Name and Location
N1/N2 Winelands toll-highway project, Western Cape, South Africa.

Client
South African National Roads Authority Limited (Sanral).

Project Description
The project encompasses 105 km of the N1 highway between Cape Town and Worcester, and 70 km of the N2 between Bot river and Cape Town.

The toll-highway project will include the construction and upgrade of roads and associated infrastructure on certain portions of the N1 between the R300 and Sandhills, and on the N2, in the Western Cape; the construction and upgrade of portions of N1/N2; the upgrade of the second bore of the Huguenot tunnel; the construction of toll plazas between the R300 and Bot river; and the construction of the new, closed ‘cut-and-cover’ tunnel alignment through Helderzicht, extending west from the Danie Ackerman Primary School to the Victoria street interchange.

In 2003, the project was granted environmental authorisation and was gazetted as a toll road in 2008.

Value
As the project is a 30-year concession, Sanral has proposed to develop it through a public–private partnership.

The concessionaire will finance the construction, maintenance and operation through toll collection and will be required to hand over the road to Sanral after this time.

The overall cost of the project is estimated at R10-billion.

Duration
The concession contract comprises the upgrade work on the N1 and N2 during an initial construction period of about three years and the upgrade, maintenance and operation of the road for the remaining 27 years.

The initial construction works will take three years to complete. The operation and maintenance period for the public–private partnership project is expected to start in 2015 and end in 2042.

Latest Developments
The initial cost of work undertaken as part of the N1/N2 Winelands toll project will be R10-billion, which will be funded through a user-pays tolling system, Sanral has announced.

“The notion that Sanral should fund this project from its own resources is, therefore, uninformed. This year, we received a total allocation of R12.5-billion to look after the entire national road network. Clearly we cannot take all of it to do one project in one province,” Sanral Western Cape regional manager Kobus van der Walt has said.

He notes that, while there has been arguments against tolling but favouring the sourcing of funds from existing fuel levy revenues, this income is required for national road upgrades and development elsewhere.

“In 2014/15, National Treasury collected R46-billion in fuel levies and R7.2-billion in vehicle licence fees, which [equals] R53.2-billion.

“In turn, R44-billion was allocated to roads across the three spheres of government, R4.9-billion to public transport infrastructure, R7.1-billion to bus subsidies and R266-million to road traffic management, bringing total expenditure to R56.3-billion. There was, therefore, a subsidy of R3.1-billion coming from the fiscus,” Van der Walt has indicated.

He adds that the Western Cape is the only province that has permission from National Treasury to implement a fuel levy to finance roads, but it has not yet been implemented.

There is further debt of R1.9-billion associated with the province’s Huguenot tunnel.

“Concerning the allegation by the City of Cape Town that the concessionaire stands to make a profit of R48-billion over the concession period, the city is confusing revenue with profit and ignoring the capital and operational expenditure. There would be interest to be paid on the debt raised,” Van der Walt has argued.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Sanral, tel +27 21 975 4600.
Group Five, tel +27 11 806 0241, fax +27 11 803 5829 or email scoventry@groupfive.co.za.
Basil Read, tel +27 11 418 6300 or fax +27 11 418 6333.
Bouygues Construction, tel +33 1 3060 3300, fax +33 1 3060 4861 or email bouygues-construction.com.