Department of Transport on its 2013/14 Annual Report

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed Members to the meeting, together with the officials from the Department of Transport (DoT). The country had recently lost two important athletes; he relayed the Committee’s condolences to their families and loved ones. The Minister of Transport, Ms Dipuo Peters, was unable to attend the meeting due to strict timeframes within the DoT. However, senior official from the DoT was present and he welcomed the Acting Director-General to the meeting.

Mr W Faber (DA) said he was not pleased that Members were receiving documentation upon arrival to the meeting. Members needed to receive important documents such as reports and presentations well in advance in order to adequately prepare for the meetings. He said he had previously raised these concerns with the Committee Staff; however they also indicated that they received documents late from the DoT. This was unacceptable.

Ms M Dikgale (ANC) agreed with Mr Faber.

The Chairperson agreed with Members and warned to the DoT that it was the last time that the Committee would be receiving documentation on the day of the meeting.

Mr Mawethu Vilana, Acting Director-General, DoT, apologised to the Committee for the late documentation. He explained that the presentation had been sent through to the Committee Secretary the previous Thursday. However the Department took full responsibility for Members not receiving their documentation on time. However, that the DoT’s Annual Report had been submitted to the Committee on the 30 September 2014.

Mr Faber explained that Members had received copies of the Annual Report; however the presentation document was not received on time.

Mr Mawethu apologised, the Department would look into the matter. He introduced the team from the DoT.
 

Briefing by Department of Transport (DoT) on its Annual Report 2013/14
Mr Mawethu explained that the presentation focused on progress made with the implementation of programmes and projects during the 2013/14 financial year. The transport sector remained key to regional and continental development. Strengthening the country’s position as the gateway to Africa required continuous maintenance, expansion and upgrading of transport infrastructure networks. The DoT reiterated the need for increased investment in public transport infrastructure, restructuring current subsidies to promote integrated settlements and transport infrastructure projects to improve access to opportunities for the urban and rural poor.

On Integrated Transport Planning, some of the objectives of the programme were to understand transport needs and behaviours of households, to ascertain cost of transport for households, measure availability and ownership of motorcars and to assist in identifying disadvantaged regions and transport needs for investment in transport infrastructure. On rail transport, 598 railway coaches were overhauled and upgraded. The Bridge City Rail Extension had also been completed. The aim of these projects was to minimise train crashes and alleviate risks on the lives of train commuters posed by aging infrastructure. Once the Green Paper on Rail Transport Policy is finalised it would address areas of infrastructure investment and regulations in the rail transport sector.

On road transport, the DoT’s S’hamba Sonke monitored rehabilitation and maintenance of roads, re-sealing and patching of surface roads, blading and regravelling of gravel roads throughout the provinces. Over 20 million driving licences had been produced and distributed in the year under review. On civil aviation, the DoT had visited 542 schools across all nine provinces to promote aviation awareness among learners, especially those from poor/ disadvantaged schools. With regard to maritime transport, a study on maritime transport shipping had been conducted, and a position paper on global trends regarding port efficiency, operations and management had been completed. On public transport, the National Land Transport Amendment Bill has been finalised and submitted to NEDLAC. Workshops had been conducted for empowerment of small bus operators in all nine provinces. However the DoT’s Cooperative Strategy for the taxi industry had not been finalised. A lesser number of old taxi vehicles was scrapped as a result of affordability of new taxis by operators. He emphasised need for the Taxi Recapitalisation Programme.

Overall, the DoT had set 329 targets for the 2013/14 financial year, 216 (66%) of these were achieved and 113 (34%) of there were not achieved. 119 vacancies were filled during the 2013/14 financial year, as a result, the DoT’s vacancy rate decreased from26.7% to 25.4%. On capacity building, 876 students were registered in different transport related disciplines in 13 universities, in fields relevant to the DoT. In addition the DoT recruited 47 interns. With regard to employment equity statistics; the DoT was made up of 273 (45%) males and 340 (55%) females.

The Department reported that the original budget for 2013/14 was R42.2 billion, with R104 762 being rolled over from the previous year which was for the refurbishment of the Mthatha Airport. Of the total budget, the DoT spent R 43.03 billion, with a variance of R 635 177 million. Over expenditure of R768 355 million being declared as unauthorised expenditure, and in addition, the DoT over spent R852.2 million on Electronic National Traffic Information Systems (ENTIS). Top allocations were to the Passenger Rail Agency of South Africa (PRASA), which received R11.15 billion, followed by SANRAL at R10.49 billion and the Provincial Road Maintenance Grant, at R8.73 billion.

With regard to the Auditor-General’s findings on the DoT’s performance for the 2013/14 financial year, the Annual Performance Plan (APP) was incomplete. However progress had been made in that the APP has been completed and re-submitted to the Executive Authority for approval. The Auditor-General also found that the DoT’s performance indicators in the APP were not well defined.

The targets for the 2014/15 APP were therefore revised. The Auditor-General also found that the DoT’s reasons for over/under-achievement of targets were not stated clearly.

Discussion
The Chairperson thanked the Department for a comprehensive presentation

Ms M Dikgale (ANC; Limpopo) welcomed the presentation by the DoT. She raised a concern about rollovers from the previous financial year; that money should be given to traditional leaders in the rural areas who would put the money into very good use. What was the DoT doing to prevent such rollovers in the coming financial year? She asked who monitored the Sihamba Sonke programme, which was tasked with taking care of national and municipal roads?

Mr Faber asked about railway transport, and why was the country still using old railway lines and not the international standard ones which had double railways. International standard railways would be less expensive and more efficient. With regard to the allocation for train safety; was there a budget for the safety of officers who worked on the trains? What was the reason for the poor achievement rate of 66%  for targets, was it because there was no permanent Director-General?

He spoke to e-tolling; and agreed with the DoT that the costs of the e-tolling system were a concern. In addition, there was no public participation throughout the entire process. He said the economic effect the e-toll system had on various stakeholders such as business and the public was a cause for worry. What was the DoT doing to resolve such issues? He also said the payment system for the e-tolling was less than pathetic. He asked about the Road Accident Fund; what was the current situation of the fund, was the fund in good condition and why was it not mentioned in the presentation? On civil aviation, the DoT only spent 61% of the budget; did this include the bailout to South African Airways (SAA)?

Mr J Londt (DA; Western Cape) said when the Committee was conducting its oversight work the previous week, the local municipality in Musina raised the issue of the by-pass road, and this was of serious concern. A lot of municipalities were also suffering because of the rail system that was not working. He referred to the Knysna municipality; there were some historical problems faced by the municipality due to maintenance not conducted. Repairing and serving roads was putting a lot of pressure on local municipalities; did the DoT have a plan in place to assist these municipalities? Municipalities were not being forced to spend money on roads rather than on service delivery. He asked whether it was a typing error that the DoT indicated that they had issued 20 million driving licences in the financial year. The DoT visited 542 schools to raise awareness on aviation; did they go to schools in the Southern Cape, in areas such as Mossel Bay, George and Knysna? 12 municipalities completed their financial plans for the transport network; the Southern Cape had done a lot to ensure that disabled people had access to public transport.  Did the DoT conduct an audit on other municipalities?

Ms E Van Lingen (DA; Eastern Cape) expressed concerns about the DoT’s general performance. The 66% targets achieved was not impressive. The Auditor-General had also raised concerns about the DoT’s targets, which were not clearly defined. What assurance was there that the DoT had taken the Auditor-General’s concern seriously and the same issues would not be repeated? The Provincial Department of Transport in Limpopo was placed under administration in 2011. The administration was lifted in June 2014 under certain conditions. However the Department of Monitoring and Evaluation put Limpopo as the second top-performing province in the country.

Of the 20 million driver’s licences issued, how many were legitimate drivers licences, how many were new and how many were renewed drivers licences?  She asked about the municipalities that had submitted their business plans; referring specifically to Nelson Mandela Bay, the municipality was in crisis and the rapid transport system was not yet operational. 12 municipalities had completed their business plans; she asked that a list of these municipalities be provided to the Committee.

Ms van Lingen continued that the Committee was tasked with playing an oversight role on provinces, however the DoT’s presentation did not provide any breakdown of its work per province. This was not acceptable. Why had the Taxi Recapitalisation Programme not used all the money allocated to it? Was it because taxi owners did not have sufficient funds to pay upfront? What were the pros and cons between the e-tolling system and the fuel levy? She referred to the DoT’s 25% vacancy rate; and said the Minister of Finance had indicated that all vacancies not filled would be frozen. How would this affect the DoT?

Dr Y Vawda (EFF; Mpumalanga) thanked the DoT for the presentation. He asked which findings from the Auditor-General had not been addressed. The concern with the e-tolling system was not so much about why the system was implemented but that there were already sufficient revenue avenues available to fund roads. Why did the DoT not just extend the existing tollgates instead of establishing a completely new funding system? The new system brought increased administration costs both to taxpayers and to road users. Of the 12 municipalities mentioned, were any of those in Mpumalanga? How was the DoT addressing the very serious issue of potholes, which affected many people? He asked whether the DoT had plans in place to permanently place graduates from universities. What percentage of the budget was spent on financial management training within the DoT? With regard to the DoT’s school programme; he asked whether the DoT was reaching pupils from rural areas and poor backgrounds.

Mr S Mthimunye (ANC; Mpumalanga) said the implementation of national law was a rule of Parliament; however implementation of certain pieces of legislation was a department’s responsibility. There were a number of provinces that had not started with the implementation of the NLTA three years after it was promulgated as national legislation. What role was the DoT playing in this regard? It would have been useful if the DoT had included a balance sheet as part of the presentation. Could the DoT expand more on the Moloto corridor?

Mr B Nthebe (ANC; North West) asked that the Chief Financial Officer expand on the rural grant. During the last presentation from the DoT, specific reference was made to the Shova Kalula bicycle programme, and how the DoT would look into the prospects on infusing a security part into the programme, had the DoT done so? What was the Department’s state of readiness in implementing the programme?

Mr E Makue (ANC; Gauteng) thanked the DoT for a very helpful presentation. He also made reference to the oversight visit which Members undertook the past week; and suggested that the DoT meet with the District Mayor of Musina to resolve some of the issues faced by that municipality. He asked that the DoT keep the Committee informed about the testing of truck safety. The country was progressing in aerospace technology; was the DoT making use of such technology, which could read traffic patterns across anywhere in the country? He said the massive overspending under goods and services was worrisome; could the DoT explain?

Ms Dikgale asked about civil aviation; and said taking such a programme to learners was a very good initiative, especially in rural areas. Did the DoT make any follow-ups on the schools it paid visits to, such as the 71 schools visited in Limpopo during the second quarter?

Ms van Lingen said it was not clear who was responsible for the provision of transport for school learners, the DoT or the Department of Basic Education? Who provided the budget for this programme and where did the lines of responsibility begin and end between the two departments? She complemented the DoT on its implementation of the programme in the Eastern Cape.

The Chairperson thanked Members for their interaction with the presentation.

Mr Vilana said in terms of the Sihamba Sonke and the Road to Musina project the District Mayor would be engaged. However there were national, provincial and district municipalities, which resulted in some of the challenges with implementation. This was a sad reality because the separation of powers in some cases made no sense. The DoT however was busy engaging National Treasury and municipalities in an attempt to deal with these issues. Transport was the key to economic growth and development.

The Chairperson said SANRAL had a responsibility to the provinces to provide capacity to those provinces in need of assistance.

Mr Vilana agreed and said however the only role was as far as how much the provinces were willing to give some of the responsibility to SANRAL. South Africa’s technology was moving towards the international standard for railway lines.

The Chairperson said PRASA needed to be invited to brief the Committee about the modernisation of the rail and the progress made in this regard.

Mr Vilana responded to the question around the safety of officials on trains and said the incidence that had recently happened in Cape Town where 19 coaches were burnt was being dealt with seriously. Railway police were budgeted for by DoT. On e-tolls he said the majority of the investment was from South African investors, with some participation by foreign players. Boom gates in urban areas would not be possible because they would disrupt the flow of traffic. According to research done by DoT, only less than 2% of motorists paid more than R100. He said the purpose of the system was not to drive businesses underground, but rather to facilitate trade. With regard to public participation, there has been intensive participation on the e-tolling system, since the beginning of 2001. The Deputy President led these public participation programmes. Consultations had taken place on every level.

With regard to the 12 municipalities, two were in Mpumalanga. On the issue of Moloto, the DoT had received proclamation from the Premier, giving up the road. The DoT had put aside R1.7 billion for the development of the road during 2015; linked to this was the railway project, SANRAL now had ownership and work would commence soon. A list of all the schools the DoT visited to promote aviation as a career of choice among learners was forwarded to Members. The programme was a combination of both practical and theory based work. The DoT brought in students who would be enrolling in the programme at university level. The bailout of SAA was not the DoT’s responsibility, it was the responsibility of the Department of Public Enterprises. On municipalities he said the DoT was busy with the Rail Branch-line Strategy, which would assist in the move from road to rail.

Mr Londt said the DoT had only paid visits to 13 schools in the Western Cape, which was not sufficient. Could the DoT provide the Committee with a list of the 13 schools visited in the Western Cape?

Mr Vilana said a written breakdown of all the schools visited would be forwarded to the Committee.

The Chairperson agreed that the DoT should provide formal responses to the Committee in writing.

Mr Vilana responded to the question of licences and said a formal breakdown would be provided to the Committee. However, on average there would be more renewals of licenses than new one being issued. On the Road Accident Fund, the DoT’s cash flow was tight, and this resulted in cash cuts. The Minister of Finance had indicated that new funds would be made available for the fund. He responded to the question on e-tolls versus the fuel levy and said National Treasury gave the Western Cape province the right to raise levies for road infrastructure funding. However levies were not discriminative in nature and were therefore not progressive tax. The nature of the work of the DoT was that of a national department and not a provincial department, therefore it was difficult for the DoT to provide provincial breakdowns on the DoT’s plans and projects. The DoT would provide the Committee with a breakdown of the work the department had done in the training of youth. On the NLTA he said this legislation replaced the NLTTA and the implementation of the Act was a departmental responsibility.

The CFO responded to the question on the taxi recapitalisation programme and said when the DoT started the programme, the value of the vehicle was R110 000, the owner needed to contribute R50 000 upfront. But the cost of vehicles was increasing, which meant the upfront costs from the owners also had to increase. The owners in most cases did not have good credit ratings. However the most important issue which the DoT was faced with, especially in rural areas was that of culture. There was a view across taxi owners that the first car bought would never be sold. These therefore added to the slowdown in the implementation of the programme.

The Chairperson thanked the Department for the presentation and the Members for the deliberations. All questions that the DoT had not responded to would be responded to in writing.

Adoption of Committee Minutes
Minutes of Committee meetings dated 16 September 2014, and 14 October 2014 were adopted without amendments.

The meeting was adjourned.