PC Transport: First Term Committee Programme & Oversight Reports

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28 January 2014
Chairperson: Ms N Bhengu (ANC)
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Meeting Summary

The Portfolio Committee on Transport met for the consideration of draft Oversight Reports and the its First Term Programme. The Committee considered the Draft Report of the Oversight Visit to Passenger Rail Agency of South Africa (PRASA) in Gauteng from 23 to 26 July 2013 and the Draft Oversight Report to Airports Company South Africa (ACSA). After page-by-page consideration of both reports, the Committee deferred the adoption of both reports to the next Committee meeting to allow for changes, insertions and corrections proposed by Members to be incorporated.

The Committee also deferred the adoption of the Committee’s First Term Programme to its next meeting to effect amendments raised by Members.

Meeting report

Opening Remarks
The Chairperson stated the purpose of the meeting to be the consideration of Draft Oversight Reports but the outstanding minutes would not be considered at the meeting because Members were very few to quorate. The Committee would also consider the First Term Programme for 2014.

The Chairperson read apologies from Mr P Mbhele (COPE), Ms N Mdaka (ANC), Mr I Ollis (DA), and Ms D Pule (ANC).

The Chairperson said it was important for an oversight report to be considered immediately after the Committee had just completed the oversight visit because the consideration of reports were not done for the sake of getting them through as a process. The Committee was undertaking oversight visits for the purposes of identifying the progress being made in terms of Government policies as well as challenges that were related to the implementation of Government policies. The visits were also aimed at influencing budgetary issues and changing on the course of action. If a report was considered after the Medium Term Expenditure Framework (MTEF) and after all the political parties had drafted their election manifestos, it meant whatever the parties came up with would not be considered in the next five years especially in a situation where there was a need to change the course of action. Therefore, it was very important that the Committee should produce oversight reports a month or two after the oversight visit. Any period longer than a month or two was unacceptable.

Consideration of Draft Oversight Report to Passenger Rail Agency of South Africa (PRASA)
The Chairperson suggested that the Committee should do a page-by-page consideration of the report.

Mr L Suka (ANC) asked for clarity on the grammar used on a particular sentence in the first paragraph of page 3 of the report. The sentence read as follows: “The benefits of the system are reduced number of signalling failures”.

The Chairperson said the sentence should read as follows: “The benefits of the system are a reduced number of signalling failures”.

The Chairperson noted that on the same paragraph, the report had to be specific as to at what stage Phase 1 was, when Phase 2 would be implemented, when would an improved service be realised, what were the expected end results, and where PRASA was in terms of the implementation process. It was also not clear how many job opportunities resulted from the project including the skills transfer which needed to be included in the report. The same would apply to the Western Cape.

Mr Suka asked what was meant by the statement that negotiations with Siemens were completed. If it was stated that negotiations with Siemens were completed, what were those negotiations and what did the negotiations entail. That sentence had to be qualified so that anyone who read the document could understand the nature of the negotiations.

Mr G Krumbock (DA) said he was not able to attend the oversight visits but he would have liked to see that a number of the projects were in stages and many of the stages were completed. It was noticeable that a lot of money had been spent. He asked if it was possible to improve the report by commenting on the work that had been completed and compare that to the original budget so that it could indicate whether tax payers were getting value for money. It was a good report and had a lot of detail but there he would have loved for it to include whether the projects were experiencing costs overruns, and if so, how much was coming under budget. If there were no overruns, it could be safe to say everything was running smoothly in terms of finances. Quite a lot of work had been done on actual transport experts. He proposed that as a Committee they should also consider inviting a financial expert so as to determine whether those projects were on budget.

The Chairperson said the comments made by Mr Krumbrock were good in the sense that the Committee could use the requested information to follow up in their interaction with the Auditor-General’s report because there was no way they could make an assessment of the impact of the financial resources. She suggested that Mr Krumbrock’s comments and recommendations should be included in the report until such time they could make an assessment on the value for money. It was also important to make it as a recommendation moving forward to say that in the Committee’s engagement with the AG’s report, it would revisit that to ascertain whether there was value for money and assess whether the projects were under or under budgeted. The points were valid but during that oversight visit the Committee could not make that assessment because that assessment was made through the AG. Therefore, the report could only include that as an issue it would like to follow up using the same report in engaging with the AG’s report.

Mr Suka said that the value for money would normally come under the quarterly reports when the department came to present to the Committee. But surely in the programme it was catered for to check the impacts. Otherwise, that was a generic statement in terms of the impact of finances, whether it was overspending or a shortfall in terms of the spending patterns.


Mr Krumbrock said Mr Suka was correct because he did not know that there were any quarterly reports covering aspects of the work regarding the projects that were already published. Even if that were not the case, it would be helpful to the Committee when it did a follow up to have those quarterly reports with them. It was better to see rather than be told that there was an overrun. It would empower the Committee more if it could have some financial information because the projects ran for some time so they needed quarterly reports which covered what already happened so that Parliament could make good decisions and know what it were looking at.

The Chairperson agreed that the report should include the issue of financials in relation to the project that had been implemented and in relation to the value for money. The report should also note that as part of the Committee’s findings on these matters, the Committee could not get the required information during the visit. However, it should be noted that the Committee required the information as part of the quarterly reports from the Department and its entities as well as part of the AG’s report so that it could use the information to make an informed assessment of what needed to be done going forward.

With regards to the Western Cape project, the Chairperson said what was missing were the indications of job opportunities and skills transfer. The projects had a modernised signalling system which would reduce the number of signalling failures and reduce train delays and cancellations due to signalling failure. What the Committee was not being told was that all these problems were caused by two factors. First, the signalling system in South Africa had been eroded because there had been no investment in the railway infrastructure for a number of years. Secondly, there was theft of copper cables. Therefore, what did not came out clearly in the report was whether the cables were of the nature that of the same optic fibre cables because it would make no difference if there were investments but PRASA was  investing on the same type of cables that got stolen. The same applied to all the projects that had the problem of signalling.

The Chairperson noted that mention was made of a team which was confident that these challenges would be addressed by the new signalling system. She asked who the team was because anyone that read the report would not know who the team was.

The Chairperson corrected the grammar used in a sentence which read as follows: “Transnet rail engineering felt that it was ready to play it role in the manufacturing of the new coaches”. The Chairperson corrected the phrase “it role” to “its role”.

Mr Suka also proposed some grammatical corrections.  

The Chairperson said central to the relationship between Transnet and PRASA in terms of refurbishing their locomotives and coaches was the National Development Plan (NDP). The report did not reflect the objectives of the NDP of building the capacity of state owned companies and it did not reflect the recommendations made by the Portfolio Committee after a study tour to China. Although in the beginning the report talked about the study tour to China in terms of observations and recommendations, but when it came to where the Committee had to see the implementation in the relationship between Transnet and PRASA it fell short. The report did not give the necessary connection although there was work that was being done by Transnet for PRASA. Firstly, the report indicated that both companies had not sat down to look at what the NDP directed them to do.  Secondly, the companies had not looked at what were the recommendations of the Portfolio Committee relating to building the capacity of the state owned companies. Therefore, the report had to state that both Transnet and PRASA had to look at particular projects to build the capacity of state owned companies informed by the NDP and in line with the recommendations of the Portfolio Committee on Transport after its study tour to China.

Mr Suka said where there was progress the Committee had to commend the Department and the state owned entities. This was the case with gender balance in these entities. The report should also highlight the concerns of the Committee relating to the issue of having more female technicians that were trained in the entities. The second issue was about the slowness of Transnet in refurbishing the coaches. These two concerns were outstanding.

The Chairperson recommended that when it came to benefits there should be a sub-heading which clearly stated “benefits” so as to be able to point at benefits. When it came to Transnet and PRASA, PRASA stated that it would have loved to give more work to Transnet but Transnet’s capacity of work was preventing that relationship from happening. So there had to be a better understanding from the side of Transnet that it was a state owned entity and it would be a preferred service provider if the Chinese model and the NDP direction in terms of building the capacity of state owned companies were being followed. However that objective could be realised if Transnet was able to play its role effectively and currently it was not playing this role effectively.

Ms R Motsepe (ANC) said that there was something that was missing in paragraph 6.3 which dealt with the visit to the Park Station in Johannesburg.  

The Chairperson said the information that was missing in that paragraph was the Integrated Transport System. What the Committee also observed was that the stations were turned into commercial centres with outlets for trading, office parks and residential accommodation which was the model seen in China.

The Committee recommendations stated that PRASA should create awareness programmes for its passengers about communication modes that existed in terms of delays and cancellations. PRASA should explore and accelerate initiatives for skills development for the rail industry, whilst improving innovation and technology.

The Chairperson said in the conclusion of the report the Committee should commend the progress made by PRASA.

Draft Report of the Oversight Visit to the Airports Company South Africa (ACSA)

Mr Suka said pages 1 and 2 of the report were about the historical background. He appreciated the number of direct jobs ACSA had created which had been captured clearly in the report.

Mr Suka said in terms of the ticket structure, he was not sure where to bring it in because the airlines in South Africa were meant for those who could afford them as they were unlike the other modes of transport which were seemingly affordable. The ticket structure was meant for those who could afford but the pricing to an ordinary person was very expensive. He understood that the South African airline industry was in competition with the international airlines.  For the disadvantaged communities who were unable to access air transport it was a dream to them. In terms of the observations and recommendations, a lot had been said by the Committee.

The Chairperson said in terms of job creation, ACSA responded that most of the retail space in airports was occupied by well-established business companies. The SMME’s and Cooperatives were not considered by ACSA. Even their security services were given to big companies. Therefore, ACSA had no focus on promoting SMME’s and Cooperatives and did not focus on the issue of fighting poverty and unemployment.

ACSA’s ticket structure closed the door for low cost airlines which was something that required followed up.

The Chairperson said in terms of key observations, in addition to the long walking distance at airports and the bottlenecks at the security gates, the customer relations that were built in 2010 did not continue at the airports after the 2010 Soccer World Cup. The friendliness displayed to passengers by airport staff no longer existed. It had been noticed that at the security gates airport staff would talk among themselves ignoring customers and their body language did not indicate any respect for customers, whereas in 2010 there was an effort made to make visitors feel welcome in South Africa. The kind of service gotten from the SA airlines was different from the service gotten from the other international airlines which was something that needed to be followed up in terms of training and making sure that SA airlines operated under the Batho Pele principles so as to put people first.

Mr Krumbock said he did not have a problem with what the report said but he had a problem with what it did not say. In terms of the ticket structure, SA airlines were amongst the expensive airlines in the world which inhibited tourism and did not help the country at all in terms of creating jobs. The argument that had been put by ACSA over the years was that their costs had something to do with recovering the expenses they were forced to incur in 2010 when building the airports in the first place. However, at some stage ACSA needed to put up the costs because it had to build airport whether it was 2010 or later, but 2010 accelerated the building of airports.

ACSA further argued that compared to the actual ticket price which was governed mainly by the jet fuel costs, its actual airline landing costs as properly interpreted, were a very small proportion than the total costs the passenger paid and therefore could not be the main reason for airports to be that expensive or at least preventing people from travelling by air. There were two arguments and it should be remembered that the Minister of Tourism had taken a fairly hard line with airports and airlines particularly South African Airways (SAA) on that issue which had weighed in on one side of the argument.

Mr Krumock said he thought that findings and conclusions were the mains reasons for doing the oversight visits but looking at paragraph point 3.4 of the report there was no conclusion, or preliminary type of finding which had been made. Not even an observation nor a recommendation which was a big oversight and, before he could support the adoption of that report he would like the Committee Members who visited OR Tambo Airport to make some kind of an observation of what they thought the correct interpretation of the facts were and what they recommend. This was very important because the central challenge had not been addressed.

The Chairperson said the purpose of the visit was to enhance efforts to make air travel accessible to all people of South Africa and relating air travel to tourism, job creation and reduction of poverty. It was clear that the report did not speak to these main issues. The Committee’s duty was to recommend to ACSA what direction the entity should take and what were the challenges the Committee could address moving forward. The report was not the end but it was the starting point for the Committee and ACSA to effect change in air travelling. Air travelling had been a source of dissatisfaction in the transport industry in terms of the manner in which it had been operating. There had been little progress to transform the air transport sector other than building new airports and the service itself didn’t speak to economic development that would come as a result of the increased tourism.

The Chairperson said the Committee had spent more time in the board room with ACSA officials than moving around OR Tambo Airport because the main issue was the low fare airlines which had been liquidated in the country because they didn’t make it. Air travel was still the preserve of the rich meaning that there was no universal accessibility in air travelling. The arguments that were put by ACSA were not accepted by the Committee in a common perspective and this had to be clearly stated in the report.

The Chairperson said what the Committee observed were the following; service that was provided there; who occupied the retail space; the efficiency of the security services and its bottlenecks which were part of the operations. However, the main issue was not necessarily the operations but it was the accessibility of air travel to all. The positioning of air travel should be done in the same way as the positioning of other modes of transport to say transport was the heart beat for social and economic development. The aviation sector was not playing that part of social and economic development at the moment.

The Chairperson said the Committee Secretary would effect the changes to both reports so that adoption could be done in the next meeting of the Committee.

Consideration of the Committee’s First Term Programme
The Chairperson said she had received a request from Mr Ollis where he requested a meeting with the Minister of Transport to brief the Committee on three problematic areas. The first area was the road accident deaths over December and January, and plans for the Easter Road Safety Campaigns to prevent serious crushes occurring again. The second area related to rail safety focusing on the train accident between a PRASA train and Shosholoza Meyl. The third area was SANRAL’s problems including the toll billing price and the security threats at SANRAL offices and the current financial stability of SANRAL.

The Chairperson said she personally agreed with the proposals and accepted that they should be included in that term. These proposals would be included in an amended programme which would be brought back for consideration and adoption in the next meeting of the Committee.

Mr Krumbrock said that it should be remembered that last year the Committee had convened a meeting with various stakeholders in the aviation industry in terms forward planning of the aviation traffic and what the relationship would be to the expansion of airports. Some of the participants representing aircraft associations in that meeting wanted to speak about some of the issues raised in the current draft report. He asked why the draft programme which included follow up meetings of aircrafts associations was not followed through. He had promised those associations a follow up meeting and this was only a question of time and programming of the Committee.

The Chairperson said that the work of Parliament was continuous and if space was not found for a follow up on any issue raised, when the current Parliament ended, it had to write a legacy report and recommend to the in-coming Portfolio Committee that those were the outstanding issue that had to be considered. The current year was a short year and all issues raised could not be concluded. The most important things were the issues that were not discussed by the Portfolio Committee and were raised by Mr Ollis. These issues could get into the programme in their legacy report in terms of what issues needed to be followed up by the new Portfolio Committee that would be established after the elections.

Mr Krumbrock said that he was fine with the procedure that had been outlined by the Chairperson.

The Chairperson thanked Members for their inputs and availability.

The meeting was adjourned.



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