By: Craig McLachlan

Job creation is virtually unattainable without decent transport infrastructure and good-quality mobility networks. It is for this reason that the N2 Wild Coast Toll Road (N2WCTR) is regarded as key to unlocking a new and golden age for a signi- ficant number of the unemployed of the Eastern Cape.

Passing through some of the country’s poorest and most rural communities, the new route will serve as an artery of economic life. Barriers that once excluded a region of the province from investment, development and realising its economic potential will be removed. Living standards will be raised and new direct, indirect and legacy job opportunities will be created.

The Eastern Cape’s official unemployment rate stands at 28.6%, expanded unemployment extends to 44.5% and over two-million social grants are paid out each month. These unemployment percentages are averages for the province, with some rural municipalities, such as Ingquza Hill (centred on Lusikisiki, Flagstaff and Holy Cross), having unemployment rates of more than 85%.

Enter the N2WCTR project, one of the biggest job creation initiatives through road construction in the history of the province.

While some of the estimated 55 000 jobs to be created will ensure people that are currently employed stay employed, a significant proportion will be new jobs. Potentially, as much as 5% of the estimated 980 000 unemployed individuals in the Eastern Cape could gain some employment through the project and its spin-offs.
About 5% of the budget for the 112 km greenfield section of the N2WCTR will be spent on labour, with more than R400- million to be allocated for wages for unskilled, semiskilled and skilled individuals employed directly on the N2WCTR project. A further R1.5-billion is destined for local small, medium-sized and micro- enterprises (SMMEs), including contractors and suppliers of goods and services for road and bridge construction.

The South African National Roads Agency Limited’s (Sanral’s) direct job creation forecast is 1.8-million work days, or 8 000 full-time-equivalent (FTE) jobs over the construction period of four to five years. These jobs will not only be for unskilled labour, but also for semiskilled and skilled individuals, including local builders, engineers, grader operators, excavator operators, welders, mechanics, foremen, drivers and bricklayers, besides others.

According to the economic employment opportunity propensities indices for road construction projects, up to 25 000 additional indirect FTE jobs will be created by subcontractors and suppliers over the construction period. These indirect jobs will be in a variety of fields: security, plant hire, manufacturing, catering, logistics, and aggregate and hard rock products, besides others.

But there is more.

Wages earned have been shown to have a two- to three-times multiplier effect in the local economy as the money is spent and respent in the local economy, boosting local retail and service businesses.

Further, the new route, which opens up access to the Pondoland area and creates a shorter and faster link between KwaZulu-Natal and the Eastern Cape, will promote local and regional economic growth in a number of sectors, including manufacturing, transport and logistics, hospitality and tourism, agriculture and agroprocessing.

Tourism, in particular, is seen as a high- growth-potential sector, with an international study indicating that one new job is created for every 30 additional stay-over tourists brought to an area. A 2008 specialist tourism study conducted as part of the environmental-impact assessment report estimated that, over a ten-year period after construction, an additional 674 000 tourists would be brought to the Eastern Cape as a direct result of the N2WCTR project. This will require more than 1 050 new beds in the hospitality industry, 900 of which will be in the Transkei area. At the postulated 30:1 ratio, the additional visitors will increase local employment figures by up to 22 450 jobs over the first ten years of the route’s being.

Critics may argue that most of these jobs will only be short-term employment opportunities. But the long-term benefits of even short-term jobs and opportunities are significant for two reasons.

Firstly, as the project will last an average of four to five years, many local construction SMMEs will be able to improve their Construction Industry Development Board grading, buy plant and equipment and develop the necessary expertise to grow their businesses. Similarly, local suppliers of goods and services will be able to grow during this period. Sanral has developed, and will implement and monitor, strong enterprise development and community development programmes, which will run concurrently with the construction of the roads and bridges. This means that beneficiaries will be able to continue their businesses or careers after the construction phase of the project has been completed. Let us not forget that other infrastructure development programmes and private developments will also be jump-started as a result of the N2WCTR project.

Secondly, the provision of a significant number of meaningful jobs – even if only for a limited period – on a project that will gain national and even international attention in an area that is currently severely under- developed and has a very high unemployment rate will have several meaningful local socioeconomic benefits that will outlast the project. These include the restoration of self and community pride and the transfer and retention of relevant skills, expertise and resources into the area, as well as the introduction of inspiration and hope for local scholars and students and the accumulation or improvement of individual, family and community assets.

Over and above the economic growth that will occur as a result of initiatives and investments in the private sector, national and provincial departments and agencies, as well as local municipalities, are getting involved to ensure that the various government initiatives linked to the N2WCTR corridor are effectively coordinated and encouraged.

These initiatives, which are led and coordinated by the Eastern Cape Office of the Premier, are linked to agriculture and agroprocessing in the Wild Coast Special Economic Zone, the ocean economy and other rural and local development initiatives, such as land use planning/nodal development for hospitality and tourism, small-scale commercial farming, community-based tourism and small town development initiatives. The initiatives stand to further contribute to socioeconomic growth and development in the region.

Opponents of the project, who decry the fact that the essence and attraction of the Wild Coast will be destroyed by rampant commercial development as a result of the N2WCTR, either do not know or do not acknowledge the many layers of protection granted to the Wild Coast by new and old laws and regulations. These include the old, but still valid, 1 km Transkei coastal development exclusion zone, the very effective National Environmental Management Act, the National Roads Act and the new Spatial Land Use Management Act. This protection, coupled with the commitment of the key stakeholders, will ensure planned and controlled nodal development, as well as the expansion of protected areas and the development of eco-, adventure-, community-based and conventional tourism products that will enhance and protect the Wild Coast.

Similarly, critics who say government should not be spending public funds on major infrastructure projects in a period of economic downturn are either ignorant of or deliberately ignoring fundamental economics. In addition to the well-established link between economic output and aggregate demand (total spending in the economy), especially during recessions, several World Bank studies have shown that investment in major new transportation corri- dors has a better economic return on investment than any other type of economic infrastructure. It makes sense to invest in the N2WCTR now and not further postpone it.

Based on the widespread impact of the N2WCTR project, it stands to reason that this road infrastructure project should be viewed as a catalyst for not only local job creation but also sustainable local, regional and national economic development.

By changing lenses to view this project from a fresh and alternative angle, nay-sayers and critics alike should begin to recognise the N2WCTR project for what it really is: a process of integrated development with a road running through it.