A1 road up for grabs
In a bold move, which is aimed at upgrading the country’s road infrastructure, government has announced plans to privatise and toll 640 km of the A1 road, stretching from Ramatlabama in the South, all the way to Ramokgwebana, in the North East. According to an Expression of Interest issued this week, through the Ministry of Works and Transport, government aims to engage private entities in a comprehensive Design-Build-Finance-Operate-Maintain (DBFOM) contract, which is expected to be cost billions of Pula, most likely half of Botswana’s proposed total budget for 2024/25.
The move by government, to allow a private entity (ies) to run the A1 road, is perhaps the country’s biggest Public Private Partnership contract yet, amid criticism the former has been slow to implement PPP projects. On Tuesday, Business Botswana sub-committee chairperson for Built Environment, Caesar Tshupelo voiced mixed opinions on the latest development.
“The move (to privatise A1 road-for now) is a welcome development as it has the potential to generate the much needed revenue for government. In fact, they could have done this (PPP project) as far back in the 1980s when there was limited traffic compared to the current situation.” he said, estimating that roughly 20 000 trucks pass from South Africa through Botswana to northern neighbouring countries. Tshupelo explained government can easily net P40 million a month by tolling motorists, with the bulk of the revenue coming from trucks passing through the country to other parts of southern Africa. Separately, Tshupelo has not ruled out the possibility of the project, once completed, experiencing the same problems similar to what the South Africa’s government gate tolling experience when they first introduced toll gates. For years, motorists especially in
South Africa’s Gauteng province have refused to pay toll fees, leading to expensive legal proceedings against the culprits. In a twist of events, Gauteng Premier, Panyaza Lesufi announced the e-toll gantries in Gauteng will officially start being switched off and delinked as soon as next month. This was the announcement made during his State of the Province Address (SOPA) on Monday (19 February 2024). In his committee of supply speech to parliament recently, works and transport minister, Eric Molale said the Public Roads Act was amended in 2022 to incorporate Road Tolling. Previously, a study had indicated that Road tolling was not feasible in
Botswana due to lack of alternative roads and low volume of traffic. The A1 road PPP project, might also experiences challenges and delays, especially during the conduct of Environmental Impact Assessments (EIA), which will also involve consultations with those who will be directly impacted by AI construction. In terms of capacity and funding, Tshupelo, said it is highly likely that, no local private investors will be able to carry out such a project, which he predicts to cost as much as P50 billion.
Nonetheless, he expects the procuring entities, Ministry of Works and Transport to make sure it empowers citizen-owned companies, especially in terms of sub-contracts relating to equipment hire, camps settings, and accommodation among others. “Local construction companies can also benefit from the doing off ramps of the main A1 road,” he stated. The move to involve the private sector to run the A1 road is not without critics. In fact, those, sources within the construction and finance spaces, advocate for alternative funding mechanisms, such as fuel levies and carbon taxes, which offer more straightforward and equitable revenue streams for road maintenance and construction.
According to an industry player, fuel levies, tied directly to road use, ensure that costs are shared broadly among users. In contrast, carbon taxes align fiscal policy with environmental objectives, promoting sustainable transport solutions while generating funds for infrastructure. Concerns have also been raised by the tendering process. While this method may streamline the selection process, it has sparked concerns about transparency and the potential for corruption. Stakeholders emphasize the need for openness and public engagement to foster trust and ensure that the project aligns with national interests and international best practices.