CROCODILE COUNTRY INN NELSPRUIT 8 DECEMBER 2004
Program Director
MEC for Roads and Transport, Mr. Fish Mahlalela
Other Members of the Executive Council present
Distinguished Guests
Ladies and Gentlemen
Thank you for this opportunity to be with you on the occasion of the Mpumalanga Roads Indaba.
The economic environment
I believe that ours is a country at the brink of a dawn of new found dynamism and prosperity.
This Mpumalanga Roads Indaba is taking place against the backdrop of news that, in the past year, our economy has been growing at a rate faster than all our expectations.
The Gross Domestic Product (GDP) of our national economy grew by more than five percent during the third quarter of 2004, leading to many analysts predicting an overall growth rate of four percent in 2004.
The continuing strength of international commodity prices, the performance of the Rand, and low levels of inflation and interest rates, also mean that our economic fundamentals are not only sound but that we have every reason to remain upbeat about the growth path of our economy.
I think that during the course of deliberations over the next two days we need to consider how Mpumalanga must share in this bullish and exciting economic environment.
Already it should say a lot to us that the sectors that have been identified as showing the strongest growth in the recent period, such as the agricultural sector, construction, transport and communication and manufacturing, are among sectors that have a strong presence in our provincial economy.
Surely the challenges for all of us, particularly as we deliberate on the
state of the roads infrastructure in our province, is to ensure that such
sectors remain competitive and contribute to wider benefits for the province
through empowerment and employment creation.
The challenge of reducing the cost of doing business
This gathering could not have come at a better time as it gives us the opportunity to discuss one of the critical areas that has long been identified as affecting the competitiveness of our provincial economy and the various industries that are located here.
As the previous speakers have indicated the state of our roads and transport infrastructure in the province leaves a lot to be desired.
Over these next two days we must delve into heartfelt and frank discussions about what can be done to address these inadequacies in a manner that contributes to the overall growth and development of the province.
These discussions should hopefully lead to the finalization of a road and transport infrastructure investment strategy and prioritization programme that will take us forward over the short to medium-term.
I believe that we cannot hope to share in our country’s new found prosperity or improved investor sentiment if we half-heartedly approach the issue of “reducing the cost of doing business” in our province. This Roads Indaba must mark a turning point from the way we have handled this matter in the past.
A recent survey conducted by the Tshwane University of Technology (TUT),
where they were assessing how far the province had addressed issues raised by
business in the 1995 Industrial Strategy documents, noted that:
“Many secondary and tertiary roads in the province are in a very bad
condition. They deteriorated over the past 10 years. Many of the roads are
damaged because of the poor railway service, which causes cargo to be
transported by road transport. The roads were not built for such heavy vehicles.
Some large enterprises indicated that the poor conditions created a bad image
around visitors (First world Plant, third world roads) and was a high safety
risk”.
Much of what the researchers say in their report is common knowledge to all of us, and their conclusion, that “the bad condition of secondary and tertiary roads is still a huge constraint”, also does not come as a surprise.
We know that there are parts of our province that have roads that cannot cope with the level of traffic and are desperately in need of upgrading.
What is a surprise is that as far back as 1995, there was a call for the Department of Works, Road and Transport to formulate a strategy indicating priorities in terms of developing, upgrading and maintaining of the road network in the Province.
This was a call made on the basis that, as was noted in the strategy document, the “dispersed nature of economic activity in the Lowveld, especially the forestry and agro-related manufacturing activity, inevitably leads to a relatively high usage of secondary and even tertiary roads”.
In the industrial strategy for the Highveld, also released at that time, concerns were raised about the inadequate rail and road links both to major markets and within the province itself.
I do not think that this situation that we have described has changed at all. I also do not think we should another 10 years in order to make a difference.
This is not to suggest that the Department has made no progress in some of these areas. Believe me when I say that we have some hardworking colleagues in the Department of Roads and Transport.
MEC Mahlalela and his team should also be commended for fulfilling their expressed commitment of undertaking an audit of the state of roads in the province.
We are happy that such an exercise has been completed within agreed timeframes and is expected to assist the Department in its budgeting and prioritization process.
It is also important not to forget that the current state of the road and transport infrastructure in the province is also largely the legacy of policies of the past.
Accumulation and development strategies before the onset of our democratic dispensation were exclusionary and geared infrastructure towards supporting the segregation of those who lived in privilege from those that were poor.
We should also remember that there was little consultation on the formulation of policies that were geared to serve a limited few.
Since then major strides have been made to have transport policies that are people-centered and developmental.
I now turn to some of the issues that should be of importance in your deliberations, with a view that it is possible to develop an efficient and viable roads network in our province.
I believe that our approach to the building of new roads or the upgrading and maintenance of existing ones, within the existing and often limited budgetary constraints, should be one that is guided by both economic and social development imperatives.
It goes without saying that we need to aim to address the transport needs of the business community in the province, which as we all know, will lead to greater investment, competitiveness and possible jobs.
However, at the same time I must echo the concern that more must be done to improve the road infrastructure in our rural areas, even where possible economic benefits are minimal.
We should all agree that the province should prioritize some roads and infrastructure projects in our deep rural areas, where a considerable portion of our population live, in order to also impact on the quality of their lives.
Your deliberations should also reflect on the implications of the current division of responsibilities and the allocation of funding between the three-tiers of government with regards to roads and transport infrastructure.
Some interesting issues were raised at the recent hearings of the Select Committee on Finance in Parliament, which may be worth exploring further.
These included the question of whether funds should be directly allocated to provinces for road maintenance and a portion of the fuel levy be paid back to them also in order to take care of their own roads.
The relationship between provinces and the South African National Roads Agency (SANRAL) was also an issue, as some provinces saw the need for SANRAL to become more accountable especially relating to the management of national roads falling within provinces.
The adequacy of budgetary allocations for a viable and efficient transport infrastructure in the provinces has also always been an issue.
However, I think that a forum such as this one is exactly where should explore the financial requirements of a roads and infrastructure investment strategy to take the province forward.
I am not among those who believe that we should solely rely on national funds and lobby even for conditional grants to address backlogs.
I would suggest that we first need to establish our priorities properly. For example, what interventions can we make, and where, that can generate much-needed economic stimulus in our province?
Secondly, I would then look at our ability to spend the available funds. It is of no use to call for more funds when we are not spending our allocated resources as a result of shortages in capacity or governance challenges within the Department.
Thirdly, where allocated funds are inadequate surely we need to investigate, and I am happy that this in area that will be addressed in the Commissions, creative mechanisms for funding the infrastructure that we require. There are many possibilities, such as building partnerships with the private sector (e.g. PPP’s) or development finance institutions and so on.
The Provincial Growth and Development Strategy of the province, which we hope to formally launch in 2005, seeks to ensure alignment of plans between and within the different spheres of government and it is my hope that, in the near future, the provincial roads and infrastructure development programme or strategy should become aligned with IDP’s.
When the IDP’s systematically prioritize which roads should be built or
improved first, much financial and developmental synergies become possible in
our province.
Concluding remarks
Ladies and Gentleman, It is almost a cliché to say that ‘without good transportation, you cannot have a healthy and growing economy’.
This workshop is a testament to this provincial governments zeal and commitment to an economy that not only grows at rapid rates but also contributes to addressing the urgent challenges of poverty, joblessness and underdevelopment.
By inviting you all to this Roads Indaba we are also saying that government does not have all the answers. Much more can be done and must be done through smart partnerships, both across the different spheres of government and also between government and her social partners.
We look forward to insightful and constructive discussions over the next two days.
I thank you