The Committee met for a presentation by the South African National Roads Agency (SANRAL) on its unqualified audit annual report.
SANRAL said expenditure on road development, improvement, strengthening and maintenance had declined for the second consecutive year. The total amount spent, R12.68 billion, was 19% lower than the previous year. R9.736 billion had been spent on non-toll roads, and R3.304 billion on SANRAL toll roads. The SANRAL app, which allowed electronic toll customers to view their transaction records and top up their credit on the go, became available to the public in August 2018. Transactions totalling R12m had been made via the app. Assets had increased from R387.7 billion in 2017/18, to R412.9 billion in 2018/19. Revenue had risen from R16.29 billion to R16.66bn in the same period, and the entity had recorded a R418 million profit compared to a R2.42 billion loss the previous year. However, irregular expenditure had increased from R333.6 million to R419.2 million.
Members asked for clarity on certain aspects of the financial report, and said the increase in irregular expenditure was a bad sign, which required strong disciplinary action to be taken. They also questioned whether SANRAL was planning any new toll roads, as there were rumours to that effect.
The Chairperson said the meeting would deal with the unqualified audit report from the South African National Road Agency Limited (SANRAL).
He asked Members to consider and adopt the minutes of the Committee’s previous meeting.
Ms B Mathevula (EFF, Limpopo) asked about progress on the Tembisa project, before the minutes were adopted.
Chairperson responded that there would be a follow up on the Tembisa project.
SANRAL: 2019 integrated report
Mr Themba Mhambi, Chairperson: SANRAL, said that the reason why the audit was unqualified was because of performance challenges inherited from previous years. A major concern of the board was that projects were being disrupted by different stakeholders because they would not get involved in projects that were in their communities. However, there were some instances of downright thuggish behaviour, where people were taking advantage of the government and mobilising communities to act against SANRAL. There had been talks to deal with these concerns.
Ms Inge Mulder, Chief Financial Officer (CFO): SANRAL, said expenditure on road development, improvement, strengthening and maintenance had declined for the second consecutive year. The total amount spent, R12.68 billion, was 19% lower than the previous year. R9.736 billion had been spent on non-toll roads, and R3.304 billion on SANRAL toll roads.
SANRAL was an expert in offering geotechnical solutions and was frequently consulted during the year. In a unique research and training collaboration, SANRAL, the University of Pretoria (UP) and the Council for Scientific and Industrial Research (CSIR) were jointly developing an integrated facility situated partly at UP, and partly at the CSIR.
The SANRAL app, which allowed electronic toll customers to view their transaction records and top up their credit on the go, became available to the public in August 2018. Transactions totalling R12m had been made via the app.
In terms of social and relationship capital, SANRAL had spent R221 million on community development projects, of which 83% had gone to black-owned companies. It had created work opportunities for 26 579 individuals, and training for 1 577. The SANRAL scholarship programme had also offered scholarships to 220 learners.
The financial performance indicated that assets had increased from R387.7 billion in 2017/18, to R412.9 billion in 2018/19. Revenue had risen from R16.29 billion to R16.66bn in the same period, and the entity had recorded a R418 million profit compared to a R2.42 billion loss the previous year. However, irregular expenditure had increased from R333.6 million to R419.2 million.
Mr M Dangor (ANC, Gauteng) said the there was a need to clarify what was off balance sheet. It would be very important to have such clarity, and adequate consultations were needed with all three spheres of government regarding the e-tolls issue.
Mr J Londt (DA, Western Cape) said that SANRAL had to clarify if they were going to renew contracts, and provide their reasons for doing so.
Ms S Boshoff (DA, Mpumalanga) asked about the allocation of bursaries, because SANRAL had not specified how many students had graduated or dropped out, and how many had been offered jobs by SANRAL after completing their studies. The fact that irregular expenditure had increased was not a good sign, since it was a business, and they had to make sure they dealt with the issue. She asked if any disciplinary measures were taken against employees, especially senior employees who were not meeting deadlines, because this was having a negative impact on projects. She concluded by congratulating SANRAL on its unqualified audit.
Ms Mathevula asked about progress on the Polokwane to Musina road, as it was always congested by heavy trucks. She asked whether Ms Mulder was going to employed permanently by SANRAL. She was concerned about the lack of persons with disabilities being employed by SANRAL as this had not been reflected in the report. What had SANRAL meant by saying, “Taking SANRAL to the people,” because she had not seen their presence in Limpopo? The scholarships were dominated by males, and she was not satisfied with that.
Mr M Rayi (ANC, Eastern Cape) said that there was a need for SANRAL to highlight their footprint in provincial statistics. He asked what criteria were used for regional roads that were revamped. Were any toll roads planned, because there rumours circulating about new toll roads?
Ms Mulder responded that there was a 14-point plan that would ensure all projects were successful. Assets form part of the on-balance sheet of SANRAL. Contracts had not been renewed yet, and there was no money leaving the country because the companies contracted to SANRAL were registered in South Africa. SANRAL had high priority projects, and these were the ones that were prioritised first.
There was a misconception about what SANRAL does in the country, and there had been media engagements to make the public aware of what it actually does.
Most of the bursaries were for technical studies, like engineering and environmental sciences.
Mr Mhambi commented on Transport Minister Fikile Mbalula’s aggressive approach towards solving the e-toll issue, saying it was affecting the whole country, and SANRAL was collecting only about 25% of what it should be getting from e-tolls.
The Chairperson appreciated Members’ inputs and discussions, and put the report up for adoption.
The report was adopted.
Adoption of minutes
The Chairperson put the minutes of the meeting on 13 November 2019 up for adoption.
The minutes were adopted.
The meeting was adjourned.
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