The Committee considered the draft report on Budget Vote 35: Transport, and the report on the annual performance plan (APP) for 2017/18 and the strategic plan for the years 2014 to 2019 of the Department of Transport (DOT).
Debates arose over the allocation of subsidies to different modes of public transport, where attention was drawn to the fact that the Gautrain was getting a larger subsidy than Metro Rail. Members recommended that the DOT should make a presentation on the skewed allocation of subsidies and explain how they reached decisions on the different budgets. They also proposed that taxis should be included, and agreed that the DOT should subsidise users, and not only operators.
Members agreed there was a need for a report on the Moloto Corridor project to avoid a situation where rail was completely excluded. The S’hamba Sonke road maintenance projects needed to be fast-tracked, as many roads were in a poor condition. The bus rapid transport (BRT) system was being implemented differently in the 13 cities in which it was operating, and there was a need for a common implementation method.
The Committee effected amendments to the observations and recommendations in both reports. It stressed the need for a reduction in the budget for consultants, and urged the DOT to employ skilled employees to reduce its reliance on costly outside assistance. It also insisted that the DOT should emphasise consequence management for all state-owned enterprises (SOEs) which were not complying with financial and administrative requirements, as highlighted in the Auditor General’s report.
The Chairperson opened the meeting by applauding the hard work and effort by all Members of the Committee on Transport, and acknowledged the work by functionaries from Parliament, specifically Mr Sifiso Ngesi, Advocate Alma Nel, the Committee Secretary, Ms Valerie Carelse, and the Parliamentary Monitoring Group (PMG).
However, she was not happy with how the Department of Transport (DOT) was working. The state-owned enterprises (SOEs) sent representatives to meetings, but the DOT was failing to send the Deputy-Director Generals (DDGs) for those SOEs to meetings so that they could respond to their concerns. The DOT looked disorganised and sometimes failed to respond to the issues raised by the SOEs. This should be corrected in future. However, the DDGs responsible for the Road Accident Fund (RAF), the Road Traffic Management Corporation (RTMC) and the South African National Roads Agency Limited (SANRAL) had been able to attend the meetings. She indicated that members of the DOT should work collectively.
The Chairperson informed Members of the Committee that a presentation would be made on two documents:
- The Draft Report of the Portfolio Committee on Transport on Budget Vote 35: Transport;
- The Report from the Portfolio Committee on the Annual Performance Plan 2017/18 and Strategic Plan 2014-2019 of the DOT.
Portfolio Committee Report: DOT’s 2017/18 APP and 2014/19 Strategic Plan
The Content Advisor for the Portfolio Committee on Transport, Adv Nel, presented the report and briefly read out the main points. She indicated that a meeting had been held with the SOEs and a report on the APP and strategic plan of the DOT had been sent to Members. However, recommendations were outstanding and the Members of the Committee should provide their input to formulate recommendations to address issues raised from the report.
The Committee had requested an action plan from the DOT to address the findings of the Auditor General (AG) which was supposed to have been submitted by 15 December 2016. The DOT had co-operated and made a presentation which touched on each of the SOEs, and had worked well with the AG to address and rectify some of the issues raised. Furthermore, the Committee Members in their 2016 Budgetary Review and Recommendation Report (BRRR), had requested the DOT to submit a comprehensive briefing of the progress made on the following issues:
- Tax Recapitalisation Programme and Review.
- Quarterly reports on investigations under way: Not much information had been obtained yet, except for the additional amount of funds that had already gone to consultants.
- Quarterly reports on the achievement of job creation targets: this issue had been previously emphasised by Mr M Sibande (ANC) that all entities in the Department should stick to their job creation conditions.
- Quarterly reports on pending litigation and settlements reached.
- Quarterly reports on human resource management and disciplinary hearings.
- Quarterly report on the Shova Kalula national bicycle programme.
- Quarterly Moloto Corridor report. The Minister had promised to come and address the Committee, since a huge amount of money for the Moloto Corridor had been specifically mentioned in during the State of the Nation Address (SONA) in respect of the road section of the Moloto Corridor Development.
- Quarterly reports on strategies to address the financial health status of the Cross-Border Road Transport Agency (C-BRTA), the South African Maritime Safety Authority (SAMSA), the Road Accident Fund (RAF) and the Passenger Rail Agency of South Africa (PRASA). Reports on the financial status of these entities had been obtained, and PRASA should report quarterly on the inroads made into the implementation of the Rolling Stock Modernisation Project.
Adv Nel outlined the observations made by the Committee on the strategic plan and APP of the DOT. The Committee had commended the Department on the improvement on the targets set through its consultation with the AG. The observations had included that the Department would have consultations with stakeholders, but it had not indicated the stakeholders to be consulted during the first quarter with a view to developing a status report on the transport sector’s socio-economic empowerment programmes for gender, youth, disability and children.
The National Transport Master Plan (NATMAP) 2050 required the Department to plan the roll-out of 10 prioritised NATMAP pilot projects. For the S’Hambe Sonke labour-intensive road mainentance programme, the Committee noted that the targets set by the Department for overall implementation of the programme were in line with the Provincial Roads Maintenance Grant (PRMG) budget.
She further highlighted that the Committee proposed that the Department should provide the Members of the Committee with its quarterly expenditure report with regard to the stakeholders that it planned to consult during the first quarter. With regard to the Gauteng Youth Commission (GYC) programmes, the Department must indicate the criteria used to select stakeholders and whether they took cognisance of the rural and urban divide. Where the Department was required to consult with stakeholders, it should either identify the applicable grouping or category of stakeholders or state the specific stakeholder where the targets allowed for this.
For the NATMAP, the Department should provide the Committee with the specific pilot programmes for 2017/2018 to allow it to conduct oversight of these areas. The Committee had also proposed that the Department should provide it with a comprehensive progress report on the S’Hambe Sonke programme. The Committee had suggested there should be a comprehensive briefing on the National Road Safety Strategy once it was approved by Cabinet. The Department should also constantly engage with Treasury to ensure that all critical vacant posts were filled with skilled employees.
On public transport subsidies, the Committee had proposed that the Department should ensure that the current system was evaluated or reviewed to ensure the best possible safe and reliable service delivered to commuters. The Department should also bring a report to the Committee on the Bus Rapid Transit (BRT) from the different municipalities implementing the system. The Committee had also recommended that the Department provide Members with the 2017/2018 implementation plan of the Moloto Corridor for both road and rail with a view to allowing the Committee to conduct oversight over the project.
Adv Nel concluded by indicating that Members should provide their inputs so that a fully comprehensive and edited report would be ready by Friday 19 May 2017. The report would be adopted during the week thereafter.
Draft Committee Report on Budget Vote 35: Transport
Adv Nel read out the report, indicating the main points and where Members’ input was required. She pointed out that the information in the budget report had been taken from the Treasury’s Budget Review and the DOT’s strategic and annual performance plans. The Committee had met with ten of the 12 entities, and one account -- the Driver’s Licence Card account -- although the Committee had not received a presentation from this entity.
The budget was also based on information obtained from the 2017 SONA, the DOT’s revised strategic and APPs for 2017/2017 and 2017/2018, the 2017/2018 strategic and APPs of entities that fell the within the DOT, the report from the Auditor General of South Africa (AGSA) and NDP.
The draft report set out the mandate of the DOT, along with a description of the projects. It also provided the programme performance from the first to the third quarter of 2016/2017. The DOT’s policy priorities for 2017/2018 were aligned with the national, regional, continental and global development agendas. The budget analysis for 2016/2017 and 2017/2018 was highlighted, and it showed that there was a decrease if one considered the exchange rates. She indicated that Members should provide their input on observations and recommendations made by the Committee when it met with the DOT and its entities.
Observations had been raised by the Committee from the meeting it had had with the DOT. The observations included the budget allocations to different entities. There was a budget allocation of R151.4 million towards the Shosholoza Meyl train, given that for a long time it had an unfunded mandate. Furthermore, the skewed allocation of subsidies on different modes of Transport had been noted. Some had higher subsidies -- specifically the difference between the Gautrain service and Metro Rail in the different cities, based on their different customer bases. A budget of R10 million had been allocated towards the Provincial Roads Maintenance Grant (PRMG). There was a need to improve national, provincial and municipal roads, since they contributed to the cost of moving people and goods within South Africa. The Public Transport Network Operations Grant (PTNOG) had a budget of R6.2 billion allocated to it.
The Committee had also observed a significant decrease in the budget allocated for consultants in the public transport programme, from R236 million in 2016/2017 to R211.7 million in 2017/2018. However, this budget had the largest budget for the use of consultants in the Department. On the National Road Safety Strategy, the Committee had noted that the DOT review process aimed at providing direction on the implementation of all road safety programmes.
On the financial health of entities, the Committee noted that the CBRTA and SAMSA’s total liabilities exceeded their assets. The RAF had claims of R170 billion against it, which kept growing, and it sometimes failed to pay all settled claims when payments were due. During February 2017, the Fund had faced operational disruption due to the attachment of its bank account, and the removal and sale of assets, which continued daily. The Gauteng Freeway Improvement Project (GFIP) e-toll situation had resulted in a postponement of the capital projects in the toll portfolio at SANRAL. The Ports Regulator had raised concerns about budget shortfalls which negatively affected its ability to expand its mandate, and a new funding model was required.
Adv Nel said that the recommendations made by the Committee to the Minister included the following:
- The DOT should ensure that the Shosholoza Meyl train fulfils its mandate.
- On the allocation of subsidies to public transport, the DOT should subsidise users and not operators, and further ensure a proportional distribution of subsidies to different modes of transport.
- The DOT should monitor and evaluate the implementation of the Provincial Roads Maintenance Grant (PRMG) to ascertain whether it was being used for its intended purpose.
- The DOT should monitor road safety programmes or strategies implemented by the Road Traffic Management Corporation (RTMC) and Road Traffic Infringement Agency (RTIA) to check whether they were yielding positive results.
- The DOT must indicate whether the services rendered by consultants provided good value for money and whether the consultants transferred skills to the employees of the Department.
- On the PTNOG, the Department should brief Parliament on the progress made on the implementation of the Bus Rapid Transit (BRT) system in 13 cities, to ascertain whether there was alignment between the budget spent, progress made and quality of work done.
Discussion: Draft Report of the Portfolio Committee on Transport on Budget Vote 35: Transport
Mr C Hunsinger (DA) commended the fact that the two reports were perfectly drafted and appreciated the hard work put into them. He referred the Members to paragraph 3 of the strategic plan and APPs which stated that five entities within the Department had been failing to comply with their financial and administrative obligations. These entities had failed to provide reliable performance management reports, and he proposed that the Members should make a specific recommendation in line with the AG’s remarks.
Chairperson agreed with Mr Hunsinger. In 2015, a recommendation had been made to the Minister to form a Committee to monitor these entities, but had been no follow up on the entities,
Mr L Ramatlakane (ANC) suggested that the Department should reduce its use of consultants and relieve its budget, since the Department could employ skilled people to do the technical work done by consultants
The Chairperson said that the Department should come and explain to Members the exact type of work done by consultants.
Mr M Sibande (ANC) also applauded the report. However, he agreed with Mr Ramatlakane’s point that the budget for the consultants should be drastically reduced, particularly for PRASA and RAF doctors. There was a need urgent need to make some new amendments in legislation for specific entities, and that should be reflected in the Committee’s report. The budget report should also reflect the Committee’s international oversight, since it had made clear recommendations that it should be allowed to conduct international oversight of some projects.
The Chairperson replied that the budget under consideration was the budget of the DOT. Concerning the oversight of international projects, the budget would come from Parliament.
Mr T Mulaudzi (EFF) pointed out that the APP did not show anything done by the human resources (HR) department to fill vacant posts, and asked what was being done.
Ms S Xego (ANC) said that the DOT in its APP and strategic plan had indicated that it would consult with stakeholders, but there were no specific stakeholders mentioned in the report. She suggested that the DOT should provide the Committee with a list of stakeholders to be consulted before they came to the Committee with a report on their first quarter expenditure.
The Chairperson noted Ms Xego’s suggestion, but replied that the DOT did not need to come and provide the Committee with the list of the stakeholders to be consulted, even if they knew them.
Mr Hunsinger said there was lack of consequence management in the entities and a lot of things slipped through. He suggested that the recommendation to be made by Members should focus on oversight and performance management of the different entities within the Department. On the budget allocation for the public transport programme, he suggested that the total sum, indicated as R6.7 billion, should be corrected to the exact amount.
The Chairperson asked Members to consider the proposed recommendations and observations of the report of the Budget Vote from pages 33 to 37.
Members agreed with observation 5.1 regarding the Shosholoza Meyl budget allocation.
Members agreed with observation 5.2 regarding the skewed allocation of subsidies. However, the Chairperson suggested this needed to be expanded to include the taxis associations that had 65% of the market, but was operating without subsidies. She pointed out that with the subsidies for buses and trains (Metro and Gautrain), it should be made clear whether they were per passenger or per kilometre. She stressed that the Gautrain subsidies were extremely higher than Metro Rail’s, and the DOT should make it clear how they reached the different amounts.
Mr Hunsinger said there was a growing concern on the allocation and proportions of budgets to different modes of transport. He asked if the Members were indeed recommending that the Department should subsidise users and not operators.
Mr Sibande replied that he thought that it was only an analysis, as had been explained the DOT researcher.
The Chairperson proposed that Members should concentrate on giving recommendations in the budget report on how they wanted subsidies to be done. Buses were being subsidised and taxis were not. She indicated that the Department should explain this situation, and the rationale behind it. Also, the Department should explain why its subsidised the Gautrain more than the Metro trains.
Mr Ramatlakane raised the same question of whether the DOT should subsidise commuters and not operators. There was need for clarity
Adv Nel said the standard view was to subsidy the users. On calculations of the budget, Members needed to know that the Gautrain generated more money than Metro Rail.
Mr Sibande said he agreed with Mr Ramatlakane, since the subsidisation of users and not operators would bring a different perspective to the policy. The recommendation on this issue should be clear.
Adv Nel proposed that the Department should subsidise users and not operators, because some taxi associations had raised concerns that the Department had a budget only for companies, and not associations. Some of the taxi associations in Gauteng had now transformed to form companies so that they could be catered for in the budget. However, she proposed that the Members of the Committee should formulate a recommendation to allow the DOT to come and present how the calculation of subsidies was done.
Mr Hunsinger suggested that the word “policy” in paragraph 6.2 should be replaced with “lay out.” The Department should then come with a presentation on the methodology and how they calculated the subsidies.
Ms Xego suggested that taxis should be included as well, not only buses.
The Chairperson said the Department had been subsiding transport, and now the Committee’s recommendation was that they should include users.
Members agreed with the observations in paragraph 5.3 and its recommendations in 6.3.
Regarding the observation in 5.4, the Chairperson said that the BRT was being implemented differently in all of the 13 cities, but it should be implemented the same way in all the cities. For instance, she indicated that Rea Vaya and RA were being implemented differently in Gauteng, while in the Cape, My Citi and GO George was being implemented differently as well. Furthermore, the BRT was not meant to replace other modes of transport but to complement other modes like taxis and trains, to enable the public to have access to reliable transport
The Committee Secretary suggested that there should be a meeting with all 13 cities implementing the BRT system.
Adv Nel said the recommendations in the report indicated that the DOT should brief Parliament on the progress made on the implementation of the BRT system in the 13 cities to ascertain whether there was alignment between the budget spent, the progress made and quality of the work done. The BRT system had been created for taxis to get involved, but there had been conflicts, especially on the ticketing system. Some cities had different views on whether the BRT was the best way. However, there was a need to get recommendations or reports from the municipalities.
The Chairperson said, with regard to the ticketing system, that it was not possible to have one ticket for to cater for all the different buses and taxis.
There were no further comments on the observations and recommendations in 5.5 and 5.6.
The Chairperson asked Members how to structure a recommendation on the Port Regulator’s new funding model, while awaiting a law to be passed. However, there was no reply.
She expressed a concern about the RAF implementing the Road Accident Benefit Scheme (RABS) before their Bill came before Parliament. She urged Members to give some input on this issue
Adv Nel said she would draw up a paragraph on the urgent legislation that the Committee had considered, particularly RABS and for the Ports Regulator. She proposed adding a recommendation that the DOT should be strict on checking how the entities advertised in terms of the legislation that had not been promoted. She also proposed that the DOT should urgently implement a review of outdated or old legislation.
Discussion: Strategic Plan and APPs
The Chairperson said when dealing with consultation with stakeholders, the DOT should factor in consequence management, and it cuts across the department. On NATMAP, the DOT should come and brief the Members on the implementation plan of any pilot projects. Members agreed.
The chairperson further proposed that the DOT should brief the Members on the S’hamba Sonke progress report for implementation in 2017/2018 with the view that Members would conduct an oversight of the projects and assess the progress and whether there was value for money
Mr Sibande said there had been no progress made, yet the Members had given the DOT recommendations on the bridges to be constructed. The DOT should facilitate and ensure that S’hamba Sonke projects were fast-tracked.
Adv Nel replied that there had been a two-year review of the S’hamba Sonke project, but if the Members of the Committee were willing, it could extend the period back to 2014 so that the DOT gave a detailed presentation of what had been done previously, and their 2017/2018 implementation. Committee Members had the option to change the project if they were not satisfied with the way it was being run, or they could make recommendations to reduce the budget
The Chairperson indicated that the roads were in a messy state in most provinces soon after the rainy season.
Ms Xego suggested that it would not be ideal for the Committee to take a drastic position to reduce the budget now, but rather the DOT should be asked to come and brief Members on how the money was being utilised. The Committee would like to see that there was value for money. The DOT should monitor how funds were being used.
Mr Ramatlakane suggested that because the issue of S’hamba Sonke was critical and urgent, the Committee Members should attach a timeframe within which the DOT should come with a report on what had been done so far. He proposed that within a period of three weeks, it should be able give a report on what had happened.
The Chairperson said it would be ideal if Members recommended that when the DOT brought its first quarter progress report, it should include specific quarterly reports with a breakdown of the S’hamba Sonke road maintenance project. The DOT needed to give specific progress on the kilometres that had been constructed. She agreed with Adv Nel that the Committee should request progress reports on the road maintenance from 2014 till now.
Mr Ramatlakane agreed with the Chairperson
The Chairperson pointed out that the Committee could not follow up to get the information on road maintenance from the provincial department, but the DOT should get the information on a quarterly basis and bring it to the Committee. Grants had been allocated to North West Province in the 2014/2015 and 2015/2016 financial years for a specific road maintenance project, but the Members had observed that the money allocated by the national Department to the provincial department had not been used for the specific project it had been budgeted for.
The Chairperson asked if the strategic plan and APP under discussion had been approved by the Cabinet, and was advised that it had passed the Cabinet Committee, but not Cabinet.
Mr Sibande raised a concern about the public transport subsidies, and said the DOT should treat all companies equally, especially in the rural areas, which seemed to be disadvantaged. Some passengers carried umbrellas in buses when it was raining, yet some companies were being forced to buy new buses. Some companies seemed to be getting better contracts than others.
Adv Nel said an amendment in APP report on the issue of the allocation of subsides would be made in the same way as the budget report, to include all modes of transport (buses, trains and taxis) for both urban and rural. Expansion on the skewed subsidies would be covered when the amendments had been effected.
The Chairperson highlighted the issue of the Moloto Corridor railway which had been previously raised by Mr Hunsinger. She suggested the Members should make a recommendation on the Moloto Corridor, to include the railway.
Mr Hunsinger said that the DOT should provide the Committee with a progress report on the Moloto Corridor to avoid a situation where the railway was completely excluded from the project
Mr Sibande agreed with Mr Hunsinger, and added that the Committee should request the progress report to avoid the budget increasing without them knowing what was happening. He suggested that the DOT should be given a deadline to bring such a report
The Chairperson said there was no need to give a deadline, but they should get quarterly reports until the road was completed.
Adv Nel said the framework of the Moloto Corridor project was wide, and included both road and railway. She asked if the Memorandum of Understanding (MoU) with China regarding the Moloto Corridor should also include rail. PRASA had emphasised that the Moloto Corridor was not in their budget, but they had not been specific about the MoU. She suggested that the Committee Members should make specific recommendations on the Moloto Corridor and request progress reports. She further pointed out the budget discrepancies, and said that she would include this in the recommendation on consequence management.
The Chairperson said the Committee should take a decision, since it was not right for PRASA to say they did not have a budget for the Moloto Corridor.
Mr Hunsinger suggested it would be ideal for the DOT to provide the Committee with a viability study, whether there was an investor or not. There was also a need to establish the work that had been done. The focus should be on the road project so that the public could benefit from the project
Mr Sibande suggested that the Committee should put pressure on the Department to update Members constantly on the project being implemented.
The Chairperson agreed that a viability study should be done and the DOT should come and report to the Committee. She also proposed that the DOT should come and brief the Committee on the Meljon road project between Limpopo and Mpumalanga. There had been no progress for several years since it was started, but the Committee had managed to push the Department and it was being revived. Currently the road was under construction and the Treasury had said they could fund only the road project and not the railway. The DOT should come and give the Committee a progress report to date
The Chairperson asked Adv Nel when the updated reports would be given to Committee Members
Adv Nel promised to make all the amendments and recommendations made by the Committee, and would send both reports to the Committee by 5 pm, after the meeting,
Mr Mulaudzi mentioned that there had been no progress on Soshanguve project.
The Chairperson asked Members to meet the following day to endorse the reports before they were sent to Parliament.
The Members agreed to meet the following day (17 May 2017) to vote on the reports.
The meeting was adjourned.
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