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Annual Report 2016 THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED ANNUAL REPORT 2016 2 3 Annual report 2015/16 Registration number 1998/009584/30 4 Vision To be a world leader in the provision of a superior national road network. Mission As the custodian of the national road network, we are committed to the creation of economic value for the nation through the provision of road infrastructure with: • A motivated and professional team. • Consideration for community needs. • State-of-the-art technology. • Proficient service providers. • The user-pays principle. Core values EP2IC Excellence Proactiveness Participativeness Integrity Care 5 THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED ANNUAL REPORT 2016 THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED The South African National Roads Agency SOC Limited Toll roads (constituting 14.5 percent of the total national (SANRAL) was established in 1998 as an independent, road network) are funded either through public-private statutory company registered in terms of the Companies partnerships or from capital market borrowings. Act (Act No 71 of 2008). The South African government, represented by the Minister of Transport, is the sole SANRAL adds value to developmental initiatives in the shareholder and owner of SANRAL. fields of transport, education, health and development of communities. We take pleasure in our role as partners in SANRAL has a unique mandate: to finance, improve, the development of South African communities and see manage, maintain and upgrade the national road network. this as closely related to our core function. We are committed to carrying out our mandate in a manner that protects and preserves the environment SANRAL makes a significant contribution to road safety through context-sensitive solutions. by maintaining and improving our road environment and by identifying and addressing road safety concerns. We The South African national road network consists of also cooperate with local and international road safety 21 490km of roads. This network seamlessly connects authorities to learn more and improve the safety of the major cities, towns and rural areas, supporting economic national road network for road users. growth and social development and contributing to job creation in the country. The agency will continue to play a constructive role in communities across South Africa and promote the SANRAL has two primary sources of income. It receives development of the country’s human capital through funding for non-toll roads (comprising 85.5 percent of the support for education at both high school and national road network) from National Treasury. tertiary levels. 6 Message from the Minister of Transport Mr Nazir Alli, the Sanral CEO, steps down later this As the Minister of Transport over the past three years, I year after a lifetime devoted to public service and to have been enriched by my interaction with Nazir Alli and the citizens of South Africa. His works will remain as his team at SANRAL. He never failed to give me sensible testimony to his achievements. and professional advice. He seldom minced his words but I could always rely on his support and wisdom and draw During his 18 years as CEO of SANRAL he has kept the on his rich experience. importance of quality road infrastructure firmly in the public conversation. His passion for roads, engineering, The public sector environment will lose a devoted and technology and safety were always evident and it is outspoken servant when Nazir Alli retires. We trust that no exaggeration to claim that our country would not we will be able to benefit from his expertise and advice have had the world-class national road infrastructure to for many years to come. We are delighted to say that the support our growing economy without the single-minded world-class quality of the South African national road commitment, drive and energy of Nazir Alli. network will remain as visible testimony to his tenure. His solid academic and professional background in Dipuo Peters transport and engineering made him the logical choice Minister of Transport when the government of President Nelson Mandela was looking for the best candidate to establish and lead the South African National Roads Agency in 1998. It proved to be an inspired choice. For Nazir Alli roads are far more than rock and gravel and asphalt. They are primarily conceived, designed and built to connect people to places and opportunities. In a young democracy such as South Africa, roads form part of the broader developmental infrastructure that contributes to the quality of life of citizens – especially those relegated to the margins of society because of decades of skewed and discriminatory planning. This developmental approach to what can so easily be an arena of numbers and technology was also evident in Mr Alli’s commitment to road safety and his determination that SANRAL would play a role in this important issue through the provision of safer road environments. Similarly, SANRAL serves as an example to many other state-owned entities on how black-owned companies and emerging enterprises managed by women, the youth and the disabled can be brought into the value chain and become job creators in their own right. Even his critics will agree that Nazir Alli had an unwavering commitment to good governance and sound financial management. The successive unqualified audits, the confidence shown by both local and foreign investors and the decisions by rating agencies to affirm SANRAL’s ratings despite turmoil on global markets are testimonies to his prudent leadership. 7 THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED ANNUAL REPORT 2016 8 Table of contents CHAIRPERSON’S REPORT 10 REPORT OF THE CHIEF EXECUTIVE OFFICER 14 BOARD OF DIRECTORS 18 SECTION 1: THE NATIONAL ROAD NETWORK 23 1.1 Sustainability reporting 24 1.2 Funding 24 1.3 Technological innovation 25 1.4 Engineering 28 1.5 Road network management 48 1.6 Road safety management 53 1.7 Land portfolio management 61 SECTION 2: DEVELOPING COMMUNITIES AND SUSTAINING THE ENVIRONMENT 63 2.1 Community development 64 2.2 Environmental management 76 SECTION 3: CORPORATE OVERVIEW, PERFORMANCE AND GOVERNANCE INFORMATION 87 3.1 Corporate overview 88 3.2 Corporate performance information 110 3.3 Corporate governance 116 SECTION 4: FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016 129 4.1 Report of the Auditor-General 130 4.2 Director’s Report 134 4.3 Statement of Responsibility by the Board of Directors 142 4.4 Certificate by the Company Secretary 143 Statement of Financial Position 144 Statement of Comprehensive Income 145 Statement of Change in Equity 146 Statement of Cash Flow 147 Accounting Policies 148 Notes to the Financial Statements 162 THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED ANNUAL REPORT 2016 CHAIRPERSON’S In the past year our network has grown to 21 490km. REPORT We are proud of the fact that the engineering and safety interventions we introduce upon assuming responsibility for provincial roads lead to visible improvements within a SANRAL brings immense value to South Africa and couple of months. its citizens through our proactive and professional management of the country’s most widely used physical I feel privileged to be associated with SANRAL and infrastructure – the national roads system. grateful to work with a visionary team of Board members and a dedicated team of professionals who lead the A well-planned and well-maintained freeway network is a organisation at management level. prerequisite for the balanced growth of the South African economy. Without this network – and, indeed, without We continue to set high standards in the fields of SANRAL – none of the country’s economic growth corporate management, accountability and financial objectives can be achieved, social services cannot be probity. In 2015/16 SANRAL received an unqualified audit delivered, and provinces, cities and towns cannot meet report from the Office of the Auditor-General for the the expectations of citizens. 13th year in succession. Confidence in the capacity and ability of SANRAL is Our achievements are recognised by our peers, locally reflected in our growing mandate. An increasing number and internationally, and reflected in the accolades we of provinces are working with us and have requested have received. These include the prestigious Fulton SANRAL to take responsibility for the management of Award for the Umgeni Road Interchange in Durban and a their regional roads. commendation for the Stafford’s Post Interchange. 10 As Chairman of the Board, it has been my privilege in the time it takes to detect incidents and dispatch first to engage on many occasions with the Minister of responders to the scene. Transport, Ms Dipuo Peters, and Deputy Minister Ms Sindisiwe Chikunga. We are grateful for their unwavering The KwaZulu-Natal FMS covers the busiest 120km of support and inspired by their vision and enthusiasm for the N2 and N3 freeways. The system has contributed to the work we are doing. maintaining an impressive incident detection time of 2 minutes and 25 seconds. We were enriched as an organisation by the leadership shown by Deputy President Cyril Ramaphosa during the In Cape Town the FMS enabled coordinated responses to engagement processes that led to the announcement of more than 20 000 incidents during the year under review. a new dispensation on the e-tolling system in Gauteng. Footage captured by CCTV cameras on the freeways is used for training and debriefing of emergency services, Although the Gauteng Freeway Network comprises only resulting in even better performance. one percent of the roads under our management it is a vital asset for individuals and businesses in the country’s Good relationships with local radio stations and SANRAL’s economic heartland. During the past year, we have made growing online and social media footprint enhance the major announcements to meet the needs of Gauteng sharing of information, which results in safer, more road users, especially those in lower- and middle-income enjoyable journeys for road users.
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