National road agency Sanral says it has hit a ‘fiscal cliff’ and can no longer expand the roads under its purview nor fully address the growing backlog of maintenance required to bring them up to standard.
Meanwhile, the national government is marching ahead with plans to move some of the most neglected provincial roads into the Sanral portfolio – making matters worse. In its Annual Performance Plan for the 2023/24 financial year, the road agency said it had reached the stage where it needs to take “rational and prudent decisions” regarding its road network growth, as well as review how much support it can give to other road authorities and how many roads it can incorporate from other spheres of government.
Sanral currently manages just under 23 500km of roads, while the provinces are responsible for 271 500km. Metros are responsible for 66 150km, and municipalities cover 256 900km. The national government is moving forward with plans to transfer roads under provincial and local governments – rapidly deteriorating due to a lack of maintenance – to the Sanral portfolio.
Around 15 000km of roads have been earmarked for transfer to Sanral’s portfolio, it said. Responding to a recent parliamentary Q&A, the Department of Transport reiterated this strategy, saying that some provinces are transferring their roads to Sanral so that they can be better developed and managed.
However, Sanral said that if it doesn’t get the necessary financing and budgetary aid from the national fiscus to match this expanding portfolio, it simply cannot keep up with what needs to be done. “Sanral has reached a ‘fiscal cliff’ in balancing network growth against insufficient funds per kilometre required to maintain the Overall Condition Index (OCI) of the network to an acceptable level,” it said.
Sanral said that if its budget is not increased, the plan needs to be reviewed, and the original 15 000km of roads to be transferred will have to be reduced to only 3 000km. “The agency does not have the financial and human capacity to take over the management of such a large network of roads. This new approach is of critical importance because previous road transfers were often done without the necessary budget transfers. Subsequent additional budget allocations from National Treasury have not adequately met the life cycle costs requirements of the transferred roads,” it said.
Sanral said that reducing the kilometres of roads earmarked for transfer would result in a more manageable road network of 25 000km. However, the government wants Sanral to manage 35 000km, presenting severe funding issues.
End of the road
Given Sanral’s budgetary constraints, it said it has hit the end of expanding new roads. Over the current mid-term period, budget allocations to Sanral will allow it to address the basic budget requirements to sustain the network. However, it is not enough to address the growing backlog of roads needing maintenance nor allow it to expand the network under its jurisdiction.
“No network increase is assumed,” it said. “Not doing expansions will result in increased congestion and associated increase in road user costs on parts of the network. Mobility is one of the most fundamental and important characteristics of economic activity as it satisfies the basic need of going from one location to the other – a need shared by passengers and freight,” it said.
“Apart from the direct cost of the congestion on the economy – through hours lost, productivity and vehicle operating costs – the social impact of congestion on society is probably the biggest concern.”
Sanral said it would require a minimum of R15.8-billion a year for the next ten years to address the basic requirements, the backlog and expand the network. This is if the Sanral network remains unchanged and the option of toll funding is unavailable.
The road agency said that it is a proponent of having private finance play a role in these objectives – but added that it had been badly burned with its experience of the Gauteng Freeway Improvement Project (GFIP), which resulted in the protracted e-toll saga (which is still not concluded).
“The GFIP experience necessitates the development of a Road Funding policy. This would be a Department of Transport-led process, and there is an urgent need to clarify the way forward with regards to the GFIP and ensuring policy certainty,” Sanral said.