From the CEO’s Desk

PROUD OF OUR EVOLVEMENT, CONFIDENT OF THE FUTURE

The Board of Directors of Roads Agency Limpopo SOC Limited, under the leadership of Mr Matome Ralebipi, was appointed in 2014. This was followed by the appointment of the Chief Executive Officer in March 2015 and key executive management thereafter. Before the appointment of the Board of Directors and CEO, the Agency was besieged by a wide range of serious challenges which paralysed its operation and ability to deliver on its statutory obligations. The Auditor-General gave the Agency adverse audit opinions, one of the worst audit opinions which indicate a shambolic state of affairs, for the 2013/14 and 2014/15 financial years.

This was unsurprising, given the state-owned company’s financial and operational status quo at that time, which resulted in the Agency being placed under administration in terms of Section 100 of the Constitution. At the time of the administrative intervention, the Agency had incurred R1 352 181 000 of irregular expenditure and R5 104 000 of fruitless and wasteful expenditure since 2007/2008. There was paucity of leadership at the executive level due to huge vacancy rate, with key business units such as engineering relying heavily on consultants. As a consequence, there was a high road infrastructure backlog, which included partially completed roads - referred to as “Bermuda” roads.

The systematic failures in corporate governance and weaknesses in internal controls, which contributed to the consecutive adverse audit findings, included outdated supplier database and asset management register. The entire lamentable state of affairs eroded trust and confidence of the public, including key stakeholders and strategic partners, in the Agency’s ability to carry out its statutory function of advancing the socioeconomic development of the Limpopo Province.

When the new Board and the executive management were roped in about four years ago, they did not have the luxury of time. A turnaround strategy was swiftly developed and its implementation drive vigorously pursued to set the company on the new trajectory of sustainable clean corporate governance and delivery of quality road infrastructure.

By the end of the 2015/16 financial year, major progress had already been registered – including the filling of key managerial posts, recruitment of highly competent engineers; appointment of highly qualified chartered accountants to improve audit and risk management; improvement of supply chain management systems; strict application of corporate governance principles; and resolution of incidences of maladministration. This significant progress did not go unnoticed by the Auditor-General, who gave the Agency an improved audit opinion. Within a period of only two years, the Agency had radically shifted from an adverse audit opinion to an unqualified audit opinion – the best possible audit outcome.

RAL has planned for a clean audit for 2017/18.

To augment the insufficient treasury allocation for the rollout of the road infrastructure, the new management embarked on a roadshow to galvanise the private sector to partner with the Agency through co-funding construction of some of the economically viable roads in the Province. Thus far, a number of private sector companies have contributed almost half a billion towards construction of new roads. This is a demonstration of trust and confidence in the Agency by its strategic partners.

In the last financial year, the Agency has upgraded a total of 46km of the road network from gravel to tar, about 122.51 lane kilometres rehabilitated and two bridges completed. Through the empowerment of SMMEs and insistence that contractors employ local labourers, we have created almost 4000 jobs within communities projects are rolled out.

RAL is a major catalyst of socio-economic development in the Limpopo Province. We are therefore unapologetic in ensuring that the national and provincial administrations’ programme of radical economic transformation is experienced by all our people.

In the next three years, the Agency is planning to spend more than R2.4 billion in upgrading, maintenance and rehabilitation of roads spread across all the five districts of the Limpopo province.