Department of Transport on its Quarterly Performance

Meeting report

The Chairperson said that there were two items on the agenda.  These were the adoption of minutes and the briefing by the Department of Transport (DOT) on its quarterly expenditure. The briefing by the DOT would be taken first.  The presence of the Deputy Minister, Ms Sindiswa Chikunga, was acknowledged.

Remarks by Deputy Minister of Transport
Ms Chikunga said she was glad to be at the meeting and that the reason for her failure to attend the previous meetings was because the meeting of the Committee, which was always held on Tuesdays, coincided with Cabinet meetings on the same day and all Ministers were required to be in attendance.. However, it had been directed that there should always be a high ranking officer at the level of not less than deputy director general, to represent the DOT at all meetings with the Committee.

Briefing by Department of Transport
Mr Dan Pretorius, Acting Chief Financial Officer of the DOT, gave an analysis of the departmental expenditure per programme.  The programme had been allocated a total adjusted budget of R333.8m for administration. To date the programme had spent R166.8m, or 50% of the allocated adjusted budget, against the benchmark expenditure target of R149.7m, or 45%.

The programme had been allocated a total adjusted budget of R118.5m for integrated transport planning. The programme had spent R28.4m to date or 24% of the allocated adjusted budget, against the benchmark expenditure drawings target of R44.3m or 37%. The under-spending was due mainly to delays on projects such as the National Household Travel Survey, the update of the National Freight data bank, and the cross border optimization plan.  The service level agreements had been signed on most of the projects, and expenditure was expected to escalate in the coming months.

A total adjusted budget of R10.301bn had been allocated to rail transport. The programme had spent R5.142bn to date, or 50% of the allocated adjusted budget, against the benchmark expenditure target of R5.149bn or 50%..   Expenditure was expected to escalate in the coming months.

A total adjusted budget of R18.231bn had been allocated for road transport. The programme had spent R9.398bn to date, or 52% of the allocated adjusted budget, against the benchmark expenditure target of R9.406bn, or 52%. The programme was busy with the process of appointing service providers and expenditure was expected to escalate in the coming months.

In respect of civil aviation, a total budget of R520.8m had been allocated. The programme had spent R32.6m to date or 6.3% of the allocated adjusted budget, against the benchmark expenditure drawings target of R37.7m, or 7.2%. The under spending was due mainly to delays in the establishment of a regulating committee and the establishment of the Civil Aviation Safety Investigation Board.

A total adjusted budget of R149m had been allocated to maritime transport. The programme had spent R53m to date, or 36% of the allocated adjusted budget, and against the benchmark expenditure drawings target of R67.5m, or 45%. The under-spending was mainly due to delays in concluding the contract for the watch-keeping services and late invoices for oil pollution prevention.

As regards public transport, a total adjusted budget of R9.993bn had been allocated. The programme had spent R2.890bn to date, or 30% of the allocated adjusted budget and against the benchmark expenditure drawings target of R2.970bn, or 30%. The under-spending was mainly due to the lengthy administration process with regard to transfer payments for taxi recapitalisation. The under-spending on goods and services was mainly due to delays in the following projects: the development of the scholar transport framework, the development of a migration plan for scholar transport and integrating the ShovaKalula into scholar transport services. Expenditure was expected to escalate in the coming months of the financial year.

Details were given concerning the expenditure on conditional grants.  These were the Rural Roads Asset Management Grant, the Public Transport Infrastructure & Systems Grant, and the Provincial Roads Maintenance Grant.

Discussion
Ms D Dlakude (ANC) stated that she was concerned with the consistent under-spending by the DOT. Though there were explanations for this in some cases, the under-spending meant there was a still a lot to be done by the DOT.
She asked if all the provinces were using the funds given them for the execution of projects where funds had been allocated, and if not, what was the DOT doing about it?

She referred to the issue of the North-West Province and observed that the during the oversight visits by the Committee to the province, it had been discovered that the money for the S'hamba Sonke programme had been diverted to pay for consultancy fees and not for its original purpose. What was the DOT doing about the situation?

How many consultants was the DOT using, as it had been discovered in the North-West Province that a department had been using 110 consultants?

Ms N Ngele (ANC) observed that the municipalities had under-spent the funds given to them by the DOT. She asked why these funds had not yet been spent.

Mr I Ollis (DA) observed that there were certain recurring themes in the DOT. The primary concern was in respect of aviation, which had generated a number of issues of concern. It appeared that a lot structures were not in place, and those which were in place were not performing according to capacity.  Attention was also drawn to the fact that the Acting Director of the Civil Aviation Authority (CAA) had been “acting” for more than 18 months.  This was highly irregular, in view of the fact that he ordinarily should not have been allowed to perform as an acting director for more than 12 months. He asked if the the Acting Director was not suitable to be confirmed as the permanent Director.

He observed that South African airports had been reported to be the third most expensive airports in the world.  He asked for ways in which the tariffs at airports could be reduced in order to attract more tourists and more air traffic to South Africa.

Ms N Ndaka (ANC) referred to the issue of North-West and observed that the DOT had always remained quiet about the issue of North-West. She wondered whether the province was still using the 110 consultants.  She also raised the issue that the DOT was under-spending and asked for more explanations concerning the reasons for the under spending.

The Chairperson said the under-spending by the DOT suggested that the projects for which the funds had been allocated, had not been executed, and asked for an explanation.

Mr George Mahlalela, Director-General of the DOT, said one of the reasons why there was under-spending was that the DOT had had to take over a project which had previously been handled by the Department of Defence.  R450m had been allocated to the DOT for this project and had not yet been spent..

On the issue of North-West, he replied that the contracts with the consultants had been discontinued, and  the issue was under serious investigation.

The Chairperson interjected and referred to the information presented by the Director-General on the over-use of consultants in the North-West. If the information had been presented earlier, the Committee would not have been harping so much on the issue.  The attitude of the DOT appeared to indicate that the issues raised by the Committee had been deliberately ignored.

Mr Mahlalela apologised for not making the information available to the Committee earlier on.

Mr Mahlalela responded to the question relating to civil aviation and the need to review the tariffs at the airport. He said that tariffs were determined by a regulation committee and there was a need to review the legislation governing the charging of tariffs.   However, it was very debatable whether the tariffs at airports were high or not.  A lot of money had been spent on upgrading the airports to international standards, and the money that had been sourced for this upgrade had to be repaid. The discussion of the reduction of tariffs could not be done outside of the context of the developmental challenges which had to be dealt with. 

Mr Ollis interjected and raised the issue of the non-confirmation of the Director of the CAA.

Ms Ndaka interjected and stated that Mr Ollis ought to be called to order. She said that the normal procedure was for the Committee to allow the Director to answer the questions and then members would then raise their questions. She stated that Mr Ollis appeared to be interrupting the Director before he could even make his point known to the Committee.

Mr G Krumbock (DA) stated that Ms Ndaka should also be called to order. He opined that she should have referred to Mr Ollis as ‘Honourable Ollis’ and not just by his surname alone. He further stated that the point of order raised by Ms Ndaka was a frivolous one.

Ms Ngele referred to the earlier statement by the DOT that it had taken over a project which had previously been handled by the Department of Defence. She asked why the project had been passed on to the DOT.

Mr Mahlalela replied that the Department of Defence had not been funded when it was running the project, and it was only when the project had been transferred to the DOT that Treasury had made R450m available.

Mr L Suka (ANC) also referred to the issue of under-spending by the DOT. He stated that the DOT should provide logical reasons for the under-spending.

Mr Krumbock asked why there was no permanent Director in charge of the CAA.

Ms Chikunga replied that the Department would not appoint a Director simply for the sake of appointing one. There were procedural steps to be taken before the position could be occupied by anyone and these steps were still ongoing. She explained that the previous acting director had being in an acting position for over 12 months and in order to comply with the law which stated that no one could be in an acting position for more than 12 months, a new acting director  had been appointed.

Mr Krumbock said his question had not yet been answered. He asked why the previous acting Director had not been confirmed as the permanent Director of CAA.

Ms Dlakude sought to interject while Mr Krumbock was still speaking but he refused.

The Chairperson interjected and commented strongly that she had given Ms Dlakude permission to interject. She asked if Mr Krumbock wanted to direct the affairs of the meeting.

Mr Krumbock stated that it was not his intention to direct the affairs of the meeting.   Nevertheless, he wanted to be given the same courtesy that was extended to other members.

The Chairperson directed Ms Dlakude to make her comment.

Ms Dlakude stated that she had raised her hand on a point of order. It was her opinion that the Deputy Minister and the Director General of the DOT had given enough reasons for the failure to appoint a permanent Director for the CAA.  She commented that the issue of the failure to fill the position was making the meeting drag on for too long.

Mr Ollis stated that he was concerned that there had appeared to be an intention to tell the opposition members of the Committee what questions that could be asked and those that ought not to be asked.

Ms Dlakude stated that it was better to allow the DOT to come at a later date to specially brief the Committee on the affairs of the aviation sector instead of belabouring the issue when there were other matters to be considered.

The Chairperson asked Mr Krumbock if he could not hold his questions regarding the CAA till another date, where the DOT would specially brief the Committee on the affairs of the aviation sector. She personally had a number of questions to ask the DOT in respect of the aviation sector.

Mr Krumbock stated that he was not averse to the DOT addressing the Committee on the affairs of the aviation sector at a later date.   However, the question he had raised was not a new issue. The Deputy Minister had more or less “half-answered” his question.

Ms Chikunga stated that the DOT could not effect the appointment of a permanent Director for the CAA due to “some reasons” and that was why there was still someone occupying the position in an acting capacity.

Mr Krumbock once again stated that his question had not yet been answered.  The crux of his question was why the permanent CEO had not yet been appointed. It was not enough for the Deputy Minister to state that there was no permanent director due to some reasons.   There ought to be a further explanation on what accounted for the reasons.

The Chairperson attempted to clarify what she had heard from the Deputy Minister. She reiterated what the Deputy Minster had said earlier about the fact that there were procedural steps to be satisfied before a new permanent Director for the CAA could be appointed.

Mr Ollis stated that it appeared that the Committee was not allowing the Deputy Minster to answer the question posed by Mr Krumbock.  It was his opinion that it was not for the Chairperson to speak for the Deputy Minister.

Mr Krumbock said it was inappropriate for the Chairperson to speak for the Deputy Minister. He felt it was up to the Deputy Minister to provide the answers to his question, or to state that she did not have the answers.

Ms Chikunga replied that the fact that someone was an acting Director of the CAA did not necessarily mean that he would be confirmed as the permanent Director of the CAA.  There were many procedures that had to be followed to the letter in order to ensure that a proper and competent person was appointed. A lot of people had applied for the position and a thorough scrutiny had to be undertaken.

Mr Krumbock said he would pose his question one more time and hoped that he would get a very simple answer. He asked if the previous acting director for the CAA had not been appointed on a permanent basis because he did not have the requisite qualifications.
 
Mr Mahlalela replied that the previous acting director had not been appointed on permanent basis, not because he did not have the requisite qualifications, but because there had been so many other candidates who had applied for the position and everyone had to be given a fair chance.

The Chairperson asked Mr Krumbock if he was satisfied with the response from the DOT.

Mr Krumbock replied that he would leave his questions for a subsequent meeting with the DOT which would discuss the affairs of the aviation sector.

The Chairperson thanked everyone for coming to the meeting.

The meeting was adjourned.