SA National Road Agency (SANRAL), Passenger Rail Agency (PRASA), Maritime Safety Authority 2013 Annual Reports

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15 October 2013
Chairperson: Ms N Bhengu (ANC)
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Meeting Summary

The Department of Transport entities South African National Road Agency Limited (SANRAL) , Passenger Railway Agency of South Africa (PRASA) and South African Maritime Safety Authority(SAMSA) briefed the Committee on their 2012/13 Annual Reports, highlighting achievements and challenges.

SANRAL noted that great strides were made in developing its road network and that South Africa now had the 10th largest road network, and the 18th largest paved road network in the world. The entities, and the Chairperson agreed that transport was the backbone of the South African economy and there was a need for a country to further improve its road conditions in order to meet the growing demands of the economy. In this year, SANRAL had placed specific focus on tackling problems with potholes, and spent R161 million in the Eastern Cape and R67 million in North West fixing potholes between September 2012 and January 2013. SANRAL’s major challenges included insufficient funding for timely upgrades and maintenance of the non-toll network, and the need, despite the public outcry, to make the National Development Plan a reality by supporting the user-pays principle. The poor would be assisted by greater access to mobility and this was a very important point. Sometimes, its plans were hindered by delays in approval from departments dealing with water and environmental affairs, and by processes in the provinces. SANRAL remained concerned about law enforcement, with major non-compliance to traffic rules, overloading, poor driver behaviour and the high accident rate that led to 14 000 deaths annually on the roads. Non-payment of traffic fines was another challenge, and there was a need to promote a culture of abiding with the law. The biggest challenge remained with high-level planning and coordination between nodes of transport. Price distortion was a huge challenge especially since the poor were largely reliant on public transport

Members asked why alternative routes to toll-roads had been closed, asked if there were special courts, how prosecutions would be done and the level of spot-checks in regard to e-tolls, as also whether proper warrants were being used, or merely bullying tactics. Later, however, the point was strongly made that SANRAL was merely enforcing and not setting policy on e-tolling and it was unfair that the media should have lambasted it, and SANRAL was commended on the  manner it had explained the difference between user-pays principles and mere money-collection. Members asked about the role of SANRAL in skills development, whether jobs created in road maintenance were sustainable, whether its scholarships were available in all provinces, whether the level of training provided sufficiently skilled people, and whether it would continue to be dependent on foreign countries for software development. Members asked about the matters mentioned by the Auditor-General and whether the regression in the audit outcomes was directly linked to the e-tolling. 

Passenger Rail Agency (PRASA) noted that there had been significant improvements since PRASA was formed and provided detailed information on the revitalisation of Metrorail, especially in respect of convenience, improvement and upgrade of coaches. 579 coaches were delivered as part of the Accelerated Rolling Stock Programme, and signalling systems were upgraded. It had increased its capital expenditure and achieved reduction in operational costs through cost containment and better management. It had awarded over 500 bursaries, particularly to engineers and IT specialists. Its major challenges were lack of funding, particularly for long-distance rail, the Mainline Pax Services (Shosholoza Meyl) which required cross-subsidisation and was costing PRASA about R870 million a year. Reduction in funding for Metrorail was affecting key operations, and there was a lack of private sector investment in new developments. Energy and service costs, and widespread cable theft, were also problematic.  However, there were new potential opportunities by integration in the SADC region, with possibilities of running trains and buses to Mozambique, Zimbabwe, Lesotho, Zambia, and boosting infrastructural investment. A prime consideration for economic benefit, job creation and mobility enhancement would be the introduction of high-speed rail. Members questioned what the 106 buses were used for in PRASA, whether they stood idle when not in immediate use, and if they were earning any income. They questioned why air-conditioners installed in trains were not ordered locally, and also raised questions about locomotives acquired from Spain, and whether it was not possible to procure more from local sources. They asked about the targets not met, called for comment on the Auditor-General’s concerns about the financial statements, asked if Shosholoza Meyl was generating profit and its funding and urged that stronger controls and action be taken around fruitless expenditure and non-compliance with Treasury requirements.

The SA Maritime Safety Authority (SAMSA) outlined that its mandate was to ensure safety of life and property in the sea, also to prevent and combat pollution of the marine environment by ships. The maritime sector had the potential to play a pivotal role in addressing the developmental challenges facing South Africa, as well as delivering significant economic benefits to the growth and development of the country. It faced many challenges, including the frequency of incidents involving uninsured or sub-standard ships, part of which could be attributed to the global financial crisis, and there were also several instances where mandatory safety requirements or other compliance issues had been flouted. Several ports’ maritime communications infrastructure and governance systems had also reached the end of useful life. Recruitment and retention of the right skills posed a challenge, and SAMSA had concerns around inadequate office accommodation. Piracy at sea was another major issue, but tighter security measures were introduced, including enhancement of Maritime Security Domain Awareness through Satellites AIS implementation. Members were not entirely happy with the presentation, nor with the fact that such a small delegation attended, but were told that the forthcoming Maritime Indaba was occupying several officials. Members felt that SAMSA and the whole maritime industry were not yet sufficiently transformed, and urged that more job opportunities be created, and not only in the coastal provinces. Members wondered if South Africa had sufficient ships and sea-power of its own, and urged that this was a matter also needing attention. They asked if there seemed to be greater public awareness and cooperation with SAMSA, and expressed concerns about the escalation of piracy and poaching and the strategies to prevent these including involvement of other departments. Members also wanted more details on the instances of over and under-expenditure. 

Meeting report

The Chairperson noted the apology of the Minister of Transport, who was overseas.

South African National Roads Agency (SANRAL) 2012/13 Annual Report briefing
Mr Nazir Alli, Chief Executive Officer, South African National Roads Agency Limited, said that South Africa had the 10th largest network and 18th longest paved road network in the world, which was something that South Africa as a developing country could be proud. He emphasised that roads were the backbone of the South African economy and needed to be preserved, maintained and improved to meet developmental needs.

In the 2012/13 financial year, about 3 535 km was incorporated into the national road network; from Eastern Cape there was 2 108 km and from North West Province 1 426 km.  The problem of potholes was identified and tackled, as all potholes were fixed between September 2012 and January 2013 at a cost of R228 million, with R161 million spent in Eastern Cape, while 67 million was spent in North West Province.

Mr Alli indicated that the South African Roads Agency Limited (SANRAL) faced major challenges, and these included insufficient funding for timely upgrades and maintenance of the non-toll network. SANRAL also faced challenges of making the National Development Plan a reality, by supporting user charge, despite the opposition and the protection of the poor, especially in terms of access to mobility. It had been hampered by cases of delays in project related approval from the Department of Water Affairs and provincial departments, and Environmental Affairs. Moreover, law enforcement had also remained a major concern, especially non-compliance with traffic rules and overloading by the hauliers. Driver behaviour was considered as the major concern in a country like South Africa, with a horrific record of road accidents, as 14 000 people reportedly died annually on the roads. Non-payment of traffic fines was also another huge challenge faced by SANRAL, as this was seen as encouraging lawlessness in those fined for reckless driving or infringement of road rules. He noted that speeding, and drunk drinking remained the most common offences, and there was a need to promote law abiding citizens. High-level planning and coordination between inter-modal transport remained a challenge for SANRAL, and it needed to work on the introduction of an integrated transport system that would enable South Africa citizens to travel smoothly. In addition, SANRAL viewed price distortion as extremely bad for the poor, who primarily used public transport.

Passenger Rail Agency of South Africa (PRASA) 2012/13 Annual Report
Mr Lucky Montana, Chief Executive Officer, Passenger Rail Agency South Africa (PRASA), mentioned that in the short space of time since the formation of PRASA, there were already significant improvements, especially on the revitalisations of Metrorail, and convenience, improvement and upgrade of coaches. 579 coaches were delivered as part of Accelerated Rolling Stock Programme. There had been improvements in the signalling system. Furthermore, there were improvements in the capital expenditure, by 82%, from R3.5 billion last year to R6.3 billion in this year. There was also a reduction in operational losses and this was done through various cost containment and management interventions.

PRASA had awarded over 500 bursaries, as part of skills development contribution and learnerships, and these bursaries were awarded to students in universities, matriculants and Further Education and Training (FET) colleges.

Mr Montana stressed the fact that although there were significant improvements at PRASA, there were also key challenges. These included lack of funding especially on long-distance rail (Metrorail). There was also lack of funding for Mainline Pax Services (MPS) -otherwise known as Shosholoza Meyl – which was costing PRASA R870 million a year. Moreover, reduced funding for Metrorail remained another key challenge that was equally destructive and affecting key operations. There was also an issue about the lack of private sector investment in new development introduced by PRASA. PRASA needed to ensure growth of investment properties. An increase in energy costs had been mentioned as a thorny issue, as negative rates and taxes impacted badly on the cash position of PRASA, suppliers and small business. Stolen cables were costing PRASA a great deal in time and finances, and were affecting the key operations and causing delays or inconvenience for commuters.

Mr Montana noted that there were opportunities for integration in the SADC region, so as to increase connection between these regions. There were opportunities to run trains and buses between South Africa, Mozambique, Zimbabwe, Lesotho, Zambia, and this was to be integrated with infrastructural investment in these regions. He lastly emphasised the need for the adoption of high speed rail for future, as the economic benefits for such project were enormous, connecting a country in a quicker and convenient way, and this was especially relevant for long distances.

South African Maritime Safety Authority (SAMSA) 2012/13 Annual Report
Mr Sobantu Tilayi, Chief Executive Officer, SAMSA, mentioned that the mandate of SAMSA was to ensure safety of the life and property in the sea, also to prevent and combat pollution of the marine environment by ships. Moreover, he also emphasised that the South African maritime sector had the potential of playing a pivotal role in addressing the developmental challenges facing South Africa, as well as delivering economic benefits of a significant nature towards the growth and development of the country .

SAMSA’s objective was aimed at ensuring the welfare and the observation of safe practices by seafarers and fishermen, compliance, and safe operation of ships and all small vessels. It also focused on safe performance of commercial activities at sea, and the safety of goods being transported by vessels.

SAMSA indicated that it was faced with numerous strategic challenges. It faced frequency of incidents involving uninsured sub-standard ships, and this could be attributable in part to the global financial crisis. There were several incidents of flouting mandatory safety requirements and key compliance, such as insurance and manning levels. The maritime communications infrastructure and governance systems had also reached the end of their useful life, and the access to port and port infrastructure to was also reported as inadequate. Recruitment and retention of talented candidates remained another huge challenge that faced SAMSA, along with brain drain and increased constraints in respect of adequate and sustainable office accommodation.  He also indicated that, due to increased piracy at sea, there were tight security measures that were introduced, which included enhancement of Maritime Security Domain Awareness through Satellites AIS implementation.  

SANRAL issues

Mr I Ollis (DA) began by thanking Mr Nazir Alli for his willingness to respond to his e-mails about constituency concerns, and also commended SANRAL for its sterling work.

Mr Ollis asked what would happen on e-tolling in the Western Cape, and why the Department had closed the alternative routes, which compelled people to use e-tolls roads. He asked if there were any special courts for e-tolls, and which legislation would be used for prosecuting people. He wondered if there were any traffic officers stopping and asking people about their contact details, especially those without e-tolls. What was the method that was going to be used to enforce people to pay for e-tolls. These questions were asked because at the moment he was not sure whether there would be warrants of arrest, or whether mere bullying tactics would be used.

Mr Alli cordially accepted Mr Ollis’s compliment on his willingness to respond to his emails about constituency concerns, and the general performance of SANRAL. He emphasised that SANRAL was not responsible for arresting people with no tolls, but that was the responsibility of law enforcement bodies. SANRAL did employ any traffic officers. There were no special courts for dealing with e-tolling, and SANRAL used debt collection system instead of bullying tactics.

Ms N Ngele (ANC) complained about lack of scholarships going to rural areas, and also questioned what methods were used to encourage students in rural areas to apply for these scholarships.

Mr Alli responded that scholarships also covered rural areas, hence the Wits Programme targeted rural areas specifically, and he indicated that COSAS School in Khayelitsha was just one example of a school in urban areas.

Mr G Krumbock (DA) questioned the reason why there should be such a problem in getting up a tourist signpost for a resort off the M3. Signposting, in his view, could stimulate economy of the area, through provision of employment opportunities.

Mr Alli responded that road signage had to comply with the Road Traffic Act, and there was specific legislation around the decision to give, in particular, tourist signs. He stressed that the local tourism authority was responsible for getting the awarding of a road sign.

Ms R Motsepe (ANC) commented that support to 179 schools by SANRAL was far too few for a country like South Africa.

Mr Alli agreed that indeed the number of 179 schools supported by SANRAL was very little, and there was more that needed to be done to ensure the incorporation of a broader number of schools.

Mr M Duma (ANC) wanted clarity on whether SANRAL could give any assurance that those who were trained and employed to build roads were adequately skilled, and whether they had the capability to build the roads in their particular municipality. He also questioned the sustainability of these projects, and whether they were providing regular income. He noted that SANRAL also planned to cooperate with the Department of Education in ensuring recruitment of more schools to be supported. 

Mr Alli responded that people were adequately trained to maintain their roads, and the important thing was that these roads were maintained by people coming from the same area or province. He also mentioned that the trainers were accredited and well-equipped. He agreed that there were some concerns about whether the projects were providing regular and sustainable income.

Mr P Mbele (DA) was concerned about  the fact that although there were only 16% of the roads that were tolled at present, the fees were very steep. If the toll road were to quadruple in number, they would account for about 84% of all roads. He questioned whether the regression in the audit findings by the Auditor-General could be directly linked to the problems that there had been with the e-toll system?

Mr Alli responded that the regression in the audit was not in any way linked to the e-tolling system.

Mr Mbele asked why SANRAL was providing scholarships to only seven provinces instead of all nine.

Mr Alli said that SANRAL made no distinction and did in fact provide scholarships to all nine provinces, including rural areas in those provinces.

Mr L Suka (ANC) firstly commended the SANRAL for fixing all the potholes between September 2012 and January 2013. He believed that any publicity on SANRAL should not be reduced to questions around the e-tolls, and was disturbed by the fact that this was constantly criticised in the media, as if there were no other significant achievements and strategic areas. However, he stressed the detrimental effects of price distortion, especially to the daily commuters, and believed there were possibilities to explore the options on subsidies.

Mr Alli responded that indeed there was a need to for SANRAL to look at the issue of price distortion and believed that the SANRAL needed to look at price regrouping. There was a need to do a collective action to solve this issue. He also suggested that single regulation was not the way to go, as regulation had two parts, could be flexible in terms of meeting the demands or become a mere policing service, and stressed the fact that a single regulation could only be possible if SANRAL was well-resourced and well-staffed.

The Chairperson agreed with Mr Mbele that democracy was sometimes about making unpopular decisions but these must also be correct decisions that could potentially develop its citizens. Matters  should definitely not be judged on how much noise was made in the public domain. She emphasised that the e-tolls were government policy, and wanted to commend Mr Alli for his explanation on the difference between e-tolls as a system of collecting money, and the user-pays policy that was a government policy. She also indicated strongly that SANRAL could not be punished for a government policy.

The Chairperson commented that she was also concerned about too much focus on the provision of an integrated transport system, and felt that there was a need to fully understand the socio-economic benefits of using an integrated transport system in South Africa. She asked whether SANRAL would continue to be dependent on foreign countries for software development, or would consider focusing on skills development, especially maths and science, to develop these scarce skills locally.

Mr Alli affirmed that in relation to capacity building, the software development was built locally, with 98% of software development being made by local people; out of 1 300 employees in the software development, only one person was a foreigner, from Morocco. He also said that as soon as SANRAL has full information on the benefits of using an integrated transport system the matter would be brought forward for further consideration.

PRASA issues
Mr Ollis firstly commended PRASA for the significant improvements, especially on signing the contract for  manufacturing local goods; meaning that there would be benefits to local people in terms of job creation, and congratulated PRASA for its wonderful projects. However, he wanted to know the function of 106 buses from PRASA, whether they were earning income or just idling. He asked why the air conditioners installed by PRASA in long distance trains were not ordered locally.

Mr Montana responded that 106 buses acted as a relief measure during massive inconvenience such as stoppage of trains due to stolen cables. The buses were not idling when not used for this purpose, and were fully functional and utilised by Autopax for local routes. The air conditioners installed by PRASA for long distance trains were 100% built locally, although they did use imported parts.

Mr Ollis commented that 52% of the targets were not met, and wondered if perhaps targets were being set that were impossible to achieve or unrealistic.

Mr Montana wanted to reiterate what he had said in the previous year, in relation to the Auditor-General’s reports. There had been a comment that certain statements of invoices were considered non-compliant. He had written a 7-page letter to the Auditor General, not attacking this office, but raising some serious flaws that were committed during the auditing process, and he emphasised that when serious flaws like that were committed, they had unintended consequences of portraying government in a negative way. He also disputed the Auditor-General’s assessment that 52% of the targets were not met.

Mr Ollis questioned PRASA’s reason for awarding a contract to Swifambo. He further questioned the Rail Leasing, and the acquisition of 88 locomotives from Spain, which he viewed as unnecessary, expensive and had the potential to take jobs away from the country.

Mr Montana said that there were considerations around awarding the contracts. Whilst, ideally, it was of course ideal that a local company be awarded the contract for acquisition of 88 locomotives, because this promoted local skills development, he also noted that there was a need to be cautious that non-performing enterprises or companies be given contracts merely for the sake of doing so, without them having any proven record on the quality of performance, competence and delivery.

Mr D Pule (ANC) questioned the revenue generation of PRASA, excluding the subsidy that came from the government. The effectiveness and funding of Shosholoza Meyl was questioned. Questions were also raised about training of young people and skills development.

Mr Montana indicated that Shosholoza Meyl was a bit difficult for government, and long distance travelling was cross-subsidised. He responded that PRASA had made significant strides on empowering young people, and this was mostly through skills development. Although, at the moment, most of the programmes on skills development were entirely focused on youth, there was a debate on the inclusion of the military veterans in these programmes.

A Member questioned why Metrorail had been without a budget for the past two years, and questioned the logic behind borrowing by Metrorail, as seemed less effective. There was a need for the country to have a superb transport system, one that focused on integrated transport, providing for greater mobility and less turbulence, and strongly believed that this must be supported. He also wished for a country to have a wonderful transport system, especially focused on integrated transport system, which will make mobility to run smoothly with less turbulence, and he emphasized that the general public needed to support PRASA in their initiative to introduce an integrated transport system. Moreover, he also questioned the effectiveness of Shosholoza Meyl and how it was funded.

Ms R Motsepe believed that there needed to be stringent action on the fruitless expenditure and non-compliance as reported by the Auditor-General.

Mr Montana responded that PRASA had indeed implemented stringent action in regard to the non-compliance and financial irregularities. All those who were found to have committed serious offences more than once were removed from their jobs; for example two security guards were recently fired for collaborating with crime syndicates in stolen cables. 

Mr Suka also congratulated PRASA on a job well-done and said the country could be proud of what PRASA had achieved in a short period of time. He shared sentiments about the lack of information from the media on the good achievements and general lack of public information and awareness on the positives. He also asked for explanation on the reason for the month to month contract with the buses Autopax. He commended the five priorities of PRASA and felt that the job creation priority was very important in the rural areas, and that improvements were needed to rural railways. There was, of course, also a need to reduce road fatalities and the introduction of high-speed trains would go far to help on this.

Mr Montana thanked him for the complimentary remarks about PRASA and agreed that there had been media misinformation and failure to make the public aware of the tremendous achievements of PRASA in a short period of time. The month-to–month contract with Autopax was not so expensive, particularly having regard to the significant impact the buses had as a relief system for Metrorail if it ran into difficulties. He reiterated that rail travelling had the potential to reduce the high fatalities on the roads.

The Chairperson also commended the PRASA team for the progress made on scholar transport. Referring to the summary of key challenges, she stressed the need for policy certainty on transport and rail policy, and said that the public should be proud of the transport systems. She asked how well-informed PRASA was on the transport policy. She also emphasised that the backbone of the economy in this country would lie with the rail, and she said that in future there was a need to consider the benefits of using high speed rail, which had added potential to create job opportunities also.

Mr Montana fully agreed that high speed rail had to potential to create massive job opportunities, and he indicated that the discussions had been ongoing, although to date much of the debate had been focused on how much this would cost short term, rather than the benefits. There was a hope to introduce high speed rail in future.

SAMSA issues
Mr Suku was not happy with the documentation provided by SAMSA and was sorry that other officials did not contribute to the presentation. He was also concerned about the extent of South African involvement in shipping and whether the present government was at the driving force of shipping and maritime matters, as the apartheid government had sold ships to foreign countries. He also wanted more elaboration on the budget challenges.

Mr Tilayi apologised for the quality of presentation, and mentioned that indeed the presentation was assembled from different departments within SAMSA. He also apologised for the non-participation of other members of SAMSA in the presentation, but explained that they were busy putting together the content of presentations, and dealing with issues for the upcoming Maritime Indaba for the following week. 

Mr Tilayi agreed that there was a need for South Africa to take ownership of the ships in the oceans, as most were indeed owned by foreign countries, like China, India, Taiwan and so forth.

Mr Suku questioned the level of transformation from SAMSA, and specifically lack of black people in prestigious positions.

Mr Tilayi conceded that transformation in the maritime industry needed to be solved urgently.

Mr Suku was concerned about the fact that there were cases of over and under expenditure reported upon, and he felt that there was a need for explanations.

Mr Duma wanted to find out if there was a way to ensure that the sea was used by all South Africans, not only those provinces in the coastal zones, and specifically what potential the sea held for the creation of job opportunities for all South Africans. He wanted further information on what was being done to curb piracy, pointing out that it was prevalent, and asked also about the role of the Defence Force and Department of Home Affairs in curbing piracy.  

Mr Tilayi responded that SAMSA had played a role in ensuring that there was a broader participation of all South Africans in the maritime industry. He believed that both the Departments of Home Affairs and Defence played a critical role in curbing piracy.

Mr Krumbock firstly corrected Mr Duma, telling him that actually the longest coastline in Africa was to be found in Somalia, not South Africa. He asked if SAMSA had noted any change in public attitudes and levels of cooperation on maritime matters, and if the public was becoming more aware of its responsibilities to report, for instance, vessels in trouble, poaching and other issues.

Mr Tilayi responded that indeed there was a change of public attitude towards the sea, since the introduction of extensive public awareness programmes, and said that people seemed to take more ownership about what was happening in the ocean. This was evident in the fishing industry. 

The Chairperson asked about the developmental approach of South Africa, and also questioned how many students were developed by SAMSA, and what commitments they were required to give.

Mr Montana commented that there were some great innovations from SAMSA’s side but was concerned about the need for broader participation and a boosting of interest in what was happening in the maritime industry.

The Chairperson thanked all the entities and the Departmental delegation for the presentations and again emphasised that transport was the backbone of the economy.

The meeting was adjourned.

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