DIGEST 2006 - Sabita

double that for two-lane
surfaced roads, and the
composition of fatalities
among accidents on gravel
(10.9%) is higher than on
2-lane paved roads (7.8%),
and much higher than on
full-speed freeways (3.2%).
Thus effects of differences in
vehicle control strongly
appear to swamp differences
in driving speed where
accident harm is concerned;
• Gravel roads
cannot, like
bituminous ones,
be constructed
and maintained
entirely using
small equipment
that can be
operated by
unskilled people;
thus they fail to take into
account SA’s abundance of
underutilised labour, and are
less effective at developing
human capital in small
contractors. National
Government’s Extended
Public Works Programme
(EPWP) mandates that
wherever labour-intensive
methods can be deployed for
the same budget outlay as
capital-intensive methods,
the former should be
favoured. In fact this is too
conservative, using an
accounting measure of value
where an economic measure
would be more appropriate.
Use of small contractors in
road construction and
maintenance builds human
capital in the form of
management, tendering and
investment skills, with the
acquisition of manually
operated surfacing equipment
an additional benefit. Since
such capital is an economic
asset with future multipliers,
we should not implicitly set
our willingness to invest in it
at zero, as the EPWP
presently does.
It is unfortunately not possible
here to attempt a quantitative
estimate of the
human capital
investment value
accruing to
surfaced road
construction and
maintenance over
gravel road
construction and
maintenance. The
issue has been
confused in many discussions by
benchmarking targets of ‘numbers
of jobs’.
.... capital is
an economic
asset with
future
multipliers
Unlike human capital, ‘jobs’ are
not assets since they are functions
of overall productivity in the
economy, are not fixed in extent,
and do not have opportunity costs
in the strict sense.
Over the coming year, I and my
graduate students at UCT hope to
make progress against this
confusion and produce a first
quantitative estimate of the
potential value in human capital
creation of labour-intensive
roadwork. In the meantime, we
must be content with noting that
whatever effect this has on the
shadow price of gravel, the
direction of the influence is clear
and must further reduce the
23