S Ndebele: South African Road Federation Conference

11 September 2006

KwaZulu-Natal MEC for Transport, Community Safety and Liaison Mr Bheki Cele,
the President of SARF, the Deputy President of SARF Mr Chris Hlabisa, delegates
from Tunisia, France, Zambia, Botswana, Tanzania, Switzerland, Ghana, Namibia,
Nigeria, the United Kingdom and the United States of America, head of the
KwaZulu-Natal (KZN) Department of Transport Dr Kwazi Mbanjwa, Heads of
Department and officials from other government departments, other distinguished
guests, ladies and gentlemen.

Let me take this opportunity to thank the South African Road Federation
(SARF) for inviting me to deliver the keynote address at this important
conference. On behalf of the people of South Africa and particularly
KwaZulu-Natal, our government extends a warm welcome to all delegates attending
this conference.

There is no doubt that this conference has come at a time when South Africa
and Africa prepare to host the 2010 Soccer World Cup. Information sharing will
be fundamental to the provision of a balanced road network, as well as social
and economic growth in Africa.

The necessary economic and social growth sought in terms of the Millennium
Development Goals for Africa and the African Renaissance must be achieved. The
alleviation of poverty cannot take place without a substantial improvement in
road infrastructure.

It was John F Kennedy who once said: "It is not wealth that builds roads,
but roads that build wealth".

Improving quality of life

By investing in infrastructure such as bridges, roads, ports, airports and
so on, a country can facilitate trade and creation of wealth as roads do not
only provide access to markets, services, employment, business development and
transport, but they also improve personal mobility and quality of life.

The socio-economic development of Africa is being held back by a lack of
efficiency and effectiveness of the road network throughout the continent. I am
hoping that this conference will be able to examine the state of the African
road network and provide solutions on what can be done in terms of sound
delivery, management and operations.

The challenge that all of us face is to find innovative ways to provide
improved transport infrastructure that will make the less vulnerable undertake
productive activities in a wider economy.

Solutions to Africa's balanced road network will no doubt lead to benefits
that are more tangible such as access, price reduction and service
improvements. The stranded will be mobilized quite rapidly and improved service
for all road users will lower transit times with positive productivity
impact.

My colleague, the national Minister of Transport Mr Jeff Radebe, recently
shared with members of the American Chamber of Commerce who were in South
Africa, some of the developments in transport infrastructure which include the
following:

The Airports Company of South Africa (ACSA) has committed some R8 billion
over the next few years for modernisation and upgrading projects at our major
airports, including the building of a new passenger and cargo airport as part
of the Dube Trade Port complex north of Durban. The Air Traffic and Navigation
Services Company (ATNS) has made major strides to improve our airspace
management, and some of their capital expenditure programmes include R96
million for the renewal of terrestrial aeronautical navigation systems and some
R160 million for replacement of existing older radar systems in certain areas
of South Africa.

In general, our Government is gearing up, and in certain cases has started,
to roll out the massive infrastructure development programme across various
sectors, estimated at R400 billion, including planned R134 billion investments
by Eskom and Transnet in the next five years.

Government commitment

For national roads, Government is planning to mobilise investment in excess
of R25 billion from both public and private sources, over the next five years
and has committed about R63 billion for the next three years in the three
spheres of government. The R25 billion, is over and above the more than R2
billion baseline allocations made to the South African National Roads Agency
per annum to manage the non-toll national road system.

A total of R10,7 billion will be used to expand the state toll road network.
In addition, the private sector will invest an estimated R16 billion in
concession toll roads. A significant proportion of this total investment will
be focused on major metropolitan nodes to address the escalating congestion
challenges. With reference to other roads, Government is gearing up to invest
R5,4 billion in the development of access roads across the country in the next
three years, using labour intensive methods with a focus on maximising job
creation and skills development. A further R500 million has been secured for
investment in strategic secondary roads that are critical for the movement of
freight.

Regarding freight transport, Transnet has committed to invest R41 billion
over the next 5 years to improve services and ensure seamless freight
logistics. Investments will be made in the areas of ports, pipelines and rail.
Of the rail portion, R8,9 billion will be invested in the coal line and R2,7
billion in the iron line, while R10,8 billion is planned for improving
infrastructure in the General Freight Business.

Eskom and Spoornet are also concluding talks to develop a new coal rail line
that will supply the Majuba power station, estimated at about R2 billion.
Government is also finalising a rail branch line development strategy, which
will pave the way for the development of an investment plan for branch lines
across the country. In KwaZulu-Natal the Nkwalini line is underway at a cost of
about R10 million.

Transnet is planning expansions at most of South Africa's ports, as well as
a R3,2 billion rand investment in the new port of Ngqurha. Some of the major
investments will be made at Durban port, i.e. R6 billion to improve the car and
container terminals and Maydon Wharf. Another R6 billion will go toward the
expansion of the bayhead complex. Richards Bay will also get major
improvements. These investments are critical for increasing the throughput of
our ports in line with the National Freight Logistics Strategy.

On the passenger rail side, Government is finalising the National Rail Plan
and associated business plans, which will focus on upgrading infrastructure and
improving services in priority corridors across the country, as part of our
efforts to improve public transport in our country.

World cup transport

As part of our preparations for the 2010 World Cup, R3,5 billion has been
allocated for public transport infrastructure. R241 million, outside of the
above figure, has already been allocated to host cities for the improvement of
public and non-motorised transport in the vicinity of the stadiums in Central
Business Districts (CDBs) and stadia linkages in key corridors linking
residential areas with CBDs and stadia as well as in communities where people
live. The R3,5 billion will be allocated across the next three years to 2009
with R700 000 for July 2006, R1,8 billion in August 2006 and R1 billion in
September 2006. Projects to be funded include dedicated public transport
infrastructure, interventions to ensure public transport friendly routes,
motorised transport facilities including pedestrian facilities, and intelligent
transport systems.

As identified in the process culminating in the formulation of the
Accelerated and Shared Growth Initiative for South Africa (AsgiSA), our country
has some key inhibiting factors that are constraining the growth of our
economy. These constraints are evident at both the macro economic and sectoral
levels and need targeted focus to be effectively addressed. They include a need
for job creating activities, the development, acquisition and retention of
skilled personnel, ensuring sufficient amounts of resources (i.e. delivery
capacity funds, human capital, materials, equipment and machinery), input
sector focus on supporting economic growth sectors, reduction of input costs,
regulatory environment constraints, and Government specific organisational and
delivery capacity, among others.

We regard job creation as a critical area for first and second economy
integration. As we know, our economy has not created jobs faster than there are
entrants to the market, notwithstanding the positive growth we have been able
to sustain for several years. From an infrastructure perspective delivery
through the Expanded Public Works Programme (EPWP) is critical for success in
job creation. This approach involves the application of labour intensive
methods to provide infrastructure. Success of this programme relies on the
mobilisation, training and effective use of the workforce on site to ensure a
streamlined and high quality delivery of infrastructure. This approach has
meant a change from conventional practice in the construction industry, and in
certain cases the learning curve has been steeper than expected causing delays
in programme rollout. However, Government is geared up to address key
challenges in this regard. Skills shortages have also been found to be a major
inhibitor to the rollout of key government programmes. This is so for both
Government internal capacity and industry capacity. The recent study by the
South African Institution of Civil Engineering called "Numbers and Needs"
clearly articulates the challenge we face in the area of engineering, and the
picture is equally worrying in other fields within and outside of the transport
sector.

Public private partnership

It is thus very necessary that industry supports Government in implementing
capacity development initiatives such as the Joint Initiative for Priority
Skills Acquisition (JIPSA) to bring the urgently needed skills to South Africa,
while also rolling out our medium to long-term capacity development strategies.
The construction industry not only faces a challenge in mobilising human
capital, but the sheer demand for construction will put a strain on the supply
of materials such as cement, steel, concrete, and other raw materials.

This period will also require heavy machinery and equipment supply, which
will be thinly spread across the various projects. going back to human capital,
specialised skills such as project management, engineering design and artisan
will be highly sought after. This presents a threat that is already being
observed in industry, that of price inflation in view of the increase in
demand. This trend needs to be arrested soon, otherwise South Africa will
generate less infrastructure per allocated spend.

The National Freight Logistics Strategy identified the key bottlenecks in
the logistics system that inhibit seamless movement of cargo, as well as
increase the cost of doing business in South Africa. The strategy went further
to define a vision for seamless logistics and identified the necessary key
interventions to improve this situation. Our main challenge now is to
accelerate the rollout of the strategy to ensure implementation of elements
such as economic regulation in the rail and port environments, the improvement
of rail infrastructure, rolling stock and operations, the introduction of
competition to bring down costs and improve service and the achievement of an
appropriate modal split of cargo movement.

Among others, environmental regulations were identified as a challenge, the
sheer time it takes to obtain the go ahead to initiate development and the
cumbersome nature of the processes involved. Many projects across various
sectors are held up by this agreeably important step, which urgently needs
simplification and streamlining. However, government has realised this
challenge and is working towards its resolution, as evidenced by the
introduction of new Environmental Impact Assessment (EIA) regulations early
this year.

In conclusion, I wish to challenge delegates to critically review current
research initiatives to determine alignment with continental objectives, in
order to overcome the legacy of the past and enhance the quality of life for
all our people. With those words, I wish you all the best in your deliberations
and look forward to the implementation of the resolutions of this
conference.

Thank you.

Issued by: Office of the Premier, KwaZulu-Natal Provincial Government
11 September 2006
Source: SAPA