SANRAL DELIVERING TOWARDS ECONOMIC GROWTH IN SOUTH AFRICA. Presenter : Zandile Nene Project Manager : Design & Construction SANRAL : Eastern Region

Transcription

1 SANRAL DELIVERING TOWARDS ECONOMIC GROWTH IN SOUTH AFRICA Presenter : Zandile Nene Project Manager : Design & Construction SANRAL : Eastern Region

2 CONTENTS 1. SANRAL background 2. SANRAL current network 3. SANRAL funding 4. SANRAL current projects 5. Procurement 6. Stakeholder engagement 7. Conclusion

3 WHO IS SANRAL? The South African National Roads Agency SOC Limited (SANRAL) is: an independent, statutory company registered in terms of the Companies Act; represented by the Minister of Transport, is the sole shareholder and owner of SANRAL; operates in terms of its founding legislation - The South African National Roads Agency Limited and National Roads Act (Act No. 7,1998); governed by a Board of eight people, six of whom are appointed by the Minister of Transport; the Chief Executive Officer, who is appointed by the Board; and a representative of the Minister of Finance.

4 WHAT DOES SANRAL DO? SANRAL s mandate is to: finance, improve, manage and maintain the national road network - the economic arteries of South Africa.

5 WHAT DOES SANRAL DO? ENGINEERING Operate & Maintain: Routine road maintenance Line marking Toll operations Periodic maintenance Every 10-14years Design & Construction: New facilities Community development projects Rehabilitation Strengthening Every years

6 SANRAL S NETWORK

7 THE ROAD NETWORK Length of South Africa s road network = km Length of SANRAL s road network = km (2.8% of South Africa s road network) SANRAL s Non Toll Portfolio = km SANRAL s Toll portfolio = 3 120km (14.5% of SANRAL s total road network) 1 288km of the Toll portfolio is managed by Concession Contracts

8 FUNDING SANRAL operates in two very distinct business areas, being toll and non-toll operations as required by our Act. Non-toll is funded through government grant, Toll is funded through, mainly, the capital market and receives income through toll fees.

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11 PROCUREMENT Legislation: The Constitution, 217 (1) When an organ of state contracts for goods and services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost effective. Public Finance Management Act (PFMA), contracting for goods and services, must be done in a fair, equitable, transparent, competitive and cost-effective system that is consistent with the PPPFA. National Treasury practice notes, Specifies the supply chain management (SCM) norms and standards.

12 PROCUREMENT Legislation continued: The Preferential Procurement Policy Framework Act (PPPFA), stipulates that when government assesses contracts, it must take into account a preference point system which prescribes functionality, price and BEE Broad Based Black Economic Empowerment Act (BBBEE) Economic transformation will be promoted through preferential procurement in order to promote meaningful participation of black people in the economy.

13 PROCUREMENT The preference point system is split as follows: (Price/Preference) 80/20 system is for tenders with a Rand value of up to R (all applicable taxes included); and The 90/10 system is for tenders with a Rand value above R (all applicable taxes included). Note: Draft proposals :- 80/20 preference point system from R1m to between R10m, 90/10 preference point system from R1m to above R50m, A new proposed category, the 50/50 preference point system will be applicable to tenders with a projected value of less than R10m.

14 PROCUREMENT - CONSULTING ENGINEERS Two-envelope system open only the technical proposal of valid tenders in the presence of tenderers agents who choose to attend at the time and place stated in the tender data and announce the name of each tenderer whose technical proposal is opened Evaluate the quality of the technical proposals offered by tenderers, then advise tenderers who remain in contention for the award of the contract of the time and place when the financial proposals will be opened.

15 PROCUREMENT - CONSULTING ENGINEERS Two-envelope system continued: Open only the financial proposals of tenderers, who score in the quality evaluation equal to or more than the minimum number of points for quality stated in the tender data, and announce the total price and any preferences claimed. Return unopened financial proposals to tenderers whose technical proposals failed to achieve the minimum number of points for quality.

16 PROCUREMENT - CONSULTING ENGINEERS POINTS AWARDED FOR PRICE: THE 80/20 OR 90/10 PREFERENCE POINT SYSTEMS

17 PROCUREMENT - CONSULTING ENGINEERS Allocation of BEE points

18 PROCUREMENT - CONSULTING ENGINEERS Targeted Enterprise A registered consulting engineering firm contracted (either by Joint Venture, partnership or sub-contracting) by the Service Provider to perform a specified percentage (min. 20%) of work.

19 PROCUREMENT - CONSULTING ENGINEERS Challenges: Prices are pegged very low and companies battle to make a profit as a result, Negative mark ups tendered to win tenders, Inexperienced personnel are being used which do not give the standard required, More time spent on training the inexperienced personnel during the supervision stage.

20 PROCUREMENT - CONTRACTORS One-envelope system Evaluated only on price and preference. Contract Participation Goals (CPG) targets: Labour target for the contract is 6% of the tendered sum, 30% is to be contributed by women and 30% to be contributed by youth (under 35 years). Black Enterprise (BE) utilisation is 12% of the tendered sum, 10% is to be contributed to women owned companies.

21 PROCUREMENT - Challenges The lowest tender is not always the right contractor to carry out the project lack of experience and financial difficulties, Cyclic industry dependant on public investment and spending, Prices can be pegged very low and contractors are battling to make a profit as a result, Cheapest sub-contractors are being used which do not give the standard required, Tendering high and low rates - Imbalanced rates, Contractors not willing to undertake additional work at tendered rates when too low, Leads to claims - Time consuming in evaluating the claims - Can lead to breakdown in relationships,

22 PROCUREMENT - Challenges Costs to parties, Dispute Adjudication Boards (DAB), Quality of personnel and plant lacking, Seems to be a lack of effort to complete works within time, Production rates, Failure to adhere to the programme of works, Coordination between contractor and sub-contractor, Quality of equipment being used on site - affects rate of production.

23 PROCUREMENT - Challenges N /1: IMPROVEMENTS TO BALLITO I/C (KM 6.66) ON NATIONAL ROUTE 2 SECTION 27

24 PROCUREMENT - Challenges N /1: IMPROVEMENTS TO BALLITO I/C (KM 6.66) ON NATIONAL ROUTE 2 SECTION 27 The original contractor, KNS Construction (Pty) Ltd, appointed in November 2010, commenced work in February 2011, Liquidated on 11 January 2012, after completing approximately 25% of the work.

25 STAKEHOLDER ENGAGEMENT Typical stakeholders on a project: Government departments, Land owners, Service owners, Service providers, Communities.

26 STAKEHOLDER ENGAGEMENT N /3: THE UPGRADING OF NATIONAL ROUTE 1, SECTION 17 BETWEEN HOLFONTEIN (KM 24.0) AND KROONSTAD (KM 45) SANRAL awarded the consulting engineering services in July 2012; construction for the project started in February 2015 and is due for completion in February Intervention: The existing carriageway will be upgraded and rehabilitated to form the northbound carriageway of the new dual carriageway freeway, and a new southbound carriageway to the east of the existing road will be constructed.

27 STAKEHOLDER ENGAGEMENT N /3: THE UPGRADING OF NATIONAL ROUTE 1, SECTION 17 BETWEEN HOLFONTEIN (KM 24.0) AND KROONSTAD (KM 45)

28 STAKEHOLDER ENGAGEMENT - Challenges ENVIRONMENTAL APPROVALS Delays in approvals, Poor communication, Water Use License Application (WULA). SERVICE RELOCATIONS Cooperation of service owners, Wayleaves, Service Relocation.

29 STAKEHOLDER ENGAGEMENT - Challenges LAND ACQUISITION Delays in willing seller, Finalising expropriation with estates, Landowners withdrawing PTO s once contractors on site. COMMUNITY RELATED ISSUES Identification of graves, Relocation of graves, Compensation of families.

30 STAKEHOLDER ENGAGEMENT N /2: THE UPGRADING OF NATIONAL ROUTE 2, SECTION 26 FROM UMDLOTI I/C (KM 11.0) TO TONGAAT TOLLPLAZA (KM 21.0) SANRAL awarded the consulting engineering services in October 2009; construction for the project started in October 2011 and was completed in August Intervention: The capacity improvement entails the addition of one or two lanes over the project length, mainly in the median. This will result in there being 4 lanes in both directions on the N2 between the start of the project and the new KSIA Interchange and 3 lanes in both directions from there to the Toll Plaza.

31 STAKEHOLDER ENGAGEMENT N /2: THE UPGRADING OF NATIONAL ROUTE 2, SECTION 26 FROM UMDLOTI I/C (KM 11.0) TO TONGAAT TOLLPLAZA (KM 21.0)

32 Labour: STAKEHOLDER ENGAGEMENT - CHALLENGES N /2: THE UPGRADING OF NATIONAL ROUTE 2, SECTION 26 FROM UMDLOTI I/C (KM 11.0) TO TONGAAT TOLLPLAZA (KM 21.0) Illegal strike on site, 225 local labour were dismissed, Three offices were damaged, 2 completely and 1 partially, Contractor obtained an urgent interdict from the Labour Court, Contractor had to employ armed security on site for protection of their core staff, Strong pressure to re-employ those that had been dismissed by other stakeholders, Recruitment had to start all over again through the Department of Labour.

33 STAKEHOLDER ENGAGEMENT - CHALLENGES N /2: THE UPGRADING OF NATIONAL ROUTE 2, SECTION 26 FROM UMDLOTI I/C (KM 11.0) TO TONGAAT TOLLPLAZA (KM 21.0) Lighting contract Nominated sub-contractor, Requirements by the South African Civil Aviation Authority (SACAA), Suppliers. Health & Safety issues Accident during the stressing of the cable at the Umdloti River Bridge, Dept. of Labour stopped work to conduct their investigations,

34 STAKEHOLDER ENGAGEMENT - CHALLENGES N /2: THE UPGRADING OF NATIONAL ROUTE 2, SECTION 26 FROM UMDLOTI I/C (KM 11.0) TO TONGAAT TOLLPLAZA (KM 21.0) Labour intimidated by Union workers who were on strike

35 LESSONS LEARNT CONTRACTOR S SITE STAFF Quality of Contractor s staff: Inexperienced staff, Moving of staff off site. Emphasise: Contracts Manager registered with the SACPCMP, tendered supervisory staff to be available for the duration of construction.

36 LESSONS LEARNT No work may start unless ROD has been received. Do not go out to tender without all the required Environmental Approvals. Insolvency of Contractor - Warning signs: Low tender amount Rates imbalanced Rates below cost Do a financial due diligence

37 LESSONS LEARNT Labour: Appointment of labour. Training. Illegal strikes. Data base of labour available to be compiled before award of tender. Labour steering committee to be formed and trained before award of tender

38 Umgeni Interchange SUCCESS STORIES AWARD WINNING PROJECTS

39 SUCCESS STORIES AWARD WINNING PROJECTS Chota Motala Interchange

40 SUCCESS STORIES AWARD WINNING PROJECTS Blackburn Pedestrian Bridge

41 SUCCESS STORIES AWARD WINNING PROJECTS Tshelimnyama Pedestrian Bridge

42 KwaMashu Interchange SUCCESS STORIES AWARD WINNING PROJECTS

43 THANK YOU SANRAL S FRAUD HOTLINE/TIP OFFS ANONYMOUS TOLL-FREE PHONE NO TOLL-FREE FAX NO sanral@tip-offs.com