SA road network needs R75bn over the next five years

A ‘relatively small amount’ compared with other infrastructure – economist Azar Jammine.
Roads and economic growth are interlinked. Image: Supplied

A total of R75 billion needs to be invested over the next five years to stop the decline of South Africa’s road network, according to Transport Minister Fikile Mbalula.

Addressing the Road Construction and Maintenance Indaba at a hotel at OR Tambo International Airport on Thursday, Mbalula said the total paved and gravel network at provincial level is 184 816 km – but 40% of this has reached the end of its design life, because about 80% of the road network is now older than the 20-year design life.

On average, more than 30% of South Africa’s roads are in poor to very poor condition, he added.

“Among the many challenges we seek to tackle, we remain burdened with the intractable challenge of the road maintenance backlog.”

Read: SA’s R416bn road maintenance backlog [Jul 2019]

Perspective

Econometrix chief economist Azar Jammine said investing R75 billion to improve South Africa’s roads infrastructure is a relatively small amount compared with other infrastructural projects, such building power stations and addressing Eskom’s debt.

Jammine said it amounts to spending about R15 billion a year over the five years.

“In the full context, R15 billion a year would amount to no more than 2% of fixed capital formation every year.

“Surely that is a reasonable amount to put aside to improve the road network? It’s really not that much.”

He said he would welcome the government prioritising this and would even be willing to pay extra if it does.

“The secret is that they would need to do it properly because a lot of the work we have seen on fixing potholes and so on is very shoddy at the moment.”

Jammine said transport and logistics accounts for 38.4% or R311.8 billion of the total R812.5 billion earmarked for public infrastructure investment over the next three years. The transport and logistics portion of this planned expenditure includes ports, harbours, rail and roads – but the money has been set aside.

He pointed out that the poor state of the country’s road network could negatively impact the tourism industry and, through that, economic growth and a lot of jobs indirectly as well.

Extent of crisis at municipal level?

Mbalula said the total paved and gravel network at municipal level is 339 849 km, and while there are serious backlogs at this level, the government cannot verify the extent of the crisis at municipal level due to a lack of information and decision support systems at this level.

“This is a matter of great concern that we need to tackle with urgency as lack of data makes resource allocation difficult,” he said.

Mbalula said SA’s road network is the largest and longest interconnected road network in sub-Saharan Africa, covering about 750 811 km, and while the SA National Roads Agency (Sanral) is responsible for the primary network, provinces and municipalities are responsible for the secondary and tertiary networks.

Finance Minister Enoch Godongwana announced in the 2022 Budget on Wednesday that Sanral will receive an additional R9.9 billion for maintaining the non-toll road network.

Transport infrastructure ‘not keeping pace’

Mbalula said the supply of appropriate transport infrastructure, particularly in the big cities, is currently not keeping pace with the growth in demand, which has resulted in the emergence of serious urban transport bottlenecks and increasing congestion.

He said most of the provincial road funding comes from the national budget in the form of the provincial road maintenance grant.

However, he noted that the condition of the provincial road network has been on a steady decline since the early 1990s due to several reasons, including a curtailed funding allocation to roads and the shrinking project output by the road sector.

“It is for this reason that we must conceptualise a new public transport funding model that includes funding for requisite infrastructure,” said Mbalula.

Government, taking due regard of one of the key objectives of infrastructure as job creation and sustainable economic growth, “recognises private sector investment as a key tenet to investments through blended finance and public-private partnerships [PPPs]”.

“The focus on developing innovative and sustainable road infrastructure programmes will play a key role in post-Covid South Africa, providing a catalyst to economic recovery,” he said.

Waning appetite for PPPs

The Budget Review published on Wednesday highlighted that the value of PPPs has steadily declined in recent years from an estimated R10.7 billion in 2011/12 to R5.6 billion in 2019/20.

It said this was partly because of onerous approval processes, especially for small projects, and poor capacity of departments to estimate risk-sharing with the private sector.

At the same time, said the review, the lack of clarity regarding the user-pays principle affects the cost of state guarantees.

It said a PPP review concluded by the National Treasury in September 2021 emphasised the need to simplify approval and compliance requirements, and reform the policy framework to assess and prioritise PPPs.

“This is expected to encourage private sector financing solutions,” it said

“The review recommends that government create a PPP centre of excellence, and that an expedited approval process be considered for projects below R1 billion in value.”

It added that National Treasury aims to implement these reforms over the next 24 months.

Mbalula said that while the road quality and road maintenance backlog challenges relate in some way to the availability of funding, it is often deeper than that.

Read: E-tolls here to stay, for now

He said that even when there is increased funding, implementation is hampered by the:

  • Absorption capacity of industry in the context of government’s massive infrastructure investment programme;

  • Overall diminishing pool of technical expertise in engineering; and

  • Development of labour-intensive construction and maintenance programmes and capacity across government levels.

Mbalula said research shows a correlation between the development of roads and economic growth in South Africa.

“If we are to improve the lives of our people in a meaningful way, we must redouble our efforts and bring our collective capacity to bear in navigating the complex constitutional arrangement that informs how we manage our road network.”

He stressed that in finding solutions on how to accelerate interventions to tackle the construction and maintenance backlog, particular attention must be paid to:

  • The poor state of SA’s road network and the inability of road authorities to plan and allocate sufficient funds for roads;

  • The state of safety on our road network;

  • Gaps in skills that have been identified between existing human resources and the specialised engineering skills required to implement road infrastructure projects;

  • Great variances identified in unit costs for project activities between the various road authorities as far as road construction and maintenance cost estimates are concerned, despite some projects being implemented on the same typology; and

  • The inability of road authorities to respond to natural disasters.

“As the transport sector, we cannot be complacent and must do our part in contributing to the country’s Economic Reconstruction and Recovery,” he said.

“This requires that we synchronise our interventions and collaborate with all road authorities, the National Treasury, the Department of Public Works and Infrastructure, the SANDF [SA National Defence Force] and other organs of state that have a role to play towards the realisation of our objectives.”

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The amount of R 416 B, as mentioned by a road engineer in that 2019 article is probably more like it.
SA probably needs at least R 500 B over the next 5 years to spend on road and even more rail network, if it ever wants to have a growing economy. This should be coming from gross austerity on wages, social grants, overall rationalisation, and selling, closing down of most parasitals.
These major infrastructure projects will generate far more jobs and wealth than social spending, that will create only more dependency, create more babys and beggars.

End of comments.

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