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South Africa's National Roads Agency, 1998 INCREASING TRANSPARENCY AND IMPROVING PROJECT MANAGEMENT: SOUTH AFRICA’S NATIONAL ROADS AGENCY, 1998 – 2011 SYNOPSIS Following the transition to democracy in 1994, South Africa experimented with ways to improve ministry effectiveness by separating policy-making functions from operations. The Department of Transport introduced principles of New Public Management and public-private partnerships to improve service delivery. The South African National Roads Agency Ltd. (SANRAL), led by Nazir Alli, reconfigured the procurement process and financing models for planning, design, construction, maintenance and operation of the country’s national road network. Increasing transparency in the tendering of contracts led to greater accountability on the part of project managers and contractors. This case study chronicles the steps that Alli and his staff took to build the agency and to deliver results on a large scale, culminating with the upgrade of the freeway connecting the cities of Johannesburg and Pretoria during the final months before the 2010 FIFA World Cup. Richard Bennet drafted this case study based on interviews conducted in Pretoria and Cape Town, South Africa, in March 2011. INTRODUCTION (SANRAL) at the time, recalled, “For all of us In the months leading up to the 2010 in South Africa, it was at the moment again FIFA World Cup, South Africa braced itself like April 1994 [when Nelson Mandela was for an influx of visitors from around the world. elected president]. …There was this huge Construction workers scrambled to finish enthusiasm to say we know we can do it, and major infrastructure upgrades, including the we’ve got to deliver. … Everybody pulled their first part of the Gauteng Freeway weight to make sure that we met those Improvement Project, an upgrade of the roads milestones.” The first phase of the project connecting the cities of Johannesburg and highlighted SANRAL’s ability to renovate and Pretoria. Officials predicted that traffic would upgrade 185 kilometers of national roads. The be especially heavy during the World Cup as undertaking was the largest toll-financed road visitors drove between the cities and to and project in the world at the time. It was also a from the international airport. test for a new agency that sought to create a Nazir Alli, who was chief executive of the more efficient and effective road transportation South African National Roads Agency Ltd. system for South Africa. In 1998, the Roads 1 ISS is program of the Woodrow Wilson School of Public and International Affairs: successfulsocieties.princeton.edu. ISS invites readers to share feedback and information on how these cases are being used: [email protected]. © 2011, Trustees of Princeton University. This case study is made available under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. Richard Bennet Innovations for Successful Societies Department, previously an arm of the people recognized the crucial role that Department of Transport, became SANRAL, transport plays in the growth of the economy an independent agency. Guided by the and in social development.” principles of New Public Management that Earlier governments had underfunded sought to introduce the logic of private sector road construction and maintenance, especially business management into government in rural areas. Road traffic had grown at a rate operations, SANRAL was responsible for the of 3% per year during the previous 20 years, development and maintenance of what was but the government had failed to make any then a 7,000-kilometer national road network. concerted efforts to expand the network and Although the Gauteng Freeway project was accommodate that growth. In the mid-1990s, significant for its size, the principles of 80%-90% of the country’s passenger and management were consistent with all of the freight transport traveled on roads, and driving agency’s projects. from rural communities to economic centers This case study charts the initial steps was difficult and time-consuming. that Alli and his team took to set up Maharaj wanted to repair and expand the SANRAL, transform the tendering process, road network, but several obstacles stood in and reform the methods through which South the way. Under earlier governments, Africa developed its national road network. corporations had paid bribes to win political favors and tenders, and to bypass regulations. THE CHALLENGE Although a South African Roads Board had With the transition to majority rule in existed since the 1930s, the board did not 1994, the newly elected government of South always address the needs of the population or Africa inherited myriad transportation consider good governance a priority. In theory, problems. Under the apartheid system of the board, whose members came from business racial segregation, housing policies had located as well as government, was independent. black townships far from economic centers. However, the chairman of the board was the Public-transit systems ran only during limited director general of transport, the Department hours to limited locations, making it difficult of Transport’s chief civil servant. The director for those in geographically remote townships to general was also responsible for carrying out hold jobs in the cities or to even look for the minister’s agenda. The structure created a employment. Improvements to the national continuing conflict of interest, according to road network would increase economic Alli. “So whom did the chief director listen to? development opportunities for large segments To the Roads Board? If the DG [director of the country’s population. general] has a difference of opinion from his The minister of transport, Mac Maharaj, Roads Board, [and he] gets his minister to believed that transportation was a agree with him, then we ignore the Roads fundamental pillar of development. Maharaj, Board. So there was no accountability,” Alli a leader in the anti-apartheid struggle, recalled. recognized that improvements in Poor coordination between the provinces transportation were vital if historically and the central government exacerbated disenfranchised segments of South Africa’s maintenance problems. Alli said, “The population were to participate in the country’s provinces used to be responsible for the economic growth. Alli shared the conviction. maintenance of our roads. There was no “Prior to 1994, transport was always there on accountability at all, none whatsoever. When the side,” Alli said. “That changed when we asked the provinces one time to show us 2 © 2011, Trustees of Princeton University Terms of use and citation format appear at the end of this document and at successfulsocieties.princeton.edu/about/terms-conditions. Richard Bennet Innovations for Successful Societies where they spent our money, on which The commission’s review process brought portions of our roads, they couldn’t even show together people from the transportation us that.” industry, the government and the academic community to examine the role that the FRAMING A RESPONSE department played in service provision. Alli, trained as an engineer, had Representatives from municipal, provincial experience in engineering consulting and had and national levels of government met with participated in the working group that taxi associations, workers’ unions, consulting developed the Reconstruction and firms, government lawyers and university Development Programme, South Africa’s scholars to evaluate the ways that the broad framework for socio-economic reform Department of Transport could adapt to meet after the end of apartheid. He had joined the the challenges of a democratic South Africa. Department of Transport as chief director of More than 300 organizations participated in roads in 1995. Maharaj led the initiative to the review process. Maharaj, reflecting on the review and alter the department’s resulting White Paper on National Transport configuration and responsibilities, which Policy, noted, “We critically looked at what included spinning off several areas, including was assumed to be the role of the state and national roads, into agencies and shrinking the found that many areas of activities could be department’s workforce to 250 employees from more effectively done if there was a direct 1,400 during the next few years. For national relationship between the providers and the roads, Alli would be the individual to carry out users.”1 the needed reforms. As part of the review, a group from the In early 1995, Maharaj commissioned a Roads Department visited other countries to study of South Africa’s transportation policy. learn from others’ experiences. The director The department historically had operated and general of transport, Ketso Gordhan, administered national roads, financing accompanied Alli to New Zealand, which had construction and maintenance through general undergone major transport reforms in the late obligation government bonds. By 1994, a 1980s, employing New Public Management government-wide budget deficit of 5.1% (NPM) principles to separate the demonstrated the need to find new models for government’s policy making and regulatory managing the financing of roads. The functions from its implementation and delivery government sought to expand infrastructure functions. The New Zealand model, known as and services to the majority of the population Transit New Zealand, sought to introduce the that had not received equal access under logic of private sector management into public apartheid but did not want to burden
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