Budget Hearing: briefing by South African National Roads Agency

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15 May 2002
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Meeting Summary

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Meeting report


15 May 2002

Mr JP Cronin (ANC)

Documents handed out:

Declaration of intent: 2002-2005
Horizon 2010
Powerpoint Presentation

The South African National Roads Agency briefed the Committee on its strategic objectives, core business and addressing its challenges. The South African Maritime Services was also due to brief the Committee but asked to be excused, which the Committee reluctantly agreed to.

Mr Nazir Alli: CEO of the South African National Roads Agency, together with Ms Catherine Smith, delivered the presentation, which focussed on its strategic objectives, core business, challenges and how it was seeking to address its challenges. [For the presentation, please refer to the attached presentation document]

Ms P Casper-Coetzee (ANC), asked why SANRA was still talking about regional structures whereas South Africa had nine provinces. When would those SANRA regions would start becoming provinces.

Mr Nazir Alli replied that the issue of regions and provinces was just a label and that it made no difference to how SANRA operated. And it had nothing to do with the Constitution; regions could easily be referred to as sectors.

Mr W Mudau (ANC) wanted to know what informed SANRA's increasing of prices for the use of toll roads. He raised a concern that if even though the building of toll roads was creating work, the salary scale of the workers employed was not desirable.

What was the difference between state toll roads and concession toll roads. He also wanted to know SANRA's role in the companies owning the concessions toll roads.

Mr JH Slabbert (IFP) sought clarity between national and provincial roads. He also asked about the impact of the legal tonnage in damaging roads.

With regard to Mr Slabbert's question on tonnage, Mr Alli said that the country's roads were designed to take the required loads and not overloads. He said what the neighboring countries were doing about tonnage and overload needed to be considered.

Mr SB Farrow (DP) said SANRA's funding structure was worrying him. If SANRA was expected to extend its services to the roads in the provinces its revenue would go down and asked how SANRA saw the issue and what it thought was the right way.

Mr G D Schneemann (ANC) commented on SANRA's preference to take over provincial roads and asked where funds for the provincial roads would come from and whether it was going to come from SANRA. If not, how were they going to fund those provincial roads?

Replying to Mr Schneemann and Mr Farrow's questions, Mr Nazir Alli said that this was the price SANRA was paying for its success. SANRA was doing well within its current mandate, and they were therefore being expected to help the Provincial roads as well. The provinces were coming up to SANRA for help to do work on their behalf. Doing nothing about the provincial roads was not an option for SANRA. They could not fold their arms and do nothing. People out there did not make any distinction between national and provincial roads. When there was a problem with roads, every structure working on roads would be tarred with the same brush irrespective of whether it was SANRA or the provinces.

Regarding funding, Mr Alli said that for the provincial roads the money would go straight to the provinces and the provinces would decide on how to allocate and distribute the money. SANRA had proposed a change in that allocation formula by the Treasury to the provinces. They had proposed a transport fund rather than fund for provinces, SANRA and so forth.

Mr Cronin commented that the funding for road maintenance let alone road extension was not working. Was it not better for SANRA to argue for the development of policy rather than lobbying for institutional rearrangement?

Mr Slabbert commented that he could not understand how the road between Bethlehem and Senegal could be declared a provincial road as he thought it did not fit that status.

Mr Farrow referred to the road survey that Mr Alli said had been taken and asked if it embraced roads in the provinces.

Mr Alli said that there was a need for a transport fund, not only a road fund. The country could not afford to have different funds for airports, trains and roads. All levies could then go into that transport fund. When that has happened, the issue would not be about whether provinces like the Eastern Cape for instance was allocating enough funds for their roads.

Mr R Ainslie (ANC) asked about the criteria for the building of toll roads. What were the main indicators in building a toll road?

Mr Schneemann asked about what happened to profits made in the toll roads and whether they were ploughed back in road maintenance. To whom did private investors on toll roads report to?

Mr Alli said they had not resolved the issue of account report as there were no agreed upon standards on how to report on toll roads. Regarding the question on profit he said they did not generate interest but carried a loss.

Mr Cronin wanted to know about the difference in pricing between the so-called state toll roads and concession toll roads. Were there any lessons to be learnt on the viability of concession toll roads?

Ms ND Mbombo (ANC) asked who decided about building toll roads in provinces as she said some provinces did not have toll roads.

In response, Mr Alli said he first wanted to dispel the myth of profit making with toll roads: there was no such thing. Before any toll road was built a feasibility study focussing on financial, social and economic aspects of the road would be done first. He stressed the fact that what may be economically viable might not be financially viable. This had forced them to separate financial and economic aspects of the road. SANRA looked at the potential of the road to pay for itself and its international benchmark. He also said that they looked at the cost of construction.

The meeting was adjourned.


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