BEYOND THE HORIZON AWAIT POSSIBILITIES INTEGRATED REPORT: Volume 1 2017 Building South Africa through better roads. Integrated Report 2016/17 The South African National Roads Agency SOC Limited Reg no: 1998/009584/30 THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED INTEGRATED REPORT 2016/17 TABLE OF CONTENTS Chairperson’s Report ........................................................................................................................................................... 6 CEO’s Report ....................................................................................................................................................................... 10 SECTION 1: COMPANY OVERVIEW .................................................................................................................................... 15 Our Vision, Mission and Core Values ......................................................................................................................................... 16 Our Mandate .............................................................................................................................................................................. 17 Our Board of Directors ............................................................................................................................................................... 18 Our Executive Team ................................................................................................................................................................... 19 Our Principal Tasks and Objectives ............................................................................................................................................ 20 SECTION 2: CAPITALS & PERFORMANCE ......................................................................................................................... 23 Manufacturing Capital ................................................................................................................................................................... 25 1. Non-toll road projects 2. Toll road projects 3. Road network management 3.1 Bridge management 3.2 Slope management 3.3 Sinkhole management 3.4 Pavement management 3.5 Routine road maintenance 3.6 Overload control 3.7 Traffic monitoring Funding Capital .............................................................................................................................................................................. 39 1. Public-private partnerships 1.1 Bakwena 1.2 N3TC 1.3 TRAC 2. Non-toll road operational and capital expenditure 3. Toll road operational and capital expenditure 4. Land management Intellectual Capital ......................................................................................................................................................................... 45 1. Automated electronic toll payment 2. Road management systems and technological innovation 3. Innovations in geology, geophysics and applied geotechnical engineering 4. Sharing innovation 5. The SANRAL Technical Innovation Hub Social & Relationship Capital ........................................................................................................................................................ 49 1. Empowerment, job creation and skills development 1.1 Value and number of contracts 1.2 SMMEs and black-owned entities 1.3 Job opportunities 1.4 Training provided on projects 2. Road safety 2.1 Approach 2.2 Road safety education 2.3 Behavioural research 2.4 Concessionaires’ road safety activities 2.5 Safe systems 2.6 Road safety incident management systems 4 3. Road safety infrastructure projects 4. Community development 4.1 Community development infrastructure projects 4.2 Community development geological projects 4.3 Empowerment, job creation and training 4.4 Concessionaires’ social projects 5. University partnerships Promoting Social & Relationship Capital: Marketing and Communications ............................................................................. 67 Natural Capital ............................................................................................................................................................................... 75 1. Environmental management 2. Liaison with regulatory authorities 3. Monitoring and evaluating environmental performance 4. Vegetation management on road verges 5. Major projects 6. Environmental impact assessments 7. Research and development 8. Impact of drought on road construction 9. Concessionaires and the environment Human Capital ................................................................................................................................................................................ 81 1. Certification 2. Workforce 2.1 Employment equity and transformation 2.2 Workforce profile 2.3 Talent management 3. Organisational philosophy 4. Employee learning and development 5. External scholarships and bursaries 5.1 External bursary programme 5.2 Scholarships programme 5.3 Internships 6. SANRAL Technical Excellence Academy 7. Employee wellness programme 8. Wellness programme for road maintenance workers Promoting Human Capital: Information Technology .................................................................................................................. 91 SECTION 3: CORPORATE GOVERNANCE .......................................................................................................................... 95 1. King IV Declaration 2. Corporate Performance Information 3. Report of the Audit and Risk Committee 5 THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED INTEGRATED REPORT 2016/17 CHAIRPERSON’S REPORT someone of his calibre and experience and we are encouraged by the positive reaction to his appointment by SANRAL’s stakeholders, from the broader engineering sector to investors. Road management, planning and engineering are fields that are continually evolving and SANRAL needs organisational renewal to meet its mandate to manage the growing primary road network and create economic value for the nation. Through the years SANRAL has built an enviable reputation as a global leader in road management, planning and engineering and will be applying this experience and knowledge in new ways to serve South African society and support development. Our track record as an organisation also speaks to the quality of our corporate governance and financial management. The Board embraces the principles contained in the King IV report on corporate governance and we pro-actively implement its recommendations. I want to express my appreciation to the members of the SANRAL Board who are contributing to high standards of corporate governance within the organisation. A word of thanks goes to each and every staff member – both at head office and in the regions – who assists in the building of a strong organisation with a reputation for quality and professionalism. The Board and management have commenced with a process of reviewing SANRAL’s long-term strategy to ensure the organisation responds to changes in its environment. In the coming year, we will consult widely with stakeholders as we develop SANRAL’s new Horizon 2030 strategy. The publication of SANRAL’s Annual Report for 2016/17 comes at a time of major changes both At SANRAL, we are mindful of the impact our within the organisation and in the broader governance procurement policies and practices have on the environment within which we operate. lives of South Africans and the transformation of the construction industry. These policies, which were Within SANRAL we said goodbye to our founding CEO, originally tailored with the aim of promoting small, Nazir Alli, who retired after a lifetime of service to our emerging, black construction companies, are being country. Our organisation and the broader transport reviewed alongside changes to public procurement sector were greatly enriched by Nazir Alli’s insights and regulations, with the aim of better supporting experience. The modernised state of our national road the transformation of the industry to reflect the infrastructure can, to a large degree, be attributed to his demographics of the country. In addition, SANRAL is drive and decisive leadership. conscious of the fact that the company operates within the public contracting arena where accountability and As a Board and an organisation we were fortunate to transparency are of the utmost importance. welcome a new Chief Executive Officer, Skhumbuzo Macozoma, who is well-equipped to lead SANRAL into Since year-end the possibility of a sovereign a new era of growth. SANRAL is proud to have found downgrade by Moody’s Investment Services has 6 become a reality, and so have the expected negative This investment in future generations will prove valuable consequences. This risk relates particularly to the toll as SANRAL’s responsibilities continue to grow. The road portfolio and results from the low collection rate on network managed by SANRAL expanded during the the Gauteng Freeway Improvement Project (GFIP). past year and we are now responsible for over The agency has implemented a number of strategies 22 197km of national and provincial roads. The to improve toll collection and ameliorate this risk. It is confidence in our ability to oversee this extensive important to note that SANRAL’s going concern status network that stretches across our country is reflected in remains intact. decisions taken by provincial governments to entrust