1. PORTFOLIO COMMITTEE ON TRANSPORT
ANNUAL REPORT 2015
The South African National Roads Agency SOC Ltd
15 October 2015 #

2. CONTENTS Network Strategic Objectives
Corporate Performance and Financial Information
Future Investments
Challenges
Loss of Opportunity
Discussion Points

3. NATIONAL ROAD NETWORK (km)
Description
Non Toll
Agency Toll
BOT
Total
Dual
Carriageway
714
623
476
1 813
4-Lane
Undivided 10
300
272
582
2-Lane
Single
17 535
990
531
19 056
18 259
1 913
1 279
21 451
% of SANRAL Network
85% 9% 6%
Total RSA Road Network Estimated to be 750,000 km

5. STRATEGIC OBJECTIVES SANRAL’s Strategic Objectives:
Manage the national road network effectively and efficiently
Provide safe roads
Carry out Government’s targeted programmes
Co-operative working relationships with all spheres of Government and the SADC member countries
Maintain good governance practice
Maintain financial sustainability
Pursue research, innovation and best practice
Safeguard SANRAL’s reputation
Pursue and maintain environmental sustainability and best practice

6. NON-TOLL BUDGET (Rand ‘000)
Description
Budget 2014/15
Budget 2015/16
Budget 2016/11
Budget 2017/18
Treasury Allocations
Adhoc Maintenance
79 240
Routine Maintenance
Periodic Maintenance
Special Maintenance
Strengthening
Improvements
New Facilities
Land Acquisition
15 000
Community Development Projects

7. TOLL BUDGET (Rand ‘000) Description Budget 2014/15 Budget 2015/16
Total Income
Adhoc Maintenance
2 198
16 566
17 986
27 420
Routine Operations
Periodic Maintenance
Special Maintenance
930
31 850
40 000
Strengthening
Improvements
New Facilities
Finance Charges

8. FINANCIAL YEAR 2014/15: Corporate Financial and Performance Information

9. 2015 Audit Report Unqualified Audit Report
Emphasis of Matter: (Paragraphs 7 – 10)
Going concern – alleviated due to the announcement of the new dispensation on GFIP e-tolls
Uncertainty about the collection of the alternative tariff due to SANRAL from GFIP e-toll violators (violations since 3 Dec 2013: R6.1 billion)
Restatement of the 2014 Financial Statements due to errors:
Late submission of Taking Over Certificates (TOCs) as a result of technical disputes between contractors and SANRAL being settled after the end of the contracting period, i.e. in the next financial year(s).
Financial liabilities were not separated between short term and long term portions due to recording error.

10. 2015 Audit Report cont’d PROCUREMENT Audit Report: Paragraphs 23 - 26:
Lack of attention to detail
Refresher courses in Supply Chain Management will be instituted
Diligence in housekeeping being emphasised

11. 2015 Audit Report cont’d
Investigation by the Public Protector (Paragraph 31):
- SANRAL requested/invited the Public Protector to investigate GFIP e-toll tender award in May 2012
- Public Protector acknowledged receipt of relevant documents and confirmed to, quote “revert to you in due course should a need arise” unquote.
- No further action by the Public Protector’s Office
GFIP e-toll tender documents were provided to third parties and published on the website.

12. 2015 Audit Report cont’d Procurement
Irregular expenditure RRM projects (Paragraph 27)
From 2000 to Contract awarded based on statistically determined lowest acceptable (benchmark) price, not ‘lowest price’ as inferred by PPPFA
-To protect SMMEs from exploitation and providing unsustainable low prices
Raised as concern for the first time in 2013
Since 2014 SANRAL awards to lowest price (at face value) as benchmark price award was considered irregular
Explained to Portfolio Committee on 15 October 2014
This audit comment expected for another year or two because of existing contracts (3 to 5 years)
New PPPFA definition being considered for ‘lowest acceptable price’ – statistically determined!!
2015 Audit Report cont’d

13. CONTRACTS AWARDED 2014/15 Type of Contract Number Rands ‘000
Non-toll Network
182
Toll Network 41
TOTAL VALUE
223
2013/14
175
2012/13
255

14. NON-TOLL: OPERATING EXPENDITURE 2014/15
Description
Number of projects
Length (km)
Cost
R’000
Routine Maintenance
108
18 283
Periodic Maintenance 89
659
Special Maintenance 30
192
Total
227
19 134
2013/14
17 873
2012/13
139
20 597

15. NON-TOLL: CAPITAL EXPENDITURE 2014/15
Description
Number of projects
Length (km)
Cost
R’000
Strengthening 55
377
Improvements 79
310
New Facilities 61
262
Total
195
949
2013/14
205
778
2012/13
106
2 715

16. TOLL: OPERATING EXPENDITURE 2014/15
Description
Number of projects
Length (km)
Cost
R’000
Toll Operations and RRM 63
1 832 1 
Periodic Maintenance 8 66
Special Maintenance* 5
3 215
Total 76
1 898
2013/14
1 857
2012/13 62
1 979
* - Refurbish anchors

17. TOLL: CAPITAL EXPENDITURE 2014/15
Description
Number of projects
Length (km)
Cost
R’000
Strengthening* 6
7 134
Improvements 18 27
New Facilities 25
Total 49 54
2013/14 42 10
2012/13 45
571
* - Traffic control centre upgrades

18. SOCIO-ECONOMIC DEVELOPMENT ON SANRAL PROJECTS FOR 2014/15

19. BEE: PROJECT CONTRIBUTION COMMITMENT 2014/15
Total
R’million
CAPEX
RRM
Total value of Contracts awarded
12 150
10 884
1 266
Value of work to HD Ownership
4 275
4 137
138
Value of work to SMME’s (black owned)
1 984
1 074
910
Empowerment % 2014/15
52%
48%
83%

20. NON-TOLL AND SANRAL TOLL Empowerment Expenditure: Value of Work Performed 2014/15
Type of Road
SMME Utilisation
Total R’000
SMME utilisation: Non-Black Enterprise
SMME utilisation Black Enterprise
Number
R’000
Non-toll roads
697
583
Toll roads
235
182
Total
932
765

21. WOMEN OWNED COMPANIES Ownership Number
Companies with ≥ 50% women owners (other than listed companies)
307
Total value of contracts awarded
R1.06 billion
Companies fully owned by women
172

22. BUSINESS/ENTERPRENUERIAL OPPORTUNITIES
40% women owned and managed SMMEs
Training is done at NQF level 3
Business owner receives management, technical, OHS, tendering skills, financial, administrative, industrial relations and HR
24 month Construction Education & Training Authority (CETA) accredited qualification
Enables owners to register with Construction
Industry Development Board
“SMMEs need big business for the experience that they can get. Our employees gain more experience on bigger projects. Also big business provides us with access to equipment which we would otherwise not be able to afford to complete the job.” Martha Mhlauli, owner of Women’s Pride Civils (working on Sannaspos rehabilitation)

23. TRAINING PROVIDED : 2014/15 Road Type Male Female Total
Total Rand Value
Non-Toll
2 021
1189
3 210
Toll
349
505
854
TOTAL
2 370
1 694
4 064

24. NON-TOLL JOB CREATION 2014/15
Type of Project
Person Hours
Average Equivalent Full-time Jobs (2000 person hours per annum)
Total R’000
Male
(‘000)
Fem-ale
Total
Non-toll Projects
22 776
5 172
27 948
13 974
Toll projects
6 699
4 993
11 692
5 846
Sub-total
29 475
10 165
39 640
19 820

25. ROAD SAFETY EDUCATION Date Number of sites Number of schools
Number of teachers attending workshops
Number of teachers receiving material
Number of learners receiving material
Grades 1–9 8 73
165
583
41 232
Grades 10–12 43
253
453
863
TOTAL 51
326
608
1 446
153 193

26. ROAD SAFETY AWARENESS

27. SANRAL STAFF DEMOGRAPHICS March 2015
Total: 295 employees

28. SANRAL GENDER DISTRIBUTION 2015
Total: 295 employees

29. SCHOLARSHIPS 2014/15

30. EXTERNAL BURSARIES 2014/15

31. INTERNSHIPS 2014/15

32. SKILLS DEVELOPMENT OPPORTUNITIES

33. TRANSFORMATION: Support for Tertiary Institutions
Chair in Pavement Engineering: University of Stellenbosch
Chair in Transport Planning: University of Cape Town
NMMU
ICT weekly sessions Grade 10 – 12 learners
Exposure & school visits to ICT lab 1603 learners and educators
University of Witwatersrand
WTTP Grade 10-12
2014/15 – 50 learners
University of the Free State
ICT weekly sessions 387 Grade 10-12
Science education students 16
Family Math & Science learners (11 495),
educators (233) student educators (546)
parents 4547 from the Free State, Northern
Cape and Eastern Cape
University of the Free State – The SANRAL Chair in Maths and Science

34. SUMMARY: CORPORATE PERFORMANCE
Strategic Objective
Total Targets
Targets Achieved
Reason for Non-achievement of Target
Manage national roads 9 8
Water licence received late
Provide safe roads 1
Government’s targeted programmes
Fewer toll projects awarded than estimated
Co-operative working relationships 2
Botswana project: Difficult ground conditions
For details please refer to Annual Report Page 88

35. SUMMARY: CORPORATE PERFORMANCE cont’d
Strategic Objective
Total Targets
Targets Achieved
Reason for Non-achievement of target
Governance 2
Achieve Financial Sustainability 3
Pursue Research, Innovation & Best Practice
Slowdown in research programme
Delay in finalising research scope with institution concerned
Safeguard SANRAL’s Reputation
For details please refer to Annual Report Page 88

36. FUTURE INVESTMENTS (3 year MTEF Planned Expenditure)
PROVINCE
AMOUNT
Eastern Cape
R 12.8 Billion
Free State
R 6.9 Billion
Gauteng
R 5.5 Billion
Kwa-zulu Natal
R 15.8 Billion
Limpopo Province
R 5.1 Billion
Mpumalanga
R 5.6 Billion
North West Province
R 4.7 Billion
Northern Cape
R 1.2 Billion
Western Cape
Total
R 62.3 Billion

39. SANRAL CONDITION SURVEY VEHICLES
Various condition parameters collected using SANRAL Road Survey Vehicles:
Roughness – how bumpy is the road – speed, wear, etc
Rut Depth – water pond on surface - safety
Macro Texture – assist vehicle tyre to drain water – safety, noise
Cracking – how much water will get in - deterioration
Deflection – remaining structural life of pavement
Alignment (DGPS) – Speed, Fuel Consumption, etc
ROW Video – Road Signs, Section Measurements, etc
Surveys at between 75 to 100 km/h
2D/3D Surface Images

41. BORROWING CAPACITY Initial R6 billion guaranteed funding (SZ bonds)
R0.63 billion N1 loan – separate guarantee
R0.52 billion ECA loan - separate guarantee
R28 billion guaranteed funding (HWAY bonds & other)
R15 billion – non guaranteed funding (NRA bonds)
Total Borrowing capacity = R50.24 billion

42. CREDIT RATINGS Moody’s Global Scale Issuer Ratings: Long-Term: Baa3
Short-Term: P-3
Negative Outlook
National Scale Issuer Ratings:
Long-Term: A3.za
Short-Term: P-2.za

44. CHALLENGES Resistance to ‘user-pay’ principle as espoused in the NDP
No alternative financing option offered
Delays in project related approvals from water affairs etc.
Insufficient high-level planning and co-ordination between inter-modal transport and the three spheres of Government

45. LOSS OF OPPORTUNITY N2 Wild Coast Project N1-N2 Winelands Project
N3 De Beers Pass

46. Thank You FRAUD HOTLINE: 0800 204 558 Website: www.sanral.co.za
11/8/2017
Thank You
FRAUD HOTLINE:
Website:
Nazir Alli
Inge Mulder
Alice Mathew
SANRAL