Department of Transport on its 2016 Strategic & Annual Performance Plan & Budget, with Minister present

NCOP Economic and Business Development

12 April 2016
Chairperson: Mr E Makue (ANC, Gauteng)
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Meeting Summary

Transport Annual Performance Plan 2016/17

The Minister of Transport, Ms Dipuo Peters, and the Department of Transport (DOT) presented the Strategic Plan and 2016 Annual Performance Plan to the Committee. The Department highlighted some past achievements but concentrated on the major challenges, which included the road fatalities although the Department was pleased to note that there had been a decrease. It was conscious that more had to be done on an ongoing basis. The seven programmes of the Department were highlighted and the achievements in each were outlined. The Department had received an increase in the budget for some of the programmes, particularly the road and rail transport, to deal with ongoing programmes on the Gauteng Freeway Project and the Moloto Road upgrades. More was also allocated for Civil Aviation, where a once-off allocation was made for a satellite tracking system project that will allow for the identification of unknown planes or ships in South African space. The Operation Phakisa Ocean Economy would be treated as a priority programme. The Public Transport programme was also set to receive large increases to support the Bus Rapid Transport in most provinces. In this programme, the Public Transport Operations Grant (PTOG) and PRASA had both experienced a healthy growth. The Eastern Cape had applied for a rollover as it had not used its funding. Another major challenge was that several high level posts were not funded but the Department was engaging with National Treasury.

Members asked about the Eastern Cape rollovers and the impact of the rollover on future allocations and asked for a breakdown by project. They were concerned over which of the roads was to be maintained, in each province, by SA National Roads Agency Limited (SANRAL), particularly in the Eastern Cape and Northern Cape. It was very important that the road to rail programme be implemented properly, for sustainability and safety and the Member wanted more detail, including how much volume of traffic had been moved from road to rail. They asked about the recent vandalism of railway stock and the rumour that this was perpetrated by the taxi industry. They asked if there were non-operative entities in the Department and what would be done about them. Members were concerned about the number of acting posts and asked about the filling of the vacancies at top level, and wanted to know about the shortage of engineers. Members questioned the funding to SANRAL and asked how much would be used for toll and non toll road maintenance. They asked for more detail on the project for rail systems in De Aar, particularly whether local labour would be used, and how skills would be transferred, given that a Brazilian company was apparently working on this. More details on scholar transport were required. More detail was also required on the Moloto Rail and Moloto Road allocations, and payments to the entities. Members expressed a concern whether the DOT had the capacity to deal with the projects, particularly the outstanding legislation.

 

Meeting report

Department of Transport on its 2016 Strategic & Annual Performance Plan & Budget
The Minister of Transport, Ms Dipuo Peters, apologised for the Deputy Minister's absence.

Mr Pule  Selepe, Director General, Department of Transport, presented the Annual Performance Plan and took the Members through the document page by page, highlighting the strategic objectives that the Department of Transport (DOT or the Department) sought to achieve. He also outlined some of the past achievements (see attached document for full details)

Some of the major challenges were highlighted. An ongoing issue was the road fatalities, although these had been dropping. Although not included in this document, there had been a decrease in the road fatalities over the Eastern weekend. However the Department recognised that it had more work to do.

Ms Lumka Lubisi, Chief Director: Strategic Planning and Monitoring, DOT, took the Committee through the seven programmes of the Department, and the strategic objectives for each (see attached presentation).

Mr Collins Letsoalo, Chief Financial Officer DOT, noted that the Department was receiving an increase for certain programmes in the budget. Compensation of employees had been allocated more funding .to deal with the projects upcoming. In Programme 2: Integrated Transport Planning, there was however a decrease compared to the previous year.  Programme 3: Rail Transport and Programme 4: Road Transport would both see increases in the budget. Monies under programme 3 were increased to deal with the transfers and subsidies to agencies such as the Passenger Rail Agency (PRASA) and Railway Safety Regulator (RSR). The Road budget had increased because of the Gauteng Freeway Project and the Moloto Road upgrades that would be occurring in this and the following financial years.

Under Programme Five: Civil Aviation, the DOT would be running a once-off satellite tracking system project that will allow for the identification of unknown planes in South African air space or ships that can be a threat to South African vessels in its waters. Programme Six:Maritime Transport will be focused on good and services, with projects such as Operation Phakisa Ocean Economy taking priority.

Programme 7: Public Transport was the third biggest programme of the DOT and it was set to receive around R11.5 billion but this will be increasing to R11.6 billion in the following year, to support the Bus Rapid Transport (BRT) systems that will be running in most provinces.  In this programme, the Public Transport Operations Grant (PTOG) and PRASA had both experienced a healthy growth. He drew attention to the roll overs that were requested for the Eastern Cape, which had not managed to use all funding.

He noted that a number of high level posts in the Department remained unfunded. However, Mr Letsoalo said that the Department was in discussion with National Treasury on this point.

Discussion
The Chairperson noted that some of the slides were not in the pack that was distributed to the Committee and asked that they be forwarded on.

Ms E van Lingen (DA – Eastern Cape) was pleased to see the Minister and congratulated her on the work that she had achieved since 2009. She wanted to ask questions about the planning. She said that in the  Eastern Cape there had been quite a large sum of money that had not been spent, and as a result no road maintenance programmes had been allocated to five districts in this province in June or October 2015. She noted that the money was not regarded as lost, but would be rolled over; however the point was that the province had essentially received less. She wanted to know the reasons for the underspend, and appreciated that a provincial breakdown had been given, but she would like to see an allocation for each of the programmes.

She commended the substantial increase in the funding for S A National Roads Agency Limited (SANRAL) and said that this would greatly assist the Agency. However, she was concerned that the national Department might be getting more work because the provinces were not performing and she asked the Department to provide a list of the roads that SANRAL is going to be responsible for, and those that the Provinces will be looking after.

She commented that it was important to “nail down” the rail to road programme. This was the only way in which a sustainable and safe road network would be created. She asked that the Minister shed more light on this programme. She asked the DOT to report how much traffic had actually been moved from road to rail, at a national level. She noted, while on the subject of rail, that there had been a number of incidents of vandalism reported on the PRASA network, and some had apparently been occasioned by the taxi industry. She asked if  DOT had been in negotiations with the taxi industry so that an amicable relationship could be reached between the two parties.

Finally, Ms Van Lingen drew attention to the statement made by the Minister of Finance in his budget speech that non-operating entities should be closed down, and asked if there were entities that fell into this category within the DOT; if so, could they be named.

Ms van Lingen expressed concern at the number of staff in the DOT in Acting positions, particularly the Deputy Director Generals, and pointed out that these were key positions. She asked if they were unfunded, if any of the positions were considered to be redundant, or whether DOT was using these posts as leverage with the National Treasury discussions. Finally, she expressed her concern about the lack of engineers at provincial level and asked the DOT to explain this.

Mr W Faber (DA, Northern Cape) expressed his concern about the R14 billion sums given to SANRAL for the maintenance of road infrastructure on the non-toll network. He had thought that the whole purpose of the E-Toll was not about making money. He asked what happened to the money already put into the programmes, how and where it was to be used, and whether there would be any cross-subsidisation with money from tolls being used on non-tolls also.

Mr Faber said that Northern Cape was the largest province and this meant that it had the longest roads. Whilst he was pleased to see the increase in the budget for the roads in this province he wanted to know how the surplus would be spent, and whether there were plans for a new road system or whether it would be used to maintain the existing roads.

Another concern Mr Faber highlighted was to do with the passenger rail system that was going to be created in De Aar. There had been talks about laying tracks here for a long time, and the DOT must be aware that there are many unemployed individuals in the town who needed work, so he had hoped to hear that there would be skills upliftment in the area. However, now that he had heard that the DOT was intending to use Brazilian suppliers for the new trains, he wondered if local skills would be hired, and how would skills transfers take place. He wondered if there would not be a language barrier.

Mr Faber asked the Minister about scholar transport, saying that when he had last asked questions on this, she had noted that there was an issue of children being transported over long distances. He therefore wanted to know what is currently happening in the Eastern Cape with scholar transport, and had the Departments of Education and DOT reached a mutual understanding.

Ms M Dikgale (ANC Limpopo) asked how the vandalism had impacted on the rail network and whether insurance would cover the damages. Secondly, she wanted to know more about the allocation of funding to the Moloto Road.

The Chairperson understood that DOT was employing interns, but asked whether their skills were being used to assist with the workload of the Department. He wanted more information on the bursaries. He furthermore wanted an explanation of the amounts paid to entities, that took up a large portion of the budget. He noted that there were some large allocations also to the “Moloto Road” maintenance but wanted to know if this also included allocations to the Moloto Rail, which had not been mentioned in the presentation.

The Chairperson was worried about the Department's workload. There were several pieces of legislation that still had to be presented. He wanted to know what the timeframes were, especially since Parliament's time would be limited in this election year. He further asked if there were enough human resources to deal with the processing of the legislation.

The Minister of Transport, Ms Dipuo Peters, said that she would answer most of the questions but Departmental officials would deal with others.

In relation to the question about the roll-over of the Eastern Cape funds, the Minister said that the DOT was  busy with the remodeling of the Public Transport Operations Grant (PTOG). The delays in the completion of the projects in Eastern Cape meant that there had not been spending of the funds in the last financial year. That made it more difficult to justify the granting of funding for the current year. That was the reason that DOT had requested a rollover of unspent money. However, there was another point also; when there was a delay in spending the money, job creation also suffers, because access to the job is delayed. The Department was now working to finding a solution to ensure that both the Department and the Province would work together so that mandates would be reached in the time frames specified. The DOT, together with the President, would be going on visits to the various provinces, advocating for Operation Back to Basics to be run. This would start in Mpumalanga.

She agreed with Mr Faber that the Northern Cape id have the longest stretches of roads. However, she reminded Mr Faber that in around 2009 the Northern Cape had handed over many of its roads to SANRAL due to lack of resources to maintain them itself. It was then decided that the little money that the province had would be spent on maintaining the other roads that did not experience such heavy traffic. She added that provinces have realised that South Africa’s national leadership cannot just settle provinces with thousands of kilometres of road network when there was not the capacity in the provinces to maintain these networks. Arrangements with SANRAL would effectively relieve the provinces so that they could focus on, for example, the rural roads and other heavy duty roads that needed attention. These road networks did provide the province with a source of revenue as well as money coming in from collection of traffic fines and other monies. The DOT is also glad to report that roads that have been placed under SANRAL are in very good condition. The Minister asked that the provinces should indicate when they did not have the capacity, so that the Department could then assist.

The Minister spoke to the rail and road programmes. She reminded the Committee that a main focus area for the DOT was to improve the state of public transport in the country. For this to happen, there are some instruments that needed to be put in place. The Department is in the process of finalising the grant strategy and it is also campaigning for the private sector's participation in the process, which would in turn help the Department to grow in infrastructure and services, and would help the DOT to realise its time- sensitive goals in the road and rail programme.

The Minister said that she was not aware of any dispute between PRASA and the taxi industry. However, she was  aware of the challenge that is being experienced in the Western Cape with the BRT system and the taxi industry. The DOT realised that the taxi industry would have a strong presence in South Africa for a very long time, and the two cannot be in competition with each other.

The Minister noted Ms van Lingen's questions about the non-operating entities and pointed out that the DOT was part of the national process on the Presidential Review Commission, which deals with the non-operating entities. The Department had been able to identify the entities who were not meeting requirements. The single transport economic regulator would also be  merging all the fragmented regulatory mandates which should lead to greater efficiency and reform.

The Minister told the Committee that the De Aar rail project was not under the Department of Transport but was headed by the Department of Trade and Industry (dti). The current programme involved Brazil supplying the locomotives and trains, but there was a difference between this and the actual rail revitalisations. She noted that there was a need for more transparency on the entire project. In the first week of the pilot project, trains will be running on South Africa’s rail network.

The Minister fully agreed with the Chairperson's concerns about capacity. The DOT had a history of making plans that took a long time to come to fruition. There had been some instances where plans had taken up to ten years to complete, because of the constraints in capacity versus volume. She noted that the DOT would compile the timelines and lists as requested and forward these to the Committee.

Mr Selepe said that Moloto Rail is not funded at this stage but it is on the agenda of the DOT.

He added more information on the capacity issues that the Department is experiencing, and said that the DOT had launched two studies that would help the Department to determine the skills it needed, and then how to find the skills to plug the gaps. The Qualifications Audit had already been completed, but a Skills Audit would soon be started. Speaking to the acting positions, he noted that the Department had experienced a shortfall in budget in the past under compensation of employees, and it needed to be able to guarantee salaries and commissions.

He also added to the Minister's remarks on the non-operating entities, and assured the Committee that a system had been put in place to monitor these. Most entities are reporting to the Road Transport branch, and each of the branches within the DOT had dedicated staff in the governance and legal divisions who looked at all legal aspects of the entities, and ensured that the APPs are up to standard and who would check their findings.

Mr Letsoalo reassured Mr Faber that not all the money in the budget would be spent on non-toll roads. He noted, in respect of the bursaries, that the DOT works with a number of universities and the bursary funding is allocated according to the current needs of the Department. Currently, it needed engineers, so that bursaries were awarded for engineering studies. He clarified the allocation for the Northern Cape under the Road Maintenance Grant, and said that again, monies are allocated according to where work needs to be done.

Mr Chris Hlabisa, Deputy Director General: Roads, DOT, said that there were contracts for scholar transport.

Mr Lusanda Madikizela, Chief Director: Public Transport, DOT, added that there was a need for policy and guidance. There had been some issues around catering for children who might have to travel longer distances than others, and there was some research into whether it would be possible to accommodate these children in some other way. However, he pointed out that there was a need for strict monitoring to avoid the possibility of, for example “ghost children” claims, so the schools were being asked also to do some verification. There were also challenges with charges. All of these issues would have to be addressed.

Mr Hlabisa also spoke to the problem of vandalism on trains. DOT did indeed have insurance. He noted the comment about the possible involvement of the taxi industry, but said that this claim had been investigated and found to be untrue. Those perpetrators who had been apprehended were not from the taxi industry but were individuals that had worked or were working in the system.

The Minister said that whilst the insurance covered the stock, it did not cover the impact that the vandalism had on the commuters using the rail network and that was why it was important that the DOT find a way to ensure that such incidents were minimised.

The meeting was adjourned.

 

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