The South African National Roads Agency SOC Limited (SANRAL) has provided an update on its efforts to ensure participation by targeting enterprises on its flagship N2 Wild Coast Road (N2WCR) project.
According to a statement by SANRAL, the organisation provided a progress report during a SANRAL small, medium and micro enterprise (SMME) Indaba held at the Lusikisiki Resource Centre on July 10.
“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,” said SANRAL’s District Office Manager, Nwabisa Gxumisa. “However, we have also identified gaps that inhibit us from surpassing our transformation goals.
“SANRAL has 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,” Gxumisa explained.
The Mayor of Ingquza Hill Local Municipality, Councillor Nonkosi Pepping, said the legacy of the N2WCR project would be vast, and was already being realised by the local community.
“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 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.
“It is important for these collaborations to occur between departments in order to reach our transformation goals,” said Kgolane Thulare, from the DSBD’s Business Infrastructure Unit, 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 SMMEs sub-contracted 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,” said Mkhethwa.
Lusanda Kali, of Indyebo Fund, a short-term capital provider specialising in solutions for SMMEs, said that sub-contractors 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 SMMEs to take advantage of their Rural and Enterprise Finance, Jobs Stimulus Fund, and Imvaba Fund, intended for co-operatives.
“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 co-operation 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.
