RAL has completed many upgrades
The Roads Agency Limpopo (RAL) has delivered a significantly improved performance over the past financial year and, under the stewardship of a newly appointed board and chief executive Maselaganye Petrus Matji, looks set to build on that success to deliver quality provincial roads in the years ahead.
“Limpopo’s road network acts as the bedrock of the province’s economic performance,” says Matji. RAL’s mandate is to build, maintain and rehabilitate Limpopo’s road network connecting the province’s five major regions of Capricorn, Waterberg, Mopani, Sekhukhune and Vhembe, and help move people and goods within the region.
But Matji is well aware of the challenges that face his agency. Limpopo has a road network of 20 260 km. Of this only about 6320, or 30%, of these roads are tarred; the remaining 14 300 km are gravel. Matji estimates that closing this backlog of tarred roads would cost about R150-billion, an amount unlikely to be sourced from the fiscus given the social challenges that the country and the province faces. “Building a road is not cheap,” Matji remarks.
He has had to make use of innovation and partnerships, while prioritising the parts of the network that need the most urgent attention. Roads that carry more than 500 vehicles per day and those in strategically located regions are given priority. But before that, the board and executive management have had to address corporate governance at the agency.
Improved governance
For the 2015/2016 financial year RAL received a qualified opinion, an improvement after years of receiving an adverse opinion from the auditor-general. Matji says this was achieved through leadership stability, strengthened internal controls, strict application of corporate governance principles and compliance with statutory and regulatory frameworks. “This would not [have] been achieved without the support of the board,” he says.
The board, under the chairmanship of Matome Ralebipi, was reappointed in November this year for another three-year term by Jerry Ndou, MEC for Public Works, Roads and Infrastructure in Limpopo. The board boasts the appropriate mix of skills ranging from engineering to finance and legal backgrounds, offering Matji appropriate support, who brings his own engineering and MBA background into frequent use.
In the last financial year to March this year RAL completed 31 road construction projects. Crucial projects such as the Bermuda Road between Ga Phasha and Mampuru and the Matsakale Road in the Kruger National Park will either be completed by the end of this year, or early in 2017.
Partnerships
One of the most remarkable achievements by the agency has been to rope in private sector partners to help fund road construction. These are mainly mining companies, such as Anglo Platinum, Exxaro and Ledjadja Coal, whose products are carried on provincial roads; cement producer PPC has also contributed. RAL has raised more than R300-million through such public-private partnerships.
The agency has partnered with Anglo Platinum to tar a 20km stretch of road in Sekhukhune that links Anglo’s Twickenham mine to surrounding villages. The overall cost of the project is R200-million; Anglo will contribute R46.8-million, with RAL being responsible for the balance.
In the Waterberg Region, RAL has partnered with Ledjadja Coal, which is constructing the Boikarabelo mine on behalf of Resgen, to upgrade the road from Lephalale’s commercial section to Steenbokpan. The project costs R200-million and Ledjadja has paid R71-million plus the cost of detailed design, while RAL will be responsible for the balance.
“We have decided to adopt a strategy where we bring in partners who can assist in road construction. Once our roads are in a good condition, businesses will be interested in participating in the Limpopo economy,” says Matji.
Mining companies normally build a facility such as a school, clinic or stretch of road and hand it over to the relevant provincial department to run. It is a sign of confidence in RAL that companies are willing to co-fund projects.
“What has RAL demonstrated? It is that they have the governance in place, they have the capacity and capability, and they have got the funding mechanisms in place to allow this to happen,” says Indresen Pillay, executive head of projects at Anglo Platinum.
Extra effects
One of the key spinoffs of road construction and design is that it benefits small, medium and micro-sized enterprises (SMMEs) that are subcontracted, such as consulting engineering firms. RAL earmarks about 30% of its spending for SMMEs and in the financial year to March SMMEs were paid R 109-million by RAL, against a target of R88-million. The over-expenditure was due to RAL taking over some projects from the department of public works, roads and infrastructure.
During the financial year, RAL’s revenue stood at R 698-million, while expenditure was at R2.5-billion, yielding a deficit of R1.8-billion, slightly down from R 2.1-billion the previous year.
Over the financial year, the agency compiled several major projects in Vhembe district, which has a strategic location as the northernmost region, sharing borders with Botswana, Zimbabwe and Mozambique, and hosting all three of Limpopo’s major industries of mining (coal and diamonds), agriculture and tourism. It is also home to the World Heritage Site of Mapungubwe.
As part of their contribution to developing skills for Limpopo’s industrialisation, RAL takes on mainly civil engineering graduates from various institutions around the country and places them on road projects in progress in order to gain practical experience.