New Growth Path, skills development & job creation in transportation industry: Department's briefing

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20 June 2011
Chairperson: Ms N Bhengu (ANC)
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Meeting Summary

The Department of Transport (the Department) gave a presentation to the Committee on the Department’s contribution to the New Growth Path, skills development and job creation. The transport sector was considered as one of the largest sectors for employment opportunity. In addition, the Revised Industrial Policy Action Plan had recognised transport as one of the key sectors. Some of the Department’s action programmes were described. The first was S’hamba Sonke, where an allocation of R22 billion had been made for the next three years, and which was expected to create over 68 000 jobs. The Shova Kalula programme aimed to integrate cycling into the public transport system, both to ease the burden of motorised transport in cities, and to facilitate transport in rural areas, and targeted the provision of bicycles to scholars, women and farm workers, and setting up localised manufacturing plants. Passenger Rail Agency of South Africa planned to invest in additional rail rolling stock, and this investment would also create short and long term jobs. The Industrial Development Corporation and Department of Trade and Industry were working on projects to localise production of buses, trucks and minibuses. There were also significant job-creation opportunities in developing more energy efficient and alternate energy transport modes. The Department would be responding to various legislative mandates around skills development, both by partnerships and by its own strategies, including promoting scarce skills and establishing courses at institutions of higher learning. The Department itself was undertaking training, but recognised the imperative to train more disabled employees. One problem was the lack of accurate national labour market information systems, with gaps and misalignments across sector skills plans. The Transport Sector Skills Plans targets and employment and training figures were set out. The Department was identifying where jobs must be created, and noted that initiatives included overseas study programmes, coupled with work placements at municipalities in holidays, and centres of development locally, as well as e-learning courses. The Integrated Transport Sector Charter required 3% skills development to be directed to black people, with 50% of that to black women. The building of the ship register and boosting sustainable jobs at sea would also assist in job creation, as would state owned enterprise projects, rural roads management projects. However, there was a need for the Department to improve coordination of the various programmes and their reporting.

Members noted that they felt the presentation fell short in relation to job creation and opportunities in the rural areas, suggesting that the programmes involving the upgrade of transportation systems seemed mostly to be directed to cities, and that it would be useful for manufacturing plants to be established locally, and ideally in the rural areas. Other questions about the Shova Kalula programme related to the beneficiaries, maintenance, distribution and oversight and local production. Members felt that the presentation was too generalised and did not indicate the macro-plans, and urged the Department to try to make use of existing resources, such as dormant rail branch lines, and to be more specific about the timeframes and implementation plans. They also questioned the grants, scholarships and initiatives at learning institutions, and asked the Department to try to ensure that the institutions would prioritise training in scarce skills, or send students overseas if this could not be done. Members suggested that gas-powered buses similar to those in South America, be used for the Bus Rapid Transport system, that South African Airways should be servicing its fleets locally, and not sending them to China, questioned where the rolling stock would be sourced, and expressed concern whether the Department really had the expertise and had conducted sufficient feasibility studies on ‘green’ alternatives. Members noted that there was still lack of planning at municipal level, and suggested that the Department try to have engineers seconded, to speed up processes, that the Department definitely needed to work with other departments, and to rework some aspects of the strategic plan.

Meeting report

New Growth Path: Department of Transport briefing
Mr Moeketsi Sikhudo, Director: Black Economic Empowerment, Department of Transport gave a background to the involvement of this Department (DoT or the Department) with the New Growth Path (NGP). Government had made a commitment to the NGP, which envisaged the creation of five million jobs in the next ten years, by identifying areas where job creation was possible on a large scale, and then developing policy packages to facilitate this job creation. The first Industrial Policy Action Plan (IPAP) was launched in February 2010. The Revised IPAP 2, covering 2011 to 2014, was released in February 2011, and this new version of the IPAP was an integral component of the New Growth Path. The plan identified opportunities and constraints in different sectors and set out key action plans for each identified sector. The transport sector was one of the important sectors to contribute to IPAP2.

Mr Sikhudo said that one of the key contributions to IPAP2 and the New Growth Path was the S’hamba Sonke programme. A budget of R22 billion had been allocated for the next three years. The budget for 2011/2012 was R6.4 billion. Business plans, supported by all MECs, had been received from all provinces. The programme was expected to create 68 675 jobs, and the figures for job creation per province were set out as follows: Kwazulu Natal – 22 278; Eastern Cape – 20 736; Mpumalanga – 8 346; Gauteng – 3 800; Limpopo – 4 432; Free State – 5 693; Western Cape – 597; Northern Cape – 741; North West – 2 142

Mr Sikhudo then outlined that the Shova Kalula bicycle programme had the objective of integrating cycling into the public transport system, by promoting it as a low cost mobility solution, specifically targeting scholars, women and farm workers. This would also create jobs by establishing micro businesses. The Department envisaged finalising the Non Motorised Transport (NMT) policy, standards and regulations and including the NMT in the Road Traffic Act. The Department also wanted to develop NMT infrastructure in municipalities and promote cycling by localising manufacturing plants. The Department planned the rollout of 15 000 bicycles by 2012/2013 and 2013/2014, and development dedicated to NMT infrastructure in five metros (Cape Town, Johannesburg, Tshwane, Polokwane, and Ethekwini). Jobs would be created by the establishment of 20 Shova Kalula micro businesses and a local manufacturing plant to sustain the projects.

Mr Sikhudo then outlined the Passenger Rail Agency of South Africa (PRASA) investment programme in rolling stock and infrastructure upgrades, which would also contribute to the goal of job creation. Companies that played an active part in creating jobs and training technicians would be given incentives to employ more labour and be given more coaches over the 2011/2012 to 2013/14 Medium Term Expenditure Framework (MTEF). PRASA’s new rolling stock programme was estimated to cost R97 billion over the next 18 years, and the delivery of the first batch of trains was expected during the 2014/2015 financial year. With regard to job creation, capital investment allocations to PRASA totalled R19.5 billion over the three-year MTEF period. This capital investment allocation was earmarked to create 5 000 new jobs over the short term and approximately 100 000 over the long term.

Mr Sikhudo highlighted that the Industrial Development Corporation (IDC), Department of Trade and Industry (dti) and the Department of Transport were working on a project intended at localising the production of buses, trucks and minibuses. IPAP2 clearly indicated that labour-intensive employment areas, like manufacturing, were critical. The Department of Transport was committed to facilitating the rollout of the Integrated Public Transport Network (IPTN) by consolidating the procurement process of metros and municipalities, to create sustainable volumes and capacity for local manufacturing.

Mr Sikhudo then noted that the current focus on the green economy and the climate change imperatives were urging the transport sector to ‘go green’. There were significant opportunities to develop new ‘green’ and more energy-efficient industries in the transport sector,  by switching to public transport and rail freight, using more efficient vehicles and by building more compact mixed income vehicles. The transport sector came second to the energy sector in producing the most greenhouse gas emissions in the country. The IDC was currently developing companies who produced bio-gas from crops, animal manure, sewage sludge and municipal waste. Gauteng province and its taxi industry launched a green vehicle pilot project, which introduced flexible fuel vehicles that could run on both liquid petroleum gas and gasoline. In the first phase, it was running approximately 70 such taxis in the province. South Africa would host the United Nations (UN) Climate Change Conference (COP17) in November 2011, in Durban. The Department was actively involved at the Inter-Ministerial Level in preparing for South Africa’s negotiating position, and in contributing to South Africa’s own mitigation commitments.

Mr Sikhudo then noted that the Department’s Skills Development Strategy aimed to respond to various legislative mandates. These included the New Growth Path, IPAP2, Human Resources Development South Africa (HRDSA) and the Youth and Rural Development Strategy. The Department would address issues of decent work and job creation and would formulate partnerships with Higher Education Institutions and other entities. Internally, this Department, like others, was required to participate in an intensive HR connect/skills audit process, which focused on eight occupational categories, including gender, disability and age. 65% of 530 staff had participated in the audit. The assessment outcomes served as the basis for the development of the overall Departmental training plan/workplace skills plan.

Mr Sikhudo explained that the strategic training priorities identified were transport technology and infrastructure programmes, freight logistics, transport economy, ports management, engineering and maritime law. Other training priorities were rail and transport planning, advanced project and programme management, financial management, transport safety and security and monitoring and evaluation. The skills identified as scarce and critical included transport economists, civil engineers, project managers and financial and economic analysts. The reasons why these skills were regarded as scarce was partially because of competition with the private sector, a lack of qualified professionals and a labour market deficiency in the relevant professions, as well as a shortage of adequate training institutions.

Mr Sikhudo then outlined the status of the Modal-specific training. He noted that there were specific training priorities for each mode of transport. The status differed from one to the other. Demographical training data up to the end of February 2011 showed that the highest training figures were amongst African females, with white males being the lowest numbers. Although the Department had not successfully integrated disabled employees into the training mandate, it would focus on this group in the future.

Mr Sikhudo highlighted that important observations made by the Department included the lack of an accurate national labour market information system. Little forecasting was undertaken by research agencies and government departments. The sector skills plans showed huge gaps in terms of labour market information and there was misalignment between sector skills plans, workplace skills plans and employment equity plans.

Mr Sikhudo went on to present the figures for the Department. The Transport Sector Skills Plan 2010 to 2015, set various targets. To date, the transport sector had employed 767 000 employees. 35 226 (4.6%) were trained across various modes. The overall employment composition across various sub-sectors tallied to 4.5% for railway, 59% for roads, 2.5% for air transport and 0.5% for maritime. 50% of transport employees fell within the Plant and Machinery sub-category, as well as at elementary occupations.

The Department, and stakeholders, were in the process of identifying the numbers, types and levels of jobs that must be created to meet skills development initiatives in each sub-sector. Mr Sikhudo noted that 16 previously disadvantaged youths had been put through the four year Prague Scholarship Programme in the Czech Republic, and the amount invested in this was R2.09 million. The Department was also supporting Centres of Development, at 13 tertiary institutions, to the value of R9.1 million. All these institutions provided relevant courses. The Department was also finalising the accreditation process for the integration of the Transport Curriculum at Further Education and Training (FET) level, and this should be in place by October 2011. An e-learning policy was to be put in place by September 2011. 5% of the total establishment would be placed as interns and learners, to address issues of unemployment, particularly in the rail and road sectors.

The Integrated Transport Sector Broad-Based Black Economic Empowerment (BBBEE) Charter set an average of 3% target on skills development investment directed to black people, with 50% of this target dedicated to black women. The Department, in collaboration with the Department of Basic Education, would introduce Road Safety Programmes as part of the Life Skills Curriculum. This should produce 10 000 newly skilled and safer drivers.

Mr Sikhudo highlighted that South Africa also needed to build up its ship register, which would provide an opportunity to create sustainable jobs. According to the South African Maritime Safety Authority (SAMSA), 36 000 seafarers were required for deployment at sea, but currently the maritime sector had 1 800 seafarers. Increasing this would result in sustainable job creation.

Mr Sikhudo added that State-owned Enterprises (SOEs) also contributed to skills development and job creation. South African National Rail Association (SANRAL) had spent R132 million on projects related to rural access and job creation. 77% of total expenditure on work would be contracted to black small to medium enterprises (SMEs) on Rural Roads Management projects. 38 interns were employed under the internship programme, 37 bursaries were awarded to external students and 98 scholarships were awarded to school students. A budget of R2 million for 2011/2012 was set aside for a scholarship scheme. The South African Maritime Training Academy (SAMTRA) was administering the Cadet Training Programme on behalf of SAMSA, and 3 439 Seafarers Certificates had been issued.

Mr Sikhudo concluded by noting that major programmes on skills development and job creation were regrettably not coordinated uniformly across the Department or SOEs, nor was there standardised reporting. There was therefore a need for the Department to attend to ensuring better coordination and proper reporting.

The Chairperson said that the Department should not generalise when trying to close the gap between the rich and the poor and those living in developed and underdeveloped areas. The Department was making it difficult to measure progress. The NGP was a national plan to contribute to the eradication of poverty, but this could only be achieved by growing of the economy through job creation. The NGP had to relate to each province, municipality and district in the country.

Ms D Dlakude (ANC) said she was from a rural area herself and knew the hardships that rural people experienced, but the presentation did not speak to these areas. She suggested that the Shova Kalula programme, and the manufacturing plants should be established in rural areas, to create more jobs for the economically disadvantaged. 

Mr Lawrence Venkile, Acting Chief Operations Officer, Department of Transport, replied that the Shova Kalula programme was aimed at some rural and urban areas and involved labour-intensive upgrading of roads. This presentation only highlighted the metros in which this programme would take place, but a breakdown across every municipality and district was available. He reiterated that the project was not only meant for the cities.

Mr S Farrow (DA) agreed with the Chairperson that the presentation was too generalised, and did not indicate the macro plan. Most challenges were related to extensive rural development programmes. SANRAL and the S’hamba Sonke programmes should be channelled to rural areas as well. He pointed out that there were several dormant rail branch lines, and urged the Department to try to make use of the resources already available in the country and build up what was already working.

Mr N Duma (ANC) wanted more information on the S’hamba Sonke programme, including where and how it would be implemented, and timeframes.

Mr Sihkodo replied that the Department had identified where and how this programme would be implemented but he did not have the information readily available, as it was still being finalised.

Ms C Blaai (COPE) asked what had informed the Department’s decision to develop the Shova Kalula programme.

Mr Venkile replied that the Department wanted to integrate cycling into the public transport system, to lower traffic volumes on city roads, and also to boost rural areas where other public transport was not available or was still being developed. The department had identified scholars, women and farm workers as most particularly in need of this programme.

Mr M De Freitas (DA) asked whether the bicycle manufacturing plant would be a private business or an SOE, and if the Department would ensure that the correct beneficiaries received these bicycles.

Mr Venkile replied that the maintenance and distribution of bicycles would be the responsibility of the provincial departments, in conjunction with the municipalities. The bicycle manufacturing plants would most likely be local, as localisation was stated as one of the targets of the programme.

Mr Farrow asked whether the scholarship to Prague was part of a grant.

Mr Sikhudo replied that it was part of a grant. The Department also planned to place these students into internships when they returned for holiday periods, since it was difficult for young learners to complete their studies if they were not provided with the opportunity to do their practical work in a workplace situation. They would be placed in municipalities to gain more experience.
The Chairperson said that scarce skills should be prioritised by institutions offering courses. If they could not offer such courses, then the Department should be making provision to send people to undertake their relevant study at institutions abroad.

Mr De Freitas asked what was meant by Centres of Development.

Mr Venkile replied that Centres of Development referred to university institutions and FET colleges who were offering transport-related courses.

Mr Farrow suggested that the Department should, for the Bus Rapid Transport (BRT) system, use buses that ran on gas, similar to those in South America, as this resulting in lower carbon emissions.

Mr Farrow thought that it was a waste of money to send South African Airways (SAA) fleets to China for services, pointing out that this had been done in South Africa in the past.

Mr Sikhudo replied that this was a good suggestion and it would indeed help the Department to save money. He added that the main problem in the transport industry was the lack of skills. The training priorities included establishing professionals who could do the work that was needed locally, instead of outsourcing these services.

Mr De Freitas asked whether the R97 billion allocated to PRASA’s new rolling stock programme over the next 18 years would include procuring this stock locally, or whether it would be procured from outside the country.

Mr Venkile replied that the tender for the rolling stock programme still needed to go out, and the Department did not know yet who would be providing these coaches.

Mr De Freitas said that the notion of ‘going green’ was of concern, simply because he was not sure that the Department was taking the right approach. He did not understand how the taxi pilot project would contribute to job creation. He added that insufficient studies had been done on the feasibility of electric cars, and he was worried that South Africa did not have the necessary expertise to ensure that such projects would be sustainable.

Mr Sikhudo replied that indeed the Department had to collaborate with other sectors of government to address these issues, including the Department of Trade and Industry, who could assist with assessing the viability of environmentally-friendly projects, and check if the demand would be the same in South Africa as it was internationally.

The Chairperson said that the Intergovernmental Relations Framework was developed to deal with the necessity of departments working together. She commented on the distinct lack of planning and design at municipal level, and she said that the Department should consider using the services of the Development Bank of Southern Africa (DBSA) to get engineers who could assist in speeding up the process. Only those metros who had qualified and skilled people seemed to be getting anywhere with development.

The Chairperson noted that the Committee and Department must work together to clarify the problems, so that the Department could re-work some of its plans. She added that it was also important for the Department of Transport and Department of Social Development to work closely together, because development of communities was part of service delivery.

Mr Venkile replied that the Department welcomed the critique and guidance from Members, particularly in regard to skills and development training. He noted that the revised and finalised skills development plan would be included in the Department’s strategic plan. He agreed that there was still a need to fine-tune coordination of implementation, in order to respond to the NGP. He also conceded that his presentation had not outlined all the necessary timeframes and social impact. However, detailed skills and implementation plans would be made available to the Committee.

The meeting was adjourned.


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