Sanral aims to have R28bn of tenders in the market by end of March

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29-01-2024
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Moneyweb
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Intends advertising another 70 ‘in the next couple of weeks’.

The South African National Roads Agency (Sanral) is aiming to have about R28 billion worth of tenders in the market by the end of its financial year in March this year.

The injection of these tenders into the economy will provide a welcome boost to South Africa’s struggling construction industry.

Sanral CEO Reginald Demana said the roads agency intends to put out at least another 70 tenders to the market “in the next couple of weeks”.

Demana said this will result in about R28 billion of tenders advertised under Sanral’s Interim Preferential Procurement Policy (PPP) in the current 2023/2024 financial year.

Sanral confirmed last week that some of the largest and most important tenders being advertised include reissued tenders for:

• The improvement of the N2 Section 34 from Leiden to Camden, with an estimated value of R1.9 billion, which was out on tender and closed on Friday [26 January 2024];
• Package 1 for the Moss Kolnik-Umlazi Canal, with an estimated value of R4.1 billion, which is currently out on tender and will close on Wednesday [31 January 2024]; and
• The Marianhill Plaza-Key Ridge project, with an estimated value of R3.1 billion, is out on tender and will close 28 February 2024.

The announcement about the R28 billion in tenders to be advertised follows Sanral reporting in December that it had closed almost 77 tenders worth R6.43 billion and had started adjudicating these tenders with the aim of awarding them early in 2024.

These tenders were among those cancelled because of a high court legal challenge by several construction companies to Sanral’s new PPP scoring system, which it adopted in May 2023 and was to be used to adjudicate these tenders.

The legal challenge led to Sanral withdrawing the scoring system in October 2023, cancelling all existing advertised tenders that had not yet closed and embarking on a public participation consultation process with interested and affected parties on a proposed interim PPP.

This resulted in Sanral readvertising 86 road construction tenders, collectively valued at R7.2 billion, at the end of November 2023 and indicating that its stated aim is to fast-track the adjudication of these tenders to get these projects back on track as speedily as possible.

Sanral confirmed last week that of the 77 tenders worth R6.43 billion that closed late last year:

One national project valued at R331 million has been awarded to date, consisting of 28 packages awarded to 14 tenderers for bridge and major culvert inspection;

• One tender is currently in the adjudication process; and
• 75 tenders are still at various evaluation stages.

Demana said earlier this month that Sanral is on a mission to accelerate work in the construction industry early in the first half of 2024.

“There is quite a lot of work we want to dish out. By March, we want to have about R28 billion worth of tenders in the market.

“However, some will be closed towards April when we enter the new financial year,” he said.

Demana said the full rollout of the additional contracts Sanral will be issuing will include dividing the R28 billion across the entire country and into all provinces.

“We try and make sure that we are distributing work and tenders equitably so that we don’t leave any part of the country feeling that we are not looking after the national road network in their area,” he said.

The spread of work across Sanral’s four regions:

• The Western Region, comprising the Western Cape and Northern Cape, will get contracts worth R600 million;
• The Southern Region, which encompasses the Eastern Cape, will get contracts worth R2.8 billion;
• The Eastern Region, which includes the Free State and KwaZulu-Natal, will get contracts worth R2.1 billion; and
• The Northern Region, comprising Gauteng, Limpopo, Mpumalanga and North West, will get contracts worth more than R500 million.
• Demana said the Eastern and Southern regions are allocated much bigger portions because they encompass significant infrastructure projects, such as the N2/N3 expansion in KwaZulu-Natal and N2 Wild Coast project in the Eastern Cape.

He added that wherever the Sanral projects are located, the roads agency has a mandate that value must flow through to small, medium and micro enterprises (SMMEs), local contractors and local communities.

Demana said this means that at least 30% of these tenders will be allocated to smaller black-owned construction companies as part of Sanral’s efforts to deepen transformation and in terms of its interim PPP.

Through these contracts, Sanral aims to ensure that small businesses graduate to become major construction companies, he added.

Demana stressed that the aim, as Sanral embarks on this extensive rollout of tenders, is to stimulate economic growth, promote infrastructure, development and create opportunities across the country.

Construction sector eager to get going

Master Builders South Africa (MBSA) executive director Roy Mnisi said last week South Africa’s construction sector is “ailing” when expressing concern about delays with the multi-billion-rand redevelopment of six South African border posts because of an extension to the closing date for the submission of bids for these projects.

Mnisi said contractors are looking for work and should be given jobs, allowed to complete the job and then move on to other jobs “to keep the industry going”.

“There is a huge backlog in public sector projects. A lot of them are still in the pipeline that haven’t been implemented,” he said.

Mnisi said it included pending projects by a number of government departments and entities, including Sanral, the Department of Transport, and the Department of Water and Sanitation.

“If we keep on postponing, cancelling or going back and forth, it just doesn’t work for the industry, which is already ailing,” he said.