Can Acsa fix our broken airports?

Mammoth R6.5bn earmarked for capex, but it couldn’t even spend R700m last year …

Airports Company South Africa (Acsa) has budgeted R6.5 billion over the next three years to fix the country’s airports, which are deteriorating in front of travellers’ eyes after years of chronic underinvestment.

Monday’s catastrophic main fuel valve failure is a repeat of what happened on 28 December 2022, also during the peak travel season. (Let’s not forget that last year, one of five baggage sorting systems at OR Tambo International Airport’s domestic terminal failed on the Friday before the Christmas long weekend.)

ADVERTISEMENT CONTINUE READING BELOW Read: Acsa finally begins fixing dark, dingy, fading OR Tambo OR Tambo faces flight delays over refuel issues OR Tambo fuel hitch due to ‘valve breakdown’

To solve the risk around the main fuel supply at OR Tambo, Acsa undertook to install a backup bypass line. Two years later this hasn’t been done. Monday’s disaster could’ve – and should’ve – been avoided.

Top (bottom?) three

This is the same story across all our major airports, particularly OR Tambo International, Cape Town International and King Shaka International. The visible decay and underinvestment in maintenance capex is plain to see.

Escalators are out of order for months – sometimes years. Moving walkways are left unserviced for years and eventually grind to a halt. All across the three major airports, passenger lifts shudder and creak. Some are out of order. Air conditioning units on air bridges haven’t worked for years. Bathrooms are (mostly) in chronic need of refurbishment.

Listen: ‘OR Tambo International is a national embarrassment’

It’s not just OR Tambo that’s dark and dingy (and falling apart). And remember, King Shaka International isn’t even 15 years old!

A stitch in time …

The thing with all this needed maintenance is that it’s incremental … R1 million here. R7 million there. And much of this maintenance capex is entirely reactive; run the equipment until it starts giving issues … (remind anyone of Eskom?).

None of the work makes the lists of “major projects” at any of its airports as disclosed in its most recent annual results presentation.

In its annual report, Acsa says “to address the backlog in infrastructure maintenance and development caused by the Covid-19 pandemic, we are implementing a rolling capex programme, that was developed in consultation with the aviation industry in January 2020″.

“This programme involves cyclical renewal of infrastructure and assets using standard, replicable processes, reducing duplication in engineering design and accelerating execution based on lessons learned from previous projects.”

The grim reality is that it needs to spend R6.5 billion on refurbishment and rehabilitation before March 2027. This number is likely understating the severity the problem (and only includes a small portion of the controversial R3.2 billion tender for a new baggage system which it has been interdicted by the South Gauteng High Court from adjudicating and awarding).

Read:
Acsa interdicted from adjudicating and awarding R3bn tender
Satsa urges Creecy to reinstate suspended air navigation services
Service breakdowns at airports signal ‘indifference to aviation sector’

Many of the issues that need fixing aren’t visible to travellers. Those baggage systems. The various complex and interconnected heating, ventilation and cooling systems at the airports. Aircraft refuelling systems. What about surveillance and security?

Spending issues

The R6.5 billion capex figure sounds chunky but only R2 billion of that figure is earmarked for maintenance/replacement capex this year and next.

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This financial year (2024/25), which ends in three months, it aims to spend a total of R816 million on capex, of which R548 million is on refurbishment and rehabilitation.

Just one problem: last year, its target was R679 million but it only managed to spend R551 million. It only spent 80% of what it was supposed to!

Acsa’s annual report shows that it did not achieve this key performance indicator last year (it missed its capex targets in Q3 and Q4).

What’s concerning is that the original plan under the current “permission programme”, under which tariff increases were approved between 2024 and 2028, saw capex of R736 million last year. On this basis, it barely managed to spend 75% of the approved amount.

Of course, capex is a moving target with constant changes to project timelines, requests for proposals (RFPs), tenders and suppliers.

What are the chances of it being able to spend the R2 billion it needs to next year (of which R1.4 billion is for maintenance/replacement capex)? And what about the R7.2 billion between April 2026 and May 2027?

All those large projects need to already be in RFP and adjudication phase.

How much institutional capacity does it even have to implement these mega projects effectively?

And that’s why escalators take months and months and months to replace.

Like most things in South Africa at the moment (after those nine lost years and the hollowing out of the state for a far longer period than that), things will likely get worse before they get better …

Read:
The great airport parking rip-off
Multi-billion-rand Cape Town and OR Tambo airport expansions to go ahead

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