SANRAL works with strategic partners to enable maximal transformation on N2 Wild Coast Road project

The South African National Roads Agency SOC Limited (SANRAL) has provided a detailed update of its efforts to ensure meaningful participation by targeted enterprises on its flagship N2 Wild Coast Road (N2WCR) project.

Providing a progress report during a SANRAL small, medium and micro enterprise (SMME) Indaba held at the Lusikisiki Resource Centre on 10 July, Nwabisa Gxumisa, SANRAL’s District Office Manager, said, “SANRAL is happy with the opportunities that have benefitted local targeted enterprises on our N2WCR programme thus far, as well as the economic spin-offs that have been presented for the benefit of the communities. However, we have also identified gaps that inhibit us from surpassing our transformation goals.”

Gxumisa said that SANRAL had been working with strategic partners, including Original Equipment Manufacturers (OEMs) and Developmental Funding Institutions (DFIs) to ensure that the interventions intended for SMMEs are tailored to this sector for them to be fully effective.

“We need to have various funding models suitable to the SMME sector to enable access to funding and sustainable growth,” said Gxumisa, adding that some of the current solutions for SMMEs were not being fully leveraged due to cumbersome barriers.

The Mayor of Ingquza Hill Local Municipality, Councillor Nonkosi Pepping, said that the legacy of the N2WCR project would be vast and was already being realised by the local community. She stressed that there is room for more transformation on the project. “We were happy that the engineers working at Msikaba Bridge are local engineers, and that locals are benefiting from these projects. But we want to see more participation by designated groups, including qualified and capable youth, women and people with disability.”

SANRAL invited the likes of the Department of Small Business Development (DSBD), Small Enterprise Finance Agency (SEFA), Standard Bank, Indyebo Fund, Eastern Cape Development Corporation (ECDC) and Bell Equipment to engage on their solutions intended for emerging enterprises.

Kgolane Thulare, from the DSBD’s Business Infrastructure Unit, said, “It is important for these collaborations to occur between departments in order to reach our transformation goals,” he said while outlining the range of programmes the department is implementing to assist SMMEs, including their Craft Customised Programme, Shared Economic Infrastructure Facility and the Market Access Support programme. He also outlined the financial and non-financial support provided by its implementing agencies, SEFA and the Small Enterprise Development Agency (SEDA) respectively. “Together with SANRAL we are also working on a SANRAL projects cluster tool to be able to devise streamlined interventions for SMMEs,” he added.

Siphethuxolo Wulana, an Investment Officer from SEFA, outlined a range of funding solutions intended for SMMEs, including the Township and Rural Enterprise Programme, the Youth Challenge Fund, Small Manufacturers Enterprise Programme and the Inyamazane Fund (for Military Veterans), which range between R50 000 to R15 million. Wulama said that SMMEs subcontracted on SANRAL projects could also benefit from SEFA’s Asset Finance and Contract Finance solutions.

Lungisile Mkhethwa, Relationship Manager at Standard Bank, said that relationship banking, working capital, and vehicle and asset finance are intended to assist SMMEs. “It is important for us as a bank to perform proper due diligence before providing capital. Our relationship banking offering assists small business owners with sound financial management.”

Lusanda Kali, of Indyebo Fund, a short-term capital provider specialising in solutions for SMMEs, said that subcontractors on SANRAL projects can benefit from their Purchase Order Funding of up to R2.5 million.

Thando Dlanjwa, of the ECDC’s Rural Development and Enterprise Development unit, encouraged the SMMEs to take advantage of their Rural and Enterprise Finance, Jobs Stimulus Fund and Imvaba Fund intended for cooperatives. “We appreciate this road infrastructure development programme by SANRAL which will facilitate economic activity and boost the socio-economic outlook of this area,” he added.

Fundile Ntsinde, of Bell Equipment, said that its new Memorandum of Understanding (MoU) with SANRAL is intended to enable access to earthmoving machinery because access to funding is often a barrier for SMMEs. “We are aiming to leverage existing partnerships with DBSA, SEFA, Small Business Development and commercial banks to enhance the financial service offering and access to finance for small contractors,” he explained. He added that their three funding options available to SMMEs are cash or bank financing, rental with the option to purchase and an instalment sales agreement.

Reflecting on lessons learnt thus far, the N2WCR Business Forum Secretary, Lwandile Gcume, said that stakeholder management and cooperation among business stakeholders was vital for the N2WCR project’s success. “Social facilitation is important to address any contentious issues before any project can commence. SANRAL must appoint more social facilitators than are currently on the ground. There is also a need for local SMMEs, particularly grade 1s and 2s, to be capacitated and for SANRAL to consider relaxing some of the stringent criteria to enable their participation. We are happy that SANRAL has heeded our call and appointed an SMME Mentor for the project. This will greatly assist,” he said.

Gxumisa said that SANRAL’s R20 billion+ N2WCR flagship project stretching from the Gonubie Interchange outside East London, through the 112km greenfields from Ndwalane to Mthamvuna River on the border with KwaZulu-Natal, is anticipated to produce 8 000 direct jobs and around 28 000 indirect job opportunities.

Business stakeholders requested for more grant funding to be provided than loans and for relaxation of the stringent criteria that continues to exclude them from meaningful participation. SANRAL was also requested to put out more work packages on the Mtentu side of the project within the Winnie Madikizela-Mandela Local Municipality because more work is currently happening in the Ingquza Hill Local Municipality.