reliance currently on the guarantee.

Bank loans – this option will continue to be explored, but would be limited by the approved bank lines as well as the borrowing cost. SANRAL will use this instrument if and when it is deemed to be competitively priced. Unless the borrowing cost can compete with the DMTN programme, this option will not be utilized.

Direct Foreign Investment – A loan of Euro 120 million from the European Investment Bank has been received during 2010/11. The EIB has indicated that they have future funding available for further SANRAL projects. Other entities will also be explored for possible funding opportunities.

Export Credit Agency (ECA) supported loan facility – A facility of R520 million was obtained from the Austrian ECA, OeKB. R380million of this facility was utilized as at March2014.It has been decided that this facility will not be drawn down any further.

Long-term borrowing requirements:

Figure 18 J Curve: Funding Levels

The graph shows that the maximum funding level will reach an estimated R66 billion by 2022. The funding levels have been increased due to the delay in implementing electronic toll collection and due to the increased violation rates

-70000

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J- Curve: Cumulative Debt: Exist & New TollsCurrent Scenario

EXISTING & NEW TOLL ROADS: J-CURVE (in Rm)


on the GFIP. This has resulted in the approved maximum debt level being reached sooner and the forecasted total debt level being breached. SANRAL will have to apply to the National Treasury to increase the approved debt level during the 2015 financial year.

The borrowing amount and the repayment period which is currently around 20 years will be extended further should the resistance to electronic tolling not reduce.

It should be noted that no toll levies are charged on a new toll road until initial construction is completed. As a result, during construction, SANRAL will borrow funds without receiving any income, resulting in the J-curve effect as depicted in the figure above. Once tolling commences, it takes a certain amount of time before income reverses the curve. National Treasury provided a R5.75 billion contribution towards SANRAL’s toll projects in 2011 to ensure that SANRAL’s debt was maintained at an acceptable level.

Credit ratings

SANRAL has historically sought to reduce its dependence on transfers from the fiscus, using the strength of its balance sheet to finance the toll road programme. To support this effort, SANRAL sought an issuer rating from an international rating agency. In 2007, Moody’s awarded SANRAL a national scale issuer rating of Aa2.za (long term) and P-1.za (short term). With the need to source international funding, SANRAL obtained global scale ratings of A3 (long term) and P-2 (short-term) from Moody’s in 2009, which it successfully maintained until February 2012. Subsequently, SANRAL was downgraded three times to the current global scale ratings of Baa3 (long term) and P-3 (short-term), with negative outlook. This was due to the uncertainty around the implementation of electronic tolling on the GFIP and its delayed implementation in December 2013. SANRAL’s ratings are closely linked to the sovereign ratings being a State Owned Company, with funding from the State, and any move in the sovereign ratings may influence SANRAL’s ratings.


Strategic Objective 6 Achieve financial sustainability

Objective Adequate funding for projects

Objective Statement To obtain ongoing allocations from National Treasury for the non-toll network and to source funding from the capital markets for the toll road portfolio backed by sound financial management and good governance practice.

Baseline Sufficient funding to maintain the non-toll roads, but not enough for timely strengthening and upgrades. There is some resistance to toll road projects which must be diffused.

Justification SANRAL provides critical national road infrastructure which are important to the economy and to the citizens for mobility and access.

Links Strategic Goals 1, 6








Public Sector Investment Index (PSII)

>20% >21% >22% >23% >24%

Expenditure Efficiency Index (EEI)

<7.5% <7.5% <7.5% <7.5% <7.5%

Risk Matrix


1. Insufficient funding for strengthening projects and upgrades

Ongoing liaison with National Treasury for additional allocations

2. Resistance to toll road projects in certain areas

Government must back the ‘user-pay’ policy fully and affected communities must be fully informed about all aspects of toll projects timely and pro-actively


7.1.7 Programme 7: Pursue Research, Innovation And Best Practice

Purpose: Ensure that SANRAL pursues excellence in service delivery through continual improvement of project implementation through research, innovation and adoption of best practice.

(a) Road infrastructure research programme

The road infrastructure research programme aims to improve efficiency in road design and delivery. Over the period ahead, the aim is to develop economically favourable road techniques, including the development of performance-related design systems and improved building materials to meet specific targets. Due attention will be given to social and environmental needs, traffic management and co-operation with law enforcement, as well as asset preservation and skills/technology transfer through structured training and education programmes.

SANRAL will ensure that sustainable long-term research funding is available through SANRAL’s funds and through partnerships with other road authorities and the industry. SANRAL will continue to fund various research projects over the next three years, the single largest of which being a 5 year project initiated in 2008, involving 22 research teams, and working on the revision of the South African Pavement Design Method (SAPDM). The end-product will be South African Road Design Software (SARDS) that incorporates the latest models for the design of granular, stabilised (cement/bitumen), asphalt, concrete and block pavements. The project SAPDM project will end in 2014/15, where after the SARDS software will be completed and distributed to users.

(b) Performance certification of road construction materials

Agrément South Africa has been in existence for over 40 years with a mandate to develop performance criteria for proprietary and innovative construction products where there are no relevant standards. Until recently, no products related to road infrastructure had been certified. However, the relatively recent introduction of innovative proprietary products developed locally and abroad has necessitated a review to assess risk exposure in the event of non-conformance, and procurement of these products in a fair and transparent manner.

SANRAL fully supports this initiative. SANRAL participates on various technical committees. SANRAL has also been active in initiating and driving the process towards certification of road infrastructure products.

SANRAL’s commitment to follow the certification route has already realised significant benefits within the industry, including:

Enthusiasm to develop innovative, cost-effective, fit-for-purpose products

Commitment to quality in both product manufacture and application stages


Voluntary offers of extended performance warranties, in some instances, four to five times longer than the traditional 12 months.

(c) Environmental research

SANRAL will continue with current research projects on selected vegetation with conservation value within sections of the road reserves. Of particular reference is the Fynbos plant kingdom that is under investigation on the N2 with the Nelson Mandela Metropolitan University, and the Oldenburgia grandis (near-threatened shrub) with the University of Grahamstown. Other than helping to grow the body of knowledge in the subject matter, the value of these research projects lies in the strengthening of relationships with, and providing additional support for academic institutions.

A major research area that will be explored in this period is on waste management, which will be aimed at quantification and classification of the waste material that is collected along the roads, and to determine to what extent best practice in waste management is followed. The ultimate aim of the exercise would be to use the information to improve separation and recycling of the waste.

(d) Social sciences research The Psychology behind Pedestrian Behaviour

The psychology behind pedestrian behaviour on freeways is a current research project. Safety, environmental protection and convenience as associated factors of mobility and access is being researched as part of the social process. The attitudes, social norms and perceived behaviour control impacts on the intention of the road user which leads to a certain behaviour will be investigated. The study will include an urban and rural setting to enable the researchers to determine the different factors impacting the choices made by pedestrians. The project is expected to be completed during 2015/16 and will cost about R600.000.


Strategic Objective 7 Pursue research, innovation and best practice

Objective 7.1 South Africa Road Design Software (SARDS)

Objective Statement To ensure that the SARDS developed as outcome of SAPDM project is successfully implemented in industry.

Baseline Software 25% complete

Justification To ensure the effective utilisation of the newly developed software models, these models needs to be incorporated into software solution to enable end-user utilisation.

Links Strategic goals 1, 2 and 3



Annual Target 2016/17 Annual Target 2017/18

Complete the development and testing of the SARDS portal

50% 75% 100%

Number of formalised SARDS training courses presented to users, and user certification

1 4 4

Risk Matrix Identified Risks Risk Mitigation

Incomplete road condition data with provincial and municipal authorities

The Provincial Road Maintenance Grant (PRMG) will be allocated only if road condition data has been provided


Strategic Objective 7 Pursue research, innovation and best practice

Objective 7.2 Understand road user behaviour – Pillar 4 of the Decade of Action programme

Objective Statement Road safety research to understand the behaviour of road users

Baseline Current behaviour of road users (drivers, pedestrians, public transport users,)

Justification United Nations statistics on global road safety show that 92% of road deaths worldwide occur in developing nations such as South Africa. On average 40 people per day are killed on South African Roads and a significant number is pedestrians.

Links Strategic goal 2, 3, 7





Annual Target

Annual Target

3 year longitudinal study to determine the knowledge and behaviour of road users in selected areas along national road network

33% 66% 100% Study completed

Study completed

Risk Matrix


Budget cut As the budget is small (R2.2 million per year), use funds from road safety projects budget


7.1.8 Programme 8: Safeguard SANRAL’s Reputation: Stakeholder Communication

Purpose: Ensure that SANRAL maintains good communication with stakeholders to protect its reputation and by providing information pro-actively and consistently through media and public relations.

The role of SANRAL’s marketing and communications team is primarily to ensure the management of SANRAL’s reputation which has a knock-on effect on its image, ratings and investor confidence. This is done by acknowledging issues, identifying milestones, working to achieve them and to ensure constant communication. SANRAL manages a continuous stream of two-way constructive engagement and in the process informs and educates SANRAL’s stakeholders, including road users, government, the industry and media.

From 2014/15 the focus will be on educating the public on the good work that the agency does nationally with regard to profiling of the projects, creation of jobs, growth of SMME, road safety initiatives as well as environmental projects. This has been done using commercial and own media. In addition, the objective is to continue with registration for electronic tolling. The campaign has both a national and regional focus. The communication in Gauteng will be intensively focused on open road tolling and the requirement to become a registered user.

At all times, SANRAL’s reputation is at the forefront of any communication, advertising, marketing and/or public relations activities, be it internal or external. Marketing and Communications will continue to ensure effective corporate positioning including:

Market SANRAL’s role in the country’s economic growth;

Create awareness about the management of the national roads network and various projects countrywide;

Skills development and exposing career opportunities within SANRAL; and

Continue to gain public understanding and acceptance of the need to toll

The marketing budget for 2015/16 – 2017/18 is R 115 million.


Strategic Objective 8 Safeguard SANRAL’s Reputation: Stakeholder communication

Objective Pro-active communication with all stakeholders

Objective Statement To communicate proactively and consistently with all stakeholders

Baseline The current communications plan

Justification SANRAL’s projects must be implemented with minimum resistance, particularly in the case of toll roads, and stakeholders must be informed about project related disruptions such as detours, road closures etc.

Links Strategic Goals 1, 6








Promote awareness about SANRAL’s mandate and contribution

Profile at least six positive messages in national/ regional press (print, broadcast or online) per month





External Publications

Publish two issues

Publish two issues

Publish two issues

Publish two issues

Publish two issues

Stakeholder engagement

Hold four round table discussions





Risk Matrix


Acceptance of the importance of communication to all stakeholders

Ongoing efforts to manage communications in SANRAL as per the approved communication plan


7.2 RESOURCE CONSIDERATIONS

SANRAL requires the following resources to carry out its mandate:

(a) Human Resources

SANRAL strives to optimise excellence in service delivery through its people – the right people with the right skills in the organization at the time when they are needed. The attainment of the strategic objectives remain the purpose of SANRAL’s existence which can only be achieved through nurturing our human capital and career development goals. SANRAL promotes the ethos of continuous learning and encourages employees’ at all occupational levels to further develop and grow. No matter how well planned a business strategy is, it will almost certainly fail without skilled people to execute the plan.

SANRAL has, through its educational programs such as scholarship and bursary schemes, absorbed graduates into its employ thus increasing its capacity for future service delivery. A structured mentorship programme supports candidate engineers with professional registration processes.

Cutting-edge leadership is a mantra of high performing organisations. SANRAL, therefore, continuously engages reputable leadership and management development programs for the executive and senior management team. Engagement with stakeholders and internal communication, job enrichment, career enhancement and skills development have been identified as critical areas which will be enhanced over the next several years. SANRAL’s strategic and operational plans will set out targets in the areas of skills and competency development, setting career-paths, employment equity, leadership development, organisational development and mentorships.

SANRAL has adopted the Accenture Human Capital Development Framework – an analytical measurement and planning tool which enables the organisation to identify and measure the human capital factors which affect organisational performance.


Figure 19: Human capital development framework

The model provides measures which are meaningful from both an organisational perspective (i.e. measures that reflect the way in which immediate value is created) and an investment perspective (by highlighting the kinds of skills SANRAL needs for its long-term objectives).

SANRAL desires to remain a professional, innovative and experienced roads agency with the agility and capacity to respond to the future needs of South Africa. SANRAL is a relatively small, specialised and high performing agency. It is therefore important to strengthen the organisation’s resilience in the light of increased work demands to become innovative with the resources at hand. The workplace and organisational culture must continue to provide a safe working environment for a highly committed, motivated and productive group of employees.

SANRAL has, since its inception, adopted a matrix structure or cluster system of working. This structure not only increases employee motivation, but it also allows technical and project management training, across functional areas.


The advantages include - better cooperation, improved performance accountability and problem solving, and increased flexibility. Additionally, SANRAL regards its cluster system as an enabler to job enrichment and lateral career progression strategies will be continued to advance individuals to targeted roles within the organisation.

The organisation’s key success factor thus far has been its ability to harness the power of partnership through enhanced internal and external collaboration with stakeholders, both public and private. SANRAL’s HR cluster strategy, to increase the talent pool, includes the following focus areas:

Recruit people with the right attitude, aptitude, skills, knowledge and experience;

Recruit people with the right cultural fit with the organisation;

Effectively manage retention of employees; and

Become the employer of choice.

The core areas of focus and activity include:

Embrace diversity;

Develop leaders ;

Promote the development of people both within the organisation and in South Africa at large;

Focused and planned efforts to retain accreditation as TOP Employer within the industry;

Create a work environment which is world class, where information sharing and knowledge management create a harmonious working environment;

Facilitate the employment relationship which creates an atmosphere of high motivation for all employees; and

Maintain a system that enables the continuous process of building and maintaining organisational capacity and capability.

(b) Funding

This item has been dealt with under Strategic Objective 6 – Achieve financial sustainability. SANRAL’s activities are guided by the available funding, either allocations from National Treasury for the non-toll network or private sector funding and toll revenue for the toll network. Concessions can only be done with projects which have a high debt service cover ratio and are viable as independent businesses. This is monitored on an ongoing basis by the Assets and Liabilities Committee of the Board.


(c) Materials and Natural Resources

The availability and price of materials for road building and maintenance is an ongoing consideration of project management. This is monitored on an ongoing basis by the project management and materials teams within SANRAL and also by the consultants. Natural resources are utilised on projects responsibly and this is often regulated by legislation. SANRAL’s environment management team oversees responsible use of resources, rehabilitation of construction sites and compliance in this area. A binding constraint is the delay in approvals from departments. Some of the permits required include environmental permits, mineral licences, water permits and utility services. Any delays in obtaining the permits or approvals would mean a consequent delay in project implementation.

(d) Plant and equipment

These resources are provided by the contractor who has been appointed to implement the project. SANRAL’s role is generally limited to monitoring that the project progresses satisfactorily and that good equipment is used in a safe manner.

(i) Information and Communication Technology (ICT)

ICT is a critical enabler which will allow SANRAL to take advantage of the opportunities in today’s ‘hyper-connected’ and information-rich world to create responsive 21st century services. The future for SANRAL’s ICT is envisaged as information-centric rather than a technology-centric model, transcending agency boundaries to deliver smarter user centred services, characterised by:

information and services being joined up and easy to access through common user-centric digital channels;

processes being defined by end-to-end boundaries from the users’ perspective;

security and privacy measures being integrated into the design and adoption of all new services and technologies introduced;

analytics providing a holistic view that better supports service planning, service delivery and evidence-based policy;

information being open by default, and sharing being widespread, encouraging knowledge creation and innovation;

ICT-enabled business systems delivering the expected benefits;

stronger central direction supported by collaborative leadership;

highly standardised computing platforms.


Appropriate human Capital

SANRAL’s Information Communications Technology (SICT) strategy is summarised in the figure below. The Strategy gives effect to the mandates SICT have as the functional leader of SANRAL’s IT.

Figure 20: SANRAL ICT Strategy

The major goals of SANRAL ICT strategy are to:

Increase Wide Area Network (WAN) Capacity to the offices - leverage existing national agreements with telecommunications partners. The telecommunications infrastructure owned by SANRAL will be configured to provide WAN connectivity and redundancy.

Improve personnel time management and reduce travel cost – video conferencing

Protect the integrity, availability and confidentiality of data - implement security best practice, improve ICT security management service and ensure network resilience against increasing cyber threats, denial of service attacks etc.


Greater involvement and support of SANRAL projects undertaken in the regions and Corporate Office - ensure that ICT functional leadership has the right mechanisms and support to deliver system change and efficient project support throughout SANRAL.

Improve network support nationally - perform maintenance, repairs and upgrades, and control, plan, allocate, deploy, co-ordinate and monitor the resources of the network

Upgrade aging hardware infrastructure - current servers and storage hardware will reach end of life within the life of this Strategic Plan. Evaluate the value and benefits of replacing aging servers with those based on the latest processor technology

Cross-platform management for computer systems - implement System Centre Operations Manager (SCOM). Use a single interface that shows state, health and performance information of computer systems

Enhance governance - streamline governance. Revise roles, accountabilities (including delivery of this strategy), and performance indicators. Target priority areas such as information management, security, privacy and project management.

ICT resources and staffing - develop resource requirements as part of a gap analysis. Define roles aligned to execution and support of IT.


7.3 RISK MANAGEMENT

SANRAL has developed an active risk management culture within the organisation. Risks affecting each strategic objective are considered on an ongoing basis. The Board is ultimately accountable for risk management but active management has been delegated to a risk management cluster. This has been further detailed under Strategic Objective No. 5. The major risks which affect delivery currently include the following as listed in the table below:

Risk Mitigation Measure

Uncertainty about the future of GFIP

electronic tolling and the increased

violations, that is, non-payment of tariffs

Government to provide strong backing

for the principle of ‘user-pay’, and to also

support enforcement against violators

who do not pay tariffs.

Delay in the issue of permits and

approvals by government departments

such as water permits, mining rights and

environmental approvals

Memoranda of Understanding between

SANRAL and departments and a

commitment to expedite reasonable

approvals to improve efficiency of

delivery

Poor safety record on South African

roads

Provide safely engineered national

roads, implement safety related

remedial measures at accident hotspots

across the country. Maintain 100% of the

network continually. Education and

awareness initiatives within educational

districts

Insufficient funds to strengthen and

upgrade SANRAL’s non-toll network,

particularly in view of the expanding

network following incorporation of roads

from provinces

Ongoing liaison with National Treasury

to increase funding allocations. There is

no maintenance backlog. Innovative

engineering designs researched and

implemented.


PART C

8. LINKS TO LONG-TERM INFRASTRUCTURE AND OTHER CAPITAL PLANS:

8.1 OVERVIEW OF 2015/16 BUDGET and MTEF ESTIMATES


A. OPERATING SUMMARY (NON TOLL) BUDGET (R'000)

DESCRIPTION

201/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018

ACTUALS ACTUALS ACTUALS CURRENT BUDGET

BUDGET BUDGET BUDGET

TREASURY ALLOCATION 8 651 596 9 728 055 10 497 184 11 916 947 12 542 488 13 490 485 14 146 662 OTHER INCOME 240 744 265 782 170 402 216 221 236 950 448 024 196 724

TOTAL INCOME (A) 8 892 340 9 993 837 10 667 586 12 133 168 12 779 438 13 938 509 14 343 386

OPERATING EXPENDITURE (B) 3 984 182 4 457 180 4 777 895 4 383 252 5 426 915 4 122 019 3 770 508

Salaries 127 469 151 419 200 255 238 266 287 900 299 438 311 438

Administrative Support 199 806 219 928 312 478 356 423 398 457 365 664 294 546

Technical Support 226 272 201 479 120 031 149 851 228 270 230 734 236 096

Property Management 194 884 204 683 244 136 178 450 243 203 266 491 311 359

Ad Hoc Maintenance 67 455 88 836 38 583 112 533 204 503 115 705 79 240

Routine Operations 923 452 1 132 454 1 178 673 835 588 1 001 666 933 031 920 797

Periodic Maintenance 1 508 334 1 678 263 1 785 083 2 040 300 2 249 117 752 910 360 541

Special Maintenance 736 510 780 118 898 656 471 841 813 799 1 158 046 1 256 492

CAPITAL EXPENDITURE (C) 4 970 709 5 952 896 6 219 599 8 081 950 8 136 331 9 815 766 10 572 405

Sundry Capital Expenditure 125 677 12 525 13 652 42 383 176 430 11 628 12 612

Community Development 127 981 97 225 100 562 383 616 358 141 277 483 124 191

Strengthening 2 897 164 3 579 211 3 045 711 3 515 873 2 267 537 2 613 979 3 488 789

Improvements 1 296 729 1 667 702 2 325 508 2 541 411 2 816 492 3 396 123 4 217 714

New Facilities 510 982 563 134 712 588 1 583 667 2 502 731 3 501 553 2 714 100

Land Acquisition 12 176 33 099 21 578 15 000 15 000 15 000 15 000


TOTAL EXPENDITURE [B+C] 8 954 891 10 410 076 10 997 494 12 465 202 13 563 246 13 937 786 14 342 914

SURPLUS / (DEFICIT) [A - B - C] (62 551) (416 239) (329 908) (332 034) (783 808) 724 473

Balance Brought Forward 1 144 193 1 081 641 665 402 335 494 786 356 2 548 3 272

Balance Carried Forward 1 081 642 665 402 335 494 3 460 2 548 3 272 3 745

B. EXPENDITURE ESTIMATES: NON-TOLL (R’000)

The Budget (Medium term estimate) is done on (cash/accrual) basis: (R’000)

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

EXPENDITURE ESTIMATES:

Audited Outcome

Audited Outcome

Audited Outcome

Revised Approved

budget Estimate

Revised Budget

Estimate

Revised Budget

Estimate

Budget

Estimate

Current payments 6 931 307 9 443 567 12 191 593 8 854 276 8 854 276 7 661 042 5 300 983

Compensation of employees 129 279 155 241 194 691 200 253 200 253 213 971 228 949

Salaries and wages 110 013 133 584 156 309 167 343 167 343 177 632 188 865

Social contributions 19 266 21 657 38 382 32 910 32 910 36 339 40 084

Goods and services 4 175 528 6 704 540 6 794 844 5 381 023 5 381 023 3 976 071 2 699 494

Administrative fees 884 614 1 150 156 125 664 245 074 245 074 100 489 35 274

Advertising 84 536 89 637 87 209 141 893 141 893 146 551 1 314

Agency and support / outsourced services - - - - - - -

Assets less than R5 000 - - 126 200 200 112 -

Audit costs 13 978 14 371 16 793 8 244 8 244 18 750 119

Bank charges 3 618 1 825 3 031 2 606 2 606 426 -

Board costs 1 810 3 823 800 20 20 30 -

Bursaries (employees) 312 396 93 3 627 3 627 3 193 -

Catering: internal activities 442 415 511 1 500 1 500 910 149

Communication 3 346 8 329 4 698 4 663 4 663 3 092 2 771

Computer services 19 750 63 549 28 318 34 185 34 185 27 230 52 424


Consultants 9 296 26 452 19 835 10 206 10 206 8 425 5 196

Contractors 3 010 122 5 215 628 6 254 534 4 766 371 4 766 371 3 438 764 2 423 124

Entertainment 417 532 814 1 425 1 425 911 977

Inventory - - - - - - -

Lease Payments - - 5 879 3 483 3 483 5 439 4 219

Legal fees 18 706 32 039 6 830 8 558 8 558 5 682 5 900

Non life insurance - - - - - - -

Printing and publication 345 384 364 123 123 28 30

Property payments 58 471 33 455 161 120 41 337 41 337 181 034 137 586

Repairs and maintenance 3 222 2 840 4 186 6 043 6 043 4 089 4 314

Research and development 40 668 38 752 41 256 68 694 68 694 6 818 5 184

Training and staff development 2 777 5 659 9 252 10 595 10 595 3 103 2 774

Travel and subsistence 19 098 16 298 23 531 22 176 22 176 20 995 18 139

Venues and facilities - - - - - - -

Interest and rent on land 2 626 500 2 583 786 5 202 058 3 273 000 3 273 000 3 471 000 2 372 540

Interest 2 626 500 2 583 786 5 202 058 3 273 000 3 273 000 3 471 000 2 372 540

Dividends - - - - - - -

Rent on land - - - - - - -

Tax payment - - - - - - -

Outside shareholders interest - - - - - - -

Other - - - - - - -

Total Expenses 6 931 307 9 443 567 12 191 593 8 854 276 8 854 276 7 661 042 5 300 983


C. TOLL BUDGET (R’000)

DESCRIPTION

2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018

ACTUALS ACTUALS ACTUALS CURRENT BUDGET

BUDGET BUDGET BUDGET

TOLL INCOME 2 208 034 2 404 141 2 446 959 4 102 102 3 964 039 5 426 464 6 093 975

OTHER INCOME - 4 892 763 - - 80 826 92 027 103 110

-

TOTAL INCOME (A) 2 208 034 7 296 904 2 446 959 4 102 102 4 044 865 5 518 491 6 197 085

OPERATING EXPENDITURE (B) 1 479 733 1 577 458 2 017 461 2 013 358 2 360 023 2 326 111 1 921 646

Salaries - - - - - - -

Administrative Support 90 494 62 778 26 239 - - - -

Technical Support 18 429 45 763 33 451 48 792 60 094 66 708 68 281

Property Management - - - - - - -

Ad Hoc Maintenance 26 081 7 339 14 110 2 198 16 566 17 986 27 420

Routine Operations 1 176 250 1 283 374 1 710 063 1 754 362 1 947 029 1 843 655 1 642 766

Periodic Maintenance 87 709 95 417 216 728 207 076 225 068 365 912 143 179

Special Maintenance 80 770 82 787 16 870 930 111 266 31 850 40 000

CAPITAL EXPENDITURE (C) 3 174 500 2 094 434 2 175 568 1 628 285 2 294 473 3 452 655 9 255 084


Sundry Capital Expenditure 1 046 245 634 - - - - -

Strengthening 43 029 28 435 113 476 190 329 334 252 367 904 215 407

Improvements 2 288 020 1 092 543 1 497 115 879 134 802 581 1 388 102 7 621 848

New Facilities 842 405 700 164 533 801 558 822 1 156 640 1 695 649 1 416 829

Land Acquisition - 27 658 31 176 - 1 000 1 000 1 000

FINANCE CHARGES 3 022 767 3 214 164 2 380 636 3 315 000 3 401 000 4 047 000 4 647 000

TOTAL EXPENDITURE [B+C] 7 677 000 6 886 056 6 573 665 6 956 643 8 055 496 9 825 766 15 823 730

SURPLUS / (DEFICIT) [A - B - C] (5 468 966) 410 848 (4 126 706) (2 854 541) (4 010 631) (4 307 275) (9 626 645)


8.2 ACTUAL ALLOCATION VERSUS REQUIRED ALLOCATION SUMMARY

The basic + strengthening backlog + expansion requirement refers to the theoretical amount of non-toll budget required to sustain the existing non-toll road network and allow for addressing the backlog in strengthening (roads with 5 years or less life) over the next 5 years, and to allow for the required capacity expansions or the construction of new roads in the congested areas of the network is shown in Figure 21 and summarised in Table 4.

The current projected MTEF allocations will enable SANRAL to address the basic budget requirements required to sustain the network, and address the strengthening backlog but not expansion requirements of the current network under its jurisdiction, no network increase assumed.

To address the basic requirements, strengthening backlog as well as expansion requirement of its current network SANRAL will require minimum of R25 billion in 2015/16 and thereafter for 9 years, should the option of toll funding no longer be available (provided SANRAL network length remains unchanged).

Figure 21: SANRAL Non Toll Budget Requirements


Table 4: SANRAL Non Toll Budget Requirements vs Allocation

Description 2014/15 2015/16 2016/17 2017/18

Funding Allocation

R 11 916 947 R 12 497 294 R 13 159 651 R 13 159 651

MTEF Basic R 12 189 508 R 12 189 508 R 12 189 508 R 12 189 508

MTEF Basic +Backlog

R 12 189 509 R 13 175 276 R 13 175 276 R 13 175 276

MTEF Basic + Backlog + Expansion

R 23 337 129 R 25 067 564 R 25 067 564 R 25 067 564

9. CONCLUSION

This document summarises the activities to be undertaken by SANRAL during the year 2015/16, extending to 2019/20 to achieve its strategic objectives leading to effective service delivery as per SANRAL’s mandate. These are guided by Government’s policies and objectives, primarily driven by the National Development Plan, the MTSF 2014 – 2019 and the Minister’s Performance Agreement with the President. They converge towards incremental outcomes in the area of national road infrastructure and the resultant creation of jobs, skills development and empowerment of SMMEs and small contractors, consultants etc.

Key Performance Indicators for financial year 2015/16 have been developed for the strategies. These indicators are included in the annexure to the Shareholder Compact with the Executive Authority - the Annual Performance Plan, and will be used to measure SANRAL’s performance. This will be done every year going forward.

Documents

The South African National Roads Agency SOC Limited ... · The South African National Roads Agency SOC Limited ... THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED (SANRAL) STRATEGIC