19 November 1999
Master of Ceremonies,
Mr Tim Ivins and your Management Team from the N3 Toll Concession (Pty) Ltd,
Mr Nazir Alli and National Roads Agency Management Team,
Engineers and Contractors,
Members of the Media,
Distinguished Guests,
Ladies and Gentlemen.
South Africa's road infrastructure - together with its people and natural resources - is one of its greatest assets. In my capacity as Minister of Transport, I have the great privilege of serving as the custodian of this national treasure. It therefore gives me great pleasure to be here today, participating in an event which will stand as a significant milestone in the process of adding value to this asset.
The infrastructure of any country lays the foundation for its development, and an investment in its national infrastructure expresses confidence in the country's economic, social, political and cultural potential.
Such confidence ensures that the image we project to the world corresponds with the reality we are building - that of a world class infrastructure serving not only commerce, industry and tourism, but linking town and countryside and serving the needs of the many millions of ordinary travelers who use our roads daily to commute to work or seek employment, to access social services, educational opportunities or markets for their produce, to return to their rural homes for weddings or funerals, or simply to enjoy a well-earned rest visiting friends or family.
At the regional level, South Africa is a key player in the economy of the Southern Africa Developing Community, and our position of economic leadership in SADC places a special responsibility on us to meet the demands of regional integration.
As custodians of this national road network it is imperative that we, as government, ensure that our country's reputation for efficient mobility and pleasurable travel not only remains intact but is further enhanced for the benefit of the generations to come.
To do so is no straightforward task. In the context of our new democracy we are faced with a fresh range of tasks and challenges - what I would call the new challenges of social inclusivity - and we find ourselves having to meet these demands and challenges in the context of tight fiscal constraints imposed on us by an inherited burden of debt and a legacy of cumulative neglect of our roads infrastructure.
The stark reality we have had to recognise is that government can no longer shoulder full responsibility for the building, upkeep and maintenance of our national roads. Faced with the pressing need to allocate resources as equitably as possible in the key pressure areas of education, health and social service spending, we quite simply do not have the money necessary to finance large infrastructure projects.
This, combined with the burden of our inherited R3 billion plus backlog in infrastructure investment, makes it imperative to look for other sources of financing and to forge new partnerships to meet the challenges of development head-on.
The great advantage which has flowed from our new democratic dispensation has been the confidence it has created in a shared vision of economic prosperity based on political stability and social participation. This confidence is daily growing.
It increasingly animates the strategic orientation of both government and the private sector. It generates new energy and creativity and allows us to be bold in searching for solutions to our developmental problems through the mechanism of public-private partnerships.
I began by saying that our national road network is a shared asset that benefits everyone in this country. As I look around me today, I am able to see the fruits of creative partnership and to sense the energies about to be released on this important project, which will stimulate the flow of goods and people between our Eastern seaboard and our economic heartland in Gauteng.
It is thus with great delight that I congratulate N3 Toll Concession (Pty) Ltd on winning the concession. On you depends not only the success of this particular project but, through your example, the continued confidence and involvement of the private sector in the African Renaissance.
I also take this opportunity to thank all those who submitted bids for the Concession. Your courage and commitment in doing so enabled us to find the very best partner for the project.
The concept of Build, Operate and Transfer contract as embraced in the 30-year N3 Concession Contract which we have entered into with N3TC - a consortium which fairly represents the demographics of our country - is the solution to addressing the needs of the N3 road and all those who travel on it.
We expect these needs to be met - and indeed hope to see user expectations surpassed - through expert private sector development and management. At the same time we know that ownership of this national asset will nevertheless remain with the people, through their custodian, the government of South Africa.
Let me now speak more directly for a moment about the project itself.
Realising the potential of the 418 km stretch of road between Cedara in KwaZulu Natal and Heidelberg in Gauteng, the N3TC has undertaken to design, construct, maintain, upgrade and finance this portion of the N3 for a 30-year period and then return it in first-rate condition to the government, via the South African National Roads Agency Limited (NRA).
The other partners in this public-private sector partnership are of course the millions of different road users and the communities living in proximity to this economic artery, all of whom will benefit from a substantially upgraded, reliable and secure road.
Jobs will be created not only during the initial construction period but throughout the lifetime of the concession, as ongoing operations and maintenance work is carried out.
Approximately one thousand jobs will be created in the first three years; these will be accompanied by comprehensive training and mentoring programmes which form an integral part of the contract. Special attention will be paid to the development of entrepreneurs through the promotion of SMMEs, and the project will be constructed from day one in an environmentally responsible manner.
Many countries around the world have adopted the BOT concept purely because it provides an enabling process for delivering on promises. But it also needs to be said that paying for a service that you benefit from directly makes you an effective, entitled - and potentially critical - partner in the infrastructural development of the country.
Participation in this form allows for democratic monitoring and feedback on service delivery. I therefore fully support the user-pay principle not only as a means of raising finance, but also as a mechanism for ensuring quality and accountability.
Today, as we celebrate the commencement of this 30-year partnership, I would like to congratulate both the NRA, for engineering this project from inception to the award of the Concession contract, and the N3TC, for their vote of confidence in the economy of South Africa and its people.
This contract is a very substantial one in financial terms, being worth R3,5 billion in capital expenditure on the route. But it has a wider implication for the overall health of the economy of South Africa, since part of the agreement is that N3TC will take over the State's existing debt of R1,38 billion.
So when we say that the consortium undertakes to upgrade, maintain and improve the existing road, to build new sections, operate them and return the whole package to Government in 30 years time, we are saying that our people get their road back not only in prime condition but also free of debt.
And this freedom from debt does not come at the end of the concession period. The debt is settled up-front with the cheque that we receive here today from N3TC. So the money we receive can begin to work for our people in other ways as from now. It is now my great pleasure to call upon Tim Ivins and Nazir Alli for the handover of the cheque ...
I thank you all.