The Department of Transport (DOT briefed the Committee on its first quarter 2015/2016 expenditure. The report focused on the progress made with the implementation of programmes and projects. Administration had a total number of 7 targets and 86% was achieved, Integrated Transport Planning had 9 targets of which 77% was achieved, Rail Transport had 5 targets, with 40% achieved, Road and Public Transport achieved 100% of targets, Civil Aviation achieved 75% of its 8 targets,while Maritime Transport achieved 50% of its target. Overall, 76% of the targets had been achieved. Over 30 media alerts were issued in terms of the Integrated Communications and Marketing Plan (ICMP),a Transport Izimbizo was profiled and 42 vacant posts were filled. 66 interns were employed and 56 of them were exposed to different workshops. The Risk Management Framework was reviewed and adopted by the Audit Committee.
The International Relations Strategy was not achieved due to prolonged internal processes. The Transport Pricing Framework was not achieved as the project implementation started late, and the Road Freight Strategy was not achieved as there was a need for an expert advice to complete the strategy. Draft guidelines for submission of economic regulatory information aligned with the work-plan of the Ministerial Task Team was approved by the Minister, but the Green Paper on the National Rail Transport Policy was not published and the National Railway Safety Strategy was not achieved due to delays in internal processes. However, a draft Green Paper on Road Policy had been developed and there had been maintenance and rehabilitation of roads monitored in provinces, and an analysis of the current status of municipal road networks was conducted. There had been consultations with stakeholders on the National Civil Aviation Policy and National Airports Development Plan. 18 reports on Accident and Incident Investigations were submitted for consideration and 10 safety recommendations were made. The Airports Company South Africa and Air Traffic and Navigation Services Amendment Bills were not achieved. The African Maritime Charter was approved by Cabinet in May 2015. An Inland Waterway Strategy consultative workshop was held in April 2015. There had been a discussion document prepared on the Cabotage Strategy but the Bill was not yet developed. The National Learner Transport Policy was approved by Cabinet in May 2015 and the Rural Transport Strategy was reviewed and submitted to EXCO for quality assurance. 680 old taxi vehicles were scrapped in the Taxi Recapitalisation Programme.
The Department had a total annual allocated budget of R53.35 billion, and 27% of that was spent in the first quarter. Some areas, including compensation for employees, and goods and services for maintaining the e-Natis, had over-spent but others had under-spent, and this included transfers and subsidies for the Provincial Roads Maintenance Grant. Nothing was spent on taxi scrapping in this quarter.
Members were concerned at the number of targets that were recorded as not achieved and that although it had set out some remedial actions it had not actually indicated why the targets were not met in the first place. They suggested that in respect of taxi recapitalisation there should have been a revision of the schedule of payments, as there was apparently an internal review due, before the scrapping allowance could be accepted. They wanted more details on the targets not met in the Rail Transport branch, and what informed the performance targets that were set. They noted that the main reason why targets were not being met seemed to be the continuing failure by DoT to implement policies, and this was an issue already identified by the National Treasury as far back as 2011. They were worried about who constituted the Risk Management team and why it was not alerted to the problems. Another recurring issue on which concern was expressed was the taxi scrapping. Railway Safety was another major concern for it was pointed out that it directly affected commuters, with some lines having been closed, and Members urged that the position of the Deputy Director General for Maritime Transport must be filled urgently. They were also concerned about the delays in the Cabotage Bill and asked who was taking responsibility. In respect of the two other Bills still outstanding, Members noted that it might well be that the Committee might take the lead and proceed with the Parliamentary Legal Advisers in drafting the legislation. In regard to the Road Freight Strategy they asked what the change was in getting technical expertise and wondered when the programme might be completed. They suggested that those branches managing to meet all targets could pass on their strategies to the others. They wanted more detail on the analysis on the municipal road network, and asked if the grants were being used for their intended purpose. They questioned the transfer to the SA National Taxi Council and the purpose to which the money was put. Members also pointed out that the longer the vacancies persisted, the more the spending would suffer and for this reason wanted more precise details on the positions vacant, and when they would be filled. They asked for written answers to several questions and pointed to the continuing problem that each of the quarterly reports was delivered already nearing the end of the subsequent quarters. They were particularly concerned that the Deputy Director General for Civil Aviation did not appear to have been made aware of Committee decisions taken at a time when he was absent. Members adopted the minutes of a previous meeting.
Department of Transport 1st quarter performance and spending: Briefing
The Chairperson noted the apologies of the Minister, Deputy Minister and several Committee Members.
Mr Pule Selepe, Director General, Department of Transport, noted that the 1st quarter performance report of the Department of Transport (DoT or the Department) would focus on implementation of projects and plans, and he noted that the Department aimed to achieve optimal performance of deliverables in terms of the Medium Term Economic Framework (MTEF) 2015/16 – 2017/18.
He described the targets and performance against them by programme. Administration had a total number of 7 targets; 86% was achieved. Integrated Transport Planning (ITP) had 9 targets of which 77% was achieved. Rail Transport had 5 targets, 40% was achieved. Road Transport had 4 targets, and achieved 100%. Civil Aviation had 8 targets, 75% was achieved and Maritime Transport had 8 targets, from which 50% was achieved. Public Transport had 8 targets and achieved all. Overall, out of the 49 targets 37, representing 76% were achieved, while 12 targets representing 24% were not achieved.
Mr Pule went on to describe the details of each programme. In the Administration programme, the DoT had been working on the Integrated Communications and Marketing Plan (ICMP) with over 30 media alerts issued; and the Transport izimbizo was profiled. 42 vacant posts were filled. In Human Resources Development (HR) 66 interns were employed and 56 of them were exposed to different workshops. The Risk Management Framework was reviewed and adopted by the Audit Committee. A business case was developed for the upgrading of DoT internet system. The International Relations strategy was not achieved due to prolonged internal processes, and a draft IR Strategy was to be completed in quarter 2.
The Integrated Transport Planning developed a draft synopsis report on NATMAP 2050. Stakeholder consultations on the National Transport Policy were conducted in May 2015. The Transport Pricing Framework was not achieved as the project implementation had commenced late. The Road Freight strategy was also not achieved as a need for expert advice to complete the strategy was identified.
In Rail Transport, work had been done on the Interim Rail Economic Regulatory Capacity, and draft guidelines for submission of economic regulatory information aligned with the workplan of the Ministerial Task Team had been approved by the Minister. As yet, the Green Paper on the National Rail Transport Policy had not been published due to outstanding issues and the National Railway Safety Strategy was also not achieved due to delays in internal processes.
In Road Transport, a draft Green Paper on Road Policy was developed. The S’ hamba Sonke Programme for maintenance and rehabilitation of roads was being monitored in provinces, and work done here included re-sealing of roads, patching of blacktop, blading and re-gravelling of gravel roads. In respect of the Access Road Development Plan, a status analysis was conducted on the municipal road network
In Civil Aviation, stakeholder consultations were conducted on the National Civil Aviation Policy and National Airports Development Plan. 18 reports on Accident and Incident Investigations were submitted to the Advisory Panel for consideration and 10 safety recommendations were made. The ACSA and ATNS Amendment Bills were not achieved due to prolonged administrative processes.
In Maritime Transport, the African Maritime Charter was approved by Cabinet in May 2015. The Inland Waterway Strategy Consultative Workshop was held in April 2015. The discussion document on the Cabotage Strategy and the Bill had not yet been developed
Under the Public Transport branch, the National Learner Transport Policy was approved by Cabinet in May 2015. The Rural Transport Strategy was reviewed and submitted to EXCO for quality assurance. 680 old taxi vehicles were scrapped in the Taxi Recapitalisation Programme.
Mr Collins Letsoalo: Chief Financial Officer, DoT, briefed the Committee on the Department’s 2015/16 Quarter 1 Expenditure. Describing the expenditure per programme in the period up to 30 June 2015, he noted that the Department had a total annual allocated budget of R53.36 billion. The Department had spent R14.2 billion in the first quarter, which represented 27% of the allocated budget. He tabled slides on the expenditure per economic classification, to 30 June 2015 (see attached presentation for full details).
He noted in particular that the budget for compensation of employees was R378.6 million and expenditure to date was R91.5 million, with the overspend due to a salary increase for level 1-12 employees. The budget for goods and services was R682.8 million and expenditure was R29.7 million, exceeding the projection of R151.5 million, with the overspend here due to the cost of maintaining and operating the eNatis. The transfers and subsidies budget for the first quarter showed underspending, due to the revision of payment schedules to provinces and municipalities for Provincial Road Maintenance Grants. There had been overspending on machinery and equipment, which came about through late-submission of invoices from the previous financial year which were then paid in this quarter.
On transfers, the total budget was R51 billion and the expenditure to date was R13.9 billion. However, nothing had been spent against the taxi scrapping budget, and SA National Roads Agency Limited had spent just over 25% of the budget in this quarter.
Mr L Ramatlakane (ANC) said he observed that the Department outlined a lot of targets that were not met and although it had outlined some remedial actions, it failed to note why the targets were not met in the first place and this made him wonder if the DoT had really looked into what remedial action would address the problem.
Mr Ramatlakane also pointed to some contradictions in the financial figures. The presentation said that underspending in transfers and subsidies, was due to low spending on the taxi recapitalisation programme. However, he said that the reason for underspending should be a revision of the schedule of payment for the programme, as it was stated in the Annual Performance Plan that there would have to be an internal review before the scrapping allowance could be accepted.
Mr Selepe replied that the Department was planning to do a review.
Mr Ramatlakane observed that 40% of the target for Rail Transport was met, but wanted to know what specific targets here had not been met. He asked also what informed the 85 % performance target of the DoT.
Mr Selepe replied that 85% was the target agreed between the Minister and the Executives of the DoT in the previous financial year. He said the DoT achieved 77%. He added that the Director General had pleaded with the Executive not to raise the target above 85%, since it was not delivered in the previous financial year.
Mr M Sibande (ANC) observed that the reason for underspending in transfers and subsidies was the revision of payment schedule to provinces and municipalities. He recalled that a short while ago, the Department had been summoned by the National Treasury and the issues that identified were to do with failure to implement the policies. He added that some of these issues had already been identified in 2011 and asked what the DoT had done to resolve them. He asked who constituted the DoT risk management team,as it was obvious there was a problem there. Risk management would give an alert that the budget was going to be overspent or underspent. However, the key fundamental issue was that policies were not implemented.
Mr Selepe replied that there was a unit for Risk Management. He said the person responsible was a Director, but there were plans to increase that to a Chief Director. Risk management would be brought under the DG's office, to receive the attention it deserved.
Mr Sibande noted that the Department was given R53 billion and only 27% of was spent. He asked why the money was not spent properly across all units; he pointed to the cases where there was 0% spending. He said the Department was supposed to keep matters functional, and was worried that in the past the Department had not utilised allocations and thus had had its budget cut.
Mr Selepe reminded Members that in this quarter, the DoT was supposed to be spending 25% of the total budget, and it had actually spent more, at 27%.
Mr Sibande said it was time to move forward as each time the DoT talked about the budget, the emphasis was on the Metro and not the people, and it was obvious that something needed to be done to assist the people. One of the notable points was the development of a business case for upgrading of the DoT internet, and he asked if the DoT's systems were talking to each other now, as this had been a problem in the past.
Mr Sibande noted that 680 old taxi vehicles were scrapped in the taxi recapitalisation programme, but this too had been a recurrent problem and the Department had been asked previously exactly what it was doing to resolve the issues. As long as the policies of the Department were not in place, nothing would be achieved.
Mr G Radebe (ANC) said he was concerned with the red flag raised on Rail Transport as the Department reached a lower target than expected. He observed that the National Railway Safety Strategy was not achieved due to delays in internal processes. He asked what these internal processes were, so that the Committee could be fully enlightened about the challenges.
Mr Radebe also observed that from previous reports, the Maritime branch had been a problem and he urged that the position of Deputy Director General: Maritime must be filled to take responsibility.
Mr Pule replied that there were there was provision for a Deputy Director General and three Chief Directors in the Maritime Transport branch, but at present only one of these four positions was occupied. He said the Department had advertised for the positions and the feedback was not good, as none of the applicants had been qualified .He added that it was a challenge, which the DoT would sort out as quickly as possible,as Maritime was a key issue, and the DoT would not allow that sector to fail. He said there was also a challenge in filling vacant positions in the Rail Transport.
The Chairperson said some railways in the Western Cape had been closed as the commuters were exposed to high risks and the tracks and stations were not user friendly .She said she was concerned that Rail Transport was underspending and there were issues around maintenance that were not done. Pointing out that rail transport was cheaper for the people, she said that the Department should urgently resolve the issues of the Rail Transport branch.
Mr Radebe pointed out that the Cabotage strategy and the Bill to support it had been raised previously. At that time the then-Acting Director General said then that it would take up to five years to implement. He asked who was to take responsibility. He asked what was meant when the Director General said processes would be fast tracked in the second quarter, and wondered if the documents would be available by then. He also said the issue of Taxi Recapitalisation had been on the agenda for a very long time and should have been implemented long ago. He observed that the reason the road freight strategy was not achieved was that there was a need for technical expertise to complete the strategy, and wanted a time frame for getting this expertise and completing the programme.
Mr T Mulaudzi (EFF) said he was concerned that a total of twelve targets, which represented 24% of the overall target, had not been achieved by the Department. He said the Department should fast track in the next quarter to try to lessen the targets not achieved. He too noted that no reasons for the failure to achieve were stated. He commended the Roads and Public Transport branches for their achievement and asked if they could not advise other branches how to achieve in line. He was concerned that Rail Transport achieved only 40% of its first quarter target, adding that slowing down of the process meant that poor people would suffer. He asked what the outstanding issues were that had to be prioritised, to take remedial action on rail transport.
Mr Selepe responded that there had been consultation with the Department of Public Enterprises (DPE) to address outstanding issues to be prioritised, that a document had been presented to Cabinet and the Department of Transport was given permission to publish the strategy for comment adding that a report should be available in quarter 2.
Mr Mulaudzi asked for clarification on the point that delays in internal processes were the reason why the National Railway Safety Strategy was not achieved. He asked if that meant there was a lack of capacity or whether it pointed to laziness of the delegated capacity. He wanted to know the status of the analysis conducted on the municipal road network.
Mr Chris Hlabisa, Deputy Director General: Road Transport, DoT, replied that the current position was that South Africa had 750 000 km of roads. He said 21 403 Km was managed by SA National Roads Agency Limited (SANRAL), and the balance of the roads were in the rural areas. He said that in 2011 the Department started a programme with National Treasury to engage on an assessment of the roads. He said a total of 21 roads were identified for priority: divided between Limpopo - 4; KZN -10; Eastern Cape - 5; North West – 2. The Department had then added another 23 which brought the total to 44.
Mr Hlabisa said the DoT must be aware of the classification, as that would assist in assigning responsibility to the road authority that would maintain an upgrade. He said the status quo analysis would assist in convincing the National Treasury on how much was needed.
Mr Mulaudzi remarked that the N2 road in Eastern Cape was managed by SANRAL, but this road was filled with potholes, adding that it had been that way for many years. He asked what the DOT had done about it, adding that the people were suffering and the road was not capable of coping with the motor traffic.
Mr Hlabisa replied that the N2 was an asset of the National Department of Transport and was managed by SANRAL. He said he would raise the issue with the Regional Manager in the Eastern Cape.
The Chairperson said the details of the N2 road that was in particularly poor condition should be emailed to the Deputy Director General for Road Transport. She asked if the grants for road network had been used according to that purpose, adding that in Madibe Municipality, three bridges had been washed away and had not been repaired. She asked if there was value for money in terms of what had been allocated to the Department, adding that if it could show that it was spending properly, this would help the people to take the Department seriously. She said some municipalities used grant money to pay salaries.
Mr Mulaudzi said the Department should submit a time frame to the Committee on when the ACSA and ATNS Amendment Bill would be achieved, adding that there were concerns expressed by stakeholders on this point when the Committee had been doing its oversight visits. He also wanted to know what had been planned to move forward after the Inland Waterway Strategy Consultative workshop held in April 2015.
He commented that the Chief Financial Officer's presentation had been clear, honest and straight to the point. He wanted to know why it was decided that R19 million would be transferred to the South African National Taxi Council (SANTACO), and if the spending of this money was monitored and used for the benefit of the taxpayers.
The Chairperson said every DDG should account to the issues that had been raised, as these questions affected different branches.
Mr Tiyani Rikhotso, Acting Chief Operations Officer, DoT, said there were consultations with the Department of International Relations and Co-operation (DIRCO). Input was sought from stakeholders who would be affected by the strategy. He said the DoT had intended to correlate all inputs by end January 2015 but delays were occasioned by slow responses from the stakeholders. It was important that whatever product the DoT came up with, it should be a reflection of how the the different stakeholders felt, and it was important to have a comprehensive understanding of the views of those affected. He said one of the improvements which would affect efficiency was the proposed relocation of the unit to the Director General’s office so that the challenges would receive the attention deserved. He said that in the past two months, the Unit had been receiving the attention of the executive and the Director General. Instability in the International Relations unit had affected the targets.
He said a notable achievement in Administration was the Integrated Communications and Marketing Plan (ICMP).He said the Communication Unit was able to profile its work, adding that one of the best things the programme had done was to get the entities to talk about the work they did and to unveil completed projects, adding that the Minister had said the DoT should not only limit communication to Transportman in October. He reported that the Department had made notable progress in reducing vacant rates, adding that two weeks earlier, DoT was sitting with a vacancy rate of 16.7%, while 10% was the acceptable level.
All the positions had been advertised, and by the end of the financial year, he hoped that all the posts would have been filled, as recruitment processes were under way at the moment.
The Chairperson said the Department should give a time frame on when the International Relations Strategy would be resolved.
Mr Ramatlakane said it was good to hear directly what was going to be done. He said Mr Rikhotso spoke well about the relocation of the International Relations Unit to the Director General's office, adding that he was only concerned that he not say when the relocation would take place. He also noted the discrepancy between the current vacancy rate of 16.7% while the acceptable level was 10%. A consistent reason given for underspending was the vacancy rate. The higher the post levels that were advertised, the higher the salaries; for this reason he asked that the DoT should specify which positions were unfilled, and the levels.
Mr Rikhotso replied that the vacant posts were: Deputy Director General posts for Maritime, Rail and Corporate Services.
Mr Ramatlakane said he was worried that the Department was going into the third quarter of the Financial Year and the vacant positions had not been filled. He said advertising and filling these vacant positions should not take three months as it was an internal management decision. He said he was concerned that Mr Rikhotso had said he ‘hoped’ the Department would fill the vacant positions before the end of the financial year.
Mr Rikhotso replied that the reason why he used the word ‘hope’ was in fact that the issue was outside the direct control of DoT, as the vacant positions were mainly senior posts which were more difficult to fill; but there was no reason for the Committee Members to despair.
The Chairperson asked that the Director General respond in full to the issues raised within the next 48 hours. She said the responses should be sent to the Committee Secretary, who would pass them on the Committee Members. The Department should give a plan that would guide the Committee.
Mr Mawethu Vilani: Deputy Director General: Integrated Transport Planning, DoT, said only two areas –Transport Pricing Framework and the Road Freight Strategy - were not achieved. He said the initial Transport Pricing Framework was scheduled to cover only ports, but as as a result of information obtained and outcomes of the study DoT decided to extend the framework to Rail and Road Transport. He said that ITP was a victim of its success, adding that the project would be completed by the end of the fourth quarter, due to the amount of work involved.
He said the Road Freight Strategy was completed, but because of the shift from road to rail, there were issues around regulations as well as issues of whether the railways were ready to take over the goods and commodities that were identified to shift from road to rail.
The Chairperson asked whether the issues raised could be completed before the end of the third quarter.
Mr Vilani replied that the Port Tariffs would be completed by the third quarter, adding that the other issues involved a lot of work which only be completed by quarter 4.
Mr Ramatlakane said he had hoped Mr Vilani would say there was no delegated capacity for the framework in the Road and Rail Transport divisions in the first quarter, since it was an after thought, but noted that it was now seemingly to be handled by a certain delegated specialist in the next quarters.
Mr Vilani said that was always the challenge when there was a presentation of the quarter one results when the end of quarter two was in sight. He agreed that there was a delegated capacity required in quarter one, which had been filled in quarter two, although this point could not be made when presenting the quarter one results. Ports were the biggest impediment to logistics training as this may be displaced into other areas. He said there was a lot of work to be done, adding that he did not want to over commit the DoT.
The Chairperson said the Department had brought itself into the current situation it found itself in, adding that it was not acceptable that the issues raised in Integrated Transport Planning (ITP) were now only to be resolved at the end of the financial year.
Mr Ramatlakane said the Committee would expect a progress report on the two issues raised in ITP in the third quarter. He also said that there was a problem in the Committee getting quarterly reports in the last quarter because these already overlapped with the next financial year.
Mr Selepe said that there would be a report on Rail Transport in quarter two.
Mr Zakhele Thwala, Deputy Director General: Civil Aviation, DoT, said the Airports Company South Africa (ACSA) and Air Traffic Navigation Services (ATNS) Amendment Bills dealt with the tariff regime. There had been poor communication between the Legal and Aviation divisions on the APP requirement for output for the first quarter. The Department now expected the processing of the two bills to be completed in the 2016/2017 financial year, as the documents had not been submitted to the Legal division, although this was currently being arranged.
The Chairperson noted that in the Committee’s oversight visit, it was pointed out that there were penalties for delays in amendment of the bills, as the amendments had to do with international issues of aviation and other related matters .She said the Committee had resolved to assist the 2 State Owned Companies to comply with international standards. She added that the Committee would request Parliament to assist in drafting the amendment. She said the amendment should be in Parliament before the end of the current financial year. The Committee would be calling in Parliamentary Legal Services and the two boards to hear the amendments.
Mr Ramatlakane was concerned that the two agencies were ready with the Amendment Bill, but the DoT was not ready. He said the Committee could sponsor the agreement and leave the DoT behind, adding that the Committee could proceed and tell the Minister of Transport that ii was not happy with the process.
Mr Sibande said the issues that were raised should have been identified before now.
The Chairperson pointed out that the Committee could amend the Bill and cast a vote of no confidence on the DoT.
Mr Thwala said he was not aware that the Department was to bring the Bill forward.
The Chairperson replied that DDG Civil Aviation was away in Canada when that resolution was taken, and asked if he was not given a report by his colleagues.
Mr Radebe made the point that the Deputy Director General of Civil Aviation also had a duty to read the reports from the Committee. Whenever resolutions were made by the Committee,they were recorded. All Committee resolutions should be attended to and the Committee should not be “taken for a ride”.
Mr Selepe asked for a chance to have an internal discussion with his colleagues, so that the Department could come back to the Members with clarity on the issues of the amendment at a later date. He added that it would take about three months to collate the Cabotage Bill.,adding that it was important to do that as it would reflect the performance of the DoT.
Adoption of minutes
The Committee adopted the minutes of the previous meeting, with amendments.
The Chairperson said transport was a critical issue that would take South Africa forward, adding that it was the reason the Members were upbeat about a number of issues. She said 76% performance against targets in this quarter was fair, but the DoT would be applauded when it was able to do more. She said there were issues of safety and other challenges that commuters encountered, and it was up to all stakeholders to ensure that transport was safe, affordable and reliable. When commuters showed their frustrations and anger, this was a prime indicator that more had to be done, and the DoT must focus on how to improve. Transport was linked with both economic and climate change issues too. A prime uniting force between the DoT and this Committee was the collective feeling for South Africa.
The meeting was adjourned.
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