Unproclaimed roads & road maintenance budgets: Department of Transport briefing

NCOP Public Services

14 August 2012
Chairperson: Mr M Sibande (ANC, Mpumalanga)
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Meeting Summary

The Department of Transport (DOT) gave a short briefing on unproclaimed roads, and how road maintenance budgets were fixed and spent. A proclaimed road was one over which a government authority had legal ownership and took responsibility for maintenance. Unproclaimed roads were those where, in the past, a government department dealing with tourism or agriculture might have constructed a road, but the process of getting that road proclaimed or handed over formally to provincial authorities had never taken place. In some instances, mere tracks may have, over time been developed into unpaved roads that were never entered into any authority’s asset register. The DOT was now attending to a classification of the entire road network and would reassess responsibility for roads. Provinces were finalising their classifications and in this financial year municipalities would also be attending to these. South Africa currently had 154 000 kms of paved roads, 453 000 kms of gravel roads, and an estimated 140 000 kms of unproclaimed roads, which also included gravel roads, although the data on road conditions dated back to 2009. The total allocation for 2011 for road construction, maintenance and capital expenditure, across all provinces, was R24.4 billion, which fell far short of the R80 billion that would be required to manage and maintain the road network properly. R6.4 billion had been made available for the S’hamba Sonke Road Programme’s labour-intensive maintenance projects, which had focused on pothole management, improving access to schools, clinics and other public facilities, and safety, but ideally R8.8 billion was needed to address current maintenance needs and backlogs. There was 95% spending, and 60 089 full time work opportunities, and 156 118 other work opportunities were created. The grant funding under the Provincial Roads Maintenance Grant, for 2012/13, was R7.9 million, but this included disaster relief funding. DOT had negotiated funding for 21 municipalities to capture data on their road networks, into a centralised process. DOT had also secured R10 million funding to develop its own capacity for monitoring, and would be developing skills in young graduates who could be deployed to municipalities to deal with the roads function.

All Members expressed their disappointment with the presentation. Firstly, they commented that several points raised in previous meetings had not been addressed and updated, and they were concerned that only three delegates from the DOT attended, and the Director General was not present, which not only seemed to indicate disregard for the importance of the NCOP meetings, but also meant that several of the questions could not be answered. Documents were submitted late, differed from the slides being shown, and contained errors. On a number of points, the DOT was told to submit a written response within the next 14 days. They felt that insufficient breakdowns were given in regard to spending and provincial patterns, and wanted breakdowns of the employment figures, with gender and disability indicators. They noted that potholes that were repaired tended to collapse after the rains, and in general questioned whether quality checks were being conducted, why the quality of construction differed so widely between national and provincial roads, and why roads were not lasting for their projected twenty years. Several questions addressed whether the Department actually monitored the position or merely relied on reports received from the provinces, in relation to actual spending, how the money was spent, what roads were being built, whether value for money was obtained and the progress. They enquired which entities were responsible for which types of roads, which entities were spending on maintenance, and which were struggling to spend. In both North West and Free State, Members noted problems with contractors, and a full report was requested on the Free State, where several contractors had apparently not been paid and some had gone insolvent as a result. The Free State Member wanted details on numbers and breakdown of roads, surfaces, spending since 1994, and full provincial details. The Committee noted the explanations that there was about 60% under-funding, a historic problem, and that DOT was not involved in provincial equitable share consultations. However, they still felt that there was insufficient monitoring and information on the real situation on the ground. They asked for an update on alternative funding models proposed, and wondered why DOT was only thinking now of increasing capacity. Members were concerned at the cost escalations caused by delays, and asked whether the grants were being used for maintenance or new construction.

Meeting report


Unproclaimed roads & road maintenance budgets
Chairperson’s opening remarks
The Chairperson noted that the Department of Transport had been asked to brief the Committee on issues that were outstanding from the previous year. Members needed to be in a position to give answers to their constituencies. He noted that during a previous presentation, there was an indication that a road assessment system was set up to guide groups of people doing road maintenance, and a report was given that R90 000 had been spent on patching potholes, and that 17 contractors were assigned on a three year contract to maintain around 4 800 kilometres of State roads. He asked for updates on these figures.

Department of Transport (DOT) briefing
Ms Johanna Mulaudzi, Director: Roads Planning, Department of Transport, explained that proclaimed roads were roads where a government authority took legal ownership and responsibility for maintenance. Unproclaimed roads were those where no authority took responsibility for the upkeep or development of the roads. That came about instances where, in the past, a government department dealing with tourism or agriculture might have constructed a road, but the process of getting that road proclaimed or handed over formally to provincial authorities had never taken place. In some instances, mere tracks may have, over time been developed into unpaved roads, but were never entered into the asset register of the relevant authority.

The National Department of Transport (DOT or the Department) had formulated a process for addressing unproclaimed roads. The DOT would do a functional classification of the road network, following which the responsibility for those roads would be reviewed. Currently, provinces were in the process of finalising their road classifications, although most had not been able to cover all of their road networks, because of  financial constraints. From this financial year DOT was engaging with municipalities to take over that process, and then a standard approach would be taken for prioritisation in roads funding.

Ms Mulaudzi noted that in South Africa there were 154 000 kilometres of paved roads and 453 000 km of gravel, and an estimated 140 000 kilometres of unproclaimed roads. However, the data available only spoke to the condition of the network in 2009. The DOT was only able to speak to 7% of the road network. South African Roads Network Limited (SANRAL) had full information, provinces held 82% information and the metros 64%. However, municipalities only had 4%.

She noted that the total expenditure on road construction, maintenance and capital expenditure, across al provinces, was R24.4 billion. The allocation was not adequate and the DOT would require an allocation of over R80 billion in order to manage and maintain the road network properly.

An allocation of R6.4 billion was made for the S’hamba Sonke Road Programme, to employ people in labour intensive projects that provinces were implementing, to maintain the network. There was a focus on pothole management, improving access to schools, clinics and other public facilities, and on delivery of a safe road environment. However, she then said that the road maintenance costs, per kilometre of road, amounted to R900 000. This meant that, in order to address current maintenance and backlogs, an amount of R8.8 billion was needed.

Ms Mulaudzi gave the figures for the Provincial Roads Maintenance Grant and the allocations per province. For the 2012/13 financial year, the total grant was R7.9 million, which also included funding for disaster management. She pointed out that only about 10% of requirements to repair flood damage was ever funded. The grant had been reduced by two percent in the 2011/12 financial year.

Mr M Jacobs (ANC, Free State) interjected to state that the copies given to Members did not contain several of the slides being shown.

The Chairperson commented that this made it very difficult for Members to follow the presentation.

Ms Mulaudzi noted this point. She continued that in the first year of the S’hamba Sonke programme, an amount of R6.4 billion was transferred to provinces. By March 2012, there was 95% expenditure on that grant, with 60 089 full time work opportunities being created, as well as 156 118 other work opportunities. The work comprised the patching of potholes and surfacing of gravel roads.

Mr Msondezi Futshane, Acting Chief Director: Road Engineering Standards, DOT stated that of the 606 987 km total road network in South Africa, 140 000 kilometres were gravel roads. To this must be added the 302 158 kms of gravel roads in municipalities, giving an estimated total of gravel roads as 593 259 kms. The DOT was holding consultations with municipalities and the South African Local Government Association (SALGA) on how to deal with those roads.

He briefly outlined that the following steps had been agreed upon:
- For those municipalities where there was a major problem in road networking, a grant had been secured by DOT, initially for 21 municipalities.
- Every road in a municipality, whether it fell within the national, provincial or local government responsibility, would be captured through a centralised process.
- There would be consultations with all road authorities and mayors in relation to that network, and municipalities would be held responsible for the roads in their own municipal area.
- It was recognised that since municipalities did not have any personnel specialising in road management, the DOT, supported by SANRAL, would develop this capacity in young graduates.
- At provincial level, the DOT had managed to secure R10 million for human capacity development.
- Each province would need an allocation of R1 000 per kilometre per year for paved roads, and R500 per kilometre per year for gravel roads.

The Chairperson commented that the information now presented was nothing new, and the main reason why the DOT had been called in was to get updates. The same matters had been presented during the 2011 Strategic Plan presentation.

Mr Futshane noted this comment but said that this was an update report.

The Chairperson registered his disappointment at the fact that only three representatives were present from DOT and said that a much larger delegation would no doubt have attended a Portfolio Committee meeting. The perception amongst departments seemed to be that the NCOP was not so important. He also said that, in future, the presentation should be made available well in advance, to enable Members to familiarise themselves with the content. He also pointed to two incorrect English translations, and said that slide 11 needed to be corrected.

Mr Futshane responded that the Department would ensure that documents were circulated earlier in future, and he apologised for the wrong translations in the presentation, which would be corrected.

Ms P Themba (ANC, Mpumalanga) also commented again on the missing pages in the hard copies.

Mr Futshane apologised for this.

Ms Themba noted that 60 089 full time work opportunities were created in one financial year. She asked for a breakdown by gender and showing the numbers of people with disabilities.

Mr Futshane said a breakdown would be provided.

Ms Themba asked about the location of the pictures on page 17.

Mr Futshane said that he would send through a description of where these had been taken.

Ms Themba asked what the Department could do to ensure that the quality of the roads was maintained, pointing out that often, when potholes were patched, they simply collapsed into potholes again after rains.

Mr Futshane responded that there were quality checks done at the planning and design stage of the roads. People from the local communities received training and filled the potholes under supervision. However, there was not always monitoring as to whether they continued to use the correct mix for later work.

Ms Themba asked, in relation to the Provincial Roads Maintenance Grant for S’hamba Sonke, whether the DOT received records from provinces, or whether it sent its own monitoring teams to the provinces to ensure that what was contained in the reports accurately reflected what was happening on the ground.

Mr Futshane responded that the Department transferred money to the provinces on a quarterly basis, and expected provinces to submit reports indicating which roads were being built. Having received those quarterly reports, the National DOT would then generate its own reports. It would check  and ask the province where the roads were for which it was given money.
Ms Themba asked for a progress report for each province.

Ms Mulaudzi responded that a provincial business plan must be submitted for approval, once drawn.

Mr H Groenewald (DA, North West) asked for clarification of what was included under ‘other’ unproclaimed roads.

Mr Futshane gave an inaudible explanation.

Mr Groenewald pointed out that since the maps provided were in black and white only, only the main roads were visible, not the lesser roads.

Mr Futshane then referred to the slide presentation and said that the roads shown in blue were part of the SANRAL network. Those roads in red were roads that provided access to “economic areas”, which included mines and other areas of economic development. The others were secondary roads.

Mr Groenewald said there was a lot of useful information on the map on road maintenance, but wished to know which entities were responsible for which roads.

Mr Groenewald noted that substantial funding was made available and asked DOT to provide a report as to who exactly monitored how the money was spent in each of the provinces.

Mr Futshane explained the procedure for the transfers. The DOT would transfer the first instalment to the provinces on a set date. The DOT checked the provincial reports and fiscal indicators, looking at how many roads were built, what was purchased with the money transferred, and how many people were being employed. Financial indicators would also show expenditure, with a figure both for actual spending and what remained in the account. A full report on that was routed, via the National DOT, to National Treasury.

Mr Groenewald, referring to the comment on the Provincial Roads Maintenance Grant, and asked for the names of the municipalities that were struggling to spend money, and also asked which entities in each province were spending money on maintenance.

Ms Mulaudzi reported on the 2011/12 expenditure of the provinces. He noted that in the North West, an allocation of R509 million was given for the Road Maintenance Grant, and the expenditure was R238 million by the end of the financial year, so only 52% of funds were spent. Part of the problem was that there were still liabilities outstanding from the 2007/08 financial year and National DOT was working with the North West Provincial Treasury to try to sort out those problems.

The levels of spending in Gauteng were also very low, with only 24% spending. When the DOT realised this, it had engaged with the provincial government and SANRAL in the third quarter, to try to bring matters on track.

Mr Groenewald said he had asked around as to when the maintenance programme was started in North West but could get no satisfactory answers, as there were no contractors. He asked for clarity as to what exactly was happening in the North West and other provinces.

Mr Jacobs expressed his disappointment in the presentation and said that he was not getting the information that he needed. He wanted to know how many roads there were across South Africa, with a breakdown per province. He also needed to know how many were paved, and when they were paved. He wanted to know, from 1994 onwards, how much was spent, how much was unspent, and what the plans were for full spending. He needed also a breakdown of roads that were not paved, with an indication of how many were proclaimed, and how many unproclaimed.

Ms Mulaudzi responded that there were broader issues around the funding challenges. Even prior to 1994, there was not sufficient funding to keep pace with requirements. Even if all roads grant funding was combined it still only represented 40% of what was needed. She noted that the provinces drew ten-year plans. The National DOT had an infrastructure plan for maintenance of the network. From that, it developed a business plan for each of the provinces. Each of the provinces was only able to be given about 40% or 50% of what they required, so under-funding remained a substantial challenge.

In addition to that, there was a further problem when decisions were taken as to how to spend the equitable share allocations in the provinces, because the DOT did not engage in that consultation. She pointed out that when the National DOT received grant funding through the National Treasury, this would lead to a reduction of the provincial DOT baseline allocations. She gave the example of the Eastern Cape, where the baseline budget for the provincial DOT was R10. The Provincial Roads Grant added another R2. Even if the provincial DOT needed all R12 to fulfil its own work, the amount of R2 would be deducted from the Equitable Share Allocation and could be put to other sectors. This did not allow the Department to address its own problems. The National DOT had engaged with National Treasury to address the funding problems at provincial level. However, National Treasury had been reluctant to assist since DOT could not give specific information on the extent of the road network. That was why the National DOT was now trying to ensure that provinces and municipalities would compile a complete listing of their own networks. The National DOT was strictly speaking running with a deficit budget, but it was trying to show that in spending the limited allocations, it was nonetheless getting value for money.

She added that the DOT then had to look at the amount of R6.4 million for the Provincial Road Maintenance Grant in the 2011/12 financial year and project how many kilometres of road the provinces should maintain, how many jobs should be created, and how much maintenance could actually be done with that allocation. At national level, the DOT was building additional capacity for monitoring provincial performance. It was not currently able to oversee every road project and every programme to the level desired.

Mr Futshane added that SANRAL was created in 1998, and took over responsibility for managing roads. He pointed out that South Africa had the largest network of roads in Africa.

Mr Jacobs asked if the national DOT would, when a road was constructed in a province, compare the work done with the money spent. He noted that in Free State, companies attending to road work had not been paid. He asked which companies were affected, and commented that one of them had apparently gone into liquidation because it was not paid. If the money had not been spent on the construction of roads, then he wanted to know how it had been spent. Mr Jacobs travelled on those roads frequently, noted that they were unfinished and no contractors were apparent. He needed a complete breakdown of the roads apparently built, which contractors were used and how much was spent.  

Mr Futshane said he did not have that information.

Mr Jacobs asked if the information received from provinces was a true reflection of what was actually happening on the ground. He pointed out that the Committee might see something very different if it went to the areas described in the presentation.

Mr Jacobs asked whether any studies were done to show how municipalities were to be capacitated.

Mr Jacobs asked what the National DOT would do about the fact that many roads in Free State were poor, because of lack of funding. He also asked what the progress had been on the provincial Roads Department that was put under administration.

Ms Mulaudzi said the Department would submit a written report on these questions.

The Chairperson said in 2011 the DOT told the Committee that about 17 contractors were assigned for three years to maintain 4 800 kilometres.

Mr Futshane said that was an arrangement by SANRAL but he would check on that.

The Chairperson asked for a list of contractors, including how many were emerging contractors, and how many were not paid in Free State.

Mr Futshane responded that there had been a delay in payment of accounts and invoices. The National DOT knew that all suppliers should be paid within 30 days. He said that project managers would submit applications for payment, and they should be dealt with in the order received, but this was not always done.

The Chairperson expressed his frustration that this was not answering the question. Mr Jacobs was concerned about the 17 contractors who were apparently not paid, and details of those who had gone into liquidation.

The Chairperson said that, within 14 days, the Department must submit a full response to the questions asked about the Free State. The Department must also submit a written breakdown of jobs created, showing a gender and disability breakdown. He reminded Mr Futshane that on 2 August 2011 the Committee instructed the DOT to keep track of job creation resulting from specific projects.

The Chairperson said that in August 2011 the Director General was asked to investigate why national roads such as the N1 and N2, despite being used by heavy traffic, were more resilient than the provincial and local roads, which showed poor construction and wear. No response had yet been received on that.

Mr Futshane responded that the design of the network was in part dictated by how those roads were to be used. The surface on national roads differed from that of provincial roads. The costing per kilometre of national roads would not necessarily be the same as local roads. Provincial roads mostly provided regional access, and connected areas where people lived.

The Chairperson felt that many of the responses were far too broad, lacking specifics.

The Chairperson said that it had been said that the South African Local Government Association (SALGA) was in favour of a different funding model and asked if it had been consulted.

Mr Futshane responded that the SALGA model proposed that each sector take responsibility for specific infrastructure, so that all roads would be dealt with by the transport sector, whereas anything to do with water would fall under that sector.

The Chairperson pointed out that cost escalations were of concern because wherever processes were delayed, the costs would rise. He asked for details on funding trends in the provinces, and what the national DOT was doing to assist the provinces.

Ms Themba was dismayed that the Department was only thinking of building capacity at this late stage, and questioned how long the DOT took to come to the conclusion that its capacity at national level was insufficient. This was already the fourth term of Parliament, yet only now was mention being made of something that should have been planned long ago. She found this unacceptable.

Ms Mulaudzi referred Members to the mandate, and said that the capacity at the DOT was always determined by the functions that it had to perform. It did not have the capacity to do monitoring. The National DOT was responsible for national roads, and for managing the agency responsible for those national roads, SANRAL. It was supposed to create a coordinating mechanism with the provinces and municipalities, based on principles of cooperative governance, and to cooperate with SALGA and COGTA. The DOT had only concluded its own restructuring in November 2011. It had been advertising posts in the media to enable the DOT now to take on the role of monitoring physical implementation of projects in provinces and municipalities that were done with grants.

Mr Futshane added that the increased capacity would enable the DOT to attend to far more, and once a project was being implemented, the National DOT would be able to provide a contact person, project manager, or consultant for that project.

Mr Futshane wanted to respond also to the question asked earlier around value for money. He said that when roads were built, or potholes were filled, they would deteriorate with heavy trucking loads. He noted that there were no programmes to maintain roads, and there were backlogs in maintenance also. The National DOT needed to raise the maintenance of municipal roads with SALGA.

The Chairperson stressed that funding models were crucial. On 22 May 2012 the Committee requested the Department to provide it with quarterly reports on expenditure patterns of the municipalities, to assist the Committee in doing oversight and budgeting but the Quarterly Report was still outstanding.

Mr Futshane responded that the Department had a report giving input into the establishment of municipal infrastructure support agents. Problems identified by municipalities in that report were categorised into low capacity, medium capacity, and high capacity. The Department would provide that report.

He explained that municipalities were categorised as C2 or C3 municipalities, according to their municipal roads. Each municipality had to be consulted to check the level of assistance needed to manage its projects. R37 million was made available to municipalities in the last financial year, with each municipality receiving R1.6 million. Provinces, however, would be given R1 000 per kilometre of paved road, per year, multiplied by the network of national roads that it would cover. R500 per kilometre per year was provided for unpaved roads. The total allocation was R10 million and was divided according to the extent of the network, category of road, and condition reports. The costs for one province would differ from costs in another. The National DOT was trying to build in indicators into the Road Access Management System for the allocation of funding, and a new formula should be available by 30 November. Once the National DOT had been told about the total network of roads that each municipality had, it would be better able to quantify the funding, and the extra capacity at the National DOT and within municipalities would lead to better management of roads. Each district should be recruiting about five graduates. The National DOT set the rules and standards for building of the roads. After design and planning, applications for funding were submitted.

The Chairperson asked for written details of the allocation to each province and each metro. He remained concerned about what funding was available to maintain the condition of the roads.

The Chairperson followed up on the question of standards data, asking when this came into effect, who was responsible and where it had been implemented.

Ms Mulaudzi responded that the standards varied for national, provincial, or local roads, depending on efficiency of spending, and cost escalation of materials. In some areas, roads would cost more to construct, per kilometre, than the standard cost.

The Chairperson asked also whether the Department had sat down with SALGA to discuss how to avoid cost escalations, reminding the Department that prolonged delays tended to increase the costs.

Ms Mulaudzi responded that SALGA had not given submissions on a funding model after the 2010 Summit, when other options were produced as part of the “mix” of funding. One suggestion was to ask National Treasury to raise a fuel levy for roads development, but National Treasury countered that more was already being given than what a fuel levy could raise. Another recommendation was that municipalities and metros  should get bonding to invest not only in roads but also other infrastructure. Recommendations on that were being pursued with National Treasury. At the Transport Strategy Session in 2011 SALGA had made an unexpected proposal that perhaps provincial taxes should be reintroduced to fund infrastructure, but the DOT would need to follow up on any other proposals from SALGA.

Ms Mulaudzi responded added that cost escalations had been debated during World Cup preparations, at national and local level. The Competition Commission was still seized with some investigations. SANRAL was investigating and quantifying levels of escalation. National Treasury, overall, was doing performance audits on whether value for money was being obtained for money spent at national, provincial and local levels.

Mr Futshane added that if tenders were not finalised within 90 days, the validity could be extended on condition that the contractor would not raise the price, but that caused some unhappiness to contractors. DOT was discussing this with SANRAL and SALGA officials responsible for roads and transport, to determine other issues that needed to be taken to a higher level.

Mr Jacobs still wanted information on  how municipalities were capacitated. He also asked if funding for road maintenance was used for that, or for road construction.

Ms Mulaudzi responded that this depended on monitoring capacity and on how the grant was managed. The grant conditions said that amounts for road maintenance were intended for preventative maintenance, routine maintenance and development. Only in 2011 did the National DOT become the custodian of those grants, as prior to that date they were managed by National Treasury. However, at the same time, the nature of the grant changed, to the Provincial Roads Maintenance Grant. The previous Infrastructure Grant to Provinces had allowed provinces to implement CAPEX projects. The previous year’s Division of Revenue Act (DORA) said that if a provincial roads department was already committed to CAPEX projects, those could still be continued under the Provincial Road Maintenance Grant, even multi-year projects. However, this was only supposed to relate to projects tabled in the 2011/12 financial year. In respect of the Free State,

Ms Mulaudzi said that she would discuss the issues with the provincial department, and its new monitoring capacity would look into every project, whether it was implemented, and whether they had been committed by 31 March 2011, in compliance with DORA. 

Mr Jacobs asked who determined the classification on the construction of national, provincial and local roads, and thought the durability specifications should be set nationally.

The Chairperson was not satisfied with the responses, in general, and said that if the Director General was not present, then officials who could respond to all questions should be present instead. Members had expected to have their questions answered on the spot, rather than having to wait for written reports, and it was very disturbing that several of the outstanding matters had not been properly addressed.

Other Members also expressed their disquiet.
Ms Mulaudzi added that written responses on the certification for different roads would also be provided. However, in brief, the National DOT had done a study with SANRAL on the condition of the road network, and it was assumed that a new road should last twenty to thirty years, provided that proper and timely maintenance was carried out. However, because of the funding difficulties, not all provinces were not doing timeous maintenance, which was the reason for their deteriorating conditions.

Mr Futshane said the Department would comply with the request for answers in writing, and adhere to the timelines.

Ms Mulaudzi noted that the DOT had been asked to provide a lot of information, and her presentation had been based on the information that she had understood the Committee to be requesting – namely a briefing on unproclaimed roads and road maintenance budgets.

Ms Themba said DOT officials should understand that as well as focusing on the matters set out in the invitation, the Committee also expected a report back on issues raised earlier. Any questions may be raised and so the officials must be well prepared.

The Chairperson agreed, and said that at the next engagement the DOT would be expected to deal with any outstanding matters. A full team should attend the next meeting.

Ms Themba stressed that the DOT must ensure that it communicated with the Chairperson on exactly what would be required.

The Chairperson noted that DOT would be asked to brief the Committee, together with the Railway Safety Regulator and Passenger Rail Agency of South Africa, on cross-border issues. DOT remained ultimately responsible for the performance of its agencies.

The meeting was adjourned.


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