Department of Transport, Cross Border Road Transport Agency, SA Maritime Safety Association, Road Traffic Management Corporation, Airports Company of SA: Annual Reports 2010/11

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11 October 2011
Chairperson: Ms N Bhengu (ANC)
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Meeting Summary

The Department of Transport (DOT) and several of its entities presented their Annual Reports for 2010/11. The Department of Transport firstly focused on its own performance highlights, which included the development of the integrated public transport system, completion of the National Master Plan and the 2020 public transport action plan. It had successfully progressed with ratifying the African Union Maritime Charter. Technical reviews of transport were undertaken in five Cities. The draft Road Accident Benefit Scheme policy had been revised and finalised. The legislation approved, and that planned, was outlined. Feasibility studies were finalised into the development of the Transport Data Act. The performance outcomes were summarised, as well as the achievements made under each. It was noted that accident and incidence rate on roads were reduced as all Driving License Testing Centres on record were inspected. Two Chapters of the Maritime Transport Policy were established in KZN and the Eastern Cape. A draft Scholar Transport Policy was completed.  The Department had to reprioritise some programmes. Major under-expenditure had been incurred, ascribed to savings on the office accommodation, and the fact that the taxi recapitalisation programme did not proceed as planned initially. It was noted that 77% of the vacant posts were filled. Interventions were tailor-made to attract people to posts and the Department’s other interventions in the areas of scarce and critical skills were outlined. It was noted that an unqualified report with matters of emphasis was achieved, but the Auditor-General had noted that the leadership, financial and performance management and governance were generally good. Members expressed appreciation at this report, but raised some concerns about the job creation, the fact that taxi-recapitalisation was so long delayed, and non-compliance issues.

The Cross-Border Road Transport Agency (CBRTA) noted that its core functions were carried out through various units. Its mandate was to improve flow of freight and passengers in the region. There was a steady increase in the law enforcement activities, and the numbers, and comparison of the countries to whom the permits were issued, was given. Although CBRTA had been performing poorly in the 2009/10 financial year, it had worked hard in 2010/11 to turn matters around, had stabilised its executive and senior management team, had designed new permits, and had managed to obtain an unqualified audit, for the first time ever, although there were some matters of emphasis that it was working on clearing. The revamping of the cross-border road transport information technology system was not introduced, due to financial constraints, and the conflict on the Lesotho Border was not yet resolved. Five strategic projects were achieved, and described. The Committee congratulated the entity on its improvements, but expressed their concerns about the Lesotho issues.

The Road Traffic Management Corporation (RTMC) had not provided its presentation in advance, although there was a written apology from the Minister for this. Some Members expressed their concern that they did not have time to read the report or formulate questions, which they would present in writing. However, the entity was permitted to continue with the presentation. The Acting officials informed the Committee that the RTMC was effectively insolvent, that 2010 had seen the disbandment of the Board and suspension of several senior employees. There were 361 staff, because of the establishment of the National Traffic Police. Some targets were met, including the conducting of a Traffic Offence Survey to determine levels of law compliance in road safety, review of internal policies, the commencement of the restructuring process, and review of the South African Safety Audit Manual. However, its liabilities exceeded its assets, R125 million of transaction fees were due from provinces, and there were serious questions around its financial sustainability. The disciplinary proceedings against suspended employees were lengthy, the entity was constantly trying to counter challenges and risks and it still awaited the results of the Task Team recommendations.  

Airports Company South Africa (ACSA) said that it was currently conducting interviews for the position of the Managing Director and Chief Financial Director, who had who resigned. The appointment of new board members was being finalised by DOT. In the 2010/11 year, ACSA had focused on completing infrastructure development. A Ministerial Task Team had provided recommendations and tariffs had been promulgated. It had won various awards, had upgraded airports for the World Cup, had achieved an increase on the aeronautical revenues, although there was a decline in hotel revenue. It had an unqualified audit report with matters of emphasis. Members were generally pleased with the presentation but questioned baggage loss and sought to find out more about passenger growth, which they noted arose in the domestic flights.  

South African Maritime Safety Authority outlined its goals of improving service delivery, strengthening corporate performance and governance and combating corruption. It had to ensure service excellence in maritime safety, security, health and environmental sustainability. It had turned itself around through five main efforts, and had improved its financial position and reduced its risk. It was pleased to announce growth of over 300% in revenue, whilst expenditure increases only increased by 60%, most of which arose through significant capital expansion. SAMSA announced that an all-female crew had successfully sailed the Agulhas through several ports that were all-female staffed. It had successfully implemented its Action Plan to address the disclaimer audit opinion of 2007 and had achieved three unqualified reports since, although there were still some matters of emphasis. The SAMSA Centre for Boating resulted in SAMSA expanding its capacity to regulate inland boat safety in all provinces. There was stabilisation of the Board and SAMSA acquired a building in East London. Members were pleased with the turnaround, but wondered if the tariff structure was not too high. They urged South Africa to acquire its own commercial vessels, and enquired about the ships coming through the harbours.

Meeting report

Annual Reports 2010/11 of Department of Transport and entities
Chairperson’s opening remarks
The Chairperson, in her opening remarks, noted that the Committee had already held discussions with the Auditor-General in relation to the audit reports for 2010/11 on the Department of Transport (DOT or the Department) and the entities, and the Committee would address the issues, particularly the matters where corruption had been cited. She noted that she would only be available for part of the meeting, but that Mr L Suka (ANC) would act as Chairperson thereafter.

Department of Transport (DOT) Annual Report 2010/11
Mr George Mahlalela, Director General, DOT, focused on some of the highlights of the Department’s performance in the 2010/11 financial year. The Department had developed the integrated public transport system which included Bus Rapid Transit (BRT) networks, and taxi empowerment had continued. The Department’s investment in the rail infrastructure and the Gautrain rail link had continued.  Another highlight was the recapitalisation of the long distance bus company, Autopax. Investment had continued into the national road network and DOT also focused on asset preservation and maintenance. DOT had completed its National Transport Master Plan, and its 2020 Public Transport Action Plan. The process of ratifying the African Union Maritime Charter had progressed successfully. The draft of the Maritime Transport Policy had already been tabled and was currently being reviewed.

Technical reviews of transport were undertaken in five Cities. The draft Road Accident Benefit Scheme policy had been revised and finalised and the legislative drafters for the no-fault / Road Accident Benefit Scheme had been appointed. Public Transport Integrated Committees had been established in all the Provinces. The Rea Vaya phase 1A starter services commenced on the 31 August 2010. Rea Vaya had a total of 28 buses, with a carrying capacity of 117 passengers and 6 complementary buses. This had been handed over by the City of Johannesburg to the Taxi Operators Investment Company to operate.

The Department had implemented legislation to have buses tested for roadworthiness every six months. Parliament also approved the Safe Container Bill and Merchant Shipping Bill. Some legislation was processed for debate, but other was waiting for approval by Cabinet, including the Oil Pollution Compensation Bill. Some of the studies finalised in the 2010/11 financial year included one into the feasibility of the development of the Transport Data Act, and another on the contribution of civil aviation to the South African economy. The socio-economic impact of Open Skies was declared, and a study into socio-economic benefits of roads on the economy was also finalised.
DOT outlined its performance outcomes in the financial year (see attached presentation). It noted that in order to support these, a Ministerial task team on economic regulation was appointed, Road Safety Councils were established in 3 Provinces. A draft Non-Motorist Transport Policy was developed and 15 000 bicycles were procured and 1 340 were distributed. An improved public transport system was rolled out. The Department had successfully upgraded the current National Land Transport Information System to comply with the National Land Transport Act. A phased-in approach of incorporating only affected Municipalities in the Committee structure was adopted and implemented. DOT had increased its contribution to job creation and targets set for provinces were met. DOT also promoted National procurement. The DOT had increased its contributions to try to ensure environmental protection.

Travel analysis zones were updated in preparation for the National Household Survey. The accident and incident rates on roads were reduced as all driving license testing centres on record were inspected. Two Chapters of the Maritime Transport Policy were established in KwaZulu Natal (KZN) and the Eastern Cape, regarding the Transport Regulation and Accident and Incident Investigation. A draft Scholar Transport Policy was completed. DOT had compiled a number of freight draft strategies on freight logistic and corridor development. The Department also finalised some public entity oversight and border operations and controls.

DOT also reported to the Committee on legal and regulatory requirements. The Auditor-General had cited five cases of irregular expenditure, and these had been handed over for disciplinary action to be instituted against those responsible. There were 26 new cases of fruitless and wasteful expenditure (see attached presentation). An Action Plan had been instituted to address commitments made to the Auditor-General (AG).

The AG’s report on the leadership, financial and performance management and governance were quite positive. The Executive Committee had approved a detailed compliance template against which the status of high level compliance matters and reporting could be checked.

Mr Dan Pretorius, Chief Financial Officer, stated that the Department had to reprioritise on its programmes in this year. There had been some large under expenditure, which he attributed to the savings on office accommodation, and the scrapping of the taxi programme in this year. The Passenger Rail Agency of South Africa (PRASA) had the highest expenditure, of all the entities, followed by South African National Road Agency Limited (SANRAL).

In the DOT, 77% of the vacant posts were filled. A concurrent headhunting and normal recruitment process had been introduced and implemented. Contract employees had been temporarily placed against vacant posts. Gender representation at all levels had improved, but Indians were slightly over-represented on the demographic equity. The DOT was making specific tailored attempts to attract those with disabilities.

The Department had addressed the issues of scarce and critical skills by conducting seven outreach programmes in rural areas to address transport related scarce and critical careers. DOT had nominated 16 students to pursue their Transport related careers in Prague. The Department had also prioritised bursary funding for transport related qualifications for employers. A Human Resource Development Strategy Implementation Plan for 2010/11 that addressed capacity development initiatives for the Department was developed. A gender forum was established within the Department, to address gender issues.

Mr N Duma (ANC) noticed that there were issues of non-compliance which had affected the Department, and enquired who was responsible for this non-compliance and what steps had been taken.

Mr M de Freitas (DA) wanted to know about the poor performance on internal controls and asked what steps would be taken on this.

Another Member asked about the underspending reported, which was of concern.

Mr M De Freitas wanted to know why the Department had same vacancy rates as in the previous year. He also wanted clarity as to why there was reduction in the numbers compensated. He asked if the Department had looked beyond job creation.

Ms N Mdakana (ANC) wanted to know the time frame for the reducing of vacancy rates. She asked if candidates who were seconded were not included in the previous statistics of DOT vacancies.

Mr S Farrow (DA) asked if the vacancy rate was calculated excluding contract employees and why the compensation budget was reduced.

Mr Mahlalela informed the Committee that the Department needed to fill all vacant posts and that DOT had an investment programme which showed how many vacancies the Department had.

Mr de Freitas questioned the visibility of the speed traps in Durban.

Mr de Freitas wanted clarity as to why the Call Centre for the World Cup was not funded.

Mr Mahlalela explained that the funding for the World Cup was given to municipalities and only after the Confederation Cup was the decision was taken to give the Department the go-ahead to help the municipalities, so that the Department had to fund the Call Centre itself.

Mr Farrow wanted clarity as to whether the Department had sought a legal opinion on whether DOT could recover funds on non-compliance.

Mr Duma thought that the Department was given a time frame on the scrapping of taxis, asked when the deadline was, and what was instituted to prevent taxi owners from bringing in old scraps that they had found in vehicle scrapyards, thereby abusing the system.

Mr Mokonyama explained that projects depended on funding. There were no funds to refinance the taxis from elsewhere, since the banks were unwilling to help taxi-owners, and therefore the Department itself had to recapitalise them. The whole project was intended to assist taxi-owners to purchase other taxis, or to assist those who wanted to get out of the programme. He assured the Committee that cloning was very difficult as the Department was checking engine numbers before it would make payment.

Mr Mahlalela added that the taxi-industry was facing problems and the Department was unable to refinance it, so that there had been adjustments to the programme. A task team was established but the feasibility study had not been completed by the end of the 2010/11 financial year.
A Member raised a concern on the delays in recapitalisation.

This Member also enquired into sustainability of the bicycle projects and plans and the lifespan of those bicycles. He wondered if there were any other non-motorised forms of transport, apart from bicycles.

Ms Mdakana asked for a number of bicycles that were distributed and to whom they were distributed.

Mr Mathabethe Mokonyama, Deputy Director: Public Transport, DOT, added that animal-drawn carts and water-carrying wheel barrows were also used as part of public transport. He noted that the Shova Kalula project issued bicycles to learners, and that the DOT was looking into the opening of a bicycle manufacturing plant in South Africa.

A Member asked for the breakdown and targets on job creation.

The Chairperson thanked the Department although she mentioned that she had hoped that a presentation would be given on future plans. She informed the Committee that in fact no corruption had been found in the Department itself, although the AG had reported on this in relation to some of the entities, and it would be up to the Accounting Officers to deal with this. She asked the Department to look at the role of transport on climate change, saying that the Department had to look into green energy.

Cross-Border Road Transport Agency (CBRTA) Annual Report 2010/11
Mr L Suka (ANC) took over as the Acting Chairperson.

Mr Matete Matete, Chairperson of the Board, CBRTA, noted that the Agency was established in 1998, and aimed to provide co-operative and co-ordinated provision of advice, regulation, facilitation and law enforcement with respect to cross border transport.

Its core functions were carried out those its facilitation and industry development unit, the road transport inspectorate, regulatory and research unit, and the advisory unit. The CBRTA had to improve the flow of freight and passengers in the region. CBRTA had to regulate competition in respect of cross-border passenger road transport. CBRTA had to liberalise market access progressively, in respect of the cross-border freight road transport. CBRTA had to empower the cross-border road transport industry to maximise business opportunities and to regulate this industry incrementally so to improve safety, security, quality and efficiency of service as stated in the CBRT Act.

There was a steady increase in law enforcement activities and operational performance in this year. The  numbers of permits issued in 2010/11 was higher, firstly in freight permits, then taxis. The lowest numbers issued were in relation to tourist permits. Taxi permits were issued to eight neighbouring countries, with the highest being Mozambique and Zimbabwe. The bus permits were also issued to eight countries, the highest being Zimbabwe, then Lesotho. Freight permits applied to ten countries, with the highest number to Botswana, and Zimbabwe.  

In its previous financial year, 2009/10, the CBRTA had not done well, and it had worked hard in this year to turn things around. It had managed to stabilise the executive and senior management team. CBRTA had had designed new permits with improved security features ,to enhance the safety of cross-border permits, as there had previously been a high instance of forgery of permits.  In this year, it had managed to work with its available funds. A scientific business model was developed at the beginning of the 2010/11 financial year. Internal controls and strategic and operational policies were implemented. A new regulatory committee policy was also implemented. CBRTA had, in 2010/11, achieved an unqualified audit, for the first time since its formation. However, there were some matters of emphasis. There were comments on the proper recording of penalties and the completeness of information on the trade receivables. There had to be restatement of some figures and irregular and fruitless and wasteful expenditure were identified. He said that this related to the rental of two buildings during the time that renovations were delayed, and it should not recur.

In 2010/11 there was an increase in property, plant and equipment, due to capital costs incurred during the office movement from Hatfield to Menlyn. The total net assets and liabilities had decreased, due to utilisation of cash reserves. The main source of income increases were lower than the employee and operating costs, resulting in the depletion of cash reserves from the previous financial year.

CBRTA believed that it must exercise full control of the penalty income. The CBRTA had seconded its own staff to work in the courts, in the rollout of the Musina Revenue Collection Model, to four regional courts, because of the backlog on administration. The entity had two pending cases pertaining to the increase in the penalty income.

A Border Indaba would be held from 18-19 October 2011.

The revamping of the cross-border road transport information technology system, which was first built in 2008, was not introduced in this year, because of financial constraints. Another unrealised objective was the conflict in the Lesotho Border area, that CBRTA believed it could resolved by political intervention.

There were five strategic projects that were achieved by the realisation of the “Changing Gears” Strategy. The first related to market access regulation, which was regulated on promotion of regional integration. CBRTA It had hoped to enhance organisational performance as its institutional performance and governance were improved. It now had an efficient, competitive and responsive economic infrastructure network link with the national outcomes. It had linked to DOT with safe and secure systems, and was working on environmental protection. The mandate was reviewed.

Mr Malele summarised that there had been a focus, in this financial year, on improving the Agency so that it became sustainable. The Changing Gear Strategy had incorporated a revised funding model with re-engineered business processes. Collaborative partnerships would ensure that CBRTA played a key role in the free flow of passengers, goods and services, and assisted in the integration of the SADC region. Operation Clean Audit 2012 aimed to fast track resolution of all issues raised. It was ready to demonstrate its commitment to adding public value through its strategic plan, and to support the National Programme of Action of government.

Mr Duma wanted to know how many corridors and boards had challenges, apart from Lesotho. He said that there should be time frames to resolve challenges.

Mr Matete stated that there were 7 regions with movement. He explained that the Lesotho challenge had been going on for almost 10 years and the entity would not meet its deadline of resolving the Lesotho challenge.

Mr Duma noted that there were still some challenges in management, particularly around the handling of large amounts.

Mr Duma enquired about the tariff structure of the five revenue streams and wanted to know the deadline for reviewing the tariffs.

Mr De Freitas also wanted background on the tariffs.

Ms Mariana Aucamp, Chief Financial Officer, CBRTA explained that CBRTA was facing challenges with the tariffs as currently different provinces were charging different fines. Secondly the process of capturing those tariff fines was not electronic, and CBRTA had to obtain data from the courts. However, this had resulted in the entity having established a good working relationship with the Department of Justice.

Mr Farrow wanted clarity as to the drop in the bus permits.

Ms Aucamp explained that the drop in permits had not affected the growth on revenue.

Mr Matete added that the drop in bus permits was seen because buses had schedules, while taxis were more flexible and were therefore preferred by the passengers.

Mr De Freitas congratulated CBRTA on its improvement, recalling that its position in the past year had been poor.

Mr De Freitas asked if Board members were paid for each meeting, or if there was a standard fee.

Although this question was not answered, Mr Matete noted that the CBRTA had still not risen to the required standard, through inadequate management and lack of funding.

Road Traffic Management Corporation (RTMC) Annual Report 2010/11
The Committee noted that the Road Traffic Management Corporation (RTMC) had handed its presentation to Members only five minutes previously.

Mr Farrow urged Members to regard this as invalid.

The Acting Chairperson informed the Committee that he had received a written letter from the office of the speaker and from Minister of Transport, Mr Sbusiso Ndebele, apologising for the late report and also explaining  that the RTMC report and the Driving License Account Report were the reasons for the delays.

Mr Farrow explained that the RTMC report was already tabled at the Shareholders Committee and he did not understand why the report should have been delayed in coming to Parliament.

Ms D Dlakude (ANC) thought there was no need to withdraw the report, but the Committee had to note that the report was late.

Mr Duma said that should be a letter from the Department explaining the reasons for the delays. He also suggested that the parties involved should comply with the process of a late report submission. However, he felt that they should be allowed to present the report.

Mr Farrow noted that the reason why reports had to be given to Members on time was that they had to read them and present them to their caucus.

Mr De Freitas suggested that the RTMC should do its  presentation but the discussion be held over to a later meeting.

Mr N Masangu, Senior Manager, RTMC, apologised that the Chief Executive Officer of RTMC was unable to be present today, and he informed the Committee that he himself would not be available on the following day, because of a bereavement in the family.

Ms Dlakude suggested that if members had questions, they should be directed, through the Chairperson’s office, for a written reply by RTMC.

The Acting Chairperson asked RTMC to proceed with its presentation.

Mr Mapoanyane, Acting Manager: Corporate Services, RTMC, informed the Committee that RTMC was faced with “perennial paralysis” but assured the Committee that it was ready to implement the traffic authorities’ systems that would be determined.

Ms D Maepa, Acting Chief Financial Officer, RTMC, warned the Committee that the RTMC Annual Report did not present a good picture at all. The 2010/11 financial year was marked with the disbandment of the Board, a broken governance system and a Corporation on the brink of collapse. As the result of this, a Ministerial task team was appointed by the Chairperson of the Shareholders Committee. The task team detailed the recommendations that were put before management for implementation. RTMC management now had to focus on six goals of the new RTMC strategy. The strategy provided a solid base on which performance could be based, whilst the recommendations focused on the rectification of the process.

The staff complement of the corporation was currently at 361 as the result of the establishment of the National Traffic Police. The depletion in the Executive management team had happened, because of the suspension of five people at management level, and because of the separation of the RTMC. The changes in management had been highlighted to the Ministerial Task Team, the Standing Committee on Public Accounts and the Portfolio Committee. The new financial and human resource management systems were implemented to support internal business processes.

There were six goals for performance against strategic targets. A National Road Traffic Law Enforcement Code was developed. There was a reduction in fatalities in comparison to previous years. Peak times were managed through activation of festive season campaigns in the major travelling routes. 1 597 learners were enrolled at the traffic training colleges for qualifications that included registered qualifications for traffic officers. RTMC also trained 363 examiners of driving licenses and 97 examiners of vehicles. A policy for Traffic Training Centres had been developed and would be implemented in the 2011/12 financial year. 118 accidents were investigated. The recommendations made in the remedial reports were complied with and sent to the relevant authorities. A Traffic Offence Survey was conducted to determine the levels of law compliance in road safety.

RTMC had reviewed its internal policies pertaining to business functions. A restructuring process had ensued, and internal consultation and draft structures had been developed. Management of disciplinary matters pertaining to suspended personal was prioritised. New offices for a conducive environment were occupied and the previous irregular lease had been discontinued.

The South African Safety Audit Manual was reviewed. RTMC proposed an International Road Assessment Programme that targeted assessment of road infrastructure in 2011/12. The Mzantsi Traffic Beat, a road safety magazine, was launched and was distributed to stakeholders. A sustainable media liaison was strengthened to ensure information and education of the public on various aspects of road safety. Road safety partnership with the public and private institutions were undertaken on various road safety programmes and campaigns.

Ms Maepa informed the Committee that RTMC was reporting on a state of insolvency. RTMC’s liabilities exceeded its assets, and the main contributor was the R200 million debt that was related to irregular use of transaction fees in the 2009/10 financial year, which was still payable to the Department, but which RTMC believed should be written off. R125 million of transaction fees were due from provinces and were payable to DOT. R34 million was incurred from previous years as irregular expenditure. An Accident Reporting System was discontinued as it would have been costly to maintain. The Auditor-General’s report stated that the location of assets was not indicated on the asset register. The IT helpdesk of R8.1 million was not impaired. She noted that much of the matter of emphasis related to the restatement of figures.

She noted that the current budget of RTMC was inadequate and led to its unsustainable state. The absence of a Board, and the inability of the Shareholders Committee in meeting remained as challenges. Lengthy disciplinary proceedings for suspended employees were also a major challenge for the entity, although it was trying to continue and develop an approach to counter these.

The new RTMC would focus on a holistic view on road safety management. The entity would be building and strengthening relationships with stakeholders. RTMC would be implementing new organisational structures that would be in line with the strategic focus, and would also be implementing measures for the attainment of an unqualified audit report.

The Acting Chairperson told RTMC to ensure that it did comply with the law. There were some positive aspects of the RTMC report, but they were overshadowed by its significant debt.

Mr Farrow noted that he and other DA colleagues could not participate in the discussion, in view of the lack of preparation time allowed to the Committee, but would ask questions in writing.

Ms Dlakude reminded the Committee that the DOT had offered a turnaround strategy to RTMC and she hoped that RTMC would improve in the following financial year.

Mr Duma noted that RTMC dealt with the safety on roads, and encouraged the Committee and DOT to work with it to help it achieve the mandate.

The Acting Chairperson asked the DOT to comment on the turn-around strategy of RTMC.

Mr Mahlalela was of the view that DOT was winning the struggle to turn around RTMC. DOT needed to stabilize RTMC, and had instituted disciplinary steps against its former Chief Executive Officer and that a new Chief Executive would be appointed. One of the main challenges was that funds for RTMC were not collected by itself, but by municipalities, although RTMC had to answer for any discrepancies in the audit process. Another was that it was still waiting for the findings of the Task Team.

The Acting Chairperson was not pleased to hear of so many debts that had to be written off all the time.

Airports Company of South Africa (ACSA) Annual Report 2010/11
Mr Wayne Van Der Vent, Chairperson, ACSA, said that ACSA was in a process of conducting interviews for the position of the Managing Director and Chief Financial Director, who had resigned. He also stated that DOT was finalising the appointment of new board members.

Mr Bongani Maseko, Acting Chief Executive Officer, ACSA, noted that the passenger figures had increased in the 2010/11 financial year, and that ACSA had strong revenue. ACSA’s capital expenditure and net loss had decreased compared to the previous financial year.

In 2010/11, ACSA had focused on completion of infrastructure development at King Shaka International Airport and Cape Town International Airport. The entity had created an enabling, predictable and transparent economic regulatory regime. It also focused on business excellence. It had capitalised on the current property portfolio and 2010 FIFA World Cup facilitation. He noted that ACSA had been supported by the largest and most stable economy in Africa to build long term business sustainability. Its operational systems had improved.

ACSA had received recommendations from a Ministerial Task Team on the 2011 to 2015 Review. The Department of Transport Roadmap (DTR) had promulgated tariffs to avoid further burden on the industry. This DTR had also developed a funding model for ACSA and Air Traffic Network Services (ATNS). ACSA also stated that a predictable, transparent and balanced economic regulatory framework was required to enable a viable aviation industry.

Cape Town International Airport had received recognition as the best airport in Africa and as the most improved airport in Africa, while OR Tambo International Airport was the third best airport in Africa, and  King Shaka International Airport was rated fourth best. Four public excellence awards were won.

Mr William Tiov ,Acting Chief Financial Officer, ACSA, stated that there was an increase in the aeronautical revenues. He explained to the Committee that non-aeronautical revenues included retail, car rentals, advertising and car parking and that those non-aeronautical revenues had increased. However,  hotel operators had declined by 2%. There was also an increase in the traffic passenger performance, on domestic and international, compared with the previous financial year. ACSA would not, therefore, require additional funding in 2011/12, as it was not a net borrower, but net payer. The investments, however, had not increased.

Mr Maseko concluded by stating that ACSA revenue looked very good and that there was an increase on the numbers of their customers.

Mr De Freitas stated that he now felt more positive about the entity. He wanted to know the reason for the increase in the domestic passengers.

Mr Duma wanted to know which was growing faster, domestic or international passengers.

Mr Maseko said that Velvet Sky and SANTACO lines had brought growth. Domestic passengers had grown more than international passengers.

Mr Farrow congratulated ACSA on a job well done and the manner in which it had handled the process. He noted that there was a massive requirement for ACSA participation in the Soccer World Cup but it was not given funding. He asked what options it had, other than to increase tariffs.

Mr Farrow wanted clarity as to why ACSA had spent 35% on security although it had such high baggage loss.

Mr Maseko agreed that the baggage loss was a bigger problem in some airlines. ACSA had taken major strides to control the issue of baggage loss but there was still a lot to be done.

Mr Farrow said that the Portfolio Committee wanted the names of those whom it was suggested would be appointed to the Board.

Ms Dlakude said that there was a great improvement in what ACSA was doing.

Mr De Freitas asked if ACSA was generating income from the space that was used by the hotel.

Mr Tiov told the Committee that the hotel occupancy had dropped even though ACSA was still receiving money from rentals.

Mr Freitas asked if board members were paid a standard fee or paid per meeting. He wanted to know if ACSA had looked at other transport means as King Shaka was far away from the major centres.

The Acting Chairperson thanked ACSA for a well prepared presentation.

South Africa Maritime Safety Authority (SAMSA) Annual Report 2010/11
The Acting Chairperson noted that the Committee had run out of time and allowed time for only a very brief report.

Ms Ayanda Mgodi, Executive: Corporation Affairs, SAMSA,  apologised that the Chief Executive Officer of SAMSA had had to attend an urgent meeting in Pretoria.

Mr Sobantu Tilayi Executive Head of Operations, SAMSA, said that SAMSA had high-level goals to improve service delivery, strengthen corporate performance and governance, and to combat corruption. The entity had to ensure service excellence in maritime safety, security, health and environmental sustainability. It had managed to contribute to the development of the South African economy through implementation of broad based black economic empowerment (BBBEE) and industry transformation. SAMSA had facilitated maritime stakeholder engagements and leveraged strategic partnership to expand the network of partners, to enhance its domestic and global delivery capacity and effectiveness.

SAMSA had five turnaround strategic pillars. The key pillar, relating to service, operational and technical excellence, was to transform SAMSA into an efficient service provider and improve on its quality of service delivery. In 2010 SAMSA successfully entered the maritime satellite industry and tracking technologies such as Satellite Automatic Identification System were used to secure the hosting of the 2010 Soccer World Cup on the maritime side, and implementation of the Great Plains system. Innovative and technological breakthroughs turned SAMSA into a competitive industry player and leader. Corporate governance and institutional development focused on transforming SAMSA into an effective maritime authority. SAMSA achieved its objective of becoming a responsible corporate citizen. SAMSA had successfully repositioned itself internationally as the representative body of the South African Maritime sector and it undertook trips to Geneva for the World Trade Organisation, International Labour Organisation, and United Nations Commission on Trade and Development, and to London to canvass positions which were intended to benefit the industry in South Africa.

SAMSA had improved its financial position and had reduced its risk exposure. The entity had also developed and implemented business processes, systems and policies. The maritime industry was developed, promoted and transformed in order to ensure satisfaction in relation to international obligations on maritime matters. Lastly, service quality to customers was improved and the entity also engaged in corporate social responsibility. SAMSA identified talent on technical staff who participated on the succession programme. Recruitment and appointment of new staff was in line with the plan of the Human Resources. SAMSA also pursued its employment equity plan.

There was increase in the SAMSA revenue and expenditure on key mandate related matters. SAMSA’s financial stability had also improved. A spectacular financial turn-around of the entity, with revenue growth of over 300% was noted. SAMSA revenue continued to be derived from government services, direct user charges and SAMSA levies. SAMSA had become a much more sustainable institution as it was now only 6% depended on government service fees to fund its mandate. As opposed to its increase of 300% in revenue, it had increased its expenditure by only 60%. Capital expenditure showed a steady increase, due to SAMSA’s needs for the entity to revamp its capital infrastructure.

SAMSA had pulled off a “World First” when an all-female crew sailed the deep-sea vessel Agulhas through South African ports, where port services were also provided by females. SAMSA had successfully implemented its Audit Recovery Plan to reverse its 2007 audit disclaimer, and had achieved unqualified audit opinions for 2008/9 and 2009/10. It had established a SAMSA Centre for Sea Watch and Response, and compulsory IMO long range identification and tracking system. The entity also launched the SAMSA Centre for Boating, which meant that it had expanded its capacity to regulate inland boat safely in all nine Provinces, without any extra funding. There was stabilisation in the SAMSA Board, and in the management capacity.

Further achievements included the acquisition of a building in East London, the launch of a Maritime Skills Study during the Maritime Celebration Day, in conjunction with the Human Resource Development Council. SAMSA had hosted a Maritime Skills Summit in Richards Bay. A Centre of Excellence was also successfully launched by SAMSA. It would host to host the Torremelinos Convention in September 2011 and the Regional Maritime Coordination Centre. SAMSA had joint efforts with the SA Navy, SA Defence and Cape Metro Medics to save Taiwanese fishermen. South Africa’s international partners had entrusted SAMSA with initiatives that had extended South African influence in the global maritime debate.

It was stressed that once again, SAMSA achieved an unqualified audit report for 2010/11. However, there were some matters of emphasis. There was R6 million irregular expenditure on event management procurement, and also evidence of material misstatements. SAMSA aimed to obtain a completely clean administration. Although it still had some way to go, as it still had to contend with delivery challenges.

Mr Farrow mentioned that Members had recently paid an oversight visit to SAMSA.

Mr Farrow asked about why it seemed that one of the board members attended meetings twice.

Mr Farrow suggested that SAMSA needed to re-look at its tariffs, which were amongst the highest in the world.

Mr Tilayi informed the Committee that SAMSA had conducted a road show on its tariffs and the response was that even though these were governed by international standards, the tariffs were too low in relation to the costs. That was the reason they needed to increase. That roadshow had also highlighted how outdated some of the SAMSA technology had been.

Mr Farrow asked why SAMSA had an office inland, in Pretoria.

Mr Tilayi responded that SAMSA had offices in all ports but they had a requirement to expand inland. SAMSA also had a presence in Limpopo and KZN Provinces.

Ms Dlakude answered Mr Farrow that may be the office inland was for administration purposes.

Mr Farrow asked for the names of those who had given guarantees, as stated in the presentation.

Ms Mgodi explained that guarantees were given for the rentals.  

Ms Dlakude suggested that the Committee had to help SAMSA to buy its own vessels.

Mr Duma suggested that the Committee had to have a broader discussion on the maritime industry, on issues like water safety and water recreation. In the presentation it was mentioned that 1 500 ships were using our ports, and he wanted to know if this included South African vessels.

Mr Tilayi gave a breakdown of the 1 500 ships, saying that only a small percentage actually visited the shore, but the bulk “rusted South African waters” as they passed through. He informed Members that South Africa did not have a commercial vessel. The vessel Agulhas was used by the Department of Environmental Affairs, but SAMSA was bidding for training berths on this ship.

The Acting Chairperson appreciated the awareness programmes and work done, asked if there were targets on job creation and encouraged it to continue with its good work.

The meeting was adjourned.


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