Department of Transport Entities 2009/10 Annual Reports: hearings continued

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21 October 2010
Chairperson: Ms N Bengu (ANC)
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Meeting Summary

The South African National Roads Agency Limited was responsible for R 16 000 km of road. This had to expand to 38 000 km. Thus it would continue to spend around 9 to 10 billion per year and ensure a continual flow of work being created. It contracted over 2000 small companies. On the non-toll road network that formed 80% of the network, routine maintenance work was done by SMMEs. Loads on the roads had increased and the roads needed to be preserved and maintained. Road paving needed to be strengthened as 80% of it was more than 20 years old. SANRAL planned to spend R 3 billion on this program. The construction price had increased tremendously, because the building materials had become a lot more expensive. Bitumen/tar was a product of the petro-chemical industry and directly related to the petrol price. SANRAL achieved an unqualified audit.

Air Traffic and Navigation Services provided an aeronautical satellite communications network which serviced 28 African and Middle Eastern states. It played a leading role in the development of air traffic management solutions in Africa and beyond. During 2009/10 it trained 1732 delegates (999 ATNS, 213 from across the African continent, and 520 from the airline industry on IATA Courses. It was installing a number of cutting edge technologies aimed at making the South African air space safer. It had received an unqualified audit opinion.

The Cross Boarder Road Transport Agency was established on the assumption that it would fund itself through selling permits and issuing penalties. In practice, these funding mechanisms did not generate enough revenue for it to cover its operational costs and capital funding requirements. Its key achievements for the year were its Business Process Reengineering Project to inform the refocusing of the agency, the completion of the Law Enforcement Training Manual, hosting a SADC Indaba, and the development of a scientific regulatory model for regulating the issuing of cross-border permits. It received a qualified audit opinion.

The Ports Regulator of South Africa exercised economic regulation of the ports system. It had to monitor the activities of the National Ports Authority, adjudicate complaints and appeals and approve Authority tariffs. It had to promote regulated competition. Its programmes were Administration, Economic Regulation and Tariffs, Monitoring and Compliance, Tribunal and Regulatory Development, Industry Development. It achieved an unqualified audit opinion with emphasis of matters.

The South African Civil Aviation Authority’s strategic objectives for 2010 were aviation safety and security, financial stability, improvement on its image, industry transformation, operational effectiveness, statutory compliance, corporate governance and human capital. Its income statement included an amount of R 9,5 million owed by the Department of Transport to SACAA for the provision of Accident and Incident Investigation Services in 2008/09.This amount had not been paid and SACAA had been informed by the DoT that the money would not be forthcoming. SACAA had obtained an unqualified audit report with two matters of emphasis.

Members asked the Department of Transport why it had not paid the SACAA the money it owed for investigations done after aviation accidents. The SACAA was asked about the loss of R9.3 million and whether it was linked to R 9.5 million. The entities were told that they had to be specific about the help they requested from the Committee to address their problems. SANRAL was asked what it was doing to retain essential staff such as engineers.

Meeting report

The Chairperson reiterated her statements of the first day of Annual Report hearings, when she stated that it was no longer enough to get an unqualified audit opinion from the Auditor-General. The Committee wanted to know what material impact the money that had been spent, had on the lives of ordinary people on the ground, especially the rural poor. The Auditor-General’s report had to begin to measure and reflect on the impact the spending had on service delivery.

In her opinion, South Africa also had to move away from the welfare state idea of service delivery. A welfare state responded to people’s need for food by handing out food parcels. A developmental state handed out food parcels as a short term measure, while it established a project that would teach people to feed themselves.

The railway services had a problem with copper cabling being stolen. The Government’s solution to that problem was more policing, but it was the wrong approach. The developmental approach to the problem would be to look at the root causes of the theft, which would be poverty, and put processes in place to address that.

The Committee and the Department of Transport was a team. The Committee was the policy making arm. If the DoT did not perform, the Committee also failed. They had to complement and assist each other. The idea to hold joint annual report presentations was so the different government entities could learn from each other and influence each other. They would also identify points of commonality and synergies that could benefit the different agencies.

South African National Road Agency Limited (SANRAL) Annual Report presentation
Mr Nazir Alli, SANRAL CEO, thanked his colleagues, because they did all the hard work and he took the credit. SANRAL was responsible for 16 000 km of road network and it still had to expand to 38 000 km. Road construction projects were big projects and spanned several years. SANRAL would continue to spend around R9 to 10 billion per year on construction and thus ensure a continual flow of work being created. This was a developmental approach. The overall non-toll road budget was R18 billion. SANRAL achieved an unqualified audit opinion in 2009/10.

On the non-toll road network that formed 80% of the network, routine maintenance work was done by SMMEs. These contractors had the opportunity to learn how to do road engineering well and in some cases the SMME had become the main contractor. Loads on the roads had increased and the roads needed to be preserved and maintained. Road pavement needed to be strengthened as 80% of it was more than 20 years old. SANRAL planned to spend R3 billion on this program. SANRAL would continue to create jobs. Over 2000 small black enterprise companies were contracted. It was sad to see that companies with growth potential, became too big for SANRAL, but too small to be subcontracted by the multinationals. The construction price had increased tremendously, because the building materials had become a lot more expensive. Bitumen/tar was a product of the petro-chemical industry and directly related to the petrol price. The Medium Term Expenditure Framework (MTEF) allowed state entities to project what could be expected during the next financial year, so it was possible to plan a continual flow of work. The toll roads would increase the income of SANRAL.
SANRAL has instituted the Freeway Management System. There were centres in Goodwood, Cape Town, Pietermaritzburg, KZN and Gauteng. They showed their value, especially during the World Cup. They improved safety on the roads, they managed traffic flow better, and personal safety improved.

Air Traffic Navigation Services (ATNS) Annual Report presentation
Mr Patrick Dlamini, ATNS CEO, and Chairman of the Board, Mr Mpho Mamashela, the first black Captain from South Africa to command a commercial flight presented. Mr Mamashela said that ATNS continually achieved what was expected of it which was safety in flying. In terms of the environment, ATNS have launched initiatives and invested in equipment to ensure that routing caused the minimum noise. When an aircraft flew, it created carbon emissions. By making the approach as short as possible, while not compromising safety, up to 3000L of fuel were saved per landing and amounted to a lot less carbon emissions per flight. Globally many airlines had closed down, but locally the aviation industry was weathering the storm and growing.

It had identified a school for disabled children in Gauteng called Philadelphia. Children in wheelchairs could become part of aviation, because most of the work was done sitting down. A few years ago, the board of ATNS was white and flying was considered something that only white people could do. The board had also been almost insolvent. The new board and management transformed the organisation. Previously there had been a huge flight of skills to the Middle East because of the fantastic packages they were offered there. Currently the organisation had stabilised. This success was due to the organisation living the philosophy that no organisation existed without people.

Before there were 2-3 classes with a 100% failure rate. In terms of its basic mandate, it did well enough, because the airplanes did not crash, but the demographics did not reflect the demographics of the wider population.

It found a good training program in New Zealand that did not have a science background as a pre-requisite. It did not demand high qualifications, it requested basic capabilities. ATNS took its teachers to New Zealand for training. The current students were not from a science or technical background, but they were the highest performing students the institution had seen thus far.

Almost all the equipment used by ATNS was imported at exorbitant prices. The CEO had embarked on a process of bargaining with suppliers for lower prices with the threat of them missing out on the emerging African market for equipment of this nature. Suppliers were engaged to contribute towards communities. A simulator, which would normally cost R20 million, was bought for R10 million in this way.

Mr Mamashele used his personal story in a career awareness program to make children aware that they had to develop themselves, to learn as much as possible, to take their education seriously and that anything was possible if a person worked hard.

Today, ATNS was cooperating with the South African Air Force. The relationship between civilian and military aviation was cordial and conducive to cooperation, unlike many other places in the world.

ATNS provided statutory services in the form of national en-route service and terminal approach and aerodrome services at Airports Company of South Africa (ACSA) airports. It provided an aeronautical satellite communications network which serviced 28 African and Middle Eastern states. It consisted of two satellites, namely VSATII (Very Small Aperture Terminal) and NAFISAT (North East Africa Satellite). ATNS played a leading role in the development of air traffic management solutions in Africa and beyond. During 2009/10 ATNS trained 1732 delegates (999 ATNS, 213 from across the African continent, as well as 520 from airline industry on IATA courses.

ATNS was in partnership with the governments of both Northern and Southern Sudan to develop the aviation sector. ATNS had trained 59 Sudanese on various aviation courses. Namibia was in the process of implementing radar equipment across the country. ATNS was training the radar controllers and engineering technicians. ATNS provided billing services for the Namibian Directorate of Civil Aviation. The revenue collected would help the country to maintain the air traffic and navigation infrastructure. ATNS was finalising a billing agreement with Ghana and Angola was interested as well. Surveillance systems were being implemented across Angola and ATNS was training the technicians to operate it.

ATNS was in the process of installing and rolling out a number of cutting edge technologies aimed at making the South African air space safer.

The ATNS received an unqualified audit opinion. ATNS spent R1 297 066 on World Cup paraphernalia and tickets.

Cross-Border Road Transport Agency (CBRTA) Annual Report presentation
Mr Sipho Khumalo, CBRTA CEO, issued and facilitated all cross-border permits. Its second function was law enforcement. It monitored transport carriers through country-wide inspections and ensured they operated legally. Its third function was to advise the Minister of Transport on regional road transport imperatives and challenges and to monitor and counteract any restrictive measures implemented by other states in the SADC region. Its fourth function was facilitation to ensure consultation and partnerships with key role players.

The founding assumption had been CBRTA would fund itself through selling permits and issuing penalties. In practice, it discovered that these funding mechanisms did not generate enough revenue for it to cover its operational costs and capital funding requirements. Due to the restrictions brought about by its financial position, it could only offer the bare minimum of services within its brief. In order to perform law enforcement to a satisfactory level, it needed significantly more funding.

This agency was meant to harmonise and integrate road transport operations in the SADC region. It inability to deliver on this mandate, due to under-funding, undermined its legitimacy as a strategic resource and tarnished its image.

In 2009/10 there were 59 880 roadside inspections which resulted in 14 470 prosecutions. Permit application fees yielded R12,3 million, permit issuing fees yielded R29,1 million and penalty fees yielded R12,6 million adding up to R54 million.

Its key achievements for the year were:
▪ Its Business Process Reengineering Project which would inform the refocusing of the agency.
▪ The completion of the Law Enforcement Training Manual.
▪ It hosted the SADC Indaba that developed an action plan for the advancement of the objectives articulated in the SADC Protocol on Transport, Communication and Meteorology.
▪ The development of a scientific regulatory model to design a more scientific approach to the process of regulating cross-border permits was initiated.

The CBRTA received a qualified audit opinion for 2009/10 but had reduced the many qualifications of previous years to one for this financial year. It was based on the inability to match amounts recorded as Receivables for Penalty Income. The penalty income information was also incomplete and inaccurate.

Its key operational constraint was a lack of funds. The R13 million surplus would be depleted by 31 March 2011. It needed an operational budget of R182 million in order to function optimally. It had two possible models according to which it could generate the needed funds. The one model would mean permit tariffs would increase by 212%, which was unsustainable. According to the other model, the permit tariffs would increase by 16%, which was more reasonable.

Ports Regulator of South Africa (PRSA) Annual Report presentation
Mr Riad Khan, PRSA CEO, said the functions of the Ports Regulator to exercise economic regulation of the ports system in line with government’s strategic objectives. It also promoted equity of access to adequate, affordable and efficient port services and facilities. It had to monitor the National Ports Authority to ensure compliance, it had to adjudicate complaints and appeals against the Authority and approve or reject Authority tariffs. It had to promote regulated competition. The objectives of economic regulation was the promotion of efficiency, investment, protection of port users, preventing pricing and service discrimination, competition amongst ports, competitive and affordable tariffs and prevention of anti-competitive practices.  The different programmes run by the Ports Regulator body was Administration, Economic Regulation and Tariffs, Monitoring and Compliance, Tribunal and Regulatory Development, and Industry Development. The current activities of the Ports Regulator were: an economic review of participation in the ports system, implementing the ports regulatory framework, adjudication of appeals and complaints, maintaining the regulator secretariat and systems, implementing tariff regulation framework, and port monitoring.

The PRSA achieved an unqualified audit opinion with emphasis of matters. These were:
▪ The under-spending of the budget by R2 843 million. This was because the entity was not fully operational in terms of its mandate, and many posts were still vacant.
▪ The un-audited supplementary schedule. PRSA provided supplementary information in the financial statements on whether resources were obtained and used in accordance with the budget, in accordance with GRAP 1 Presentation of Financial Statements. The supplementary budget information did not form part of the financial statements and was presented as additional information.
▪ PRSA submitted its strategic plan after the start of the financial year, on 30 April 2009, to its executive authority, contrary to Treasury regulations. The strategic plan was submitted for comment to the DoT prior to the required date, for feedback. The plan was finally submitted on the date set out above, after amendments as required by DoT.
▪ The audit committee was not properly constituted in terms of Treasury regulations and it did not substantially fulfil its responsibilities. There was conflict between what the law required and what the Ports Regulator had available as staff for the audit committee. This matter had not been resolved yet. The entities internal audit function did not have an internal audit charter as required by Treasury regulations. The Internal Audit function was outsourced due to the organisation being so small and thereby not justifying the establishment of an in-house internal audit. The internal audit report was not signed off by the end of the financial year. This had been corrected.
▪ PRSA did not settle payments due to creditors within 30 days from date of receipt of invoices, contrary to requirements. Consequently, fruitless and wasteful expenditure amounting to R6219 was incurred.
▪ PRSA did not formally approve and implement a fraud prevention plan contrary to requirements.

In terms of internal control, the following deficiencies were identified during the audit: Leadership did not design and implement an appropriate internal control system to ensure that the entity complied with all applicable laws and regulations. Current staffing levels did not allow the formal process separation necessary between procurement and financial transactions. The CEO signed off all payments to ensure oversight until staffing would be in place. There were no irregularities as a result of a lack of internal controls. In terms of employment equity, the Ports Regulator consisted of 67% black males, 33% black females in the Technical and Management Categories, and 14% white male and 86% black female in the support staff and interns category. This entity, unlike others did not break the demographics up into white, black, Indian, Coloured. The Ports Regulator spent R 2.1 million on consultants and lawyers, R1.4 million on travel and accommodation and R8000 on Bafana Bafana T-shirts to give to international ports company and regulator managers.

Capacity was a challenge in 2009/10. The first tariff assessment was difficult as the Regulator had to act in the absence of historical precedent. There were policy gaps, for example, what was the perspective on Capital Work in Progress? On implementation of the Act, there were questions about the speed and possible policy shifts. There were small organisation challenges such as the scalability of systems for information and data processing systems. Strategic challenges were budget constraints and long-term financial sustainability, time constraints on part time regulator members especially when tribunals had to sit, and ensuring that the regulator was not a referee and a player. Important interventions required were the consideration of additional members that had higher levels of availability for tribunals, a revised income model for the regulator, and additional budgetary allocations.

South African Civil Aviation Authority (SACAA) Annual Report presentation
Director of Civil Aviation, Captain Colin Jordaan, said the objectives and functions of the Civil Aviation Authority were to: control and regulate civil aviation safety and security, to oversee the implementation of and compliance with the National Aviation Security Program, to oversee the functioning and development of the civil aviation industry, to promote civil aviation safety and security, to develop any regulations that were required in terms of this Act and to monitor and ensure compliance with this Act and the Chicago Convention on International Civil Aviation. The strategic objectives for 2010 were aviation safety and security, financial stability, improvement on SACAA’s image, industry transformation, operational efficiency and effectiveness, statutory compliance, corporate governance and human capital.

Its income statement included an amount of R9,5 million owed by the Department of Transport to SACAA for the provision of Accident and Incident Investigation Services in 2008/09.This amount had not been paid and SACAA had been informed by the DoT that the money would not be forthcoming. Default on this payment would result in a net loss for the financial year of R18.8 million which would have to be funded out of reserves, despite the instruction from the Committee that the DoT had to pay SACAA.

The SACCA obtained an unqualified audit report for the third year since the current CEO/ Director took office in December 2007. As opposed to the clean audit obtained in the previous financial year, two matters of emphasis were noted by the AG. These related to the unsuccessful conclusion of disciplinary action against two managers within the organisation following lengthy suspensions. This resulted in a finding of fruitless and wasteful expenditure according to the rules applied by the AG.

Challenges experienced by the SACAA during the 2009/10 financial year were the global recession in the form of a decline in passenger numbers and rising fuel costs. The SACCA generated all of its revenue from passenger safety charges, industry user fees and a fuel levy on aviation fuel. Revenues were below budget and cost cutting measures had to be introduced.

There was a new Aviation Act and new regulations had to be instituted. According to the State Law Advisors, the “deeming provisions” included in the Act, stated that regulations could not be amended, but had to be replaced. This replacement proved to be a technical challenge.

The year 2009 had proven to be the safest in many years due to several safety initiatives instituted by the SACAA.

Because helicopters and training had become more affordable, there had been an increase in helicopter registrations. However, there had also been a more than proportionate increase in accidents in this category. There was a lack of experienced instructors and SACAA was in the process of tightening control over instructor training.

The 2010 FIFA Soccer World Cup had been a resounding success from an aviation safety perspective. During the 1 month period, there were no accidents and only 1 incident reported. The SACCA deployed dozens of inspectors to all airports and they were ready to respond to any emergency that might have occurred.

SACAA had been ISO certified since 2000. A customer satisfaction survey done in December 2009 rated it at 71%. A regional office had been opened in Cape Town in September 2009.

Regarding employment equity, 16 out of a staff complement of 437 were Coloured and none were employed at top and executive management levels, 274 were African, 24 were Indian and 116 were White. This differed significantly from the national demographic.

Africa had a reputation in the world as being a dangerous place for aviation. It was important for this perception of Africa to change in the minds of potential tourists. South Africa ranked 78th in terms of tourist dollars spent in relation to GDP, a figure of 3.5 % vs the world average of 6.9%. Yet South Africa was one of the safest countries in the world when it came to airline passenger travel. There had never been a major air disaster on South African soil since the advent of air travel in South Africa in 1952 (London to Johannesburg).

Thus, there was room for growth and the SACAA had a significant role to play in changing the perception of the world regarding aviation safety in South Africa and Africa. This was crucial if South Africa wanted to become a major tourist destination. Due to its remoteness from Europe and North America, the percentage of tourists who would arrive by air in South Africa, would be much higher than the world average of 47%.

From an infrastructure point of view, in the aftermath of the FIFA World Cup, the country was ready to experience dramatic growth in the tourism market. This growth would go a long way towards job creation and poverty alleviation. South Africa also had to entice the high-end tourist market, that would arrive in the country by private jet, to choose South Africa as a tourist destination. However, provision would have to be made by customs to process this market away from the mainstream travellers. If this market could be mobilised successfully, more jobs could be created more rapidly.

The Chairperson made an apology on behalf of the CEO of the ATNS, because he had to leave due to other commitments. The Deputy Director General of the DoT had to be present for the discussion session after both days of annual report presentations by the DoT entities. She had not tendered any apologies and did not explain her absence. This could be problematic in the long run, as her subordinates were present and would have to brief her on what was said, whereas she would have to oversee them executing the tasks that the DoT would get to do.

Mr M De Freitas (DA) said that irrespective of which structures people were working in, constitutionally they were accountable to this Committee. He suggested that a formal letter be written to the DoT, because it ignored the recommendation made by the Committee for DoT to pay the SACAA what it owed. It was unacceptable and unconstitutional.

The Chairperson said the previous day, the CEO of PRASA, Mr Lucky Montana had raised a red flag to the Committee. If PRASA’s recommendation was not responded to, there would be consequences, and PRASA could not be blamed.

At the beginning of the year, three entities had major challenges amongst others, the Cross-Border Agency. Since then change had been effected. Up till that moment the Department had been unable to deal with the problems. The Road Traffic Management Corporation was absent, because the Committee decided not to interact with that entity, until the Minister had briefed the Committee. This was a very radical step. The Ports Regulator was under-funded and was highlighting these issues for the second consecutive year. The DDG responsible for resolving these issues, was absent from the meeting.

As a result, questions directed to the DoT had to be deferred. It would cost the Committee another day to brief the DDG and invite the Ports regulator. It took extra time and cost.

The Committee also had to ask the Office of the AG, to what extent it monitored and evaluated the branches within the DoT that had the responsibility of nurturing any particular entity. The entities were state-owned. The state was the parent organisation and had to nurture and support its entities.

The DDG had to be present because she needed to take action.

Mr J Maake (ANC) asked SANRAL to clarify the different kinds of maintenance on page 14. Was it ad hoc, routine, periodic, and special operations?

Mr Nazir Alli replied that routine maintenance was cutting the grass along the road, cleaning the drains, fix guardrails, repairing small potholes and repairing signs. Periodic maintenance was doing a seal, in other words, to spray tar on the road and put a layer of stone chips on it. Ad hoc and special maintenance as basically to preserve the assets.

Mr Maake said to SANRAL that the before and after pictures in the presentation did not correspond.

Mr Alli noted the comment about the before and after pictures, but invited the Committee to come and see for themselves during an oversight visit.

Mr Maake said to SACAA that the actual duty of the Committee was to the voters. The Committee had to make sure that entities were doing the right thing. He asked entities to be specific in what they requested from the Committee.

Mr De Freitas referred to p5 slide 10 where the presentation referred to the amount that the DoT owed SACAA and have not paid, despite being ordered by the Committee to do so.

A DoT official said that initially it was 4 million. The DoT approached Treasury, but Treasury declined the request. The head of SAMSA also said that entities received mandates without budgets to carry out those mandates. The DoT asked for a certain amount and received less.

Mr N Gcwabaza (ANC) asked SACAA whether it could explain the loss of R9.3 million and whether it was linked to the loss of R 9.5 million. He asked whether Capt. Jordaan could explain what would have meant a positive outcome to the disciplinary hearings.

Capt Jordaan replied that the CAA budgeted for a loss of 7.145 million. The entity ended up R25 million under budget. Through internal rearrangements and cost cuts, this was reduced to R 2 million under budget.

Mr Gcwabaza asked about the money that DoT owed SACAA. Next year the SACAA would have to restate the loss at R18 million. Regarding the disciplinary action, what would have stopped the matters of emphasis?

Capt Jordaan replied that in both cases the people appealed directly to the board. The investigation took too long to be completed. By then the disciplinary procedure could not be followed anymore. In the second instance, the employee was pregnant. She was constantly unavailable. She asked her GP, and he confessed to booking her off. The HR department did not want to continue and gave her maternity leave. The disciplinary process dragged on for months and she asked for the charges to be dropped. The head of the disciplinary committee agreed. How it could be prevented? In future all disciplinary procedures had to be dealt with and finalised as fast as possible. The DoT had to fund investigations. This year investigations were under-funded by R3 million. The DoT did not pay ¾ of salaries. It affected the finances of the CAA.

Mr Maake said that CBRTA had to list what it needed the Committee and DoT to do, and not merely lament.

Mr De Freitas commented about the CBRTA that in February when it had addressed the Committee, the picture was gloomy. Currently, there was an optimistic energy that prevailed. The AG report was qualified, and he suggested that the agency had to put in measures to address the qualifications.

Mr Sipho Khumalo (CBRTA) noted the request of Mr De Freitas to get the presentation at least a day before the meeting in order to prepare for the meeting. The funding models explained what the CBRTA was asking for. Slide 27 gave the current situation and a snapshot of how the money would be spent. For the CBRTA to perform optimally, it needed R182 million to migrate from the box on the Left to the box on the Right. The idea was not to lament. The CBRTA was created in 1998 and by 2010 it still was not functioning properly, a decision had to be made. Either fund it properly so that it could function well, or close it down.

Mr de Freitas thanked SANRAL for submitting the presentation the previous day. He was glad to hear the new CEO recognised that more freight had to be on rail than on the roads. The retention of black engineers was mentioned. The Government was constantly competing with private companies, to retain staff. Did SANRAL look at what other governments in other countries did to retain their staff?

Mr Alli replied that SANRAL was looking at ways to retain staff. It was a major challenge because of the decimation of the education system. The state could not compete with the offers from the private sector. Internships and bursaries were very important. SANRAL had scholarships for almost 90 Grade 11 and 12 learners as well. They might not become engineers, but hopefully stay in the sciences. Before South Africa had no skills for the intelligent transport system. Now, because it had been rolled out, the Universities of the North West and Stellenbosch were offering courses in it. The testing of the gadgets were now done in South Africa. This was also developmental.

Mr Gcwabaza commended the officials of the entities for their hard work and in most cases clean audits. He referred ATNS to page 13 where it referred to a healthy financial position, but later referred to a capacity challenge.

Mr De Freitas said that Mamashela of ATNS was very inspirational. All South African had to hear his story. It showed that it was not about race, that anybody who wase given an opportunity, could achieve, without lowering standards. However, Mr Mamashela mentioned revenue. It was about delivery. No transport entity should make money.

Mr Mamashela thanked Mr De Freitas for the compliment and said that it was the spirit of the people that he worked with that made everything possible. ATNS faced challenges regarding sovereignty. For example in Europe all airspace was managed centrally. The EU worked as a unit. No country felt threatened by another. In Africa, some territories had just come out of conflict. There was a lack of trust. When these obstacles could be overcome, there could be a central place, for example South Africa, from where all the airspace in Africa could be managed by people from all over Africa. When aircraft went from the RSA to Zimbabwe, Zimbabwe did not know about the aircraft. The pilot did not know whether he was on a collision course with another aircraft. A common frequency operator was proposed. How could these challenges be overcome? When help was offered to these countries, they suspected ATNS of being the new colonisers. Some countries refused to communicate with some of the other countries. When the Air France plane crashed, South Africa had the technology to track it accurately, and Argentina did not. South Africa was then managing 10% of the air space between South Africa and South America. After the Air France crash, South Africa was approached by the international aviation body to manage the airspace all the way to South America.

Regarding the profitability of ATNS, although it did not exist to make a profit, it helped to have good financial management and good cash flow. All the equipment it needed was very expensive. The CEO believed that the markets for future growth was China and Africa. He believed that things had to be done differently.

Before the World Cup, ATNS was short of air traffic controllers. Management came forward with many ideas, and the problem was solved. As a result of South Africa’s isolation, ATNS had its own academy to train air traffic controllers. It academy attracted students from all over the world. Due to a change of attitude, the good exchange rate, clear English being spoken, the academy was doing very well.

The employees and students of ATNS had a sense of ownership. In order to fill up its manpower needs, it needed to get people from outside. Part of the earnings of a worker depended on how well he could transfer skills. Everybody had to mentor somebody, and if the person being mentored did well, the mentor got paid more.

Historically, communication by stakeholders was characterised by head-butting. ATNS had regular user engagements with airlines, communities and other stakeholders. ATNS was given a 35% increase and it was supported by users. ATNS used the money to bring the latest technology to South Africa, sooner, rather than later. The savings generated went to the airlines. It actually had to go on to the passenger in terms of reduced fees.

Ms N Ngele (ANC) thanked SANRAL for listening to her complaint and putting a guardrail on the road tnext to her house in Qcunu, Transkei next to a bend on a major road. Before the trucks used to leave the road and crash into her house. She complained about the state of the roads in the Transkei. She asked whether the road could not run past the town instead of through it.

Mr Alli replied that the partnership between City Mthatha, SANRAL and Department of Public Works was being signed. Some cities prefer the road to come through it, because it brought business into the city.

The Chairperson said, taking its cue from the State of the Nation Address (SONA), the DoT had to unpack and identify its role as the collective Transport Family as well as individual entities. The country went to elections, and the ANC won the elections. When the ANC government said it was developing rural infrastructure, and education, what did it mean? It meant access roads to schools and farms had to be built and upgraded. When the focus was on health, it meant access roads to clinics and hospitals had to be built, upgraded and maintained. In the strategic plans, those things did not get highlighted.

A former president in his SONA had raised sanitation as a national priority area for service delivery, but there was no plan, no budget and no deadline attached to it. There were no people with the necessary skills to do it. The StNA was not a fashion show. There was no excuse. When the state president had declared something a priority, it had to be reflected in the budget and the programs of the departments and their entities.

It was the duty of the government to change people’s lives and address their social needs. The World Cup was an experience that the country could continually draw lessons from. When there were targets and deadlines set, everybody mobilised towards that goal. When there were no targets and no deadlines, there was no mobilisation.

The DoT needed to set targets for the issues that had been red flagged. Mr Montana said that PRASA needed new trains. SANRAL drained their financial resources to build and maintain roads, but the roads were damaged rapidly, because it carried too much freight, which ideally had to be moved by rail. The road network was 16 000 km long, it had to expand to 38 000 km. When would this target be reached if SANRAL had to continue repairing the road. The Committee were lawmakers. It could make laws to force the migration of freight to rail. If that were done, the Committee would have responded to the needs of PRASA, SANRAL and the strained relationship between PRASA and TRANSNET.

The CBRTA was under-funded. The Chairperson thanked the CEO for turning the organisation around. This entity also needed the intervention of the Committee to ensure it received the funding it needed to fulfil its mandate. The Committee would discuss this at the next meeting on its Budget Review Report. It was clear from the presentation of the Independent Ports Regulator that it was in dire straits. The Committee’s Report had to reflect the circumstances that the entities reported to the Committee.

The Committee needed to engage with the Standing Committee on Finance on the role that that committee played in how Treasury allocated funds. The Chairperson’s understanding of budget allocation was that it had to happen according to the priorities set out in the SONA. The strategic plan was designed accordingly, funds and human resources were made available and deadlines and targets decided upon. If one then received too little funding, it was impossible to deliver on the strategic objectives. The Committee would make the Committee on Finance understand the frustration of this situation.

When South Africa won the bid for the 2010 World Cup, the President said that the country just had to find the money to finance the event. In the same way, the money had to be found to deliver on the issues which had been red-flagged. Regarding the contractors that outgrew SANRAL and then were too small to subcontract for multinational companies, was there no bridging program to assist them to get to the next stage? She thanked Mr Mamashela for his approach in finding a way to train people well, despite the lack of science training in the schools. She wished all government departments displayed the same creativity in overcoming obstacles to service delivery.

The meeting was adjourned.


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