Sanral Awards 7 Billion Rands Highway Contracts In South Africa

The roads agency said the move aims to boost the construction sector as part of government investment. 

By Yvonne Tagoe on
25th February 2023

The South African National Roads Agency (Sanral) announced the award of four major construction tenders for the N2 Wild Cost highway in the Eastern Cape and the N11 in KwaZulu-Natal for R7 billion (US$401 million). 

“These awards will help boost the construction sector and should be seen as part of the broader national effort by the government to invest in economic infrastructure,” Sanral said in a statement. 

The four contracts awarded are: 

  • Construction of the N2 Wild Coast Highway, from Msikaba Bridge to Mtentu Bridge in the Eastern Cape. The project was awarded to WBHO H&I JV at the cost of R2.54 billion (US$145.5 million). It will run over 54 months. 
  • Rehabilitation of the N2 from Mt Frere to Ngcweleni River in the Eastern Cape was awarded to Rumdel Construction Cape. The 45-month project is valued at R1.2 billion (US$68.7 million). 
  • Construction of the N2 Wild Coast Highway from Lingeni Intersection to Msikaba Bridge in the Eastern Cape was awarded to the WBHO-Edwin Construction JV. The project runs for 45 months and has a contract value of R2.29 billion (US$131.1 million).
  • Upgrade of the N11 from the N11/R103 Interchange to Elandslaagte in KwaZulu-Natal. The road connects Ladysmith and Newcastle. The R864.8 million (US$49.5 million) tender was awarded to Raubex Construction. It is a 39-month project. 

David Fraser, Peregrine Capital executive chair, said the project would boost the construction industry and give it much-needed momentum.

“Long may they continue. Hopefully, it tells us that Sanral is going to continue to catch up with the [contract award] backlog. They did nothing for so long. Firstly, they have to clear the backlog and, secondly, put out the current contracts as well. I certainly hope this isn’t the last [of the awards], and there is a continued pipeline of contact awards that keep coming out,” said Fraser. 
Sanral said the projects would provide black-owned small, medium, and micro enterprises (SMMEs), who are subcontractors on the project, a collective revenue of R1.2 billion US$68.7 million). 

The agency said 35% of the two Wild Coast highway construction projects will be sub-contracted to black-owned SMMEs, with this percentage exceeding Sanral’s transformation targets.

It added that 30% of the N2 from Mt Frere to Ngcweleni River and the N11 from the N11/R103 Interchange to Elandslaagte contracts would be subcontracted to SMMEs. 
“Through the establishment of Project Liaison Committees (PLCs), we will also ensure fairness and transparency in all the appointments of subcontractors and the engagement of local labour,” said Themba Mhambi, Sanral board chair.
Sanral also ensured that the project would provide large-scale job creation, skills development, knowledge transfer, and poverty relief. It added that the significantly long construction periods afford these communities sustained economic opportunities.

“If the Sanral separately funded community development projects are factored into the equation, the number of SMME opportunities – as well as training and job opportunities for ordinary members of our communities – significantly increases, thus tangibly reducing unemployment, inequality, and poverty. Moving forward, striking a balance between safeguarding our big and established companies and creating opportunities for black businesses at higher and lower CIDB [Construction Industry Development Board] grades will be a material deliverable within Sanral,” said Mhambi.

Top Photo: Road construction works - Stock Image (Bambulla | Dreamstime)

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