South African Business 2016 edition

OVERVIEW the stations

OVERVIEW the stations were isolated and did not run in conjunction with other forms of transport, like taxis and buses. The average age of the fleet was 40 years. This frustration led to vandalism and acts of outrage. The new programme had three phases: • 2007-2010 – Stabilize commuter rail by bringing all the different passenger railway networks into one; • 2011-2014 – Focus away from refurbishment to replacement; • 2015-2018 – Growth and expansion. Road National government has spent ever-increasing amounts of money on road allocations over the last five years, increasing at a rate of 16% every year. The South African National Roads Agency Limited (Sanral) has successfully raised billions of rands through bonds and capital markets in order to finance, manage and maintain the national road network of 16 750km. However, plans to pay for the Gauteng Freeway Improvement Project through tolling have run into political obstacles. At its inception, SANRAL only had about 7 000 kilometres under its jurisdiction, and has since grown by threefold. The portfolio comprises of a 15% toll-road and 85% non toll-road split. “The vast majority of the portfolio concerns non-toll-roads. The non-toll-road funding comes directly from National Treasury as for any other department. The significance of the national road network is that it carries 80% of the freight that moves on the surface of South Africa,” said Sanral CEO Nazir Alli. Currently the largest challenge facing our roads at the moment is funding. He explains that looking at the country’s entire road network of 750 000 kilometres, it is the 10th largest network in the world, of which only less than 1% are tolls. “On the entire network of South Africa we have a backlog on maintenance of R197-billion,” explains Alli. “Our challenge is figuring out how to catch up on this backlog, how to fund it, and how do we make sure that we service the areas and parts of the country which are under-serviced? “While at the same time, how does the South African government, with its constrained budget and limited resources also meet its challenges in terms of the social wage that we pay to people—how do we tackle that problem?” Asked whether the proposed e-tolls, that have been the subject of a heated civil debate, would be established to assist with funding, Alli explains that e-tolling would solely be a method of collection and that one must not confuse it with the principal and policy of tolling. “The principle has been well established in South Africa and affirmed in two different places. In 1996, in the White Paper on Transport, we said that tolling is an instrument that the government will use where it is necessary, as it is believed that it can assist in terms of meeting the challenges of the budget. Additionally, it is clearly stated in the National Development Plan that this is an instrument that we will use when needed,” says Alli. South Africa has 325 019 heavy-load vehicles and the road freight industry employs 65 000 drivers. Air Airports Company South Africa (Acsa) owns and operates the country’s 10 biggest airports. The company also manages SOUTH AFRICAN BUSINESS 2016 108

OVERVIEW airports in India and Brazil. A 10-year spending plan announced in 2013 allocated R50-billion to expansion and R20-billion to maintenance. OR Tambo International in Johannesburg caters for more than 17-million passengers every year, receives more than 105 000 arriving airtraffic movements and employs 18 000 people. The Cape Town International Airport has been expanded and improved. King Shaka International Airport (KSIA) opened north of Durban in 2010. Emirates is the international carrier to KSIA. Several airports have been mooted as possible regional freight nodes: Wonderboom Airport in Pretoria, Polokwane Airport in Limpopo and Mafikeng Airport in North West Province. Transporting minerals Transnet Freight Rail is beefing up the commodity corridors that ferry raw materials. Amounts include: R26-billion on improving the manganese line to Port Elizabeth from the Northern Cape. Transnet aims to deliver 11.7-million tons of manganese by 2018, substantially increased from the 4.8-million tons delivered in 2011. R29-billion to upgrade the iron-ore line that links Sishen (also in the Northern Cape) with the Port of Saldanha in the Western Cape. As much as R50-billion could be spent on the connection between existing coal fields in Mpumalanga (and new ones in western Limpopo) with the Richards Bay Coal Terminal. The South African Ministry of Transport has several agencies and businesses reporting to it: Air Traffic and Navigation Services Company, Airports Company of South Africa (Acsa), National Transport Information System, Road Accident Fund, South African Civil Aviation Authority, South African Maritime Safety Authority (SAMSA) and the South African National Roads Agency Limited (Sanral). SECTOR INSIGHT • The Harrismith Logistics Hub will become an inland port. • Acsa is operating in India and Brazil. 109 SOUTH AFRICAN BUSINESS 2016