Transport: Minister's Budget Vote Speech


25 Apr 2012

Minister of Transport, Mr Sibusiso J. Ndebele and Deputy Minister Jeremy Cronin gave their Budget Vote speech on the 25 April 2012.


Address by Minister of Transport, Mr Sibusiso J. Ndebele, MP on the occasion of the Department’s Budget Vote

Honourable Chairperson of this house
Chairperson of the Transport Portfolio Committee, Ms Ruth Bhengu and Honourable members of the Committee
Other Members of Parliament present here
Deputy Minister of Transport, Mr Jeremy Cronin
Director General of Transport Mr George Mahlalela and his team from the department
Road and Transport MECs and HoD’s from our provinces
Transport sector stakeholders present here today
Members of the media
Distinguished guests, ladies and gentlemen

It is a great honour and privilege for me to once again stand on this platform to deliver to you another budget vote for the Department of Transport.

The overall budget allocation for the department of transport for the Financial Year 2012/2013 totals 39 Billion Rand, growing to 48 Billion rand in 2014/2015.

The bulk of this allocation goes to the following items:

10 Billion Rand set-aside for the Passenger Rail Agency, PRASA; of which 5 Billion Rand goes into the acquisition of the new rolling stock.
18 Billion Rand is allocated for roads, of which 8.8 Billion Rand is set-aside for SANRAL and another 8.7 billion rand for S’hamba Sonke programme.
10 Billion Rand is allocated to Public Transport, 5 Billion Rand of which goes to bus subsidies and the remaining 5 billion Rand is earmarked for BRT related projects and the Taxi Recapitalization Programme.
Over the past few years, the Department of Transport has embarked on a concerted effort to develop and improve South Africa’s transport system to serve as a catalyst for socio-economic development, particularly the movement of goods and passengers.

Our efforts have seen a meteoric increase in the provision of a safe, reliable, efficient and affordable transport system.

I should also acknowledge however that we still have a lot of work to do until we can safely say our people are living the transport dream.

In his State of the Nation Address, President Jacob Zuma, said: and I quote: “the country’s socio-economic development can be improved and realized through a sustained massive infrastructure development programme spearheaded by a developmental state in partnership with an active citizenry and private sector,” unquote.

Through the Presidential Infrastructure Coordinating Commission, a 10-year project plan was developed and 5-year priorities based on the following development principles were identified:

Balancing the development of new infrastructure with the maintenance of the existing one
Improving infrastructure links with rural and poor provinces
Addressing capacity constraints and improve co-ordination and integration
Scaling up investment in infrastructure

Four key sectors have been identified as central to the envisaged development: transport, water and sanitation, energy and communication.

Six strategic infrastructure projects have been identified with transport playing a central role in all of them, namely:

Unlocking the Northern Mineral Belt with Waterberg as the catalyst
Durban-Free State-Gauteng Logistics and Industrial Corridor
South Eastern node and Corridor Development
Unlocking the economic opportunities in the North West province
Saldanha-Northern Cape Development Corridor; and
Integrated Municipal Infrastructure Projects

Whilst all these strategic infrastructure projects have transport as providing corridor linkages, the Durban-Johannesburg and North West are principally transport corridors.

The PICC framework gives us a blueprint of transport projects over the next few years in the spheres of roads, rail and public transport infrastructure development and services.

Honourable Chairperson, Members

I therefore wish to take this opportunity to announce key transport projects to be rolled out over the next few years:

Projects in the Durban-Johannesburg Corridor:

Sale of the Durban International Airport to TRANSNET for the establishment of a dig-out port.
Development of Cato Ridge as a dry port.
Planned extension of commuter rail to reach Pietermaritzburg.
The development of Harrismith as a logistics hub.
Gauteng Logistics Hubs including, Tambo-Springs, Central Rand and improvement of City Deep.

We have put emphasis on the importance of getting right the balance between freight and passenger services. There’s indeed no doubt that without freight logistics, the country would grind to a halt.

As a result, we have taken a firm decision to prioritize the 2050 vision for the Durban-Johannesburg Corridor transport improvements that will enhance the freight industry and open up more opportunities to grow the sector. 

The 2050 vision forms the backbone of South Africa’s freight transportation network and is vital in facilitating economic growth for the country and the Southern African region. Its major objective is to deal with Infrastructure and Operational Planning, and Investment as well as Demand Forecasting over a 50-year horizon.

The vision for the Durban-Gauteng Transport Corridor provides an integrated transport solution to the growing expansion requirements of the corridor that will form the foundation for the establishment of a Southern African Regional Freight Corridor. 

Research is currently being undertaken to determine the nature of investment required for this corridor. Preliminary estimates so far indicate that for the Port Development precinct, an estimated 100 Billion Rand would be required and an estimated half-a-trillion is projected for the entire corridor.

The following are the Project Developmental components: The Port of Durban; Durban–Gauteng road corridor; Durban-Gauteng rail corridor (including High Speed Rail); Logistics Hubs and Terminals within the Corridor, as well as supportive local area Land-Use Plans.

Some of the other key national projects include: National Road Infrastructure development projects, Acquisition of New Rolling Stock by PRASA and the transformation of the Public Transport System.

Balanced investment in transport infrastructure will lead the country to efficient and sustainable growth, mobility and community access. It is important that we reduce the cost of doing business and ensure that our economy remains competitive in global markets.

We are now entering an interesting phase of transport integration, road-based logistics, ports, road, aviation and rail and the safety and security of transport services and infrastructure.

We base all these plans on sophisticated intermodal planning, efficient intermodal transfer facilities and streamlined institutional and intergovernmental arrangements for implementation.


Honourable Chairperson and Members

We are presenting our budget speech 5 days before the implementation of the first phase of the Gauteng Freeway Improvement Project.

South Africa is estimated to have about 9.7 million vehicles. About 2.5 million of these are estimated to be in Gauteng. Of these 2.5 million, only 800-thousand travel regularly on the tolled road that accounts for only 185 kilometers of South Africa’s overall 750-thousand kilometers road network. The GFIP e-tolling project was premised only on this 800-thousand vehicle population and not the 9.7 million vehicles nationwide.

Fact is we cannot expect Mr Papiyana in Mthatha in the Eastern Cape to finance the construction or upgrading of a road regularly used by Mr Ponto in Johannesburg in the Gauteng Province.  

We are therefore encouraged that 501 245 e-tags have so far been sold and distributed to regular users of this road network, a clear indication that people are cooperating with us.

We encourage those who have yet to purchase their e-tags to do so in order to be eligible for the discounted tariffs announced by government in February this year.

It is also important to note some people who reside in Gauteng still won’t be affected by the introduction of e-tolling.

For instance, a teacher who resides and works in Soweto who never travels on the tolled road network need not be concerned, as he or she doesn’t utilize the road on a regular basis like someone who resides in Pretoria but works in Johannesburg.

Once-off users are encouraged to contact the SANRAL call center to get day passes that will qualify them for discounted tariffs should they wish to travel on the tolled road network.

We also have a responsibility as a country to service the debt incurred when GFIP was implemented to improve the road network in question. It is now public knowledge that South Africa has a financial obligation of 20 Billion Rand to this effect, escalating to 32 Billion Rand with interest over the next couple of years.

Failure to honour this obligation will adversely affect our country’s credit rating. Just yesterday the world woke up to news that Argentina’s credit rating has been downgraded. South Africa is no exception to this possibility should we fail to honour our commitments.

This is important to note particularly because as a country we borrow at least 10 billion rand a week to service our budget deficit, state debt and meet the financial obligations of state owned companies. 

We would like to thank the people of Gauteng for their cooperation as we move towards the implementation of this critical project. We extend similar gratitude to the Premier of Gauteng, Ms Nomvula Mokonyane and the provincial government for the leadership displayed during our discussions on this matter over the past few months.

We have learned very valuable lessons out of this process.

It is also important to remember that the implementation of the project was postponed on two occasions. The first postponement was in March 2011, after various stakeholders raised concerns. The postponement was intended to allow for further consultations to take place. A Steering Committee was then established which recommended to Cabinet a comprehensive discount regime which included zero-rating of public transport vehicles.

I wish to take this opportunity to re-emphasize that no public transport vehicle will be expected to pay for the e-tolling tariffs. They are exempted because we believe users of public transport are in the main people in the low-income bracket, therefore largely categorized as poor. 

The second postponement was in February this year that eventually led to the National Treasury setting-aside 5.8 Billion Rand for the project. This intervention resulted in a further reduction of tariffs, therefore further alleviating the financial burden on the consumer.

All these concessions were done in response to the concerns raised by the public, indicating that we are a caring government that’s willing and able to listen to its citizens.


Honourable Chairperson, Members
Roads play a critical role in the movement of passengers and goods in the country. A large percentage of people are dependent on roads for many reasons. Chief among these reasons is for people to be able to reach government service centers such as educational and health facilities, and to earn a living by having access to work opportunities.

All sectors of the economy depend on roads to transport goods to all corners of South Africa. The majority of goods (estimated at 83%) is transported by road and furthermore, forecasts reveal that freight transport demand will grow by between 200% and 250% over the next twenty years.

This will put more pressure on the existing road infrastructure and lead to increased congestion, increased vehicle operating costs and ultimately higher logistics costs.

The South African Roads Federation estimates that the failure of the road network, both in condition and its ability to cope with increased demand, imposes an estimated additional 20 Billion Rand per year in excess road user costs (including fuel consumption, tyre wear, vehicle maintenance) and up to ten times more in congestion costs.

For rural communities, the very poor state of many municipal access roads (including un-proclaimed roads) have contributed to soaring vehicle operating costs and more significantly, hampered the ability of communities to access services in key health and education sectors.

South Africa has a total road network of almost 750-thousand kilometers of which 17-thousand kilometers is managed by the SA National Roads Agency.

The total annual maintenance requirement for the South African road network is 88 Billion Rand.

The total allocation from treasury in 2012/2013 Financial Year for roads is 38 Billion Rand, leaving us with a shortfall of at least 43 Billion Rand.

The situation is further compounded by the following cost pressures:

            : Exchange rate fluctuations
            : Fuel price volatility that has an impact on bitumen price – an   important input in road construction and maintenance
            : Price changes in other input materials

It is important that I start by giving context to the funding framework for roads in South Africa. There is an annual fiscal allocation to SANRAL for the maintenance and upgrade of the non-toll road network. The Roads Agency’s allocation for 2012/2013 is 8 Billion Rand.

For provincial governments there are three sources of road funding, namely: – equitable share from the fiscus, the ring-fenced Provincial Road Maintenance Grant (S’hamba Sonke) and provincial fines, penalties and forfeits.

Other than the Provincial Road Maintenance Grant, the two funding sources are part of the overall budget allocation to provinces. Based on specific priorities and budgetary imperatives, provinces have the discretion in determining the amount of resources to be allocated from their total revenue pool towards operating and maintaining their road networks.

For municipalities, just like in provinces, equitable share allocations and own revenues constitute a pool of funds from which municipalities are able to finance their road infrastructure and they also have a discretion in determining the amount of resources allocated for roads.

Some of the major projects being undertaken by SANRAL include:

The R341 million Sitebe Kommkhulu to Viedgesville Road on the N2 in the Eastern Cape.
The R42 million Harrismith – Kestell Road
The R64 million Durban North Coast Interchange project
The R147 million Ventersburg – Kroonstad Road project and the
The R51 million Mhloti – Tongaat toll plaza project
The challenges that road network development faces are articulated in the Road Infrastructure Strategic Framework for South Africa. On average, more than 30% of our roads are in poor to very poor condition.

We therefore need to focus on the following areas:

Road Maintenance fund
Rural development through rural road infrastructure
Job creation
Ensuring rural transport safety and law enforcement
Skills development
In addition to job creation, the provision of rural infrastructure contributes to protecting the socio-economic rights of people in rural areas. Road infrastructure in our rural areas is necessary to ensure access to schools, clinics and economic opportunities. Our Rural Transport Strategy is not about the rural access roads only but also addresses the following challenges:

Building of bridges and non-motorized transport facilities
Developing and implementing the integrated public transport networks for regular transport services
Developing and upgrading the rural airport network with a proper road-link infrastructure and services
Revitalizing the rural railway operations by expanding rail passenger services and freight operations to rural areas

S’hamba Sonke

The S’hamba Sonke roads maintenance programme was launched on 18 April 2011. The first allocation to this programme was 6.4 Billion Rand for the 2011/12 Financial Year, 7.5 Billion Rand for 2012/2013 and 8.2 Billion Rand by 2014. The sum total allocation for this programme will be 22 Billion Rand by 2014.

For the first time in the history of this country, this entire amount is ring- fenced for the maintenance of roads. The provincial roads maintenance grant is a conditional grant dedicated to road maintenance.

For the 2012/13 financial year this money is allocated as follows: KwaZulu-Natal: 1.2 Billion Rand; Eastern Cape: 1 Billion Rand; Mpumalanga: 1 Billion Rand; Limpopo: 934 Million Rand; Gauteng: 566 Million Rand; Free State: 447 Million Rand; Western Cape: 411 Million Rand; Northern Cape: 308 Million Rand and North West: 501 Million Rand.

Road Safety

Honourable Chairperson, Members

Road Safety is one issue wherein all South Africans share a unity of purpose. It is a problem that affects everyone regardless of colour, gender, religious beliefs or even political affiliation. We agree that we all have a common responsibility to ensure that our roads are safer.
We are confident that we are on the right path to win the battle against road carnage.

We are encouraged by the significant reduction in road fatalities recorded over the recent Easter long weekend.
Although we remain concerned about the lives we continue to lose on our roads, we believe that a reduction from last year’s Easter death toll of 297 to 181 this year is worth noting. This means our strategies are relevant to address the challenge we face on our roads.
I wish to convey my sincere congratulations to the MECs present here with us today for their tireless efforts in ensuring that we save lives on our roads. Your work has not gone unnoticed.

My gratitude also goes to our traffic law enforcement agencies at all levels for their sterling work. We also thank the Police Service and Emergency Services for the partnership in ensuring that our roads are not turned into killing fields.  

Credit should also go to the South African motorists. We’ve noticed a remarkable improvement in their conduct on our roads. It’s encouraging to note that motorists are now taking personal responsibility for what happens with their cars once on road. It is indeed not government Ministers and officials who drive these vehicles.

We will continue with our educational and policing activities throughout the year to ensure a culture of voluntary compliance with the rules of the road. 

We encourage everyone to become a friend of the Decade of Action for Road Safety. You can do this by becoming a member of Road Safety Council in your community, ensuring that you take ownership of the streets and roads in your neighbourhood.

We also urge you to wear the Decade of Action tag at all times as a symbol of your commitment to safer roads. Our guests are donning this tag today and we encourage them to keep it on. 

We will continue to seek lasting partnerships with the private sector as we explore various ways of addressing road carnage. I wish to thank our corporate partners who have been working with us on a number campaigns aimed at saving lives such as iPledge with Imperial Holdings, Think Pedestrian with the Nelson Mandela Centre of Memory, United Nations and Equestria Fleet; our partners in road safety activations such: Pick n Pay and Netcare 911. They are present with us here today. Nangomso!

The Road Accident Fund needs to be financially resourced to carry out its mandate on victims of traffic accidents. Just yesterday, we were in Mitchells Plain where the RAF took services to the community in that area.

A total number of 22 claims were settled on the spot, with the highest individual
Payment of 915-thoudand rand. The total amount paid out to claimants during the two-day campaign is 3.1 million rand. 

We also handed over wheel chairs to members of that community, one of the recipients is a man who got involved in a car crash 17 years ago.

I’m glad to announce that he has not allowed this unfortunate situation to kill his spirits. He is now a road safety councilor, working in his community to save the lives of others. We commend the RAF for this sterling work.  

Road Traffic Management

The battle against increasing road traffic fatal crashes has to be won. The Department of Transport and the Road Traffic Management Corporation (RTMC) will intensify efforts to reduce accidents by half by 2020 as part of the United Nations Decade of Action on Road Safety.

This we intend achieving through the implementation of the Road Safety Strategy and the National Rolling Enforcement Plan (NREP).

The formation of Road Safety Councils in all provinces and various other programmes such as SANTACO’s Hlokomela campaign are expected to play a significant role in achieving our road safety targets.

The role of the Justice Crime Prevention and Security cluster which is a composition of Metro Traffic Police, SAPS, the Departments of Transport and Justice, will also play a pivotal role in prosecuting traffic offenders.

We have also made great strides in stabilizing the leadership of the RTMC. I have the pleasure to announce that by end of next month we would have finalized the appointment of the Board of Directors and CEO of this critical agency.

Rail Transportation

In the past one hundred years, South Africa has created one of the most advanced highway systems in Africa, an extensive network of railway lines and a vibrant and competitive aviation sector. Unfortunately, due to a lack of investment over the past three decades, we have seen the decline of the rail sector.

In our efforts to correct this, the Department of Transport has embarked on the process of developing an all-encompassing Rail Policy which will cover freight, long distance passenger and commuter rail.

The main thrust of the policy will focus on investment and new modern technology. It will address the regulatory framework required particularly economic regulation, infrastructure and operations.

It will also make proposals regarding the investment required to restore rail to its rightful place in our country’s economy.
The Green Paper on National Rail transport policy will be launched by the end of June to among other things, bring about some certainty in the rail sector.

Regarding passenger rail services, the ageing rolling stock combined with rapidly growing needs, has led to renewed focus by PRASA on scaling up rolling stock investment as part of a broader strategy to acquire modern technology to meet changing demands.

Last week I attended an event wherein PRASA issued a Request for Proposals to prospective Rolling Stock Manufacturers in the near future. The rolling stock programme is valued at 137 Billion Rand. It is envisaged that a Preferred Bidder will be announced in the last quarter of 2012, with financial close aimed for June 2013.

The procurement programme for rolling stock, once approved, will follow the fleet programme process as set out in the government’s Industrial Policy Action Plan (IPAP II).

Moloto Rail Development Corridor

We have now established a Steering Committee chaired by the Director General of the Department of Transport George Mahlalela to drive the Moloto Corridor development. The Committee consists of Gauteng and Mpumalanga Provincial governments, Tshwane Metro and six other local municipalities along the corridor.

We are commencing with the feasibility study as of next month. Among other things it would look at various public transport options for the corridor. The steering committee will report back to us on the outcomes of the study in the next 18 months.

Public Transport

As part of South Africa’s Public Transport Strategy (PTS) we are moving towards a highly quality integrated Mass Rapid Public Transport Network which includes rail, taxi and bus services.

The intention and objectives of the White Paper on National Transport Policy, Moving South Africa and the Public Transport Strategy is the provision of public transport that is reliable, affordable, safe and integrated that meets customer needs.

Integrated Public Transport Networks

We have integrated public transport networks which are being rolled out in 12 cities, Joburg, Cape Town, Tshwane, Nelson Mandela Bay, Buffalo City, Mangaung, eThekwini, Polokwane, Mbombela, Rustenburg, Pietermaritzburg and Ekurhuleni.

For 2012/13, R5billion has been allocated in the Public Transport Infrastructure and Systems Grant to 12 cities that are slated to implement Integrated Rapid Public Transport Networks. For the 2013/14 and 2014/15 years, R5.55 billion and R5.87 billion are allocated in the MTEF respectively.

Subsidized Service

Transforming the subsidized bus services presents us with a perfect opportunity to integrate the conventional public transport services and thereby incorporating previously informal modes like taxis and small bus operators. Chronic underinvestment in public transport systems is continuing to create the current stalemate in the introduction of new public transport services.

In this regard the market response has been that 60% of public transport trips are carried through the minibus taxis. Despite the recent increase in the transport infrastructure investment grant of R13bn between s 2007 and 2011 and an additional R5bn in the next 3 years, commuter bus and rail operations subsidy still lags behind.  Implementation of integrated contracts, including taxis and small bus operators will require over R14billion.

Taxi Recapitalization Programme (TRP)

The TRP current contract is in its penultimate year with regard to the contract period and so far about 45-thousand old taxi vehicles have been scrapped at a cost of R2.3bn out of an initial target of 12-thousand old minibus taxis.
As Government we have taken the broader approach of the following recommendations:

Impress upon financial services industry to create affordable facilities for the taxi industry
Support the industry’s strategies to organize itself into formations that can transact economically on behalf of members
Develop a post TRP vehicle replacement model for the taxi industry
Facilitate the incorporation of the taxis and small bus operations into mainstream public transport through set asides or subcontracting
Design public transport contracts to cater for fleet renewal
A Transport Ministerial meeting with MECs that sat last week in Johannesburg resolved on the following:
Opting for negotiations of contracts
The establishment of a steering committee comprising of national and provincial governments negotiate contracts.
Invite all current providers of services to the negotiations
And finish the negotiations by September this year.
Honorable members, I must stress that meaningful progress has been made in the formalization of the taxi industry. In almost all the 9 provinces, the taxi operators have organized themselves into local associations, regional, provincial and national structures.

At national SANTACO has the department’s support as the structure that was envisaged by the NTTT process. SANTACO developed a TR3 2020 Strategy that aims to transform and develop the industry that the department supports.

Projects that been proposed by the strategy and have already commenced include the establishment of a Training Academy, road safety campaign as well as diversification. Both the department and SANTACO are identifying projects that can be prioritized to make the industry self-sustainable.

Maritime Transport     

Honourable Chairperson, Members

The Department of Transport is finalizing the Maritime Shipping Policy. The policy will address the following areas, namely:

Coastal shipping
Ship-registration in South Africa
Skills development

A final round of negotiations with stakeholders was completed last month. We will be ready by end of May to talke this draft policy to cabinet. Once the policy is adopted as white paper, we will then proceed with the implementation of all projects related to the developemnt of the shipping industry in SA.

Aviation Transport

Our country’s aviation services are premised on the work of the South African Civil Aviation Authority, the Air Traffic Navigation Services and the Airports Company South Africa.

The three entities have an obligation to ensure that aviation safety and security, airports infrastructure development and air navigation services are efficiently carried out.

This is a Permission Year in which the Airports Company of South Africa (ACSA) and Air Traffic and Navigation Services (ATNS) are submitting their applications in terms of the increase of their tariffs.

These applications have to do with the increases in Airport Charges and Air Navigation Service Charges.

A review of the current Airlift Strategy that was a five-year strategy has become a priority. The development and promotion of our air transport industry is dependent on this.

The Airlift Strategy review will involve an analysis that includes successes, challenges and obstacles faced in its implementation with a view of mitigating these challenges in future.

We congratulate ACSA on securing the bid to build an airport in Sao Paolo, Brazil in preparation for the 2014 FIFA Soccer World Cup.


Honourable Chairperson, Members

I wish to thank the Deputy Minister of Transport Mr. Jeremy Cronin for his continued support and commitment to our endeavor to transform the transport industry. Working together we can do more!

I also thank the Director-General Mr. George Mahlalela and his hardworking and dedicated team for keeping the ship afloat even in challenging times.

In addition I want to appreciate the role played by all transport agencies and their Boards, Management and Staff for their contribution and determination.

To the transport sector; thanks for your continued support. Working together we can ensure that South Africa realizes and lives the TRANSPORT DREAM!    

I also thank the Transport Portfolio Committee Chairperson Ms. Ruth Bhengu and the committee for the wonderful work and their insight in making sure that our mandate on transport matters is implemented. Chairperson, Honourable Members, I therefore request the House to approve the Department of Transport Budget for 2012/13.

I thank you!

Transport Budget Debate, 25th April 2012

Jeremy Cronin, Deputy Minister

Building on Minister Ndebele’s comprehensive outline of the many different areas of sectoral responsibility of the DoT, I’d like to step back a little and ask some basic questions.

Why after 18 years of democracy do we still encounter so many challenges with public transport in our country? The Easter Weekend road crash statistics showed a significant decline this year, thanks to a concerted effort from DoT, RTMC, provinces, and the driving public. But we still have extremely high levels of road fatalities and injuries, why? Why (and these matters are NOT disconnected from transport) do we still have such high levels of inequality and unemployment in our society? To answer these questions it is absolutely important to understand the impact of the past on our present.

“After 18 years of democracy you can’t still be blaming apartheid”, I’ll be told. I agree – for two reasons. In the first place, the point is not to blame the past, but to understand the ways in which it continues to shape and distort our present, so that we can change it.

In the second place, I agree, because it is far too narrow a perspective simply to blame “apartheid”. Apartheid was a mid-20th century political project of the National Party, but it was not disconnected from a much longer history.

In the 1960s and 70s it was fashionable in many (largely white English-speaking) liberal circles to forget their own past and blame apartheid on the backward, “frontier” mentality of the Afrikaner. This was a convenient way of exonerating British colonialism, and the Chamber of Mines and its related banking oligopolies. Yet, the key cornerstones of the invidious apartheid system were laid down long before 1948 – land dispossession; native reserves; indirect rule through hand-picked “traditional” leaders; pass laws; the migrant labour system; and urban segregation.  Apartheid was a more aggressive application of these measures in the face of the deepening challenges to the earlier colonial and segregationist policies.  

The decisive process that shaped modern SA was the introduction, from the outside, of an advanced, capital-intensive, mining-based, industrial revolution in the last quarter of the 19th century. I don’t believe we have given remotely enough weight to understanding the impact on the present (including our transport present) of this reality. The industrial revolution in SA did not emerge organically out of local small-scale, artisanal manufacturing. It arrived in a highly developed, oligopolistic form as massive joint-stock companies focused on extraction of mineral wealth for external benefit.

What once propelled spectacular growth has shaped and distorted SA’s economy and our broader social realities ever since. SA’s economy continues to be excessively dependent on the export of unbeneficiated minerals. Our manufacturing sector, with exceptions, is weakly developed, as is the small and medium-enterprise sector. The dominance of the mineral-energy-finance complex is hard-wired into the texture of our society.

Let’s take a relatively small but telling example. Thanks to work by the National Ports Regulator, we have only recently discovered significant anomalies in our port levies regime. Port charges at our Saldanha iron ore export terminal are 47% below the global average for similar terminals. Our coal export terminal port charges are 37% below the global average. By contrast, our port charges on a full container for export (i.e. basically on locally manufactured goods) are about 415% more than the global average, and cargo dues 935% more!

Now bear in mind that iron ore mining creates on average around 500 jobs, coal mining around 1000 jobs, and manufacturing around 3700 jobs for every R1-billion of production – and then you begin to get an inkling of one of the myriad ways a particular history, dominated by the mining-finance complex, has structured our transport system, and distorted our economy. Written into the pricing of our transport logistics system are distortions that are part of a broader, problematic, entrenched growth path that undermines our capacity to create much higher levels of employment.

We have to change the growth path itself, and we have to ensure that our transport interventions are contributing to that transformation.

Once recognized, it is relatively easy to effect progressive changes to our port charges, for instance. This is exactly what lay behind President Zuma’s SONA February announcement of a R1-billion rebate on port charges for manufactured exports. It is considerably more complex to develop a comprehensive policy including a comprehensive transport freight logistics policy to tackle the web of factors that continue to strangle the development of our industrial base. When we do try, we are told the state “shouldn’t second-guess the market”. But business as usual will simply reproduce all our structural flaws. 

If our mining-led industrial revolution shaped and distorted our logistics network, it also required vast quantities of coerced, unskilled migrant labour, and this meant deliberate spatial engineering. Migrant labour, subsidized by families locked into poverty-stricken subsistence in so-called homelands, is no longer a central feature of our labour market. But through the 20th century, segregationist urban settlement controls increasingly reproduced the same structural reality. The black working class was settled in remote, peri-urban reserves, dormitory townships, far enough away from the commanding heights of power and wealth to be contained and controlled, close enough to be migrated daily to work in factories, shops, and white suburban homes. 

This has resulted in a persisting, racialised urban geography. Black workers and the urban poor continue to be hugely disadvantaged by their geographical marginalization in dormitory townships. The average public transport trip in London is 8 kilometres, in Tshwane it is 26 kilometres, in Cape Town the average bus trip is 20km. These long commutes in South African cities are typically from high density dormitory townships, along low-density corridors into CBDs and industrial zones. In the Mangaung metro the past is even more dramatically written into the geography of the present. The metro consists of the old Bloemfontein, still a relatively compact settlement and the former Bantustan area, Thaba Nchu, 50 kilometres away from the outskirts of Bloemfontein. Yet one-third of Mangaung’s population lives in Thaba Nchu. These long distances have a massive impact on the poorest of the poor. Households in SA earning less than R500 a month are spending on average 35% of their meager household income on transport.

This pattern of urban sprawl has an extremely negative impact also on the viability of our PT systems. Large fleets are required to move millions of people every working day. But the long distances mean that often the bus fleets can only make one over-crowded trip in the morning and one in the evening peak periods. When more than one trip is possible, the return trip is an uneconomic, empty fetching trip. At 10am in the morning in many of our major cities we have huge bus and rail fleets, subsidized by the fiscus, but standing idle. Despite R7-billion a year on bus and rail operating subsidies the financial sustainability of PT is precarious.

With growing urbanization through the 70s and 80s, the apartheid regime increasingly gave up on spending on bus and rail transport for the dormitory townships into which they had forcibly removed the black working class. Low cost, survivalist minibuses moved into the gap. In 1975 in Johannesburg only 3% of commuters were using minibuses compared to 41% in 2000, while buses’ share of the market declined from 22% to 4%, and trains from 20% to 8%. The emergence of the minibus sector needs to be saluted as one of the outstanding examples of grass-roots, bottom-up empowerment. But minibuses are inherently not the safest, nor the most fuel efficient mode for transporting large numbers of commuters over long distances daily. Congestion, pollution, overcrowding and road crashes are among the consequences we continue to bear as a country for having lost the viability of our mass-mover PT modes.    

We won’t overcome all of these challenges just through delivery of more RDP houses to the same faraway localities, or more bus subsidies for the same daily migratory haul. There has to be a determined effort to tackle the root causes of ongoing exclusion. We need integrated public transport systems, mixed-use, mixed-income human settlements, and relatively dense corridor development. These are among the key strategic priorities of the Presidential Infrastructure Coordinating Commission, which has also identified getting a much greater democratic public sector grip on land use management and planning.

And that brings us to the flip-side of the same urban sprawl challenge. While the apartheid regime was forcibly removing ever growing numbers into distant dormitory townships – there was a major, private-sector led, civil-engineering and property speculator-driven programme of freeway, shopping mall and suburban housing construction in and around the outskirts of our major urban conglomerations. Increasingly, white middle-income households moved out of the inner city suburbs of Hillbrow, Yeoville, Sunnyside and into more car-commuting, shopping-mall, peri-urban housing developments in Fourways, Somerset West, Sunninghill, and so forth. This freeway construction to serve the misplaced aspirations of white middle-income households saw average travel times for this stratum also increasing – in Johannesburg car travel times have increased by nearly 60% since 1980.

Unfortunately, because we have not always sufficiently asked ourselves what problem it is that we are trying to solve, in the post-1994 period we have also often allocated too much to car-commuting, freeway expansion – of which the current e-tolling hot potato is a glaring example.  

Minister Pravin Gordhan has said that, as government, we have learnt many self-critical lessons from the Gauteng Freeway Improvement Project (GFIP). As the DoT we have said that IF we could re-wind the clock back to 2007 we would not recommend embarking on this project at all.

However, a R20bn rand public debt has been incurred for Phase A1 (some 180kms) of what was going to be a projected 500kms and more. Minister Ndebele and MEC Vadi have categorically put on hold any further expansions of GFIP. Minister Ndebele has also clearly instructed SANRAL not to proceed with any other tolling projects unless much better motivation for tolling, or for the particular project (tolled or otherwise), is provided. This applies to the proposed N1/N2 toll project here in CT.

But R20bn has already been spent in Gauteng. How do we pay for the debt incurred? Increase the fuel levy, we are told. We have looked at that option and there are several reasons why Cabinet has supported Treasury in choosing not to go this route:

·        Above all, it will be inequitable – we will be forcing a Lusikisiki or Mitchells Plain minibus driver to pay an extra fuel levy for freeways in Gauteng.

·        What about a dedicated Gauteng fuel levy? That might have been more feasible in the days when the levy was collected at the pump – but it is now collected directly from the refineries, and so it would add a significant administrative cost to set up a Gauteng collection system.

But, of course, there is still unhappiness. One COSATU affiliate issued a statement this week saying: “Our aim is to make the tolls uncollectible and force the Government and SANRAL to find more equitable ways to pay for road improvements.”

We empathise with the concern expressed by COSATU for those car owners in Gauteng who are not wealthy or middle-class, who cannot really afford a car, but who, equally, cannot afford NOT to have a car given the poor state of public transport, and the marginalisation of working people. But the trouble with the way the criticism of e-tolling is being raised is that it misses the FUNDAMENTAL issue – the “point of before”.

It is not just a question of finding a more equitable way of paying for GFIP – (and this we have tried to do with exemptions for buses and minibuses, and other rebates and reductions) – it is above all asking the preceding, point of before question – Was spending R20bn on freeway expansions in the richest province in SA, in which 70% of households have no access to a car, and on a road network on which only 2% of the traffic is public transport – was this an equitable, developmental priority in infrastructure spend in the FIRST place?

If we don’t ask ourselves THAT question the danger is that we will continue to allocate our energies and our scarce resources into projects (tolled or untolled) that reinforce dysfunctional patterns, like urban sprawl, that we have inherited from the past. And THAT is what has to be changed.



Transport: Minister’s Address

5th June 2012

Honorable Chairperson and members

Deputy Minister of Transport Mr. Jeremy Cronin

Honorable Chairperson and members of the Transport portfolio committee and other members present here

Department of Transport Director-General Mr. George Mahlalela and the entire Team DoT

Other leaders of government present here today

The leadership and representatives of Transport entities

All members of the Transport family

Members of the media

Distinguished guests

Ladies and Gentlemen


Please allow me to start by expressing my sincere heartfelt condolences to the people of Nigeria who have been visited by tragedy. As you may all be aware that all 153 people on board the commercial airliner that was flying between Abuja and Lagos died when it crashed into a densely populated neighbourhood in the capita on Sunday.

It is indeed a tragic end to life and our thoughts are with the government and people of Nigeria as they observe a 72-hour mourning period.

Back to the business of the day, it is an honour for me to once again present the Department of Transport's budget vote for the year 2012/2013 before this house. The National Council of Provinces is an important house representing the views and aspirations of our people in all the nine provinces.

It is a very critical instrument of our democracy that seeks to ensure that the needs of our people, particularly those residing in geographically marginalized communities, are given attention at all times.

We firmly believe as the Department of Transport that together with the NCOP, we can take forward the task of building better communities and successfully tackle the socio-economic challenges confronting our people.

Provinces and municipalities are at the coalface of service delivery. Having spent at least 15 years as a member of the provincial executive myself, I have a better understanding of the importance of the NCOP in ensuring efficient service delivery.

It is for this reason that we are currently in the process of strengthening provincial and municipal capacity to efficiently deliver on the identified transport infrastructure programmes.

We move from the premise that this partnership with the NCOP goes beyond just mere co-operative governance between ourselves as institutions of the state. We believe that it is also about forging strong and dynamic relations with communities.

I stand here today to present the Department of Transport budget for the financial year 2012/2013 amounting to 39 billion rand.

I do so with the expectation that you will sincerely engage us on the future direction of transport in our country.

Of this budget allocation, 17.3 billion rand is earmarked for roads and public transport programmes in provinces and municipalities.

7.9 billion rand has been set-aside for provincial roads, part of which 489 912 million rand is for Disaster Management and 663 400 million rand goes towards the Coal Haulage Network in Gauteng and Mpumalanga.

We have allocated 9.7 billion rand for the South African National Roads Agency Limited, SANRAL. It is important to note that this allocation is not part of the conditional grant issued to provinces. It is also in addition to the 5.75 billion rand that we committed towards the Gauteng Freeway Improvement Project earlier this year.

Honorable Chairperson, members

One of the crucial elements of a functional economy is an efficient public transport system. We continue to make strides in ensuring that all South Africans have access to efficient, reliable and safe public transport. We have therefore allocated 9.3 billion rand for this very important function; broken down into 4.9 billion rand for municipal public transport infrastructure and 4.3 billion rand for provincial public transport subsidies.

In addition to these conditional grants to provinces, we intend making additional investments to provinces through the Presidential Infrastructure Co-ordination Commission, the PICC.

His Excellency President Jacob Zuma announced towards the end of 2011 the establishment of the PICC - an infrastructure development coordination machinery that seeks to address all challenges related to the roll-out of infrastructure in our country.

Whilst there's a natural expectation that National Treasury would increase budget allocations for infrastructure development to support our ambitions, a sizeable portion of this funding will be through leveraging private sector investments mainly through our State-owned companies.

The current ANC policy discussion document offers a view on the question of infrastructure funding, and I quote: "Composition of expenditure should be changed in favour of infrastructure development. It is going to be difficult to finance infrastructure initiatives from the fiscus only, thus, the question of infrastructure funding and appropriate pricing of infrastructure is key. It would be important for employment creation and for long-term economic growth prospects that infrastructure expenditure be clearly funded through a combination of fiscal allocations, borrowing and user fees," unquote.   

The main transport project to be funded through the fiscus will be the Passenger Rail Agency's much-anticipated new rolling stock acquisition programme that has a budget of 139 billion rand attached to it.

This programme will ensure that we position rail as the backbone of public transport in our country.

Honorable Chairperson, members

South Africa is poised for a major infrastructure shake-up. Our country will in the next coming years be turned into a virtual construction sites, with gigantic cranes occupying the skyline. This major infrastructure drive will bring with it economic spin-offs including the creation of sustainable jobs and other economic opportunities.

But more importantly the new face of South Africa beyond the drilling and digging will be one that will position our country as an investment destination of choice and ensure that we stand shoulder-to-shoulder and compete with the best in the world.

Some of the key projects that are currently at various stages of development include:

-       Improving road and rail systems in Lephalale, Moloto corridor and rail services in Mpumalanga linking the coal line to Richards Bay in the provinces of Limpopo, Mpumalanga and KwaZulu-Natal. I'm glad to announce that the work of the Steering Committee assigned to the Moloto Corridor project is at an advanced stage. The team is expected to report back to me on the outcome of their feasibility study by the end of the year. This Committee comprises all the critical role players in this project including the provinces of Gauteng, Mpumalanga and Limpopo; and their key municipalities.

-       The second key project is the KwaZulu-Natal, Free State and Gauteng through the improvement of rail-road networks as part of the Durban-Gauteng Corridor development initiative

-       Upgrading of the N2 in the Eastern Cape that's set to improve mobility and access of all our coastal provinces to the Western Cape; and

-       The North West strategic infrastructure programme which has as its main focus the upgrading of their main road networks.

Challenges in provinces

Our provincial departments have been hard at work to ensure efficient delivery in our three important areas of service delivery - roads, public transport and road safety. All provinces have made major advances in these areas over the past years. They continue to build and maintain road networks, improve our public transport systems and implement sustained and targeted road safety campaigns.

However all transport authorities at provincial and municipal levels continue to experience challenges with insufficient funding, capacity and compromised technical standards in road construction.

The challenge moving forward therefore is to continue focusing on mobilizing the required resources for roads and public transport, strengthening technical capacity in all transport authorities and putting in place monitoring and evaluation systems to ensure that standards are adhered to without compromise.



Honorable Chairperson, members:

Please allow me to briefly share with you some of the critical interventions we are making in ensuring that we have the best road infrastructure, efficient, reliable and safe public transport system and how we intend saving more lives on our roads.



Our roads programme must, as a matter of priority, address provincial economic development, urban mobility and rural access to achieve a balanced road network for our country.

As we reported last year, we launched the new Road Maintenance programme called S'hamba-Sonke (Re Sepela Ka moka) and after a year of implementation, we are reporting successes in many provinces. There's still a lot that needs to be done in other areas wherein provincial authorities continue to experience challenges.

Based on information received from provinces to date, I can report that the total collective expenditure by provinces through S'hamba-Sonke for 2011/2012 was 5.9 billion rand against a target of 6.4 billion rand, representing 92 percent expenditure.  

During the first year of this programme a total of 60 089 full time equivalent jobs were created against our original target of 70 000, representing 83 percent achievement against the target we had set ourselves.

We are currently in the process of finalizing several interventions to address capacity and other related challenges experienced by provinces.

To this effect we have finalized a project delivery support mechanism with the South African National Roads Agency, SANRAL for all provinces. We are establishing a Project Management Unit through SANRAL to provide support to affected provinces. At the same time, we are re-positioning SANRAL to provide greater strategic support throughout the country.

The aim is to bring back to service retired engineers who will work with new graduates to share expertise and ensure that we have the necessary capacity to roll-out the best road networks in our country.

The S'hamba Sonke budget allocation for the next MTEF is 25 billion rand and the allocation for 2012/2013 is 8 billion rand.

This budget for this programme is allocated to provinces in the following order:

·         1.3 billion rand for the Eastern Cape

·         1.5 billion rand for Kwa Zulu Natal

·         1.1 billion rand for Limpopo

·         1.2 billion rand for Mpumalanga

·         564 million rand for the Free State

·         579 million rand for Gauteng

·         594 million rand for the North West province

·         478 million rand for the Western Cape; and

·         483 million rand for the Northern Cape

In addition to the above allocation, SANRAL is currently undertaking the development of the Durban North Coast Interchange project worth64 million rand. Also is busy with the upgrade of the toll plaza in Mdloti and Tongaat worth 51 million rand.

We are also working on the Ventersburg to Kroonstad Road upgrade. 147 million rand has been allocated for this project. The Harrismith to Kestell Road is also being upgraded to the tune 42 million rand during this financial year. Another major road project we are currently undertaking with SANRAL is the 341 million rand Sitebe-Komkhulu to Viedgesville Road on the N2 in the Eastern Cape.

Honorable Chairperson and members:

We need to measure our performance on whether our communities have access to schools, clinics, economic opportunities and other social amenities. Part of this will be a re-commitment to a 100% target of rural access to schools, clinics and economic centers by 2014. In simple terms, this means that we will be running while everyone walks.

In our main urban centers, our focus is on the challenge of congestion and the development of integrated municipal, provincial and national networks, supported by an affordable and seamless public transport system.

Please allow me to briefly deal with the big question confronting us as a country: How do we fund our road infrastructure projects? We have a backlog of 139 billion rand for roads and unless we find other alternative funding sources, we will not be able to reverse this backlog as the fiscus alone will not be able to fund these much-needed road networks.

It is important that we acknowledge the importance of alternative funding sources including the user-pay principle if we are to successfully address the historical backlog we face as a country.

Building and maintaining infrastructure using future revenue streams is a funding tool used all over the world.

At the moment provincial governments rely mainly on limited sources of funding for road infrastructure and these are: equitable share from the fiscus, the ring-fenced Provincial Road Maintenance Grant (S'hamba-Sonke) and license fees.

In municipalities as is the case in provinces, equitable share allocations and own revenues constitute a pool of funds from which municipalities are able to finance their road infrastructure needs and they also have a discretion in determining the amount of resources allocated for roads.

It is also important that we establish a shared development principle. If we are to achieve balanced development in our country, it would be incorrect for us to over-invest in one province at the expense of the rest of the country.

The ANC policy discussion documents once again seek to address this question in the following manner, and I quote: "Our economic transformation programme seeks to promote a geographically inclusive economy. This will require that infrastructure development be rolled out in targeted areas in a phased manner, especially in former homelands. In this context, we must optimize the investments that we have already made in the establishment of Industrial Development Zones through special determinations relating to incentives, access to adequate and affordable basic inputs such as electricity and water," unquote.



Honourable Members, we have over the past few years invested substantially in improving our public transport infrastructure and systems. We have made major progress in our main metropolitan areas. Additional investments are still required in Johannesburg, Durban, Cape Town, Tshwane etc. We will continue to make these interventions.

Our public transport sector requires a renewed focus to reverse the deterioration experienced over the years. Investments in public transport operations through the taxi recapitalisation programme, rapid bus transit systems and the subsidy systems have sustained appropriate levels of services up to now.

We have sustained our commuter rail services, through the refurbishment of commuter rail coaches and the introduction of GAUTRAIN.

Through PRASA's new rolling stock acquisition programme, we aim restore Metrorail services to their best levels by ensuring that the infrastructure is of acceptable standards and therefore improve on the efficiency of the train services, including introducing new advanced technology that would result in shorter train intervals.

However there are still major public transport challenges in many small towns and rural areas. These endemic challenges that continue to undermine the efficient and effective performance of public transport, in particular subsidized bus services are as follows:

  • Subsidized public transport contracts remain bus only contracts and almost the majority of them have been managed on a month-to-month basis for a long time
  • As a result of the short term nature of these contracts, most operators have not been able to recapitalize their fleet for a long time
  • Lack of transformation has perpetuated the dominance of a few players in the industry, among others.



Honorable Chairperson and members:

There's a general agreement within the Transport family that the current bus contracts should be renewed through a managed negotiated process. These negotiations will be with existing operators with provisions for taxi empowerment.  This approach will allow for a progressive replacement of current bus contracts and the phased implementation of additional route networks based on new approved integrated municipal transport plans.

I am happy to announce that at the recent meeting between myself and all MECs of Transport, we reached an agreement on the need to enter into negotiations with bus operators regarding longer term contracts.

The MinMec established a Committee that would provide oversight and monitor the negotiation processes. Provinces and affected municipalities will manage negotiation processes. We intend to finalise these processes by the end of this current financial year.

Given the urgency required to integrate different public transport modes as well as the associated increase in the cost of doing so, a substantial rethink of the method of implementing this process is required.

A negotiated approach will provide a win-win solution to numerous challenges that are facing the current contracting system.  Government would be able to influence and realise economic empowerment for the previously disempowered whereas current operators would be guaranteed stability through longer term contracts. 



Another critical area that has been receiving our attention is the finalisation of the Scholar Transport Policy. We have been in dicussions with the Department of Basic Education in a bid to find an amicable solution to this challenge.

Currently there's a disjuncture in the location of this function in different provinces. In 5 provinces, the function lies with the Departments of Transport while in 4 other provinces it is the reponsibility of the Department of Basic Education.

The general understanding emerging form our discussions is that the Department of Transport should be the custodian of this policy and function. The proposed new policy approach on this matter will be brought before the Portfolio Committee on Transport soon. 



Let me start by acknowledging the South African drivers and road users for their positive contribution towards reducing road fatalities in our country. We are of the view that there's a culture of personal responsibility that's beginning to define the character of the South African driver. A culture that says road safety begins with me.

South Africa is a signatory to the United Nations Decade of Action for Road Safety 2011/2020 together with other UN member states.

Through this initiative, we have committed to halve road fatalities by 2020. I'm glad to say that in South Africa we are well on our way to achieving this target.

I say this because we have been able to reduce the number of deaths on our roads during the 2010 FIFA World Cup, the 2011 December holidays and during the recent Easter long weekend break wherein the death toll came down remarkably from 297 to 181. This is by no means a cause for celebration. But it says to us that this is possible and we should continue to work with government through the "Friends of the Decade" to do even better.

We have introduced "The Friends of the Decade of Action" group as part of maintaining momentum towards the implementation of the United Nations Decade of Action for Road Safety.The purpose of the group is to roll-out the Decade of Action campaigns. We have so far seen several campaigns implemented under this banner in partnership with the Department of Transport, including: The iPledge campaign with  Imperial Holdings, a pedestrian safety campaign called Think Pedestrian in partnership with Equestria Fleet Management, the launch of the First Aid Training Programme for Taxi Drivers with SANTACO, among others. We invite other private sector players to come on board and play their role in reducing road fatalities. Working together we can do more.


In conclusion, it is important that we work closely with all our provinces and municipalities to ensure that we achieve the targets we have set ourselves on road infrastructure development, public transport and road safety. This coordination is very important because indeed the realization of our plans for transport is dependent on the successful execution of these set targets. I therefore urge all parties concerned to join hands with us and ensure that we work together for the betterment of the living conditions of our people.

Chairperson and members, I now request this house to support this budget of the department of transport for the year 2012/2013.

I thank you.


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