Department of Transport on 2nd Quarter 2015/16 performance

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27 October 2015
Chairperson: Ms D Magadzi (ANC)
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Meeting Summary

The Department of Transport’s (DoT’s) report focused on the implementation of programmes and projects for the period between 1 July 2015 and 30 September 2015, as well as the optimal performance of deliverables in terms of the medium term expenditure framework (MTEF) from 2015/16 to 2017/18. The DoT had achieved 43 of its 50 targets for the second quarter. A breakdown of the achieved and non-achieved targets, as well as the deliverables carried over from the previous quarter, was outlined.

A high vacancy rate was identified in the office of the DG, and factors affecting the performance of the Department were elaborated upon. The expenditure per programme and per economic classification for all the departmental programmes was outlined, with areas of overspending highlighted.

The discussion by Members focused on issues around the Budget Review and Recommendations Report (BRRR) which were related to the performance levels within the Department. These included solutions for the finalisation of the Green Paper to avoid job losses; the accommodation of the Land Transport Amendment Bill to ensure compliance; the lack of capacity and skills within some entities in the Department; non-accountability of funds allocated to cities through the public transport network grant, and how such funds were being monitored by the Department; overspending within the Department, and how it could be curbed; what the DoT’s role was in assisting Maritime Transport to improve and achieve its target; what external factors, beyond the control of DoT, were affecting its performance; what was causing prolonged procurement that created numerous delays; how it carried out its open-ended stakeholder consultations; and the coordination of some programmes within the Department.

The Committee said the submission of an action plan developed by the Department should accompany the quarterly reports of the Department. It questioned the level of accountability on the road maintenance grants allocated to provinces. Comments were also made on the implementation of the bus rapid transit (BRT) policy.

The BRRR was deliberated upon, and observations were made for inclusion in the final report. The report was thereafter adopted by the Committee.

Meeting report

Department of Transport: 2015/16 second quarter expenditure
Mr Pule Selepe, Director General (DG), Department of Transport (DoT) said the report focused on the implementation of programmes and projects for the period between 1 July 2015 and 30 September 2015, and also on the optimal performance of deliverables in terms of the medium term expenditure framework (MTEF) 2015/16 to 2017/18.

The DoT’s total number of targets for the second quarter was 50, and it was able to achieve 43 targets, which amounted to 86%. Seven targets (14%) were not achievable. The breakdown of the targets for all the programmes of the Department was outlined. Seven out of the eight targets for administration were achieved, amounting to 87.5%. All the nine targets for Integrated Transport Planning (ITP) were achieved. All targets for rail transport, road transport and civil aviation were also achieved. Three out of the eight targets (37.5%)for maritime transport were met. Public transport had eight targets, and achieved seven.

The notable achievements for administration included the exposure of 59 interns to training intervention, the upgrade of the internet system, and the roll out that would continue in the third quarter, and the finalisation of the application and data architecture, under enterprise architecture. However, the DoT was unable to meet its target in terms of the filling of vacant positions. A target of 29 posts to be filled was set, while only 21 was achieved. The shortfall was due to the cutting of the Department’s compensation of employees’ budget by R27 million. The Department also received a communication from National Treasury to the effect that no vacant position should be filed for the rest of the year. DoT was currently in the process of engaging with National Treasury for additional funding necessary to fill these posts, especially because the Department currently had a high vacancy rate at the senior management level.
There was a carryover target from quarter 1, which was the international relation strategy. The draft for this strategy had been finalised in quarter 2 and stakeholder consultations had been conducted.

As for ITP, the notable achievements included the conclusion of the policy gap analysis for the review of the White Paper on the national transport policy. Stakeholder consultations had been conducted with the national transport forum on the review of the road freight strategy. Stakeholder consultations had also taken place on the infrastructure funding framework and transport pricing framework, the development of the public sector participation (PSP) framework, and with the Passenger Rail Agency of South Africa (PRASA), Transnet, the Development Bank of Southern Africa (DBSA) and the National Treasury.

ITP also had carryover targets from quarter 1. The inception report for the transport pricing framework had been developed and the targeted stakeholder consultations had been conducted in quarter 2. A service provider had been appointed for the road freight strategy and a consultative workshop was held with the national transport forum, as targeted in quarter 2.

The notable achievements under rail transport included the approval of the Green Paper on the national railway policy that was approved by Cabinet in August 2015, and launched in September 2015, as well as the development of the draft amendment of the National Railway Safety Regulator Bill. Carryover deliverables under this programme from quarter 1 included the national railway policy that was approved by Cabinet, the conducting of the scoping and needs analysis of the National Railway Safety Regulator Bill, as well as the development of the draft Bill as targeted; and also the inception report and draft conceptual report developed for the national railway safety strategy.

The key achievements for road transport included stakeholder consultations on the road policy that were conducted in the quarter and were still ongoing. The monitoring of projects were ongoing for the S’hamba Sonke Programme, while progress reports on expenditure and physical indicators had been provided for the quarter; as well as the approval of the Administrative Adjudication of Road Traffic Offences (AARTO) amendment Bill by the Justice, Crime Prevention and Security (JCPS) cluster in June 2015, for presentation to Cabinet.

One of the notable achievements in civil aviation was the stakeholder consultations that were conducted in July 2015 on the national civil aviation policy, as well as the incorporation of the stakeholder comments in August 2015. The policy was presented at the Economic Sectors, Employment and Infrastructure Development (ESEID) cluster in September 2015. Other achievements were the discussion of stakeholder inputs on the national airports development plan, which were incorporated in August 2015, and presented to the ESEID, as well as the publishing of the 30 occurrence reports, alongside the making of 13 safety recommendations and two emergency recommendations under accident and incident investigations. The carryover deliverables under this programme were the stakeholder consultations that were ongoing on the Airports Company South Africa (ACSA) and Air Traffic and Navigation Services (ATNS) amendment Bills; and the legal vetting process which was now completed, on the regulations for the phasing out of the chapter 2 aircraft, including the submission of draft regulations to the Minister for the approval that was targeted.

The achievements under maritime included the approval of the Merchant Shipping Bill by the Portfolio Committee on Transport (PCOT) and the National Council of Provinces (NCOP), which would be presented at the National Assembly; and the presentation of the African Maritime Charter to the PCOT in September 2014.

One of the non-achievements under this programme was the inability to finalise the Green Paper on the national maritime transport policy for submission to the International Cooperation, Trade and Security Cluster (ICTS) cluster due to capacity constraints. The remedial action to address the issue was to appoint a service provider that would finalise the Green Paper and also ensure that the submission to the ICTS was fast-tracked. Another non-achievement was the non-finalisation of the service providers for the cabotage policy, strategy and Bill. The remedial action in that regard was to fast-track the appointment of the service providers. Stakeholder inputs on the inland waterway strategy were still being captured. The remedial action for this was to convene a stakeholder meeting in quarter 3 to finalise inputs.

There had been a carryover from quarter 1 on the recommendations of the mock audit findings. The audit had, however, been finalised and the process of stakeholder consultations had been initiated. The targets for the first and second quarter had been missed.

The notable achievements under public transport included the review of the rural transport strategy that had been submitted to MinMEC, and the presentation of the draft plan on the integrated public transport turnaround plan to provinces and the bus industry in July 2015. However, a notable non-achievement had been identified in the Land Transport Amendment Bill, which had been submitted to Cabinet in quarter 1. Cabinet had recommended further consultations with Cooperative Governance and Traditional Affairs (CoGTA) that were subsequently held in July 2015. The Bill was currently being processed for re-submission to Cabinet. The Bill would be submitted to State Law Advisors after approval by the Cabinet.

In terms of the organisational health of the Department, the current vacancy rate was 18%, which was down by 0.58% from the first quarter. There was a high vacancy rate of 21% in the office of the Director General (ODG), a 26% vacancy rate in transport information system (TIS), a 28% vacancy rate in road transport, a 21% vacancy rate in civil aviation, and a 21% vacancy rate in maritime transport. There were 38 vacant positions in senior management services (SMS). However, the female representation at the SMS level stood at 40%. 30 out of the 38 vacant positions had been earmarked for female employees. Two SMS members with disabilities formed 1.8% of the achievement in this area.

With regard to governance, a risk management strategy had been developed and approved. Action plans to address the 2014/15 audit findings had also been developed and implemented.

The factors affecting the performance of the Department included government-wide policy decisions, the non-availability of evidence to support reported information, the non-alignment of the evidence submitted with the approved technical indicator descriptions, capacity constraints in terms of skills and vacancies, external dependencies beyond the Department’s control, and the prolonged procurement processes.

Mr Collins Letsoalo, Chief Financial Officer (CFO), DoT, presented the spending on the budget till 30 September 2015. Provinces were expected to submit their spending for the previous month on the 26th of the next month to the Department. This explained why the presentation showed expenditure of provinces for August, as they had been submitted to the Department only the previous day.

In terms of the year-to-September expenditure per programme, administration had spent 51% and ITP 40%, while rail transport, road transport, civil aviation, maritime transport and public transport had spent 60%, 52%, 47%, 38%, and 33% respectively. In the first two quarters of the financial year, the Department had spent R27.2 billion, or 51% of the allocated budget.

The expenditure per economic classification revealed that there had been overspending of about R8.1 million for compensation of employees. There had also been around R56 million overspending for goods and services, which was due to unfunded events such as funerals, African Union (AU) Conference, as well as payments prescribed by court orders. As for machinery and equipment, the Department was reclassifying its operating leases to the new modified standards. Money from goods and services would be used to fund the machinery and equipment.

The expenditure per economic classification for programme 2 (ITP) reflected an additional R2.7 million used to cover the over-expenditure on compensation of employees. The programme had spent only 44% of its budget, mainly because of the under-spending on goods and services linked to invoices that were yet to be submitted to the Department.

The expenditure per economic classification for programme 3 was also faced with the problem of delayed invoices. Compensation of employees was at 48%, while the spending for transfers and subsidies was 60%, which was based on an agreement with National Treasury. The bulk of the money had been transferred to the Passenger Rail Agency of SA (PRASA).

Programme 4 highlighted a critical area of overspending for the DoT. The overspending of R119 million that was pointed out under this programme was due to the eNatis maintenance as the result of a court order. The total overspending on this programme amounted to about R117.8 million, which was about 53% of the budget.

The spending for programme 5 was about 47%. Money had had to be shifted from goods and services to transfers and subsidies because of the foreign membership fees that DoT had to cover.

In terms of programme 6, it was noted that funds had been moved from programme 7 to prorgramme 6, which focused on maritime. The transfer made was about R10 million, which was used for the port regulator. Compensation of employees was currently at 42%, while goods and services was at 39%. The Department was trying to fast-track the spending of the funds allocated for this programme. This was a critical area being monitored by the DoT.

Transfers and subisidies for programme 7 was at 33%, while goods and services was at 26%, compensation of employees at 50%, and machinery and equipment at 38%. The overall spending for this programme was at 33%, but it was mainly for transfers and subsidies, particularly those funds that went to the municipalities that began their financial year only on 1 July.

The public transport network grant under transfer payments was at 25% because of the non-alignment of municipalities and the DoT in terms of the transfer schedule that had been agreed upon with the National Treasury. The provincial road maintenance grant (PRMG) was at 56%, while the public transport operations grant was at 43%. Rural road asset management was at 100%, since it had been fully paid to the respective municipalities. Only 16%, or R52.4 million of the R331 million taxi scrapping budget had been spent

Only 55% of the provincial road maintenance grants transferred during the period had been spent up till August. 43% of the public transport operations grant had been spent. This grant covered operations that were run within provinces. The lowest spending of 20% was in North West, while the highest spending was recorded in Northern Cape.

Ms S Xego (ANC) said that the Committee had drawn the attention of the Department to a lot of issues during the (BRRR) discussion on the annual report. Where the performance level in the Department was still below 50%, such issues should be addressed immediately. The earmarking of 30 out of the 38 vacant positions to be filled for women was seen as a welcomed development, in line with the women’s conference that had promoted the equal representation of women in senior positions. The Department was urged to inform the Committee of any difficulties that may arise in getting women to fill the positions whenever they were advertised.

Clarification was sought on the procedure adopted by the Department in increasing salaries, as it had been indicated as a reason for the overspending recorded. Clarity was also sought on the zero spending recorded under the transport section.

Mr M Maswanganyi (ANC) recalled that at the last meeting, the Deputy Minister had said there would be a comprehensive strategy on road safety. He wanted to know if the strategy had been mentioned in the presentation. What could be done to resolve the issue of the Green Paper that was yet to be finalized, in order to avoid job losses? Would the Land Transport Amendment Bill accommodate people and ensure compliance with the regulations?

Mr M de Freitas (DA) said the lack of capacity and skills in some entities within the Department was a problematic issue, especially in the maritime sector. He wanted to know why there was no accountability for the funds allocated to cities through the public transport network grant, how the DoT monitored the expenditure, and how the grant was designed to be rolled out in these cities.

Mr M Mabika (NFP) referred to the overspending alluded to in the presentation, and wanted to know what the Department was doing to curb this.
Mr M Sibande (ANC) wanted to know what role the DoT was playing in assisting maritime transport to improve and achieve its target; what external factors were beyond the control of the Department that were affecting performance within the entities of the Department; what criteria were being used by the Department in coming up with its allocations, as the presentation showed that there was a still a greater concentration on the areas that had been pointed out by the Committee in the past. More information was requested to determine the progress of the risk management programme.

The Chairperson said that although the progress in the Department was appreciated, there were still several issues yet to be addressed. Stakeholder consultation was one of the things drawing the Department back, even though it was beyond the control of the Department. This was strange a occurrence, as it was found in every programme of the Department. Legislators were supposed to receive Bills from the Department, and once such legislation was received by MPs, it was treated with immediate effect. However, it had been noticed that there was no legislation coming from the Department to the Committee. The Department was urged to work together with the Committee in achieving the goals of a better South Africa.

She wanted to know how open-ended the stakeholder consultation carried out within the Department had been. The issues already pointed out in maritime transport was one of the areas being considered by other committees, to ensure that all relevant committees worked together to achieve the target in this regard. It was important for these issues to be resolved within the shortest possible time, and necessary funds allocated in that respect.

The coordination of some of the programmes within the Department was another area highlighted by Chairpersons of other Committees as an area that should be addressed. There was a need for coordination between the DGs of a variety of departments, instead of competition among these various departments.

The Department was requested to submit its developed action plan for every quarterly report it presented to the Committee, for appraisal by the Committee and also to enable it to monitor the progress of the Department in carrying out the action plan, to understand the challenges it faced, and to help to resolve them
Clarification was sought on the reason for the prolonged procurement alluded to in the presentation, and what strategies had been developed to resolve this issue in order to fast-track the needed services from the Department.

The issues raised in North West were a cause for concern. Although the road maintenance grants had been allocated to the provinces, the Committee had still found potholes and other defects in these provinces during its oversight visits. Provinces should be held accountable for the road maintenance grants they receive. The Department should develop interventions to ensure that the funds allocated for road maintenance were used for that purpose.

The policy on bus rapid transit (BRT) system should be implemented on a developed template by the Department.

The presentation had not addressed rural transport, and this was where transport was needed the most. Contracts for buses and rail lines had not been extended to the rural areas. The Reconstruction and Development Plan (RDP) of the 1990s had been very elaborate on how transport and transport related issues should be executed, to the extent that transport must address social issues, should go to the peripheral of rural areas, and should be reliable and accessible.

Mr Selepe, in response to the issues raised, said that the performance target of the Department had been a minimum of 85%. It was trying to achieve all the targets it had set for the financial year, but was striving to achieve at least 85% of its target, at worst. The Department acknowledged that an achievement of 50% was not sufficient.

It was doing its best to fill most of the vacant positions with women.

The Department was developing a first draft for a road safety strategy, but it was still a very raw draft. The Department was, however, working towards finalising it by the end of November. The interventions for the road safety programme were also ongoing. These numerous activities carried out by the Department had to be informed by a broad strategic framework to ensure coherence around road safety issues. However, there was no strategic framework at the moment.

The DoT agreed with the comments made on the lack of capacity in maritime transport. Several steps were being taken to ensure that maritime transport was performing as it should. The issue with maritime was that there were three chief director positions, of which only one was occupied. The other two positions, and the deputy director general (DDG) position, were still yet to be filled. Once the senior manager returned to the Department, he would be able to assist in reducing the workload. These positions had been advertised. The Department was considering the conversion of one of the chief director positions to the ocean’s economy section, which would focus on issues of the ocean’s economy in Operation Phakisa.

Towards the end of the previous financial year, the executives of the Department hadmet on a weekly basis to put measures in place that would fast track the projects that were falling behind. There had been issues beyond the control of the DoT, such as the submission of the draft Bill to the Committee, but the Department was still in consultation with stakeholders and was hoping to complete that process by mid-December. This was a process that DoT would have preferred to fast-track but it was beyond its control. These consultations were responsible for the delays in projects, but Cabinet could return a project if it found out that there had been insufficient consultation.
The Department was grateful for the availability of the Committee to monitor its progress, and its request for the submission of Bills.
The DoT had an elaborate plan for public transport tenders, especially around areas of investment.

Mr Letsoalo responded to the issues of salary increases. Although 5.8% had been budgeted, the increase had come out at 7%. As a result of this, the National Treasury had told the DoT to source the extra money. This was after National Treasury had cut the DoT’s budget by 37%. The money budgeted in the adjustment budget was yet to be allocated.

The reason for the absence of spending in some cities for transport services was because the cities had not requested money, probably because they still had some money at their disposal.

On the issue of Cross-Border Road Transport Agency (C-BRTA) and the court order, DoT had approached National Treasury the same way it did for the issues of funds and fees. National Treasury had rejected the case of a fee increase for the South African Maritime Safety Authority (SAMSA) because it believed that SAMSA was spending money on issues that were not within its primary mandate. SAMSA was spending a lot of money on the SA Agulhas, a ship that was part of a donation from the Department of Environmental Affairs. Even though the ship had come to the end of its useful life, SAMSA had bought the ship and begun using it for training purposes. Although the economic considerations of SAMSA were understandable, security and safety was still the primary mandate of SAMSA.

The Chairperson noted that the issues raised by the CFO were critical and should be discussed further. There might be a need to engage with the portfolio committee dealing with Treasury matters. The DoT would have to brief the Committee properly in order for Members to be aware of the necessary details required for the engagement with Treasury. It was suggested that these critical matters be included as part of the recommendations in the BRRR that would be submitted to Parliament, as they would lead to a big challenge for the Department and its entities.

Mr C Hunsinger (DA) said that SAMSA’s primary mandate was not just safety. Its mandate also included the promotion of the country’s maritime interests. It was therefore important to ensure that necessary facilities were put in place to carry out these mandates. It would not to appropriate to argue that the institution should be wound up on the basis of lack of funds. It was agreed that a special engagement with the National Treasury should be organized to discuss these issues.

The Chairperson requested that the DG should come up with a one-page document to request an engagement with the portfolio committee on Treasury matters at the earliest possible time. Issues raised in the SAMSA Act that spoke to the role of maritime and Operation Phakisa should be factored into the discussions that would be held.

Mr Letsoalo said that the Department had not planned to overspend. The departmental budget was managed and spent on a tight basis. The Department ensured that all funds spent were aligned with the budget. It was indeed true that some branches of the Department were overspending, but these issues were being managed by the Department. The overspending was due to unforeseen and unavoidable expenditure that had not been refunded by the National Treasury.

With regard to risk management, it was noted that the Department managed its risks properly. The DoT had a risk management plan and register, and it operated in accordance with the risk management plan. It checked to see if anything that was affecting its performance was included in the risk management plan. If such issues were seen in the risk management plan, it would mean that they were realisable, and it would then examine the reasons why such controls were not working. On the other hand, if such issues were not found in the risk register, they would be added to the risk management plan.

Prolonged procurement issues were the result of several delays and issues, such as the amount estimated by the Department falling short of the actual market value in the consultation processes.

The money for road maintenance was usually approved and allocated for the purpose it had been designed for. The Department could not, however, say why the money was being spent on other projects by the provinces.

Mr Mathabatha Mokonyama, DDG: Public Transport, said that one of the performance areas being focused on in public transport was the ADPlus. The target for the year was to have bilateral meetings, visits and inspections, once every quarter for all the cities being supported by public transport. The issues of monitoring and evaluation were therefore being addressed by public transport.

The Nelson Mandela Bay issue had been investigated through a forensic investigation that had been completed. The Department was awaiting the council’s pronouncement on the outcome of the investigation, so that it could assist in any way possible. The new administration had already taken steps to deal with issues of financial mismanagement in terms of suspended people. The Department would work with the municipalities in this regard.

The emerging issues from the transition focused on the standards and the norms within the BRT system, as part of the integration. It had been indicated that integration involved the sharing of spaces and the matters that the Department aimed to promote. The issue was the balancing of integration with concentration on the road which was not supported by ADPlus and the white paper. It was believed that competition should be for the road, and not on the road. Models had been worked upon for industry transition. The only risk was that the operation of companies was voluntary and people were not forced to continue such operations, even though they would be alerted to the pros and cons of the two systems. Companies that were awarded contracts in this regard could not come back to compete with other institutions within the entity. This was the challenge with integration. However, the BRT guidelines had been developed and respective parties operating BRTs should respect them. The guidelines had been further reformed and had gone into depth on the South African situation concerning the needs of school children in the mornings and afternoons.

The Department was working on the public transport transformation plan, also known as the accelerated turnaround plan. This plan addressed a differentiated model, as well as the issues raised by the Chairperson on the need for a quality public transport system throughout the country. BRTs were for selected cities, based on the uniqueness around travel demand challenges. There was a need for an appropriate solution for small and medium-sized cities.

The battle being fought with the Treasury was on issues of policy and social inclusion, in terms of the allocation. The scoping of the country had been carried out in order to find out areas that were subsidised, and those that were not subsidised.

The Department was aware of the challenges it was being faced with, and it also knew what should be done to address these challenges. However, it was faced with financial constraints to resolve them. The Department needed triple the amount it was currently allocated in order to sort out the problems in the country. It was spending an average of R18 billion per annum.

In considering the three major metros, which were Johannesburg, Cape Town and Tshwane, it was noted that the highest cost per kilometer was in Cape Town, taking into account the total distance cost, the number of kilometers, the number of vehicles, the industry transition and so on. There should be a benchmark that would consider how realistic some of these amounts needed to be spent were. This was because the bulk of the money was spent on operations, especially with regard to how many people were brought in or opted out of the system.

It was pointed out that the Uber rideshare application was now being used in all the cities. Based on the discussions around waiting for the amendment on the National Land Transport Act (NLTA), Uber wanted the DoT to come up with a new type of public transport service which was application-based (app-based). The Department was tempted to develop that kind of transport service. Instead, it had categorised the app-solutions as part of meter-trade services. The only difference was that one would use the meter service, while the other would use an app that could locate anywhere -- even outside the municipalities. The app was competing for the market within which the meter trade operated, but it could go beyond the areas allocated for metered trading within the municipalities. The metered service operators should be able to make representations on the app where the need arose, in terms of the Promotion of Administrative Justice Act (PAJA) Act. The people who experienced the system should be elated with the kind of services provided by the Department. The DoT would not be accorded the platform to object to the application. Instead, the taxi people would have an opportunity to object to the application, just like any newly introduced application, and it would be adjudicated over.
In terms of the amendment Bill, the processes seemed to be taking forever. However, consultations contributed to the delays experienced. The DoT was scaling down in terms of the NLTA Bill and was keeping records of the main stakeholders to be consulted. Parliament would want to believe that the Department had carried out adequate consultation before bringing the Bill to it.

The learner transport policy had been gazetted and necessary institutions were already being set up. It had been agreed that the policy would be used to standardise the allocation of functions.

Mr Chris Hlabisa, DDG Roads, DoT said that the issues within provinces, particularly in North West, had been identified around June/July of this year. It was for this reason that the Department had focused its energy on engaging with the provinces directly and find out what the issues were. The DoT had discovered that there were quite a number of road projects in some provinces that had commenced but were yet to be completed. Inquiries had been made as to where the funds allocated for these incomplete road projects were. The feedback given to the Department was that the money was with the Department of Public Works (DPW), but the DPW on the other hand admitted to having no such money. A meeting had been called between the Department of Roads and the DPW to deal with the matter. The accountable person was the head of department (HOD) in the Department of Roads and Public Works itself. The process of prioritising projects had been carried out and gazetted under the new procedure. The incomplete projects were being monitored on a monthly basis. There was need for prioritization of projects within the provinces and municipalities. The DPW should also be held accountable for funds allocated to it for various projects, otherwise such allocations would be stopped.

It was not only North West province that was faced with the problem of incomplete projects. Two sections of the roads in Limpopo and Mpumalanga had been handed over as part of the national assets of the DoT. Negotiations were ongoing on the plans for the section of the road in Gauteng. The condition given by National Treasury was to the effect that the roads would be handed over to DoT as part of its national assets. Nonetheless, the Department was still working on the two sections of the road.

Mr Mokonyama referred to the Gauteng hand over. The impression held by the Department was that the province wanted National Treasury to transfer the money to it, and it would then decide how to spend the money. The condition given by the National Treasury was for Gauteng to hand over the roads for them to be declared as national roads, and then be refunded, just as it had been done in other provinces. The Department still believed that Gauteng would agree to this arrangement.

Ms Nosipo Sobekwa, Acting DDG, Maritime, spoke on issues of capacity within the sector. Whenever the sector carried out its functions, it made use of the private sector in the form of specialists. An example was audit, as the sector struggled to get auditors for its audits. The auditors should be specialised people who were trained by the International Maritime Organization (IMO) itself. The sector often had to advertise several times till it got qualified specialists that could conduct the audit appropriately.

The sector usually conducted a marine court enquiry both on the land and at sea. Specialists were also needed for this job to be carried out. This kind of work would require the sector to go to the supply chain in order to source people to do these jobs.

It was important to note that SAMSA’s Objective C – to promote South Africa’s maritime interests -- was a very complex one, because it could not be left open-ended, in order to curb the possibility of having an organisation that would invade other organisations’ space. SAMSA had to operate under objective C within its mandate.

Mr Maswanganyi said that the Committee should carry out the necessary investigations before meeting with National Treasury or the Appropriations Committee, especially with regard to conditional grants. The pattern of expenditure for municipalities was quite low. It had been suggested to the DG that a regular meeting system, like the one adopted by chief executive officers (CEOs) of entities should be developed. The Department should consider meeting with municipal managers to offer support to them. Failure to support municipalities often resulted in funds being returned to the Department, which reflected badly on the national department. Assisting municipalities would help the Department to reprioritize early enough without waiting till the end of the municipalities’ financial year. The same principle would apply for entities within the provinces.
The Department was urged to develop monitoring and intergovernmental relations support among municipalities. A forum should be developed at the intergovernmental level that would offer support to the other spheres of government, so that progress could be recorded.

Mr Hunsinger wanted a response from Maritime on its expenditure performance, and also about not raising fees and issues which had led to an increase in expenses.

Mr De Freitas said that the Department had confirmed his initial comments about the absence of control and accountability within its sectors. The Committee should monitor the Department more. He felt that the BRT system was not appropriate for South Africa. It was a Latin American model that was designed for their purposes, and which South Africa had tried to copy, not taking into account the fact that its circumstances were different from what pertained in Latin America. The way the South African cities were designed was also different due to the apartheid legacy. Even without the apartheid history and inequality, the way the roads and streets were designed were completely different. South Africa used the British model, while Latin America used the French model. The country had tried to take what worked successfully in Latin America and wanted to apply it within the South African context. This was the reason why it could not work, including the way in which it had been managed.

Mr Sibande restated his concerns about the factors affecting the performance of the Department. He agreed that there was indeed no available evidence to support the reported information in the Department, and also on the problem of prolonged procurement. The DoT was urged to give indicators on how these problems could be solved.

Mr Selepe acknowledged that the factors identified as affecting the performance of the Department were accurate. The tendency was for the Department to look outside for solutions for the various challenges faced by it, instead of embarking on a thorough introspection to figure out what the internal factors causing the challenges were. The factors affecting performance beyond the Department’s control were about consultative processes that the Department had to undertake. This also applied to intradepartmental processes, where the Department had to discuss issues with some other departments. Some officials in other departments contributed to the delay by not reading their minutes as and when required, which led to issues not be thrashed out before getting to the Cabinet where they would again be returned to the drawing board.

As for the issues around prolonged procurement, it was pointed out that consultants could not be blamed for delays in service delivery. This was because timelines were often drawn for the delivery of services, and mechanisms would be put in place to ensure that service providers delivered on time. The failure of the Department to procure on time would also not be a fault of the consultants. It would be the fault of the procurement processes within the Department.

Mr Mokonyama said that the sentiment around the BRT system and its strict implementation was the main reason why the Department had embarked on a turnaround plan that spoke to differentiated solutions according to the needs of particular areas.

Mr Letsoalo clarified that the sector that had spent all its money had been SAMSA and not Maritime. SAMSA had a reserve of more than R200 million and most of it had been spent on the SAS Agulhas.

Mr Hlabisa referred to the two sections of roads in Limpopo and Mpumalanga had been handed over as part of the national assets of the DoT. The Department was not only concerned with the financial part of the project but was also concerned about the performance part of it. It was more concerned about what was happening on the ground, as opposed to spending of monies. The plan was not to take money back from the provinces. The Department worked with the provinces and met with them on a monthly basis to discuss the PRMG. The Department was aware that two-thirds of the road network was rural, and could therefore not take the money away from the provinces. Instead, the Department wanted to assist provinces to come up with solutions.

Consideration and adoption of the Portfolio Committee’s budget Review and Recommendations Report (BRRR)
The report was deliberated upon, after a careful consideration of every page.

Mr Maswanganyi noted that the Gauteng issue should be noted in the report.

Mr Sibande said that the comment raised by Mr Maswanganyi, which was on page six of the report, should be included in the recommendations.

Regarding the railway system, Mr Maswanganyi said that PRASA had once raised an issue on the compatibility of systems between Transnet and itself. He wanted to know if the issue had been discussed, and if a distinction could be made between the two systems.

The Chairperson replied that the issues had not been covered and the scribe would be asked to include them in the report. It was not only PRASA that was faced with such issues. Portnet also had some issues with its interactions with Transnet at port level. The Act specifically allowed the Minister to declare the assets that belonged to Portnet and to PRASA. Up until now, nothing had been done in that regard. It was suggested that the matter be raised as a recurrent one that affected the operations of PRASA.

Another issue indicated by PRASA was the fact that passengers had to wait for freight to pass before they could proceed, which led to the passengers being delayed. These issues had to be raised to discuss what was more important -- the passengers or the goods.

Mr Masawanganyi said that the acronyms used in the report should be consistent.

The Chairperson noted that supply chain issues had not been covered.

Mr Masawanganyi said that the Auditor General (AG) had raised issues of supply chain management (SCM), and suggested that they should be included in the findings of the report, under 3.2.

Mr Sibande raised the issue of the achievement of a business plan, and suggested that it should be covered in the report.

The Chairperson agreed that other achievements of the Department should be included in the report.
It was suggested that the fact that irregular expenditure was increasing on an annual basis should be included in the report.

Mr Hunsinger wanted to know if the learner transport policy that had been approved by Cabinet in terms of processes and clarity would come to the Committee again, and if the Committee could ask for an engagement with the Department of Basic Education (DBE) on the issue.

The Chairperson replied that the DBE had been asking for a time to engage with the Committee, but the delay had been on the side of the Committee.

The recommendations made by the Committee in the BRRR would be presented through the Speaker, who should inform the Cabinet of the intention to make follow-ups on the issues raised.

Mr Sibande said that advertisements for the filling of vacant positions should be prioritised and included in the observations within the report.

Mr Masawanganyi said that the point raised by Mr Sibande should be placed in the recommendations instead, since it was speaking to areas where help was needed in the Department.

Mr Sibande replied that the issue should be reported as observations, since it would still be reported to Parliament for intervention. At this time, what was needed was proper monitoring and implementation.

Mr Masawanganyi said that since the issue of filling of vacancies had been raised by the Auditor General and the executive had been made accountable in that regard, it was important to ensure that the Minister took the matter seriously.

Mr De Freitas wanted to know what was meant by standardising the implementation of the BRT, since the actual designs could not be standardised.

Mr Sibande pointed out that the Committee’s observations alluded to the fact that all entities within the Department had submitted their annual performance plans (APPs) on time. The Committee’s observations had to be implemented.

The Chairperson said that the issues that needed standardisation should be outlined, especially in terms of policies.

Mr Masawanganyi said that the entities within the Department should also submit reports on pending issues, and this should be included in the report.
Ms Xego said that a recommendation should be made on the SAMSA issues reported by the Department.

The Chairperson said that the budgetary review being discussed had focused on 2014/15 budget, and other issues beyond the report would be discussed in the BRRR for the next financial year.

Adoption of the report was proposed by Mr Masawanganyi, and seconded by Mr Sibande.

The meeting was adjourned.

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