Road Traffic Management Corporation (RTMC) & Air Traffic and Navigation Services (ATNS) on their 2013/14 Annual Reports

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16 October 2014
Chairperson: Ms D Magadzi (ANC)
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Meeting Summary

In the afternoon session of this day-long meeting, Air Traffic and Navigation Services (ATNS) gave an overview of its three-volume Annual Report; its performance and services; its presence in South Africa, Africa and beyond; its regulated business model and context; key performance areas; revenue sources and operating costs; stakeholders groups and their shared interests; matrix of material, economic, social, and environmental sustainability issues; stakeholder prioritisation of material issues; strategic model; and key performance indicators.

Members felt that the targets were not achieved and the performance in respect of safety service provision was poor. Clarity were sought on unclear issues, including acronyms, on the ATNS intervention in preventing incidents with small aircraft, on the DRC related communication problem, and on whether contracts that were concluded to reduce overall flight delays. The controversy between the Department of Transport and the Security cluster about who should control the airspace, was highlighted as an impediment to ATNS operations.

The Road Traffic Management Corporation (RTMC) focussed on performance information, financial information, governance structure, and the Auditor-General report. Only 23% of its performance targets were achieved while 70% of targets were not achieved and 7% were transferred to the Road Traffic Infringement Agency The RTMC Chief Executive Officer drew the Committee's attention to numerous allegations of misconduct by former management that had a negative impact on its operations.

Members asked what would constitute a package of solutions to get the RMTC performing and was amendment of its legislation needed? They asked how the RTMC received an unqualified audit opinion when it was clear from the narrative report that "various factors were lacking". They asked how a reduction of employees had resulted in an increase in employee remuneration. The Committee requested the Department of Transport compile a written report on the issues raised by the RTMC CEO and submit this to the Committee.

Meeting report

Air Traffic and Navigation Services (ATNS) on its 2013/14 Annual Report
Mr William Ndlovu: Chief Financial Officer: ATNS gave an overview of its three-volume Annual Report; its performance and services; its presence in South Africa, Africa and beyond; its regulated business model and context; key performance areas; revenue sources and operating costs; stakeholders groups and their shared interests; matrix of material, economic, social, and environmental sustainability issues; stakeholder prioritisation of material issues; strategic model; and key performance indicators.

He noted that the ATNS provided services to nine ACSA airports in South Africa on a statutory basis and to 12 regional airports on a contractual basis and that it was responsible for air traffic management in approximately 10% of the world airspace..

Mr Ndlovu said ATNS business objectives for 2013/14 were:
▪ Safety service provision;
▪ Airspace capacity and efficiency;
▪ Operational efficiency
▪ Performance based navigation (PBN)
▪ Development of optimised and efficient aviation infrastructure in a cost effective manner
▪ Operation of the satellite communication networks: SADC VSAT II & NAFSAT
▪ Comply with relevant legislation, regulation and standard
▪ Fraud and whistle-blowing policy
▪ Implementation of environmental plan
▪ Address social challenges in the communities in which it operates
▪ Manage the training pipeline for ATS and technical staff
▪ Review and implement the human resource plan
▪ Achieve B-BBEE targets
▪ Achieve preferential procurement targets as set by the Transport Charter

He stated that in 2014, turnover was R1 292 712 925 and net profit was R244 262 255. Capital expenditure was R174 633 096. He went on to explain the ATNS stakeholder groups and their shared interests and the ATNS strategic model.

He explained the objective measurements and explained whether the targets for 2012/13, 2013/14 and 2014/15 financial year were achieved. Most of the targets were rated 50% or more achieved (see document).

Mr M Sibande (ANC) sought clarity on some acronyms, on why some targets were not measured, on the measures in place to achieve safety, on whether the ATNS assisted small aircraft in terms of communication, on the DRC related- communication problem, and on whether contracts were concluded to reducing the overall flight delays.
Mr T Mulaudzi (EFF) sought clarity on whether South African air traffic was safe.

Mr M Mabika (NFP) sought clarity on the ATNS intervention in preventing incidents involving small aircraft.

Mr Ndlovu explained the acronyms that were used in the presentation. With reference to safety, he replied that the safety ratio had improved significantly as from 2004. It improved due to the training of the controllers. The training was a joint initiative between South Africa, Arab Emirates and United States.

With regards to assisting small aircraft, Mr Ndlovu stated that the ATNS had concluded contracts with them and agreed on how the ATNS could assist them. Regardless of that, the ATNS provided equipment for maintaining their aircraft free of charge. Small flight (referred to as general aviation) could make between 700-800 movements in South Africa. The ATNS provided technical services to general aviation.

On the question of the communication problem in DRC, he replied that he meant that there was no infrastructure in the DRC that would facilitate effective communication on the ground.

Referring to the traffic delays, he replied that the ATNS monitored them on a monthly basis and according to its reports, the delays were not caused by controllers but by lack of space to land on at airports. A plane might arrive on time but remain in the air until a space was available to land on. This kind of problem was not the fault of ATNS. On missing a flight, he explained that plane that carried less than 500kg were not controlled by ATNS and they, in addition, fly in the area, controlled by ATNS. However, in the case of incidents, it became the responsibility of ATNS to intervene.

The Chairperson thanked Mr Ndlovu for his presentation. Referring to p48 of annual report, she sought clarity on why a business plan developed in 2010 was being utilised. She remarked that the ATNS business plan should be reviewed and be aligned with the National Development Plan and Annual Performance Plan. She remarked that it was critical to talk about environmental issues and the ATNS should indicate its contribution towards the reduction of emissions. She appreciated the Auditor General report which showed a good reputation concerning the ATNS financial statements.

Mr Zakhele Thwala, Deputy Director General: Civil Aviation, Department of Transport, noted that the Department was willing to assist the ATNS. However, there was disagreement between the Department of Transport and the Security cluster. In 1999, an agreement was reached that air space should be controlled by one department. Regionally, there was also a problem, given that each department concluded an agreement with regional countries with regards to controlling space. The Security cluster had its own infrastructure. The intervention would be possible if the DoT and the Security cluster had one voice.

Mr Ndlovu appreciated the Chairperson's advice and guidance and noted that most of ATNS’s targeted areas were based in different countries and it conformed with the regulations of the country having jurisdiction. Environmental issues were key to ATNS operations and they were at the heart of the ATNS. However, their contribution towards climate change was so small and the Committee could not expect it to be bigger.

The Chairperson said that the Annual Performance Plan was clear. It set out a number of items that the department and its entities had to meet. For that reason, the ATNS should present a plan to the Committee on how it would be meeting them.

The ATNS Chief Executive Officer, Mr Thabani Mthiyane, apologised for not arriving in Cape Town on time and not being able to brief the Committee. He replied that the ATNS looked at the National Development Plan and had planned business objectives in light of the National Development Plan.

The Chairperson remarked that the CEO was an African who acted as an African and therefore she accepted his apology.

Road Traffic Management Corporation (RTMC) 2013/14 Annual Report
The Chairperson said that she wanted to hear the role of the RTMC in the alleviation of poverty, before introducing the members of the Committee.

Adv Makhosini Msibi: Chief Executive Officer: RTMC, introduced the RTMC team and proceeded to take the committee through presentation. He noted that the presentation would be made within the legal perspective. He agreed that within their mandate, they are obliged to contribute to social and economic development. The presentation focused on performance and financial information, its governance structure, and the Auditor-General’s report.

RTMC was established as a partnership between national, provincial and local spheres of government and he outlined its objectives. The 2013/14 outcome oriented goals were fourfold:
▪ To make roads safe in South Africa
▪ To ensure effective stakeholders relationship
▪ To provide corporate support
▪ To ensure corporate excellence.

With regards to staff complement, Adv Msibi noted that some of the management positions were vacant. The majority of personnel comprised the National Traffic Police numbering 223, which accounts for over 60% of the staff complement.

Adv Msibi explained that 23% of its performance targets were achieved while 70% of targets were not achieved and 7% were transferred to the Road Traffic Infringement Agency. He noted that a total of 122 major fatal crashes were investigated in 2013/14. Not all major fatal crashes were investigated due to lack of financial capacity. A crash investigation cost R42 000 per crash. He highlighted the RTMC achievements which included number of vehicles stopped and checked in collaboration with provinces was above the target at 13, 451, 218. Unachieved targets were explained as follows:

National Traffic Police Operations
•Lack of management capacity hindered the operations of the National Traffic Police (NTP)
•Subtle resistance to the presence of NTPs

Targets outside corporation mandate
•Development of curriculum for schools
•Implementation of safe vehicle standards

Target on functions not transferred
•DLTC service delivery improvement model
•Provision of information based on eNaTis

Road Traffic Information
•Fragmented systems across key sectors and lack of methodology resulted in the delayed publication of the reports

Road Safety Monitoring and Evaluation
•Hindered by absence of system with provinces and no national footprint

Road Safety Strategy
•Conflicting mandates delayed the review of a national road safety strategy

Standards and Norms
•Development of curriculum dependent on external departments and other agencies
•Code was halted in year and resuscitated towards the end of the year

In terms of financial statements, he stated that the 2013/14 financial year was highlighted by a general under-expenditure throughout the RTMC. As at 31 March 2014 the total assets stood at R832 696 704 in 2014 and at R523 943 280 in 2013 whereas the net assets stood at R797 406 732 in 2014 and at R423 933 754 in 2013. The accumulated surplus was R797 406 732 in 2014 and R423 933 754 in 2013. Surplus funds of R373.5 million were declared in the Annual General Meeting held on 19 September 2014.

He concluded that the capacitation of internal audit and risks management had been factored into the development of the approved structure.

Mr L Ramatlakane (ANC) appreciated the framework of the presentation and the fact that the AG did not raise any shortcomings about the financial statements. Referring to the challenges raised, he sought clarity on what would constitute a package of solutions? What should the Committee do in order to intervene as an organ entrusted with making laws.

Mr Mulaudzi seconded Ramatlakane and remarked that most of road accidents were caused by drinking and driving. He suggested a solution to this problem as in Arab countries, South Africa should bar anyone who drank alcohol from driving.

Adv Msibi replied that he had a problem with old traffic officers whose mentality ought to be checked as this might enormously contribute to solving the fragmentation in the traffic sector. He suggested that there was a need to reduce old traffic officers on the roads.

Referring to the management, he noted that the outgoing management did not follow the rule of law. To begin with, the shareholders should be honest. However, it transpired that the shareholders were sitting in meetings where resolutions were taken, but could not implement them. Rather, they implemented their own decisions. This had negative impact on budget.

Mr Mulaudzi commented that the RTMC was not capacitated financially, otherwise it could do its work. He asked Mr Thwala if he could avail a required budget to carry out its mandate.

Mr K Sithole (IFP) sought clarity on how the RTMC received an unqualified opinion when it was clear in the narrative report that various factors were lacking. Should the Committee set out its own policy to determine whether an entity's unqualified audit was valid?

Mr C Hunsinger (IFP) sought clarity on the drop in staff numbers yet, at the same time, an increase in remuneration. He asked if the board of directors was meeting, because the annual report indicated the last meeting was held in December 2013. He asked if the recruitment of new staff meant the posts had been advertised, with candidates shortlisted and interviewed. Referring to p9 of annual report, and noted a "lot of movements" were mentioned, and sought clarity on those movements. Lastly, he sought clarity on the declaration of the surplus and whether this complied with the National Treasury requirements.

Mr M de Freitas (DA) expressed concern about road safety and remarked that the RTMC‘s road safety programmes were not real. There was a high death toll. The entity was facing lack of resources and relevant skills and it lacked capacity to carry out its mandate and the system of internal controls was not entirely effective. Added to this, the road traffic regulations could not be enforced. He noticed that the RTMC suffered from setting up 'clear and relevant objectives' and that only one of members of the management board had qualifications in transportation and road traffic. Other members had legal backgrounds. Referring to p50 of annual report, he noted governance agreements concluded with the provincial governments, and sought clarity on the collaboration between the RTMC and provincial governments.

Adv Msibi replied that it was the first time that an annual report was tabled by RTMC before the Committee. The RTMC had never had oversight responsibility. In reply to Mr de Freitas, he said that although most of the members had no qualifications in transportation, they acquired transportation knowledge through experience and short courses. The RTMC was focussing on law enforcement, and the main problem was the attitude of the road users. Most of the accidents were not caused by the people who were under influence of alcohol. These accidents were fewer compared to those who tried to overtake cars in areas where overtaking was restricted. To Adv Msibi, the road user’s mindset had to be changed.

Adv Msibi explained that the legislation should respond to basic matters and should be based on an individual approach. He believed that there was a need to deal with fundamental issues that cause road mortality. There was a need to review the existing legislation in the context of criminal matters for the sake of improving the concept of intention in road accidents. He referred to the current case of Jub- Jub in Soweto and a school bus driver who killed learners in a Cape Town road accident. In these two cases, the accused were discharged of murder and were found guilty of culpable homicide.

On the matter of increased remuneration, he said that people were appointed as “acting” in the senior positions and that practice increased employee remuneration. In some cases, they were appointed to senior positions which did not exist in the management structure.

With regards to the declaration of surplus, the surplus was not declared in the previous financial year. In that case, the accounting authority was the shareholder. When the former CEO was recalled, it transpired that there were four cars without documentation. In addition, it transpired that the CCTV and telephonic lines were "plugged off" and issues that occurred in the offices could not be detected. Most of staff were employed as interns for a period of two years or more and as interns could not challenge the conduct of their managers. In some meetings, the remuneration and budget were confirmed in the presence of the Department. A lot needed to be done to turn the entity around.

Mr Chris Hlabisa, DOT Deputy Director General: Roads commented that the CEO should be given the benefit of the doubt and thus supported. He was a competent CEO with a competent management team.

Ms S Boshielo (ANC) seconded Mr Hlabisa. He asked  Mr Hlabisa if he was aware of the former management’s misconduct and requested a report on the issues raised by Adv Msibi, particularly, measures that were taken.

Mr Sibande seconded Ms Boshielo and sought clarity on how long such misconduct had been going on.

Mr Mulaudzi expressed concern that the Department might employ the principle of “no fault” and move on. He commented that an act, such as removing the documentation of cars, was a criminal act that need an investigation and the transgressor held responsible. A report should be submitted to the Committee.

Mr Ramatlakane seconded the call for a written report. He reminded the DDG that the question about the legislation had not been answered. Time was against the Committee, and he suggested that the question on legislation should be answered in writing. He commented that he saw on TV a RTMC member making comments about taverns and linking them to car accidents. He sought clarity on that.

The Chairperson said that the Department should respond in writing. The written report would assist them to hold them accountable.

Mr Thwala and Mr Hlabisa agreed that a report would be submitted.

Adv Msibi replied that the RTMC was also focussing on taverns. The rationale behind such focus was based on the fact that roads where one found taverns, had a large number of road accidents. He gave an example of taverns situated on the main roads in Mamelodi and Soweto.

The Chairperson thanked everyone and requested that non-Members excuse themselves so the Committee could discuss internal matters.

[Apologies from Ms D Carter (COPE); Ms ST Xego-Sovita (ANC)]

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