The Committee was firstly briefed by the Department of Transport on the National Land Transport Amendment Bill. The main purpose of the National Land Transport Amendment Bill was to modify the Act by inserting and amending certain definitions to keep up to date with developments since the implementation of the Act. Key Amendments related to Uber and Taxify and the definition of electronic hailing, and made it compulsory for operators using electronic hailing services to have an operating license. Electronic hailing companies would be prevented from facilitating electronic-hailing services or the electronic-hailing application, should an operator not have an operating license. Other Amendments related to integrated public transport networks and the Bus Rapid Transport services in metros and large cities and ensured integrated planning across municipalities and provincial departments.
The Committee felt strongly about the need to regulate electronic hailing and it was suggested that the Bill should distinguish between a service-focused definition and a driver-focused registration as the Committee had to get a grip of the very slippery way that Uber had of doing business. Many countries worldwide had suspended the use of e-hailing until regulations were in place and Members suggested that the Department investigate how other countries had regulated electronic hailing. It was decided that more research had to be done on appropriate legislation to manage e-hailing companies. A Member suggested that the Minister of Transport be consulted prior to provincial legislation regarding transport. A submission by the MEC of Gauteng during the public hearing process caused some consternation in the Committee as it was felt that it set a dangerous precedent and the MEC should have approached the Minister during the regular meetings with MECs.
The Railway Safety Regulator presented its 2016/17 Annual Reports and Financial Statements. The Regulator had received an unqualified Auditor General Report with non-compliance in expenditure management. There were 11 findings and one recurring finding. There was a significant reduction in the number of findings in respect of procurement and contract management compared to the previous financial year. 89% of the performance targets had been met. Achievements included the publication of the first set of Regulator Standards; a 19% revenue increase and four Human Resources Standards implemented. 71 inspections and 266 audits were conducted. A pilot project on Certification of Train Drivers was conducted. Flagship projects included the Ergonomics Society of South Africa Conference, certification of train drivers and technology reviews of Passenger Rail Authority South Africa trains. However, neither the Railway Reserve Regulation nor the Human Factor Regulation was implemented.
The Committee was concerned that the budget allocated to consultancy services to assist the Railway Safety Regulator operations had quadrupled over three years. International Standard that Railway Safety Regulator followed. The Committee wanted assurances that the railways was at the highest possible standard in comparison to standards internationally. The employment equity figures were examined and questioned. Members asked about the certification of train drivers, compliance with the preferential procurement policy, risk management and youth development.
Lastly the Road Traffic Management Corporation briefed the Committee on its 2016/17 Annual Reports and Financial Statements. The Corporation received a clean audit for the 2016/17 financial year. There were no material findings. The total expenditure budget for 2016/17 was R701 058 and the actual expenditure was R764 252. In summary, 79% of the 2016/17 performance targets had been achieved. The growth of the Corporation was positive, and the Audit Committee Report had approved the internal audit charter. The Corporation overspent by 9%, mainly due to Natis transfer into the RTMC, as well as Anti-corruption activities. No National Development Plan goals or Medium-Term Strategic Framework targets were negatively affected.
The main achievement was the approval of the 2016 – 2030 National Road Safety Strategy that provides a blueprint on addressing road carnage in South Africa.
The Committee asked about the number of Board meetings, the Cross-Border Road Transport Association, training courses, fraud, achieve of goals and whether the regulations on Railway Reserve and Security Regulations would be published by the end of the year.
The Portfolio Committee agreed upon 14 November 2017 as a suitable date to attend to the State Capture report.
The Chairperson welcomed the Committee Members. She said that the meeting was 30 minutes late but there are challenges whenever there is some festivity in Parliament. There were apologies from the Minister Mr Joe Maswanganyi and Deputy Minister Ms Sindiswe Chikunga, who would be joining the President of South Africa in welcoming the President of Senegal. There was also an apology from Mr L Ramatlakane (ANC) who had joined the Portfolio Committee on Police. The other Committee Members did not send apologies.
The Chairperson suggested that Committee Members should be aware that Mr G Radebe (ANC) always arrived late on Tuesdays because he had other things to do before attending the Portfolio Meeting. The Agenda was that the Committee would be deliberating on the National Land Transport Amendment Bill and receive briefings from the Railway Safety Regulator and Road Traffic Management Corporation on their Annual Reports in preparation for the BRRR issues. She indicated that the Deputy Director General of the Department of Transport, Mr Chris Hlabisa, would introduce the presentation and officials from the Department would present. The Department would have 35 minutes for the presentation and then Committee Members would engage with the presentation.
Briefing on National Land Transport Amendment Bill
Mr Chris Hlabisa, Deputy Director-General: Road Transport, Department of Transport (DoT), thanked the Chairperson and introduced the team from the Public Transport unit in the Department who would be taking the Committee Members through the National Land Transport Amendment Bill.
The main purpose of the National Land Transport Amendment Bill was to modify the Act by inserting and amending certain definitions to keep up to date with developments since the implementation of the Act.
Mr Hament Patel, Acting Deputy Director-General, DoT, said that the Department had addressed those proposals that had come from the public and from stakeholders and determined which were relevant. The proposed additional amendments were based on those proposals. He would only go through the sections in the Bill highlighted in yellow.
Mr Chris Hunsinger (DA) interrupted, saying that he was confused. He understood that it was important that the Committee moved on the National Land Transport Act but he gathered from the introduction that there had been a round of public participation. He appreciated that the public had suggested certain amendments or had made contributions to where the Committee was in terms of the development of the very important Bill. However, he thought it was important that the Members of the Committee received the comments and input exactly as it had been presented during the public participation. The Committee could not accept that the Bill had been evaluated, filtered, and then the Committee had to recognize what remained after some sort of a filtering process. Surely it should be important for the Committee to review the inputs from the public. He said that, personally, he could not just accept what had gone through filters. The Committee could not simply rubberstamp what someone else had decided was applicable or not.
The Chairperson informed Mr Hunsinger that before the Committee had taken the Bill to Parliament to explain that extensive input had been made during the public hearing, the Committee had come to an agreement as to what the Committee would be doing about the recommendations that had come from the public hearing. The Committee had had to take the Bill through the Parliamentary processes the previous week so that the Committee would be able to re-advertise for members of the public to acquaint themselves with the amended version. She suggested that she could request the Committee Secretary to get the copies of the extensive amendments that had been complied for Committee Members. She asked the Committee Secretary, Ms Valerie Carelse, to send the amendments electronically to the Committee Members. She asked if Mr Hunsinger agreed, which he did.
While waiting for the Committee Secretary to send the document to the Committee Members, the Chairperson asked the Department to continue with the presentation.
Mr Hament Patel continued with the presentation of the Bill.
National Land Transport Amendment Bill
Amendment of Section 1(c)
The proposal was put forward by Uber and Taxify who had indicated that the Department should include a definition of electronic hailing. The definition has been inserted.
Amendment of Section 1(d)(a)
It was a matter regarding integrated public transport network. The City of Cape Town had indicated what should be added to the definition. The Department did not have a problem with the amendment.
Amendment of Section 1(g) of the Bill
The definition of non-motorized transport included all non-motorized wheelchairs as part of non-motorized transport. The input was from a group that dealt with disability issues.
Addition of Section 8(3)(b)(f)
The clause would enable the Minister to publish regulations that set standards or requirements for electronic hailing.
Amendment of Section 10(5)(c)
An addition to the powers and duties of Provincial regulatory authorities, Clause 5 deals with the MEC’s obligation to publish regulations for public comments. It aligns with the Minister’s requirements.
Amendment of Section 12
The section was presented by the Gauteng Provincial MEC, Ismail Vadi, regarding the establishment of a Provincial transport authority. The details provided for the kind of Provincial entity that was proposed. It related to the provincial entity as established in section 12(1) that had to perform the functions of the intermodal planning committee contemplated in that section.
Substitution of Section 15(15) (4)
Intermodal planning committees were located at the major metros and four other municipalities undertaking BRT systems. The intention was for the Committees to undertake integrated planning. If there was an established provincial entity, that entity would take over those functions as well.
Amendment of Section 18(12) (b)
The clause was in the Act but there was an addition to it: “and after undertaking the prescribed public participation procedures”.
Amendment of Section 39(20) (c)
This clause speaks to when a planning authority wants to rationalize its public transport services. The only addition is that “the regulatory entity must, on request of the planning authority”.
Amendment of Section 50(30)
The matter related to electronic-hailing. Mr Hament Patel added that maybe it should include ‘person’ or ‘company’, but the legal advisor was considering the matter. For example, if it came to the notice of Uber that one of their operators did not have an operating license, Uber would have to cancel the electronic-hailing application that would have been provided to that operator. The clause reinforced the previous one which said that electronic hailing companies should not facilitate the electronic-hailing services or electronic-hailing application, should an operator not have an operating license. An unlicensed operator should not even be allowed to enter the electronic-hailing system.
All the amendments had been done by the State Lawyer Advisor. Rather than have it as a separate section, the State Lawyer Advisor, had put it in a schedule. It was not something new, and was already in the Bill.
The Chairperson thanked the Members and said that she thought that they should hear from the Legal Advisor of Parliament and the State Law Advisors before Members could ask questions.
Ms Noluthando Mpikashe, Parliamentary Legal Advisor, greeted the Committee Members. She said that she had nothing to add from her side but she stated that she had looked at the Bill and there was nothing that was illegal or unconstitutional about it. Even though the State Advisor could not come to the meeting because she had another commitment, she was satisfied that the Bill was constitutional. The new clauses did not affect the constitutionality of the Bill.
The Chairperson asked if the Committee Members would like to talk to on issues that had been raised by the public but which were not included in the Bill. The Committee had made a presentation to Parliament that the Bill would be published for public comment and Members would have to attend another round of public hearings. As the Members were dealing with the Bill, they needed to indicate whether to take a whole month getting public hearings or to take just one day. Did Members see anything in the inputs that had not been included in the Bill?
Mr T Mulaudzi (EFF) believed that the Committee Members had to have another consultation. He said that his concern was on page 16(a) where Mr Patel had said that Provinces may pass legislation or enter into agreements. He said that he did not want to leave that clause as it was. The Department had to insert a sentence saying that such actions had to take place in consultation with the Minister of Transport. To avoid conflicts, the Provinces could not act as if they were federal states where they decided without consulting the National Department. The same applied on page 19 (b). The amendment gave power to the Municipality without acknowledging the MEC of that Province. He added that it would be good to prevent conflict within the Province.
The Chairperson asked if the issues that Mr Mulaudzi had just raised could be put into the Regulations than being put in the legislation. She said that listening to Mr Mulaudzi, she was of the view that the issues were more operational than legislative.
Mr Mulaudzi replied that there was no problem if the State Lawyer could see that the gaps were closed in terms of the principle items. They could be written in the Regulations.
Ms Mpikashe, replied that if the Committee accepted that proposal, it had to be in the Act because they were policy issues. It was something that the Department was required to do. It was not operational and had to be in the Act.
Mr M Sibande (ANC) said that he was concerned about the amendment of Section 50 of Act 5 of 2009 on page 36. He said that his concern was that there had to be a distinction between the person who was providing software and the people who provided licenses. That was where Uber, for example, was condemned internationally. If a company provided software, there had to be procedures to be followed if the company was mandated to give the software to members of the client’s organization. The issuing of software could not be in conflict with issuing of licenses. The Members did not need a conflict with licensing.
The Chairperson replied that the Amendments to the Bill would be able to deal with the issues that Mr Sibande was raising. The law was clear that one had to have a license before the application for an operator’s licence could be made.
Mr T Mpanza (ANC) referred to Section 8 on pages 15 and 16 that spoke about the Province. He said that he wanted to check whether the clause had been incorporated and accepted. Mr Patel had said that it was a submission by the MEC of Gauteng. The Committee had raised a concern about the input as it set a dangerous precedent because the Committee understood that the MEC had a platform where he could raise the matter with the Minister. It seemed a very strange arrangement for the MEC to put in a public submission and to dictate the Amendment. The Committee expected an answer or explanation from the Department’s Legal Advisors as to whether it was acceptable, and how the Committee should deal with it to avoid setting a dangerous precedent. It might not be sustainable in the future. He did not have a problem with the content of the submission, but he was asking about the context.
The Chairperson replied that the point could be responded to politically by the Minister. It would be very difficult for the Department to intervene and try to find out what caused the MEC to present at the public hearing instead of having a meeting with the Minister. The Department did not necessarily have to respond to that point, but the Committee would make a note for the Minister to say whether, in future, that was what the Committee would have to anticipate. There may be others who would look at it and say that if MEC Vadi did it, why could they not do the same.
Mr Hunsinger said that he recalled that MEC Vadi did make a presentation during the public participation process. The Committee had received a copy of MEC Vadi’s presentation, so the information was accessible and could be evaluated. The Committee was ready to consider input and to determine whether it should be taken into the legislation. He had concerns about the role of the Executive Authority, particularly in the definition that the Members were proposing.
In respect of electronic hailing, Mr Hunsinger felt strongly that the Members should distinguish between a service focused definition and a driver focused registration of some sort because that was where they would get a grip on what they were currently experiencing within the Uber environment. The Committee could learn from International experience. India had been faced with more or less the same challenge in trying to get a grip on terms, definitions and legislation. Even while India was in the development phase, Uber had changed its operation so that it fell outside of the scope of the definition. In 29 cities in India, Uber was operating in a way that did not confine them to what was contained in that definition. Uber in India had also expanded its services to include a courier service. Looking at the definition in the Bill, Uber could offer a courier service, and it would not fall within that definition. The definition should be technically sound. There were ample examples internationally that the members should take cognizance of and then should focus on a driver registration of some sort in order to get a grip of the very slippery way that Uber had of doing business.
The Chairperson replied saying that the Department had captured what the Members were saying. She asked Mr Patel if there were responses.
Mr Patel replied that the Department did not have a problem with consulting the Minister about the comment on the Provincial Transport Authority. There had been a comment that the situation set a precedent, but he would leave that matter with the Chairperson to address it. The Department was happy to add that the Municipality must consult the MEC. Regarding the person who provided the software, there was a procedure to be followed before the software could be provided. That procedure was outlined in the Bill so the matter had been addressed. The need for including a driver focus in the electronic-hailing definition, as well as a service focused definition, was noted. The drivers in the case of e-hailing services or meter services were called operators in the Act. The Act dealt with how operators were regulated so quite a substantial portion of the Act dealt with the operator. It was all regulated in that space.
The Chairperson asked if there were any other responses or input from the team from the Public Transport unit.
Mr Hunsinger asked for clarity on the electronic-hailing and the fact that it was already taken up in the operator regulation environment. He asked why it was difficult to get a grip on it.
Mr Patel replied that the Department was not struggling with it. He said that the points had been noted, and the Department would look into it.
The Chairperson noted that Mr Hunsinger was saying that the Members were having challenges. Why were there challenges if there were regulations that would be able to regulate the situation and return the situation to normality? The one other thing that came to mind was that the Minister was speaking to the Hoering teams and had indicated that he was awaiting the legislation. But if the regulations were there to regulate the operators, why not use the regulation while the Committee was still processing the legislation?
Advocate Takalani Mndanduleni, Deputy Director: Legislation, DoT, said that currently the Bill did not cover e-hailing, hence the process of amending the Act. That was the problem. The Act did not cover e-hailing.
The Chairperson said that the Acting DDG had suggested that the operators of Uber and other organisations were regulated as operators. Therefore, if Uber drivers were operators and there were regulations that dealt with the operators, why couldn’t the drivers be regulated in that way? The Members wanted to focus on the operators and not the application.
Adve Mndanduleni replied that he was unsure if he understood the Chairperson correctly, but the Act focused on the operators. He reminded Members that when an operating license was issued, it was not issued to the driver, but to the operator. Practically the operator would hire a driver. In terms of the current Act, there were various types of services with an operator but e-hailing was not identified as a type of service in the current Act. The Act dealt with metered taxis but was not clear about e-hailing. Hence the amendment to include e-hailing. The second problem was regarding regulating as the drivers were not identifiable by law enforcement officials. The third problem was the issue of activating the operator because currently someone with a vehicle might just join Uber, and Uber would activate him and try to operate without an operating license. If a company, activated an operator without an operating license, it became a criminal offence.
The Chairperson replied that the Committee would argue the whole day.
Mr Hunsinger replied that he agreed that it was clear that the Members needed to drill down on that particularly. What the Committee understood was that in terms of regulations around the operator, it was sorted out. The Members only needed to look at the e-hailing definition. It was not that simple. There was a particular arrangement, and therefore a particular legal implication, in terms of making the call and thereby establishing the relationship between the service, the service provider and the client. It made it far more technical and a much-expanded definition was needed. It was quite clear that in terms of the current regulation framework dealing with the operator, there was also a space in terms of how Uber explained what the Committee saw as the employee, i.e. the driver of the vehicle, but whom Uber did not recognize as an employee. That complicated the matter. So, while the Committee had the opportunity, it should get the definition sorted out and get going on Uber because Uber was messing up the Market and a lot of relationships.
Mr Sibande said that, as he had earlier indicated, the Members should make the distinction between the two. Were the Members discussing the software or were they discussing the law. He asked if the Members were concerned about who could take over by the means of the software. He thought that the Committee Members should come back to it because they had said they needed a law which would protect them. He could not recommend people who started with ill-discipline instead of using their own software.
Mr Hlabisa said that he agreed with the Chairperson that the Committee would engage on the subject until the cows came home. The National Land Transport Act was under review because of some challenges that the Members had seen. One of the challenges was Uber, one of the services that needed to be legislated and regulated. With that in mind, while the Committee was still looking into the Amendment of the principle Act, it needed to review the regulations. Regulations were more operational than legislation. The questions raised by the Members were quite complicated insofar as the definitions were concerned, as Members spoke to the effect. He requested that the State Law Advisor and the Department Legal Advisor take note of it and make sure that when they were formalizing and firming up the principle Act, they also revisit the current regulations to ensure they talked to the Act that was being reviewed.
Mr Mpanza said that he was following the logic. The Members could not allow a situation where there was a vacuum and people did as they pleased. He asked if the Regulations addressed that vacuum while the Members were dealing with the Act. There had to be something that made sure that there was at least some regulation. He said he had been aligning himself with the Chairperson but now Mr Hlabisa was saying that the Members should wait until the Act and Regulations had been reviewed to accommodate Uber. That was a problem.
Mr M De Freitas (DA) said that South Africa was not unique when it came to e-hailing. Many countries in the world had had to deal it. He asked if there was a way that the Members could do some kind of research on countries that had overcome the problem with appropriate regulations. Was there a way that the Committee could learn from other countries? Many countries worldwide had suspended the use of e-hailing until regulations were in place. The Members needed to find a way to deal with e-hailing and, at the same time, stop the violence. He suggested that there might be some research on countries that had created legislation and overcome the problem.
Ms Mpikashe, said that the Department was saying was that there was a gap currently. There was nothing limiting Uber, hence the Amendment. If the Committee talked about Regulations to the Act, they had to remember that they could not have a Regulation without an Act that prescribed the Regulation. There had to be an Act that gave the Minister the power to pass regulations and then there could be regulations on the issue. Currently there was nothing regulating Uber in terms of the law.
The Chairperson replied that all the Members were talking to the matter that had been raised by the Acting DDG when he had said that there were regulations which regulate the operators. That was the Members’ point of departure. Those regulations could regulate the operators. She asked what the Department needed to do. The proposal that Members needed to research other countries to find out what mechanisms were put in place would help them to deal with the challenges. The challenge to Members, as public representatives, was the carnage, the violence, the deaths, as people were fighting for space and to be operational. That was the challenge that the Members were faced with. It was like a see-saw. Members wanted to have good legislation but they were looking at the imbalances that could drain Members even as they were dealing with the legislation. A Member became emotionally involved as a Public Representative.
The Chairperson added that the Members needed to do some form of desktop research to find out how other people were dealing with e-hailing. At the same time there are certain proposals, so the Members should look and relook at the definitions to determine whether they would be able to stand the test of time when the law became operational. Those were the critical things that she believed that the Members should look into in terms of the definition of e-hailing. She asked if Members agreed. She needed the Members to look into the definitions and maybe suggest a tweak here and there. Could the Members look at other things that they wanted to put into the legislation to make sure that the legislation moved forward but did not have to come back in 2019 for amendments.
The Chairperson said that it was work in progress, but the intention was that before the Members rose for the festive season, they should have finalised the public hearings. That meant that the Committee might have to do it over the weekends. She expected the Legal Advisors to go and work on the Bill so that by the time the Committee Members started with the public hearings, everything would fall into place. She thanked the Department of Transport.
Mr Solly Kekana, Acting CEO, RSR, presented the 2016/17 Annual Reports and Financial Statements of the Regulator, including the audit outcomes and the performance, emphasizing the key achievements. The RSR had received an unqualified Auditor General Report with non-compliance in expenditure management. No audit adjustments were required in the financial statements. The 2016/17 audit findings showed that RSR was able to reduce the number of findings, year on year, from 2011 as a result of various corrective action plans that had been implemented. There were 11 findings and 1 recurring finding. There was a significant reduction in the number of findings in respect of procurement and contract management compared to the previous financial year. Findings were reduced from eight to four.
89% of the performance targets were met. Achievements included the publication of the first set of Regulator Standards; a 19% revenue increase; four HR Standards implemented, 71 inspections and 266 audits were conducted, a pilot project on Certification of Train Drivers was conducted, and a paperless environment was achieved.
Flagship projects included the Ergonomics Society of South Africa Conference, certification of train drivers following an MOU with PRASA and technology reviews of PRASA trains. However, neither the Railway Reserve Regulation nor the Human Factor Regulation was implemented. Only 70% of the targeted PTI Improvement Directives had been issued.
Mr Hunsinger said that he would focus mainly on the RSR’s use of consultants, and not just that particular year because the Members could see trends across the years. He said that looking at the last three years, the budget allocated to consultancy services to assist the RSR operations had quadrupled. In 2014/15 it was about R5 million, which had increased to R23 million, and in the current year it was R27 million. He asked where the money was going because surely when RSR did an audit of consultancy services it needed, it would focus on trying to expand the platform so that there was no need to subcontract the skills and abilities. It might be cheaper to incorporate that work as part of their continued operation. He asked for some detailed specifics on the four different elements of the consultancy. He asked if the RSR team could just explain what management quality services meant. If RSR needed management quality services for three years in a row, he was curious as to what those services were. The cost had almost doubled over the past three financial years. There seemed to be a problem if the RSR could not fix it in three years. What did the RSR continuously need to assess and what was categorised as management quality services in the budget allocation.
In terms of training, coaching, and development of staff, the RSR had spent R 2.5 million in that financial year. In particular, what Mr Hunsinger found quite interesting was something described as strategic thinking projects. He asked if RSR could elaborate on that. RSR had spent R 1.1 million on strategic thinking projects. He added that the legal subcontracting was under R1 million three years ago and now the RSR was spending R 0.5 million in just one category of legal support. The total budget in terms of legal expenses for consultancy was way over the R3.4 million expended in the financial year under review. He asked RSR if it should not get a platform of legal employees because, being the service offering that RSR was, it would make sense to have legal capacity within its midst.
On the financial side of affairs, Mr Hunsinger asked about software upgrades and development around Pastel, the cost of which had dropped significantly, although RSR had a constant allocation towards development. He assumed it was training of staff and also upgrades on software for Pastel which had cost around R150 000, but it had dropped to R14 000 or R20 000 in the latest financial year. Lastly, on HR support, he saw hugely varying figures in the past three financial years, from about R0.25 million to close to R1 million and then to R0.25 million. The figures did not coincide with expansion of staff because if RSR needed HR support, it would relate to interviews and recruitment of staff. He did not see any correlation between the two. So, what was the HR support for?
Mr De Freitas asked if there was a certain International Standard that RSR followed. How did the Committee ensure that the railways was at the highest possible standard in comparison to standards internationally and how did the Members make sure that they retained that level? He asked how the RSR measured standards when they were assessing. RSR had mentioned in the presentation, and in the annual report, a lot of work that the it did amongst youth, which was commendable, but he was trying to understand if those young people eventually ended up working for the entity, or was RSR giving back to the community, or was it done strategically so that it would meet certain objectives in the entity?
Mr M Shelembe (NFP) referred to the number of current employees. The figure in Johannesburg was 163, which was the Head Office and Gauteng region. He was not able to see how many people were employed in the Head Office and how many staff were employed in the Gauteng region because the RSR had said that a Head Office was a National Office where RSR put all the Provinces. If he looked to the figures in other Provinces, they were very low, but he did not understand why. He asked for clarity on the difference between the Gauteng region and the Head Office so Members knew. He referred to the Employment Equity Act and said the Committee was happy that there were more women than men, but he did not see the youth. He asked where the youth and the physically challenged people were. RSR was to see that everybody was involved. He said that one had to appreciate that there was a youth development program in place.
Mr Sibande said that he wanted to check whether the presentation was equal to the task. He said he had looked at the employment equity and it did not hold water. He said that Members wanted to see the categories in senior positions. There was a contradiction. He asked about the Auditor General’s finding about fruitless and wasteful expenditure. He said that the RSR had indicate to the Members whether it had put adequate measures in place to address the repeat findings. In terms of management, what steps would RSR take if staff failed to comply with legislation? One of the contributing factors in not meeting the target, was that some of the staff did not comply with the legislation. He also had a problem with consultancies. If RSR had risk management officials, they would show the entity if there was a debt, which was better than the consultancy doing everything.
Mr Mulaudzi referred to the achieved target of 89% for 2016/17. He asked why the RSR did not get 100% because it had set the financial targets. It was no use having a qualified audit when some of the targets were not met. He said RSR should not create unreasonable targets because it would fail and not achieve the targets. His colleagues had already spoken about the reduction of consultants. Although RSR had said that the reduction had saved R6.8 million, how much had that reduction been from the previous financial year? Regarding the certification of train drivers, he asked if RSR had in-service training courses to train the drivers. He also wanted to know how many suppliers had complied with the preferential procurement policy. He addressed the first and second action plans for the first target not achieved.
RSR had said that the assessment would be conducted during that financial year. Mr Mulaudzi asked RSR to tell the Members the percentage of assessments conducted to date. The Members did not want to just assume that it was happening. In terms of youth development, RSR had said that18 interns and 52 youth had been provided with financial support. He asked what was the scale youth development in the entity. He asked if RSR took the youth from the same area. He asked what SDIX was. Lastly, he referred the under-expenditure by RSR and asked what the reasons were for underspending.
The Chairperson said that in the previous engagement with the Committee, one of the issues highlighted was that RSR was expecting the Department to provide it with the Road Reserve Regulations and Safety Regulations. If that had not been provided, what were the implications? What challenges was RSR facing in the absence of regulations? What systems could be put in place so that the Committee was able to assist RSR to realize the anticipated safety measures? The road reserve issue was a problem. When one travelled through the country, people were building on the railway reserve without caring about could happened. When people did that, it was danger for everybody. RSR of took care of the youth and women, but why had RSR excluded disability in the presentation?
Mr Ngwako Makaepea, Acting Deputy Director General: Rail Transport, DoT, said that he would hand over first to the Acting CEO to respond to the operational questions and then he would close on the issues of regulations and the use of consultants.
Mr Kekana, said that he would start with the last question raised by the Chairperson on the issue of rail reserves. The rail reserve challenges that the RSR would be faced with that would especially affect the regulator on the rail crossings, was that the RSR would not be able to hold anyone accountable, especially not operators. The Municipalities could not be held accountable for any unsafe operations within a rail reserve as the RSR could only engage with operators. What the RSR had done a year or two ago was to establish a Steering Committee on railway crossings. It was a technical Committee which travelled around the country meeting Municipalities and Provincial entities, looking at security clusters, human settlements, roads and spatial planning. In that Committee, the issues were discussed so that the Committee did not leave them unattended whilst waiting for the regulations to be published. He said that the statistics on disabled personnel was just an omission. The Annual Report was more detailed. RSR did have disabled personnel in the organization and because RSR was a highly engineering space, there were risk factors so person had to be able to deliver in the position. Where there was no risk, disabled people would be looked at.
He explained that SDIX was a service delivery index. It was the method that the organization had adopted to continuously improve their performances. It was an outcome-based index where the organization did not look at inputs but sought to look at the impact that the organization had in the industry. In terms of the Youth development, RSR was a national entity and looked at all the geographical areas of the Republic. Regarding the numbers in the presentation, 18 were interns and 52 were on bursaries that RSR issued to anyone requesting funds. RSR absorbed most of the youth on the internship programme as employees and put them on a training program. There were other departments for internship, but the emphasis was on engineering. He said that RSR set their targets by looking at the risks and looking at performance of the mandate. They also looked at the trend analysis of the previous years. RSR did want to reach 100%, but certain things were beyond its control and dependent on the ability of third parties to deliver.
The Regulator did not have in-service training for train drivers. However, RSR wanted to accredit certain schools. The RSR was mainly an engineering organization that, with the investment it had seen, had to augment its capacity with consultancy services. RSR acknowledged the high level of consultancy but it had upscaled the interns and sent personnel to universities such as the University of Pretoria and the University of Johannesburg. About 100 staff were at the Head Office. RSR was trying for a lean structure at Head Office so that RSR had oversight of the regions, while the regions engaged with operators at that level. RSR had its own standards on Human Factors and looked at safety critical grades. Train drivers were one of the critical grades that had to comply to the RSR standard. When operators applied for their permits, they needed to comply with a lot of requirements. RSR had recently introduced a code permit where the operators needed to inform RSR how they had improved training, how they advertised their vacancies, and how they intended to fill the vacancies as well. RSR looked at it on an annual basis when operators did their permit applications.
Mr Regardt Gouws, CFO, RSR, said that he would try to give some background to the consultancy question. In 2014/15, R 16 million was spent, in 2015/16, R 35.1 million was spent, and 2016/17, R 28.3 million was spent. For the 2017/18 year, RSR had budgeted R 10 million less, i.e. R 18 million. The draft budget figures were currently at R 9 million. RSR was on a drive to reduce consultancy from R 35 million to about R9 million to R10 million. Services that would always be incurred, such as the legal fees related to the board of inquiry, internal auditors, and there were HR consultants. The staff complement had increased from 175 to 201 staff members. Therefore, RSR had had to pay recruitment costs and the cost of creating jobs. He gave figures for employment equity saying that there were two disabled employees as of March 2017. Women empowerment was currently at 28% at senior management level and 36% at professional skills level. With the increase in the staff capacity, RSR had found more males applied, which was why there was an increase in males. Of the 14 posts of senior management, four were occupied by women, and of the 91 posts of the professionally qualified, 33 posts were occupied by females.
In terms of fruitless and wasteful expenditure, consequence management had been taken. One contract that was found to be irregular and, after investigation, RSR had accepted the resignation of the supply chain officials involved in the incident. Investigations had been carried out into the irregular expenditure listed in the Annual Report. It should improve to the next financial year. RSR was contesting one of the amounts related to the contract he had referred to previously.
The Chairperson interrupted and asked if RSR has managed the consequence by accepting the resignation. She asked how Government had benefitted out of that resignation.
The CFO replied that RSR had not suffered a financial loss. Business services were rendered but the process was not as per the prescribed legislation. It was not that RSR had lost money in terms of services. It was a fine line, and quite difficult to manage. To ensure compliance, RSR had implemented a process, and had a compliance management unit to check RSR transactions before spending took place. RSR had implemented new processes before issuing a purchase order to ensure that all the Supply Chain Management (SCM) requirements were met. The SCM procedures were reviewed quarterly by internal auditors and the report went to the Auditor General. There was also an accounting reason for underspending. There were financial accounting entries that had gone into the financial statements and did not actually show the cash underspent. In the budget comparison in the Annual Report, the underspending looks like it contributed to professional fees. There was quite a large budget amount for consultancy services.
The Acting Deputy Director-General said that he wanted to emphasis the issue on the findings because he served on the RSR Board as a Shareholder representative and knew that the Board made sure that the serious issue of consequence management, such as procurement of contracts, was not condoned by the Board. He took cognisance of the concern raised by the Committee about the use of consultants and the Board would make sure that they monitored that. There needed to be a balance between hiring full time staff members in the organization, and staff who understood the developmental and new technology investment that would take place over three years. Those were the issues that RSR would need to deal with. The social impact assessment on the three regulations had been done on the rail reserves and on the dangerous goods. On the human factor there had been a decision that, because there was a standard that governs the human factors, RSR would rely on that, and would deal with the matter in the next financial year.
The Department had published regulations on 30 June 2017 and on 30 August 2017, and had received comments from the stakeholders. RSR was looking at the comments so that the final regulations on security and rail reserve could be issued and implemented. The RSR technical committees were working with Provinces regarding the issues of rail reserves. RSR had elevated the issue of risk and had appointed a Chief Risk Officer to be able to deal with those issues. The Department would take the other issues as comments, and would address them.
Mr Mulaudzi said that he had forgotten to ask about the Board meetings for RSR. He asked how many Board meetings were held in 2016/17. He said that the Department had to justify the salary hike of the CEO of RSR because it was abnormal.
The Chairperson replied that those responses by the Department would come in writing. She asked how long would it take for the regulations to be finalized.
Mr Makaepea replied that the regulations would be published within a period of six to eight weeks. The regulations had been delayed because a new requirement by the Department of Monitoring and Evaluation had affected the implementation. The Department of Monitoring and Evaluation wanted RSR to do a detailed socio- assessment as per the Departmental guidelines. The regulations on Railway Reserve and Security Regulations would be published by the end of the year. The Human Factor would rely on the current standards. The Committee would hold RSR to its word. The Chairperson said that, coupled with the regulations, was legislation that had to be sent to Parliament. The Committee was still awaiting that. She thanked the RSR for their presentation.
Briefing by Road Traffic Management Corporation (RTMC) on 2016/17 Annual Report
Adv Makhosini Msibi, CEO, RTMC, presented the 2016/17 Annual Report. The purpose of the presentation was to provide a report on the Annual Performance of the RTMC for the period of 2016/17 in line with Section 22 of the RTMCA, Section 55 of the PFMA and the National Treasury Regulation 55.2. Three new non-executive Directors had been appointed in 2016/17. The RTMC Board held seven meetings during the year and Board Committees had held 20 meetings in total. The Audit and Risk Committee held five meetings and other committees such as the Youth Structure and the National Advisory Road Safety Council held four meetings.
The Corporation received a clean audit for the 2016/17 financial year. There were no material findings. The total expenditure budget for 2016/17 was R701 058 and the actual expenditure was R764 252.
In summary, 79% of the 2016/17 performance targets had been achieved. The growth of the Corporation was positive, and the Audit Committee Report approved the internal audit charter. The Corporation overspent by 9%, mainly due to Natis transfer into the RTMC, as well as Anti-corruption activities. No National Development Plan goals were and Medium-Term Strategic Framework targets were negatively affected.
The main achievement was the approval of the 2016 – 2030 National Road Safety Strategy that provides a blueprint on addressing road carnage in South Africa. Other achievements were four evaluation reports on road safety, programmes for youth, children, the community and one focussed on drivers, passengers and pedestrians and cyclists. There was underachievement in terms of roadshows, the number of Youth programmes implemented in institutions of Higher Learning, training of traffic officers and the Road Safety Practitioners Curriculum was not completed.
Mr G Radebe (ANC) asked how the staff transferred who had been to RTMC from the Cross-Border Road Transport Agency (CBRTA) impacted RTMC in terms of their budget. He asked what type of structure RTMC was ready to form. The other issue in terms of National Road Safety, was that RTMC had said that they required funding to support the plan. He asked how much was required to support implementation of the National Road Safety strategy. The other issue was regarding the sustainability of the RTMC finances. What did RTMC mean by that? In terms of the 24-hour shift, was RTMC still engaging with National Treasury regarding the financing of the strategy? He asked if RTMC had the human resources capacity to implement the strategy. He had noticed at times that there was a reliance on cameras instead of the visibility of traffic officers, and cameras did not prevent accidents.
Mr Mulaudzi asked about the number of Board meetings and the point of seven Board meetings instead of four per year as per the companies Act. He thought that all provincial traffic colleges were under RTMC. Was he correct? He asked whether RTMC had challenges in terms of the CBRTA law enforcement officers’ salary packages. He asked about the 18% increase. Where, exactly, had the RTMC conducted the educational programs? He asked what the RTMC was doing about the statistics on the road crisis economy. RTMC knows the cause of accidents was human factors such as drunk driving, and suggested that RTMC ask the Department to amend the law. In Saudi Arabia accident rate was really low because they did not drink and drive, but in South Africa driving is permitted with a limited amount of alcohol in the blood stream.
The Chairperson noted that Mr Mulaudzi’s time was up.
Mr Sibande replied that it was not fair to compare South Africa to Arabic states. He asked RTMC if they had an action plan with a view to ensuring achievement of all the performance targets. He asked how many cases had been identified in the Fraud and Corruption Unit, and how many people had been charged so far. He asked if there were any financial implications. He was worried about when work towards the refined 5-year strategic goals was going to begin. He said that there was a contradiction in training because the RTMC had said that people were already being trained but the document showed that there were people to be trained. He said that the strategic goal of training was not there because of the lack of resources and infrastructure. He said RTMC could not set a target that they are unsure of. Regarding the budget performance program, he asked if there were financial implications.
Mr Mpanza asked how far the integration process of all traffic officers into a single integrated Traffic Department was because that issue was always ongoing. Considering the lack of resources and infrastructure, how would the process be communicated, and when did the RTMC anticipate completing it? He asked if the RTMC was in a position to meet the UN targets and if not, what were the stumbling blocks in achieving the targets. He said that one of the Provinces was planning to install cameras in traffic officers’ vehicles to deal with the issue of corruption. He asked if the rumour was true. He noted that there would be a lot of legal implications if that was true.
Mr M Shelembe asked if the target was for the Board to meet seven times. He asked if there was a fixed budget for the Board.
Mr De Freitas asked why the curriculum for traffic officers was still being developed and what training had been provided previously. He asked if RTMC had put measurable goals in place to measure the success of the campaigns, and if so what were they?
Mr Holsinger asked that the RTMC number the pages in their documents in future. Regarding the achievements of 2016/17, he asked what alignment there was with road safety strategies. He said that the Committee should have a comparison of the data from the four reports. He said that there were two major episodes that spoke to where the Committee was in terms of the presentation. The first was the NaTIS transfer, especially the legal costs attached to the NaTIS episode. The second was the CBRTA law enforcement section. He asked if the NaTIS legal bill and operational costs were the main reasons why the vehicle licence renewal fees were increased by R 30.00 With about 12 million vehicles in South Africa, that would add R360 million per year to RTMC’s income revenue stream. He asked that if those elements were the reason and what unit cost analysis had led to the decision for an increase of R 30.00.
Mr Msibi replied that the RTMC was governed by legislation passed by Parliament and he emphasized Section 48. In 2007, when the RTMC was established, the then Minister of Finance and the then Minister of Transport had given approval to the transactional fees which were determined at R30.00. Approval was then given by the then Minister Trevor Manuel to the effect that the Corporation had to annually increase the transactional fees by R6.00. If the Committee took account of the years in which the transaction fees were not incorporated, it amounted to R60.00. But that was not the issue. Government had acquired new amenities since its inception. The service provider was not paid to upgrade the system. The system needed to be upgraded and a staff complement had to be dealt with because, in terms of the law, the RTMC had to be self-sustainable. He asked if the RTMC should go into the previous decisions. The issue of the R30 rand stemmed from the correction of the past and amounted to R3 per month over the past ten years. The transfer of the CBTRA had been undertaken without funding. RTMC had received the staff without the funding, and that entailed R18 million per annum. CBTRA cost R 57 million, and with personnel, RTMC had to make a total of R 75 million available.
Mr Msibi assured the Committee that RTMC had the necessary infrastructure. RTMC had entered into an agreement with the army in Heidelberg and the army had provided RTMC with facilities. However, the Department of Public Works had declared the agreement non-compliant and had applied a new law in relation to the issue. That was where the delay came in. However, they had a clear plan on how to deal with the matter. There had been a financial slip in the RTMC, but it did not mean that they could not deal with the issue. He mentioned that the objectives of the RTMC Act were to deal with the concurrent functions, particularly with the Schedules 4 and 5 of the Constitution and Section 156.
The Municipalities and the provinces were the shareholders and thus could not be excluded. Mr Msibi explained that RTMC and the Municipalities were not aligned, and it was a glaring issue that had been considered in terms of the performance management of the provinces. All the Annual Performance Plans (APPs) and the Strategic Plans of the municipalities were controlled and aligned with the Department that would need to ensure that they had the same performance indicators. The dominant feature in the evaluation report was that there was a disjuncture in relation to the APPs in the Provinces, National Department, and entities as well. The National Road and Safety Committee was where law enforcers, together with the communicators, sought to ensure that Province, Municipality and National had one point of entry.
The RMTC had long since developed the curriculum, which was the NQF level four. The curriculum had been developed together with the Universities. What RTMC was currently developing, was the curriculum for the Road Safety Practitioners because RTMC did not have a curriculum for practitioners.
There had been 69 cases of fraud and 45 arrests. The 45 arrests were not individuals, but were cases. RTMC had collaborated with the Hawks and Crime Intelligence. The minimum requirement for meetings of the Board was four per annum but RTMC had seven meetings because the Board had to decide whether to defend certain amenities and to deal with the integration of all the former states. The remuneration of Board Members was on a retainer, irrespective of the number of meetings the Board held. That was intended to prevent it becoming a money-making scheme. The issue of the 24/7 was unfolding and the rumour of body cameras was not applicable in South Africa. In the Gauteng Province, RTMC had piloted a processing system installed in the vehicles. Limpopo was piggybacking on the process. The UN targets for 2020 could not to be achieved, and the targets were then aligned to the NDP for 2030. Two key issues were the review of the Road Safety strategy, which RTMC had complied with by the 29 March 2017, and the identification of the lead agency in the Road Safety Strategy.
Mr Msibi agreed that there was a lack of resources. National traffic officers’ requirement had been updated to level of the NQF level 6, so RTMC had to do the same with all the provincial and municipal traffic officers. The traffic colleges in the provinces would be used for the upgrading process. The second phase was to upgrade all the traffic officers. SAPS had given RTMC the right to train traffic officers, so RTMC was closing the gap in training. The delay in the Review Committee, in terms of section 18 of the RTMC Act, was that RTMC was only supposed to deal with the Code. The Minister, Deputy Minister and the MECs had followed the process as per the South African National Defence Force where the review was in terms of the entire spectrum. How did the RTCM deal with the human element? He said that if RTMC could deal with pedestrian safety, which was the highest element, that would ensure that RTMC would have reduced about 50% of road risk. The issue of stray animals was only applicable in the rural provinces. RTMC had also identified 50 hazardous locations, and most of these areas were found in KwaZulu-Natal. The collaboration with the Department of Basic Education was to deal with pedestrian risk.
Mr Radebe said that if there were any another questions, they should be addressed in writing.
The Chairperson said that the Committee Members could see the good work done by RTMC. She said that RTMC should keep the Committee updated on its progress.
The Closing Remarks
After the presentation, the Committee discussed the date for the next meeting which would address State Capture. The Committee agreed on 14 November 2017 as the next meeting date and that the Minister should be called for the meeting.
The meeting was adjourned.
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