Department of Transport on its Quarter 3 performance

Meeting report

The Acting Chairperson welcomed the dignitaries and stated that some of the Committee Members would join as the meeting progressed and invited the Acting Director General (DG) Department Transport (DoT) Mr M Mokonyama to commence his briefing.

Briefing by Department of Transport (DoT)

The Acting DG, DoT apologised on behalf of the Minister and Deputy Minister of Transport who were attending to other functions. In his briefing, he stated that the overall performance figures of the 2016 third Quarter indicated that out of the planned targets of 51 in the seven programmes, only 34 were achieved. He reported that there was a slight regression in the third Quarter compared to the second Quarter, mainly due to Maritime Transport (MT) which had performance levels (PLs) of 20%. However the PLs of administration and Integrated Transport Planning (ITP) were 90% and 71% respectively. The challenges that led to lower PLs in the Rail Transport (RT) programme were due to delays in policy implementation. He highlighted that the notable achievements under administration were; incorporation of stakeholder inputs and updating of draft transport sector gender empowerment policy, conducting of outreach community programs in two schools, implementation of integrated communications and marketing strategy for internal communication, stakeholder management, external relations and content development, piloting of targeted departmental business intelligence solutions and reduced audit findings from 220 to17. Under Integrated Transport Planning (ITP) he reported achievements such as submission of Green Transport and Draft Road Freight strategy to DoT EXCO, the development of the targeted Draft Harrismith, Free State (FS) Hub framework Implementation Plan even though FS tabled alternative agenda to DoT and the development of targeted Draft Road Tariff Determination Framework.

Mr Mokonyama said the achievements under RT programme were: development of conceptual Frameworks for National Rail Bill and Rail Economic Regulation, submissions of Branch-line model for Private Sector Participation and National Road Safety Amendment Bill to the Minister. In addition, achievements made in Road transport were: submission of the Draft Access Road Development (DARD) Plan for Limpopo, North West and KwaZulu-Natal (KZN) Provinces to Cabinet, inspections of Active Driving Licence Testing Centres (DLTCs) and 74 Active dangerous Goods Operators (DGOs) in line with National Road Traffic Act, Act 93 of 1996. Achievements recorded in Civil Aviation (CA) program were: receipt of Ministerial approval for both National Civil Aviation Policy and National Airports Development Pan, submission of technical specifications for Cospas Sarsat Medium Orbit Search Rescue (MEOSAR) which was approved by the Bid Adjudication Committee and starting the implementation of regulations for phasing out chapter two aircraft. He stated that the only achievement under MT was presentation and adoption of International Maritime Organisation (IMO) World Maritime Day Parallel Event scheduled for March 2020, due to policy delays. However, achievements under Public transport (PT) included: development of a draft concept for Integrated Public Transport Network (IPTN) plans in district municipalities, submission of the Integrated Public Transport Turnaround plan to Committee of Transport Officials (COTO) Bus Sub Committee on 30 November 2016, and Ministers and Members of Executive Councils Meeting (MINMEC) on 2 December, 2016 and implementation of Taxi Recapitalisation Review (TRR) Report. In addition, under the PT program, IPTNs were funded and the Bus Rapid Transit systems (BRT) were monitored in Tshwane, George, Johannesburg and Mbombela and the National Transport Bill was processed in Parliament.

The Acting Director General also reported non-achievements under the seven programmes. Under administration, the legislation on transport public entities was suspended due to the process of reviewing the reports of over 170 Government entities. For instance, DPSA, and DPME were undergoing reforms which could affect the Department. Non-achievement in ITP included: delays encountered in the submission of the White Paper on National Transport Policy (NTP) to Cabinet although comments from stakeholders was incorporated and the Socio-Economic Impact Assessment System (SEIAS) and Forum of South African Director-Generals (FOSAD) cluster processes were concluded. In addition, the DoT was not able to conduct stakeholder consultation on the Draft Regional Transport Integration Market Access Strategy due to delays in internal processes. He reported that under RT there were challenges on how DoT related with Transnet services without affecting its operations which led to delays in submitting the National Railway Policy to Cabinet. He stated that delays from internal processes affected the submission of the Road Accident Benefit Scheme (RABS) and the Road Safety Strategy while, delays in the submission of the White Paper on Road Policy was due to non-completion of SEIAS certification. In addition, only 107 Active Vehicle Testing Centres (VTCs) inspection reports were submitted to South African Bureau of Standards out of the 140 VTCs targeted and the review of laws for Road Entities could not be completed due to internal processes.

He stated that the CA programme had non-achievements as a result of internal delays which affected the submission of the Airports Company and ATNS Amendment Bill to Cabinet. Furthermore, the Maritime Transport Act, the Merchant Shipping Bill 2016 and the infrastructure support for Operation Phakisa Ocean Economy targets could not be achieved due to delays in internal processes while the Internal Waterway Strategy could not be submitted to Cabinet due to capacity constraints. He also stated that non-achievements in PT were due to pending cluster approval of Rural Transport implementation Strategy. He however reported that all the SEIAS issues, the Nation Aviation policy and other strategic policies would be presented to the DG cluster in a meeting scheduled to take place after the meeting with the Committee.

The Acting Chief Financial Officer (CFO) Mr Dan Proteus, Department of Transport, reported that the DoT recorded under expenditure of R49 million due to outstanding invoices for the lease of office accommodation which were in dispute, compensation of employees, Office of the DG, international relations and strategic planning. Slow expenditure on National Transport Planning Databank, Harrismith Hub and Road Freight Strategy led to a R3 million under expenditure under ITP, while a R4 million under expenditure was experienced in RT because service providers failed to meet project deliverables for the Rail Safety Amendment Bill and the NRSS. Over expenditure of R199 million was recorded for Road Transport as a result of the unfunded Electronic National Traffic Information System (eNATIS). In addition under expenditure of R3 million experienced in CA was due to lack of expenditure on the Satellite Tracking System as DoT applied for Treasury approval to shift the funds to Air Traffic and Navigation services program (ATNS).

He said that in the MT program, an over expenditure of R10 million was due to unforeseen expenditure on oil pollution prevention services, under expenditure on Compensation of Employees and slow expenditure on some projects. In addition, Treasury approval was sought for the unforeseen expenditure on oil pollution prevention services to offset South African Maritime Safety Authority’s debt. The under expenditure of R142 million experienced in PT program was due to under expenditure in review of Taxi Recapitalisation Model, Implementation IPTN in district Municipalities, the Shova Kalula Bicycle project, technical oversight and support for PT because the target was not achieved. The Acting CFO also reported that due to vacated posts during the financial year, R30 million under expenditure was recorded under Compensation of Employees whilst Goods and Services recorded an over expenditure of R167 million due to the cost of unfunded eNaTIS. In addition due to reclassification of leases on photocopiers as capital and expenditure, R1 million was over-spent on Machinery and equipment while R131 million was under spent because Rural Road Asset Management Grant was withheld for four municipalities due to non-compliance and under expenditures for transfers and subsidies.

Mr Proteus also reported that although conditional grants were given for Provincial Road Maintenance payments, Public Transport Operations (PTO), Public Transport Networks (PTN) and Rural Road Access Management, PTNs only accessed 50% of its grants due to delayed consultations with Treasury. In addition Passenger Rail Agency of South Africa (PRASA) and some Agencies under DoT were funded but the Maritime Rescue Co-ordination Centre could not be funded until February 2017, due to delays arising from passing of Acts. In addition, Transfer payments were made to Non-profit Institutions (100%), South African National Taxi Council (80%) and Higher education Institutions (78%) however; only 49% of funds were accessed in removing old taxi’s. Furthermore, the DoT exceeded budgeted expenditure for transfer of payments to international organisations due to exchange rate fluctuations and staff withdrawal of service also led to an overspend on leave pay outs. He also reported that transfer of payments under the PTN grant was 50% because the transfers to municipalities only started in July when their accounting year started. In addition, fund transfers for amalgamated municipalities were implemented in August. Based on this, the Acting DG reported that all transfers would be paid out before the end of the financial year.

Discussion

The Chairperson observed that the Acting DG stated that all transfers for the PTN grant would be paid out before the end of the financial year and he remarked that the main issue was not complete pay out but making sure the money was used for the allocated purposes. He also observed that the Acting DG stated that that progress was slow in some municipalities but did not explained what steps the DoT took to enhance the transfers. He asked the DoT to explain the actual progress made on transfers to PTN in Polokwane and Rustenburg apart from money spent. He also asked the DoT to state the progress so far in all 13 municipalities because 50% meeting of targets on transfer could be unclear and the real challenges faced could remain unsolved. In addition, he asked the Acting DG to clarify if the DoT was able to actually assist the PTNs with its capacity.

Mr M Sibande (ANC) expressed concerns on the transfers to PTN implemented in July because it could be interpreted as physical dumping. He asked the Acting DG to state why the transfers took so long before it was implemented. He also expressed concerns on the word “regression” used and asked him to clarify the statement in terms that the Free State tabled an alternative plan for the Harrismith Hub. He asked the DoT to state the systems that was used to monitor programmes, especially when provinces started their own work. He also asked the Department to explain how it dealt with rural areas under the Public Transport Safety Improvement Plan because the cities had dedicated lines for My Citi Bus. He further remarked that there were allegations that the contract given to cities was different from that given to rural areas. Based on this, he asked why DoT gave contracts of one year to rural areas and longer contracts to city service providers. He asked the DoT to explain the discrepancy between bus services in the city and rural areas as people complained that when it rained in rural areas, it also rained into the bus. He also observed that under the CA programme, there were delays in sending the ATNS Amendment Bill to Cabinet. He therefore asked where the internal delays were observed and for the Department to give timelines on when the Bill would be submitted to Cabinet. He also remarked that some of the delays were internal delays and he asked the Acting DG to state how often he had meetings with the department. Another major source of concern for Mr Sibande was the issue of Taxi Recapitalisation because it was always included as a yearly challenge. He asked the DoT to state when it would be finalised. He also suggested that DoT had to improve the ways it approached Taxi and Bus drivers because it was shown that the consultants engaged did not consult with the relevant stakeholders.

Mr C Hunsinger (DA) asked the Department to confirm if the comparative performance analysis for each programme reflected the percentage achievement for the third Quarter, and also to include in its presentation the total performance for the year and state what other benefits that could be received from a community outreach other than administration and why only administration benefits where highlighted. He asked the DoT to explain why the Harrismith Hub plan had a poor road network, and to clarify if the Draft National Road Safety Regulator Bill was submitted to the Minister or the Cabinet. He also asked the Acting DG to elaborate on complaints about the Driving License Agencies (DLA) because he heard that the DLA did not do much verification. In the same vein, he asked the DoT to state how it ensured that these vehicles went through verifications. He observed that the Acting DG stated that the DoT had not implemented the regulations for the phasing out of Chapter two aircrafts. He asked the Acting DG to clarify if the classifications was a South African or international classification and state why the DoT was behind in implementing the classification. He also wanted to know what the acronym FOSAD stood for and how it would fit in for the normal processing’s submitted to the Committee. He also observed that funds (R275 million) had been rolled over for KwaZulu-Natal and this same activity occurred previously. Based on this, he asked the Acting DG to confirm whether this was something that would continually re-occur.

Mr M De Freitas (DA) asked why the challenges on the Taxi recapitalisation never seemed to end. He observed that under and over expenditure occurred in programmes and he asked what reprimands the DoT put in place to ensure that under and over expenditure was not a common occurrence any more. He also asked the Department to state how the funding for the bus rapid transit (BRT) program was handled because people in charge of the fund bypassed administration and why was the BRT for Nelson Mandela Bay built since 2010 but buses never used the BRT lane.

The Chairperson suggested that it could be useful to reschedule a separate briefing for the Taxi Recapitalisation project but asked the Acting DG to respond to questions. He observed that some of the non-achievements had high percentages therefore he asked the Acting DG to clarify the targets for third Quarter and the total targets. In addition, he asked the Acting DG to give an update on expenditure on transfers and subsidies granted to the PT program.

The Acting DG stated that the BRT was a new program that the DoT initiated and the department would come in to brief the Committee on this programme and other programmes that the Committee needed further clarification on. He reported that the review on Taxi Recapitalisation was finished and the DoT would brief the Committee after todays scheduled briefing with the Forum for South African Director Generals (FOSAD). He stated that the transfers to PTN was not physical dumping but the transfers occurred in July because the accounting year of PTN commenced in July and ended in June, while the financial year of DoT ended in March and the financial year in question was an election year for PTN. In addition some municipalities wanted to wait until August because the municipalities were merged, for instance Naledi Local Municipality was incorporated into Mangaung Metropolitan Municipality and the municipalities were not sure if they would have the same name or bank accounts. He reported that fortunately the names and the bank accounts of the merged municipalities were retained and all of the payments were up to date according to the targeted schedules. He admitted that discussions on program needed to go beyond money to performances. Based on this, he stated that acquisition of buses caused some delays on the Taxi Recapitalisation. However, Rustenburg, Polokwane and Mbombela buses would be rolled out during this financial year. The Mangaung Metropolitan Municipality BRT was in its initial stages due to delays but Ekurhuleni BRT was launched and was being tested. In addition the DoT was finalising infrastructure and discussing with taxi operators in Ekurhuleni. He stated that the role of DoT on BRT was monitoring and focussed group discussions.

On major issues faced at the city, the Acting DG stated that the staff turnover was very high. The DoT did not dictate how the city structured its transport operations or how they operated and money for acquisition of BRT was dispensed based on the dollar rate. He reported that although there was a slight regression in a few areas, the policy and strategic developments assisted the programmes and improvements would be recorded in DoT’s programmes as the financial year progressed. He reported that the Maritime Policy was by approved by Cabinet and policy strategies was conceptualised and developed and the DoT also consulted with stakeholders to get the policy gazetted. He stated that the DoT made publications in newspapers and also made radio presentations to reach out to all stakeholders. DoT was working with the Provinces for economic development, for instance the DoT was working with Harrismith, Free State Hub in line with alternate plans not alternative plans as he had earlier stated. He also reported that the DoT was not responsible for the streets but it was the responsibility of Provinces. However, the DoT invested by subsidising Provincial programmes. He attributed the general under expenditure to be due to Taxi Recapitalisation but stated that it would be irresponsible of DoT to present a lower budget and when the budgeted amounts were high the vehicles did not get to the country on time. He stated that the DoT had a cut-off date but stated that some of the vehicles budgeted for were older models and DoT had to make new arrangements.

On the progress made on Road Safety Amendment Bill, the Acting DG reported that the Bill was submitted to the Minister after the changes were presented to the Deputy Minister. The DoT was also expected to present the Bill to the Economic Development Cluster. He stated that other specific benefits were received on the outreach program as campaigns were conducted on gender, disability, youths and children to empower a wider range of beneficiaries. He stated that roll-overs were presented on a case by case basis, for instance the R275 million was rolled over because KwaZulu-Natal (KZN) did not comply with the Division of Revenue Act so the money was with-held and when KZN complied DoT had to seek approval from Treasury to pay it during the financial year captured. He explained that it was not necessary for Roll-outs to be repeated every year but provinces could apply for funds not expended. In addition, the KZN roll-out was a once–off expenditure that would come up once until the end of the financial year. The Acting DG also reported that the Department prevented under and over expenditure by monitoring procurement management plans, provided a monthly expenditure report and the DoT also had an electronic financial database that indicated expenditure item by item which was communicated to project managers.

Mr G Radebe (ANC) observed that the Road Safety Strategy was submitted in September 2016. He asked why the DoT could not implement the RSS in all the three quarters. He also observed that approval was granted to shift R65 million from the PT programme to some under funded programmes. He asked how the Department would deal with the review of the Tax recapitalisation model, implement the ITPN in district municipalities, the Shova Kalula Bicycle project and support PT.

Mr Sibande asked the Acting DG to state the challenges that pertained to DoT as a result of the State of the Nation Address and also give timelines for the upgrade of Moloto Road, Pretoria.

Mr De Freitas asked the Acting DG to give more information on the oversight visit to check DoT information technology systems.

The Chairperson congratulated the DoT on its final court judgement on eNATIS and asked for an update on what happened after the favourable court judgement. He also asked for a progress report on the 13 municipalities that received funds for BRT stating the current expenditure, and progress made in these 13 municipalities, clarifying discrepancies on the statement he made on submissions and to state if submissions were made to the Cabinet or the Minister and also to clarify if this activity was a target or sub-target.

The Acting DG stated that the targets were achieved when the Minister signed the Cabinet Memo. He reported that the submission of the Civil Aviation policy to Cabinet was targeted for December 2016 and this was already achieved. He committed to give progress reports on IPTN and stated that the DoT could give details on how much was allocated, how much expended and the progress in pictures. He also stated that the next project of DoT was to find out what challenges were slowing down the progress in the 13 municipalities and get the challenges solved. On progress reports on Moloto Road, Pretoria, he stated that the DoT applied a three pronged approach to upgrade the road which were: appointment of locals to analyse the challenges of the road, setting aside a road contract for local service providers (planning and design completed about to start construction) and setting up a dedicated railway line in the area. He also reported that the majority of funds transferred was sourced from the Taxi Recapitalisation fund because there was a delay in the importation of vehicles and although the money to implement the project was available the programme still had under expenditure challenges based on delays in importation, approval was received from Treasury and the funds transferred to other programmes. He reported that eNATIS received another court victory in November, 2016 and the company was mandated to return all assets as verified by Public Finance Management Act (PFMA) Section 32 within 30days. He concluded by stating that the Committee was invited to come on oversight visits to the DoT on any fact finding mission even when it was unannounced.

Mr Sibande observed that the Committee had earlier on been invited to the DoT on an oversight visit but at the time the DoT was not ready for the Committee but stated that if the Acting DG was inviting the Committee the Members would heed his call.

The Chairperson remarked that the Acting DG was confident and presently had a good grip of operations in the DoT.

The Acting DG stated that the old system had earlier experienced operational challenges but presently there were improvements in in the operations of DoT.

The Chairperson resolved that the Committee needed more information on the whole expenditure of the BRT Network, what progress was made within the 13 municipalities and what the DoT was doing to assist these 13 municipalities (stating the expenditure to date), update on the physical infrastructure of BRT lanes (since it was a huge cost driver) and explain why the same consultants were used for different provinces.

The Acting DG reported that the DoT did not play any role in the procurement for services but would submit the consultants appointed to the Committee.

The Chairperson discharged the Acting DG and his team from the DoT and stated that the consideration of the minutes of the Committee meeting dated 14th February 2017 would be postponed until the next meeting but invited Members to comment on the Draft First Term Programme (DFP) of the Committee.

Mr Sibande stated that he supported the DFT Programme after looking at the listed programmes.

The Committee Secretary (CS) raised issues on the availability of Members for the Road Safety meeting.

The Chairperson asked Members whether enough time was allocated to engage the Passenger Rail Agency of South Africa (PRASA) on the primary item status of Metrorail which was earlier deferred. He resolved that since the meeting was earlier deferred, they should be prepared for the briefing and he instructed the CS get PRASA notified.

The motion for the Draft First Term Programme to be adopted by the Committee was moved by Mr Sibande and seconded by Mr Radebe.

The Chairperson remarked that Members presented a strong motivation to engage the Chair of Chairs on the study tour. He explained that it was not cancelled but it had to be properly motivated. In addition, he suggested that the study tour could be scheduled for the new financial year with properly motivated documents and the Committee needed to ensure that it did not have any outstanding oversight reports.

Mr Radebe observed that the Chairperson, the CS, the Content Advisor and the Researcher failed the Committee by not allowing Members to utilize their budget allocation because the study tour was been approved even though the Committee could not be denied from fulfilling its mandates. He suggested that the Committee should not plan for the next financial year but resubmit and get approval before the budget was released.

Mr De Freitas supported Mr Radebe’s submission but emphasised that he Committee had to ensure that it presented a detailed report on the oversight visit. He also reminded Members that the Committee had an oversight visit to the Northern Cape that needed to be done.

The Chairperson accepted that he failed because he did not have a meeting with the Chair of Chairs on the study tour. He explained that the meeting was supposed to be motivated by a proposal from the Support Officers (SO) but the proposal was not done. He requested that the SO work on the proposal and properly motivate for the study tour on behalf of the Committee.

The Chairperson appreciated Members and the SO for their attendance and contributions to the meeting.

The meeting was adjourned.