1. The South African National Roads Agency Limited
Road Infrastructure Roll-Out
Presentation to the Portfolio Committee
Wednesday 6 November 2002
Cape Town

2. Contents Network Strategic Objectives Challenges Non-Toll Roads
Proposed 5 Year MTEF
SANRAL Contribution to Poverty Relief
Progress
Toll Roads
Concession Contracts

3. National Roads (7,200km)
National Routes (5,300km) – 12,500km
Strategic Network (7,500km) – 20,000km
Primary Network (18,000km) – 38,000km

4. STRATEGIC NETWORK KMS Existing National Road Network 7,200
Provincial Roads-Transfer Already Agreed:
- Free State
- Eastern Cape
- Western Cape
- Limpopo Province 1,950
Provincial Roads-Transfer to be Finalised 8,640
TOTAL STRATEGIC NETWORK 20,000

5. STRATEGIC OBJECTIVES
To provide and manage a sustainable National Road Network
Minimise the cost of road transport
Stimulate economic growth
Promote Black economic empowerment and value for moneys
Be sensitive to the environment
Meet the needs of our road users and investors
Inspire innovative and effective research and development

6. CHALLENGES Capacity of delivery institutions (Private and Public)
Use existing capacity within Govt
Institutional fragmentation
Network layout and responsibilities
Development of Human Capital
Within the Agency
Within the industry sector
Sources of funding

7. Non-Toll MTEF Submission 2003-05 (R Mill)
2003/ / /06
Baseline fm 2002/03 1,171 1,241 1,315
Depreciation ZAR
Border posts
Traffic Control
Network Expansion ,650
TOTAL 1, , ,122

8. PROPOSED 5 YEAR MTEF National and Provincial Roads
Macro Impacts of Funding Levels

9. PROPOSED 5 YEAR MTEF National and Provincial Roads
Ideal situation
5-10% poor to very poor condition
Maintain rest between fair and very good condition
Match to capacity
Earmarked allocation for rural/community roads, +/- R3 bn

10. PROPOSED 5 YEAR MTEF National and Provincial Roads
National and Provincial road condition under this scenario

11. PROPOSED 5 YEAR MTEF National and Provincial Roads
WHAT WE ACHIEVE
Growth of backlog halted/slowed
Rural (inter/intra village) roads boosted – increase economic growth
Many opportunities for jobs, SMMEs and ABEs
Stabilise & grow sector
Retain skills
Develop Human Capital

12. PROPOSED 5 YEAR MTEF National and Provincial Roads
Rural (village) roads;
R k/km to upgrade rural roads
Labour; % of construction in community pockets
Every R100m/year on construction;
– person days on directly employed
km upgraded per year
=>R3bn over 5 years;
11,5 – 15,4 million person days over 5 years
Upgrade km of rural roads
Leave R670 – R900m in rural economy over 5 years
Excludes multiplier effect of 4 - 6

13. PROPOSED 5 YEAR MTEF National and Provincial Roads
Immediate Strategy;
Use MTEF funds to build Govt and industry capacity
Adapt spending to maintain good roads and prevent further deterioration
Ring fence 10-15%/year for rural (inter/intra village) roads for socio-economic improvement

14. SANRAL CONTRIBUTION TO POVERTY RELIEF
107 Projects in rural areas
R230 million allocated of R294 million
Estimated employment person days
R51,6million on labour
Skills development
Types of project;
Weed eradication
Nurseries for indigenous plants
Roads safety projects (education, infrastructure)
Roads and Bridges

15. SANRAL CONTRIBUTION TO POVERTY RELIEF
SDI’s;
Lebombo: Hluhluwe-Kosi Bay (85%)
St Lucia Wetlands Park (98%)
Total Investment R310,2 million
3900 Jobs created

16. PROGRESS-TOLL ROADS
Funding of roads has always been a controversial subject. This is not only true from a fiscal point of view – tax based revenues need to serve a large number of disparate demands – but also from a road user point of view in having to pay tolls.
It is important to note that the Agency manages approximately 80% of its total network as non-toll roads. This places a large financial burden not only on the Agency but also on National Treasury.
It is for this reason that alternative funding instruments be used and developed to address the infrastructural needs of our country while at the same time reducing the stresses on tax based revenues.

17. PROGRESS-TOLL ROADS
We are mindful that the implementation of toll roads
hinges on many political, economic and social
concerns. They are not simply a matter of capital
augmentation but also depend on such deeply
embedded societal concerns, such as:
 Equity
 Income transfer
 Environmental issues
 Attitude towards taxation
 Role of Government

18. PROGRESS-TOLL ROADS
In terms of public sentiment towards toll roads there is seldom a distinction drawn between Agency toll roads and toll roads operated by the private sector under concession agreement.

19. Extension to existing toll routes
PROGRESS-TOLL ROADS
Extension to existing toll routes
Route Kms Status
N1 Great North Construction underway,
completion due early 2003
N2 Tsitsikamma Final environmental approval awaited
N3 Mariannhill Process anticipated to commence mid 2003
N4 Pretoria Construction commenced,
completion expected mid 2004
N17 Springs-Ermelo Pending proclamation of national roads

20. PROGRESS-TOLL ROADS Proposed New Toll Routes
(Additional information available in Horizon 2010)
Route Kms
N1 Kroonstad-Three Sisters 671
N5 Winburg-Harrismith 224
N8 Kimberly-Maseru 374
N12 Johannesburg-Three Sisters 901
N2 Richards Bay-Ermelo 436
N11 Ladysmith-Middleburg 349
N12 Edenvale-Daveyton 27

21. PROGRESS-TOLL ROADS Proposed New Toll Routes
The feasibility studies are underway and the Public Participation Process is currently being designed.
Please refer to “Horizon 2010” for further details

22. PROGRESS-CONCESSIONS
Existing Concession Contracts
Maputo Development Corridor (100%)
N3 Jhb to Cedara (95%)
Platinum (60%)
Total Investment R9.7bn
Direct foreign investment R 1bn
Jobs created

23. PROGRESS-CONCESSIONS
Works in the near future;
Wild Coast Development Corridor– commences 2003
N1/N2 Development Corridor in Western Cape – commences 2003/2004
Estimated Investment R3,8bn
Estimate of Jobs 8000

24. Proposal for sustaining expanded non-toll network
Proposed total network
TOTAL km
NON-TOLL km
TOLL
4 000 km
CONCESSION
2 800 km
(1) Current MTEF funding 2002 (5 300kms)
1 061
(2) Annual expenditure requirement, current toll & concession network
725
370
355
(3) Annual expenditure requirement toll & concession expansion
2 500
2 100
400
(4) TOTAL NATIONAL ROAD NETWORK
ANNUAL EXPENDITURE (1+2+3)
4 286
2 470
755
(5) Total private sector contribution to annual expenditure requirement (public sector saving) (2+3)
3 225
(6) Reallocation of 65% of public sector saving (5x65%)
-1 600
-500
(7) REVISED PUBLIC SECTOR FUNDING (1+6)
3 161
(8) Available for other uses (5-6)
1 125
Of the total “saving” to the fiscus, it is proposed that 65% be consolidated into the treasury funding of non-toll roads in order to susin the expansion in the non-toll network and the remaining 35% put to other uses.