Transport: Minister's Budget Speech


31 May 2011



Department of Transport Budget Vote address to the National Assembly by: Mr Sibusiso Ndebele, MP, Minister of Transport

1 Jun 2011

Honourable Speaker
Honourable Members
Members of the transport family
Ladies and gentleman


Transport is a catalyst for economic growth and the engine for job-creation in South Africa. Principal modes of transport for people in South Africa are rail and road, with few people utilising air and even fewer, utilising the Indian and Atlantic Ocean that surround us effectively classifying us as a maritime nation.

The provision of reliable, sustainable and safe transportation of people and goods from place to place is critical to the transformation of our country. Typically an effective, safe public transport system will reduce transport costs and create job and income generating opportunities and increase the value of real state. Additional direct impact will be felt through the creation of sustainable communities, and at the same time contribute to the reduction of energy consumption.

Yes, an effective public transport system will increase the quality of life for all our communities.

Investing in the transport sector

Honourable Chairperson, the questions facing our transport sector in South Africa is the question of limited funding for infrastructure development and maintenance. This is by no means a South African problem only.

This was indicated by US President Barrack Obama in his State of the Union address earlier this year when he called for greater private sector investment in the provision of road infrastructure.

Supporting President Obama on the drive to attract investment into public transport, Richard Geddes, an associate professor of policy analysis and management at Cornell University, states and I quote:

“Broadening the use of public-private partnership in the transportation projects can build new roads, bridges and tunnels quickly and efficiently without adding to the federal deficit.

“As a country we need massive investment in transportation infrastructure but we agree with President Obama that the fiscus cannot be used to meet these requirements. That investment must come from the private sector and not from government only,” Prof Geddes said.

Our shared view is that we must develop the methodologies which encourage private sector participation and investment in the provision of key infrastructure. Alternative funding models also need to be developed for consideration, just as alternative construction materials and construction methodologies need to be researched to enhance the value for money.

In this regard the Passenger Rail Agency of South Africa (PRASA) held a market engagement conference on the 5th of April 2011 at Gallagher Estate where we presented to the numerous participants the new rolling stock programme and the business opportunities emanating from that exercise.

Following this the Department of Transport will, on the 13th – 14th ofJune 2011, host the International Investment Conference in Cape Town under the theme “Creating winning partnerships through investment”. This will provide an opportunity for dialogue between investors and the Department in the pursuit of alternative funding streams.

State of transportation in South Africa

As I deliver my address this afternoon, over 600 buses are making their daily trip of 160 km from Tshwane to KwaNdebele. In the morning they will make the return trip back along the Moloto Corridor. They carry commuters who often leave home at 3am and arrive back at 9pm daily. Government subsidises these commuters to the value of R412 million per annum.

Of interest is that many of these commuters earn less than the subsidised amount per month. Noting these challenges, the Department is currently investigating an alternative and more cost-effective transport network for the Moloto Corridor which is safe, cuts down travelling time and will effectively address the commuter needs.

The completion of the Gautrain rapid rail network Link 1, between Sandton and OR Tambo International Airport which was opened in June 2010, and the Link 2 from Johannesburg to Pretoria which will be opened in June 2011, ushers in a new era in public transportation matching world standards in rapid rail transport. This will set a benchmark for future rail developments in South Africa.

Honourable Chairperson, the Gauteng Freeway Improvement Project (GFIP), e-tolling and future tolling of roads has been in the media recently and in many discussion platforms on radio and social networks around the country. However for the debate and discussions to be constructive it is important that the aspects are viewed within the appropriate context.

I will focus on the GFIP, hoping it will provide a further base for debate.The GFIP is an initiative that aims to encourage people to use public transport, in an effort to alleviate traffic congestion on Gauteng’s freeways. The South African National Roads Agency (SANRAL) together with its partners, the Provincial Government of Gauteng, and the Metro authorities in Tshwane, Johannesburg and Ekurhuleni developed a project to upgrade or construct approximately 500 kms of road around these three Metros. The GFIP is a phased plan design approach. The objective was to provide a safe and reliable strategic road network which would optimise road based public transport and the movement of freight.

In 2007 Cabinet approved the project, after which SANRAL was required to follow with a further proposal, that of Intent to Toll the roads which were part of the project. Cabinet set numerous requirements that SANRAL had to comply with. SANRAL had to advertise widely the details of the project, the intent to toll, the proposed toll points and the expected toll tariff, upon which the public were given the opportunity to comment. The comments were then considered by the Minister of Transport, where after the related road sections were declared toll roads.

However due to budgetary constraints and demands placed on National and Provincial Government for housing, education, social grants, health facilities and other social obligations, an alternative funding source had to be found. National Government allowed SANRAL to source the funding for infrastructure development and a tolling system. This effectively would allow SANRAL to identify potential investors to raise the funds, without resorting to the National fiscus for such a large budget to implement the state of the art system which SANRAL did, and implemented Phase One.

Funding for the project implementation was obtained through the issuing of Government Bonds, and therefore to re-pay this “debt”, the “Open Road Toll” or e-tolling system was introduced. Noting the consultative process implemented since 2007 and the various decision makers, role-players on this project, currently numerous concerns have been raised by the public with regard to the final implementation of the tolling system.

Honourable Members, for those of you who have travelled on the part of the GFIP that has been completed we must agree that we now have a state of the art road network system. Notwithstanding all this, the need for further consultation to address the concern of the public was noted and, I suspended the implementation of the e tolling, and established a task team to engage all stakeholders further in pursuit of a conducive and consulted position with regard to e tolling on GFIP.

The Steering Committee chaired by the Director-General, embarked on extensive public consultation to review the concerns raised and the assumptions underlying the determination of the tariff. A comprehensive report on the work of the Steering Committee will be submitted in due course which we will review.

An announcement on the final outcome of this process will be made shortly following further consultation with the stakeholders.

Honourable Chairperson South Africa sits at a cross-road with regard to road infrastructure investment, which is needed not only to develop and build new roads but more importantly to manage our ageing road network. Going forward we need a collective engagement of thoughts, ideas and alternatives both in construction and funding methodologies that will ensure effective use of our current and future road network. It is with this objective that I appeal to all to proactively engage on these processes as we keep South Africa Moving.

Transformation of the public transport sector

Chairperson, the transformation of the public transport sector is a fundamental objective that we are pursuing. Following numerous meetings and interventions since 2009, it is with great pleasure that I can today inform the house of our progress with regards to the Rea Vaya Bus Rapid Transit System. Earlier this year, the taxi industry in Johannesburg became the 66% shareholders of the Rea Vaya Bus Rapid Transit System.

This constitutes one of the most significant Broad Based Black Economic Empowerment [BBBEE] transactions that our country has seen in the transport sector in the recent years.

The implementation and roll-out of the Rea Vaya Bus Rapid Transit System in the four identified cities is progressing well. The Johannesburg Rea Vaya Rapid Transit System Phase 1 has been successfully implemented and is now operational. Commuters now travelling to and from Johannesburg have another world-class public transport system to choose from when travelling. In Tshwane there is a review of the design in order to align with the rail network.

In Cape Town Phase 1 has been completed with the routes to the Airport and the inner city operating. The budgetary constraints and challenges that exist are currently being addressed between my Department and the City of Cape Town. With regards to Nelson Mandela Bay final negotiation with the Taxi Industry is taking place.

The Department is providing support and actively participating in the process. In respect of Durban, an inner city bus distribution network system is functioning. Currently they are busy exploring other methods of Rapid transportation.

In 2010 the taxi industry through the South African National Taxi Council (SANTACO) developed a strategy known as the TR3 2020: Transforming Transportation and Building a Legacy, a ground-breaking initiative that we fully support. Jointly we have identified three priority projects to be implemented this financial year namely:

  • The establishment of an academy for the taxi industry.
  • The Hlokomela initiative responding to road safety and customer care.
  • The establishment of cooperative and strategic alliances that will advance the diversification of the industry, and leading to economic empowerment.

Honourable Chairperson we also wish to take this opportunity to recognise the partnership we have established with the industry over the years. We were part of the establishment of Santaco which was to position the industry for growth into the rest of the transport sector.

Santaco turns 10years in September this year, we wish the organisation well in this the 10th year of its productive existence. We look forward to decades and decades and more decades of collaboration with SANTACO towards the provision of a better public transportation for all.

Various other cross-cutting interventions dealing with the public transport system are currently in progress. Firstly, our discussions with municipalities are focusing on the establishment of an integrated public transport system. Secondly, our engagement focused on getting the taxi industry and the small bus company operators to become part of the transformation of public transport sector. We are pursuing the objective that a portion of all current public transport contracts, through a negotiated framework, will be allocated to these two public transport service providers.

Road infrastructure programme

Honourable Chairperson, it is generally acknowledged that over the years the underinvestment in our road infrastructure together with the age of our roads has resulted in the degradation of our road network.

In 1997, the study “Moving South Africa” indicated that the South African road network comprised of 60 000 km of paved road. The report further indicated that only 18% of the road network was in a “very good condition’, however of greater concern was that the report projected that in 2020 the roads in a poor condition would increase by 20%. This could be attributed to the limited implementation of effective road maintenance on our network.

A further contributor was the limited budget allocation to implement effective road maintenance. In 2011 more than 75% of our current road network is now 20 years or older. Based on the road design life span of 20 years and the various report indicators, 40% of the provincial road network has reached a crisis point due to the limited maintenance that has been done. We estimate that R75billion investment over 5 years is required to arrest this situation.

A further point for consideration is the growth in the vehicle population. The Gauteng province considered as our economic hub experiences 10% growth in the vehicle population per annum. With the road network not keeping up with this growth the resultant effect is congested roads, with safety being compromised and most importantly, a negative impact on the economy.

Noting the state of our roads highlighted by various study reports, on the 18th of April this year we launched the S’hamba Sonke Programme in Durban, KwaZulu-Natal.The S'hamba Sonke - Moving Together programme will see the Department of Transport launching a new roads upgrade and maintenance initiative to fix and upgrade the entire secondary roads network of South Africa.

The programme will create 68 675 new jobs for emerging contractors and jobs across the country. This ring - fenced conditional grant will be implemented in the following five key areas;

  • The rehabilitationof key arterial routes in support of the rural economy through labour intensive projects
  • Prioritising the use of labou r absorptive construction methods.
  • Elimination of potholes on our roads.
  • Creating access roads to schools and clinics and public social infrastructure.
  • Establishing the Road Asset Management Systems [RAMS] and introducing the “Know your network” program, which consist of regional engineers in all the provinces monitoring daily road conditions including any possible overnight damage.

The S’hamba Sonke programme has been allocated R22 billion for the current MTEF Cycle, with the allocation for 2011/ 2012 being R6.4 billion. Business plans have been received from all provinces supported by all the MEC’s. For the 2011/2012 financial year the allocations to Provinces are as follows:

  • KwaZulu-Natal: R1.2 billion which will create 22 278 jobs
  • Eastern Cape: R 1.0 billion which will create 20 736 jobs
  • Mpumalanga: R 1.0 billion which will create 8 346 jobs
  • Limpopo: R 934 million which will create 4 432 jobs
  • Gauteng: R 566 million which will create 3 800 jobs
  • Free State: R 447 million which will create 5 693 jobs
  • Western Cape: R 411 million which will create 597 jobs
  • Northern Cape: R 308 million which will create 741 jobs
  • North West: R 501 million which will create 2 142 jobs

To ensure the effective implementation and monitoring of this program, project management units will be established in all provinces by June 2011. Provinces will report monthly to the Department and the Department will report quarterly to National Treasury, and where necessary corrective action will be taken to ensure effective implementation. In addition to S’hamba Sonke the national roads upgrade programme implemented through SANRAL will continue.

In the current financial year the total allocation for Capital is R 5 727.3 billion and for Operations R 2 924.2 billion, a total of R 8 651.5 billion. This includes an amount of R464.7 million for the coal haulage program within the Capital Budget allocation.

In the implementation of key strategic projects, going forward SANRAL will focus on enhancing methods that will create more jobs and increase Broad Based Black Economic Empowerment.

Rail programme

Honourable Chairperson our passenger rail system has come under serious focus and public scrutiny in the recent past due to the two train collisions in Pretoria and Soweto. This public concern about the safety of the rail system is justified and we need, through our actions, to assure the public that we will be able to deliver safe and reliable services moving forward. It is important to remind Parliament and the nation of the state of our railways. After almost 40 years in operation, the current rail system (rail technology, operating procedures, service-design and skills base) is fast approaching the end of its design-life.

The poor levels of performance, reliability, safety and high maintenance costs should be clear indicators to us. These systemic failures are primarily due to a combination of old technology, decades of under-investment, deferred and poor maintenance and loss of critical skills. For example, the international norm is that a train would fail every 822 days whilst it stands at an average 20 days in our country. This tells a story that requires our urgent intervention and long-term solutions. We have a bold plan for railways.

PRASA’s strategy over the next 3 years is informed by the demand for quality rail services, the current performance of the system and PRASA’s capital investment/modernisation program. The strategy will culminate into two key focus areas:-

  • a)Operational recovery plan for rail services; and
  • b)Committed Infrastructure Investment/Modernisation program with job creation targets.

PRASA’s New Rolling Stock Programme is estimated to cost R97 billion over the next 18 years, with the first batch of trains expected to be delivered during the 2014/15 Financial Years. This programme has been undertaken along with a feasibility study. To that end, between April 5th and 7th, PRASA held formal meeting with these stakeholders.

Durban to Johannesburg Corridor

A multi-agency structure comprising the Gauteng, the Free State and KwaZulu-Natal Provincial Governments, eThekwini Municipality and Johannesburg Municipality, and the Department of Trade and Industry, and Public Enterprises has been established.

The structure will drive the development of passenger and freight services on the Durban to Johannesburg Corridor. It will also consider the improvements of the Durban Port, the future use of the old Durban Airport International Airport site, and the Harrismith, Cato ridge and City Deep logistical hubs.

North - South Corridor

Our vision is of an Africa that has the transport infrastructure that facilitates the movement of goods and people by road and rail, effectively connecting with our neighbours in the Southern African Region.

Road safety programme

On 11 May 2011, South Africa participated in the launch of the United Nations Decade of Action for Road Safety 2011 /2020. The Decade of Action Program seeks to halve road deaths and end the carnage on our roads. Road deaths affect us all. Worldwide 1.3 million people are killed annually, with 14 000 people being killed in South Africa. Every member of society, especially those who have lost their loved ones in road accidents, will become the natural driving force of this program.

Worldwide as in South Africa, the Decade of Action commits us to developing and enforcing legislation on key risk factors such as;

  • Effectivemanaging and monitoring of speed limits.
  • Eliminating drinking and driving.
  • Increasingthe use of seatbelts, child restraints and motorcycle helmets as a norm.

Our response to this global call is contained in our multi-pronged programme involving all citizens which seeks to end road deaths. This includes the following interventions:

  • Review and implementation of South Africa’s Road Safety Strategy and action plan 2011 – 2020
  • All provinces, districts municipalities, local municipalities to report monthly on road accidents indicating the causal factors and the plans to address them.
  • All provinces, districts municipalities, local municipalities to report monthly on and the implementation of the National Rolling Enforcement Plan.

It was agreed by all that at least 1 million drivers per month, 250 000 per week, or 45 000 per day, would be stopped and checked to ensure compliance with driver’s licence, and road worthiness of the vehicles. These targets would ensure that at least 60% of all motorists within a period of 6 months would have been checked for compliance with the road traffic regulations.

  • The First National Traffic Intervention Unit deployed in high accident areas and hazardous locations.
  • The introduction of road safety programs as part of the life skills curriculum, as agreed with my colleague the Minister of Basic Education Ms Angie Motshega. As an outcome of this intervention we hope to produce 10 000 new drivers with the appropriate skills to become safer drivers.
  • Through Community Road Safety Councils launched in the nine provinces, we advocate the “Road Safety is Everybody’s Business” approach.

Traffic management

According to our Constitution road safety and traffic management are National, Provincial and Local Government competencies. This shared responsibility creates challenges relating to coordination and results in the lack of uniformity in our law enforcement efforts. It was with this in mind that the RTMC Act was passed by this Parliament in 1999.

The Road Traffic Management Corporation Act of1999 established a legal entity chaired by the Minister of Transport with provinces and municipalities as shareholders. Putting the RTMC in order has been one of the urgent tasks facing the transport sector. Currently an Acting CEO has been appointed to lead the Corporation, to ensure that the mandate is delivered.

We have stabilised the RTMC and the organisation is now positioned to lead our efforts to end road deaths and to create a safe road environment in South Africa and the region.

Maritime transport

The implementation of the maritime transport policy which will address coastal shipping between our country and our neighbours is a priority. Effectively this seeks to increase regional trade through integration of activities. Furthermore in line with Government objectives of skills development within the maritime sector a skills development programme for young people will be introduced, in line with the various maritime activities.

The maritime industry globally provides the world with transportation of numerous commodities, fuel, foodstuff and other goods. The maritime industry is the lubricant without which the engine of sea trade would simply grind to a halt. The maritime industry contributes to 2.2% of the National Gross Domestic Product, which amounts to between R25 billion and R35 billion as indicated in the Port of Durban statistics.

Due to the four million tons of cargo that we currently handle, our maritime agency the South African Maritime Safety Agency, has identified that we require a total of 36 000 seafarers for deployment at sea, currently we have 1 800 seafarers at sea, hence an opportunity arises to create further sustainable jobs. South Africa does not in fact own its own vessels. The need for South Africa to build up its ship register will provide an opportunity for new entrants to enter into this sector effectively, transforming the sector from its current status.

Civil aviation

One of the key legacies of the 2010 FIFA World Cup was investment of R17billion in airport infrastructure. We are now expected to start the repayment of this investment. The review and improvement of the tariff determination framework will continue so as to ensure effective service delivery within the aviation sector.

Airport infrastructure in provinces will be supported, with the objective of ensuring the provision of adequate and effective infrastructure to promote air transportation of both passengers and goods.

Current bi-lateral agreements that seek to increase tourism will be reviewed, to ensure that the intervention plans being would effectively achieve this. Further discussion with all related stakeholders will take place in the near future.

Departmental organisational review

Honourable Chairperson, noting the importance of the Transport Sector projects, my department took an organisational review to ensure that we could effectively deliver on our mandate. The Department of Transport’s key focus areas are, improving our road network, public transport, investment in rail infrastructure and services, road safety, maritime and air transport projects.

To ensure that the Department’s mandate is achieved, an organisational review of the structure was done. The approved new organisational structure reflects a departmental structure based on modes that will elevate the functions of the Department from being focused on policy development to being the coordination of implementation of the Transport sector programmes.

This organisational structure will further ensure effective monitoring and evaluation of programme outcomes, and provide single point accountability.


Honourable Members, I wish to thank the Deputy Minister Mr Jeremy Cronin for his ongoing partnership and comradeship as we transform the Transport Sector.

I thank the Director-General Mr George Mahlalela and his team for their hard work and dedication.

Furthermore, I would like to thank all the agencies especially their Chairpersons and CEOs for the dedication to the critical role they play in the delivery and implementations of our transport agenda.

I thank the Transport Portfolio Committee Chairperson Ms Ruth Bhengu and the committee for the constructive way in which they engage the Department and for the diligent manner in which they conduct oversight on the programmes and projects of the Department.

Last but not least, a warm and sincere thanks to the transport family for your ongoing, tireless effort at ensuring that we keep South Africa on the Move, contributing to making a better life for all.

Together we can do more to move people and goods for economic growth and the development of sustainable communities, at the same time transforming the transport sector.

Chairperson, Honourable Members, I hereby request the House to approve the Department of Transport Budget for 2011/2012 of R36billion.

Thank you

Issued by: Department of Transport
1 Jun 2011



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