Treasury fingered as the real fiend behind roads slowdown
Sanral CEO says Treasury's procurement regulations have allowed armed vigilante groups to run riot
In a recent interview, roads group Raubex highlighted how work from Sanral has all but dried up. It has been tempting to accuse Sanral of torpor, but the national roads agency has been caught up in a number of battles not of its own making, not least of which are regulations published under National Treasury’s Preferential Procurement Policy Framework Act (PPPFA) of 2017. These have hog-tied building projects in red tape and introduced the phenomenon of site invasions.
Sanral CEO Skhumbuzo Macozoma explains more:
We have requested meetings with national Treasury – I’m still waiting. The PPPFA regulations are ambiguous, they need to be tightened up.
Number one, it says that a minimum of 30% beyond a threshold of R30-million shall be subcontracted. People are now coming to our sites and saying: 30%, not the minimum, is allocated to us as locals exclusively and we want it.Now, nowhere in the regulations does it say 30% as a quota and nowhere does it say 100% localisation.
But you go to Middelburg, and you re-issue a tender for a subcontractor, and people from outside bid and the people from Middelburg protest. They say: this 30% is exclusively for us. But that’s not what the regulation says.
So now why are we going back to bantustans? Because of an interpretation? This is what is happening everywhere and not just for Sanral: all roads authorities, all hotel construction projects, all hospitals etc. Now you’ve got vigilante groups, some are armed and projects are stopping.
In KZN, the Hammarsdale bridge has been stopped since November last year. Many of the contractors that are stuck in that mode will get liquidated, and it’s not only small ones.
I know there’s been a steady growing perception in the media that Sanral is not releasing work: let’s set the record straight.Are you taking particular strain because work for construction players has dried up elsewhere?
Propping up infrastructure investment in SA has been the transport sector, and the bulk was in roads. If Sanral sneezes, there’s going to be a problem. But you only feel it because the rest of the sector is not investing as much. If you take R800-billion over the medium term for infrastructure as a commitment, Sanral only has R60-billion for the next three years.
That R800-billion figure has been bandied around for years …
I know, it’s nebulous. And that’s the challenge. The PICC (Presidential Infrastructure Co-ordinating Commission) was created to stimulate infrastructure development, co-ordinate government investment and unblock our blockages. We’re having conversations but we have problems. We cry foul because people are (invading) sites, but then Treasury responded and said: there’s no truth to this thing, it’s just fiction.Do you feel Sanral has been used a punchbag for rage against tax abuse generally, particularly in the case of e-toll resistance?
There’s no doubt that South Africans are generally upset with government. Part of what we’re trying to do is have a conversation with South Africans to say: let’s not throw the baby with the bathwater. You’ve got an entity here that delivers the best infrastructure on this continent and we hold our own against the best in the world. Why would you want us to slip back to some of the roads authorities that are seriously struggling?
The national development plan says that economic infrastructure must be funded differently to social infrastructure. So let the user pay principle underpin the provision of economic infrastructure, at least.We need a fresh policy context: let’s agree on where should we be tolling, how should we be tolling, and when? If you shut down private funding, I’m afraid public funds are going to move us very slowly.
Is there any way to break this impasse?
As I started here in December 2016 we embarked on a long term strategy which is Horizon 2030. It says, number one, we want to take back the responsibility for funding policy to national Treasury. We’ve meddled in it too long and we’ve got egg on our faces.
All we want is to plan the road network system, submit requests for funding and do our jobs. Where the money is sourced from, Treasury must worry. We must just keep hounding Treasury.
Previously you’d be apologetic and say, look, there’s competing demands, maybe health is more important – but right now I don’t care, because if there are no roads people can’t get to clinics anyway. Roads stimulate the economy and create opportunity for other services to be delivered.
Thirdly, we are not going to abandon the role of private funding. Which means we are not going to abandon tolls. But we agree that we need a fresh context. If we had not used private funds all of the infrastructure we delivered from 2009 until now would not have happened.
So we project to be a R30-billion-plus entity by 2030. With private funds we can hit it in 2024. Sanity has to prevail. We do suffer the sins of other entities. All those who have been insinuating corruption at Sanral, there’s nothing here, there’s really nothing here.