Appropriations Standing Committee Report on Gauteng July 2015 Oversight Visit

Standing Committee on Appropriations

11 August 2015
Chairperson: Mr N Gcwabaza (ANC) (Acting)
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Meeting Summary

The Standing Committee on Appropriations to consider the Committee’s first draft report on its oversight visit to the Gauteng Province from 20 to 24 July 2015, which it had undertaken in order to determine the progress made by the National Treasury with regard to supporting large cities to accelerate economic growth and integrated development through its Cities Support Programme. To this end, site visits to the City of Tswane and the City of Johannesburg had been conducted on 21 July 2015. The projects visited had been the Mabopane Station Modal Interchange and the Diepsloot Development.

The Committee had also sought to track expenditure on the rail modernisation programme being implemented by the Passenger Rail Agency of South Africa (PRASA); assess the readiness of PRASA for the arrival of the first 20 trains at the end of December 2015, which formed part of the rolling stock fleet renewal programme; and determine the progress made by PRASA in the delivery of infrastructure projects under the Station Modernization Project, in which 135 stations had been prioritised for upgrades. Phase 1 of this project consisted of 27 stations around South Africa. The Committee had conducted inspections at Braamfontein Rolling Stock Depot (22 July 2015),Shosholoza Meyl Junction (22 July 2015), Park Station (23 July 2015) and Gauteng Nerve Centre (23 July 2015)

The Committee had held a stakeholder meeting with National Treasury, the City of Tswane and the City of Johannesburg on 21 July 2015. The Committee also held a meeting with PRASA on 22 and 23 July 2015 to discuss the rolling stock fleet renewal and station modernization programmes. The briefing on 22 July 2015 had been held jointly with the Portfolio Committee on Transport, and a presentation had been made by the Railway Safety Regulator. PRASA had also made a presentation on the height specifications for the locomotives which had recently been imported from Spain for long distance purposes, as part of Shosholoza Meyl.

Members of the Committee deliberated and made some amendments to the report. They also made some changes and added new observations and recommendations. The Committee agreed to review the report on the following day, before it was adopted.

Meeting report

First Draft Report on Oversight Visit to Gauteng Province, 20 to 24 July 2015
The Chairperson said that they should go through the report page by page.

Mr A McLoughlin (DA) said that his surname was incorrectly spelt on the first page of the report.

The Chairperson agreed that it should be McLoughlin with a capital “L,” instead of Mcloughlin with a small “l”.

Mr M Shaik Emam (NFP) said that they had met two building contractors at the site, and he was not sure of the other stakeholders that were listed in the report.

Mr M Figg (DA) said that they might be rushing things, because the presenter had said he was going to take them through the report, and they did not want to run ahead of him.

The Chairperson said that on page one of the report they had agreed that a correction had to be made and then they could move on to the second page.

Mr Figg said that the presentation stated the delegation consisted of the Members of the Committee and the support staff, but in the next paragraph it talked about “The Committee met with the following delegation”. It might look better if that was paragraph 2.1, instead of paragraph 2, which was “Delegation”.

Mr Tshepo Masoeu, Content Advisor, said that just under the heading “2. Delegation,” they could create a subheading “2.1 Committee Delegation,” and then “2.2 Stakeholders” that they had met.

The Chairperson said Mr Shaik Emam had mentioned the fact that they had met contractors on the site during the visit by the Committee. The other people who had been there had not signed the register in order to verify who they were

Dr C Madlopha (ANC) said that the delegation they met at the site was same the delegation they had met at the Passenger Rail Association of South Africa (PRASA) -- they were not different people.

Mr Shaik Emam said in the report they had listed a number of stakeholders. However, they had met one set of contractors when they were at the bridge, and when they had gone to the nerve centre, Siemens and other contractors were there. He did not know if it was unnecessary to put them on the register, but not everybody they had met had been provided for.

The Chairperson said if they had been present and were part of the delegation, they should be recorded in the register, because they had been taking notes themselves. Therefore, the secretariat would check their names and add them in the report as part of the delegation.

Mr Masoeu said that section 3 gave the terms of reference, which was just the motivation as to why they had had to visit the projects which formed part of the City Support Programme. The first paragraph spoke to the intention, as outlined in the National Development Plan (NDP), which stated that urban sprawl should ideally be reversed, as denser forms of development were more efficient in terms of land usage, infrastructure usage and environmental protection. The Committee, in its 2015 Division of Revenue Bill, had welcomed efforts at improving planning and alignment through the introduction of the Built Environment Performance Plan (BEPP), which sought to bring together local governments’ integrated development plans and policy priorities identified in the budget. The Committee had also welcomed the new fiscal package aimed at supporting cities to implement spatial restructuring and increase their contribution to infrastructure development.

The Committee recognised the importance of the role of cities in catalyzing inclusive economic growth. Therefore, in its oversight, the Committee sought to determine the progress of the Cities Support Programme being implemented by National Treasury, and also to gauge the extent to which this new fiscal package translated into the realities on the ground. As such, the approach was to focus on the Neighborhood Development Partnership Programme, which was intended to support the development of economic hubs in larger urban townships.

Dr Madlopha said that on page 3 of the report, in the last paragraph, there was something missing between the words “focusing” and “massive” in the second sentence of that paragraph. The sentence should read as follows: “The National Treasury contextualised how cities can play a more leading role in stimulating inclusive growth by focusing on massive investments in urban areas”.

Mr Figg said that in the last sentence of the first paragraph, point 3.1, there should be a comma between the words “transport” and “infrastructure”.

He asked for clarity with regard to the figures that were reflected on the last paragraph of page 4, where an investment of R128.5 billion had been identified across 232 projects.

He said that the statement made “about urban and rural townships” in the table on page 3 of the report was confusing to him, it should be clarified whether it was urban townships or rural townships they were talking about.
Mr McLoughlin corrected the word “states” with the word “contains” in the last sentence of the second paragraph in point 3.1, where it read as follows: “The 2015 Division of Revenue Act states the following outcome statements and outputs for the Neighborhood Development Partnership Grant (NDPG)”.

The Chairperson said that the statement referred to by Mr Figg in terms of urban and rural townships was taken from the Division of the Revenue Act, but obviously in the course of their visit they had been looking at the urban townships, the metros.

Mr Masoeu said the National Treasury had reported that nationally a catalytic project pipeline was emerging and investments of R128.5 billion had been identified across 232 projects. These projects were predominantly funded by own resources, 41% loans, 34% grants, and 21% with some contribution from provinces and state owned entities. However, thus far there were no public-private-partnerships, and private sector leverage remained low at R8 billion. The majority of the projects were at the preparation and selection stages, 25% at the construction stage, and 13% had been completed.
National Treasury had indicated that the figures were not complete -- these were the only figures they had for now, and were not meant to be 100% accurate.

Ms Zandile Hulley, Committee Secretary, said they had made reference to the fact that some of the contributions had come from state-owned entities. The rest of the money would come from provinces, which was why it was stating that with some contributions from provinces and state-owned entities, this should make up the 100% funding.

Mr McLoughlin corrected a grammatical error in the words “working with,” to become “work with” on page 4 of the second bullet in paragraph 2 of the report.

Mr McLoughlin said that in the third paragraph on page 4, they should put the word “and” between Built Environment Performance Plans (BEPP) and the Integrated City Development Grant (ICDG).

Mr Masoeu said that on page 5, there was a table which listed inter-governmental challenges and city level challenges.

Mr McLoughlin said that on page 5 of the report, in bullet 5, the sentence read the “Department of Human Settlement”, but should read the “Department of Human Settlements”.

Mr Figg replaced the word “comprises” with the word “consists” in the last paragraph of page 5.

Mr McLoughlin replaced the word “due” with the word “for” in the third paragraph of page 7.

Mr Figg, in Committee observations and findings, replaced the word “embedded” with the words “integral part” in the last paragraph of page 8.

Dr Madlopha corrected the words “township puts” with the words “township put” in point 4.15 on page 9.

Mr McLoughlin added another observation as point 4.16 on page 9, which read as follows: “The Committee notes that there was an infrastructure project, which included a road and a bridge, being implemented by the Johannesburg Development Agency and alongside that was a road project being implemented by the Johannesburg Roads Agency. The Committee is of the view this may result in overlaps or duplication which could have serious cost implications. Value for money principles should be an integral part of the mandates and functions of all municipal development agencies”.

Mr McLoughlin said that in point 5.4 on page 11 concerning AFRO 4000 locomotives’ safety compliance, the first sentence should read: “PRASA reported on the 20 AFRO 4000 diesel locomotives which have been acquired from Spain in 2015, of which 13 have been delivered thus far.” The words “have arrived in South Africa” should be deleted.

Mr McLoughlin said that in point 5.6.2 on page 13 concerning Duff’s Road Station, the support staff should check and verify the correct dates, because it was stated in the report that the above site had been handed over to the contractor in September 2015, with the practical completion date set for the end of April 2016.

Ms M Manana (ANC) said that in the last paragraph of point 5.7 on page 14, the last sentence of that paragraph should read: “Furthermore, it was reported that the cost of management, maintenance and security of stations was relatively high, with the main cost drivers relating to recurring repairs, cleaning, water and electricity”.

Mr McLoughlin said that in point 6.10 on page 15, the paragraph should read: “The Committee commends PRASA on the submission that Park Station is self-sustaining, wherein it generates enough revenue to cover all its operational expenses,” instead of saying the Committee commends PRASA “on ensuring that Park Station is self-sustaining,” because it was not the Committee that was committing to that statement, but PRASA.

Mr McLoughlin said that in point 6.15 in the first paragraph of page 16, the second sentence should read: “The Committee was of the view that the compatibility of the locomotives with South African safety standards should have been incorporated as part of the prototype testing phase”.

Mr Figg said that they should add another recommendation as point 7.3, which read: “That the Minister of Public Enterprises and the Minister of Transport ensure that: 7.3.1 The partnership between the Passenger Rail Agency of South Africa and Transnet is strengthened and formalised in the procurement of the new rolling stock, the modernisation and upgrading of rail infrastructure and in the overall operations and maintenance of the rail network”.

The Chairperson said that the support staff should check with PRASA on the issue of the 18-year period of overhaul for new trains which had been highlighted on page 10 of the report.

The Committee staff should make changes to all the amendments that had been made by Members  and submit the final version to the Committee at 16h30. The Committee would reconvene tomorrow and review the report before its adoption.

The Chairperson thanked the Members of the Committee for their inputs. He also thanked the support staff for giving value to their work.

The meeting was adjourned.


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