Department of Transport Annual Performance Plan; with Minister

NCOP Economic and Business Development

18 April 2018
Chairperson: Mr M Rayi (ANC, Eastern Cape)
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Meeting Summary

The Minister of Transport stated that the Department of Transport contributed towards four outcomes of the Medium Term Strategic Framework Outcome 4: Decent Employment through inclusive economic growth; Outcome 6: An efficient, competitive and responsive economic infrastructure; Outcome 7: Comprehensive Rural Development and Land Reform and Outcome 10: Protect and enhance environmental assets and natural resources. The Department had identified key areas of service delivery over the medium term. It included

having an efficient and integrated infrastructure network and operations of which the National Transport Plan would be the point of departure. There was a need to build a transport sector that was safe and secure. The Road Safety Strategy was key in this regard. Improving rural access, infrastructure mobility and greater attention to the Learner Transport Policy was also on the agenda. The focus was also on improving public transport services. The Bus Rapid System was making inroads in selected areas but had its own challenges on implementation. As always efforts were being made to have increased contribution to job creation. The bottom line was about how many jobs could be created.

Minister Blade Nzimande identified the following key issues that required attention:

  • There was a need to strengthen oversight over public entities. The DoT required a dedicated unit to perform oversight. Truth be told sometimes entities had more expertise than departments.
  • There was also a need to ensure that board vacancies at entities were filled. The terms of most of the boards of entities were expiring. The Department had to apply its mind properly and the first entity to be tackled was the Passenger Rail Agency of SA. It was unacceptable that trains were late on a daily basis.
  • The filling of positions within the Department had to be prioritised. The constant reshuffling of Cabinet did not help as two Ministers of Transport had come and gone. As a result, filling of posts was delayed. He would endeavour to fill posts.
  • There was a need to ensure that audit outcomes were taken seriously.
  • The Department of Transport briefed the Committee on its Annual Performance Plan (APP) 2018/19

The Department had 31 planned targets in total. The Committee was provided with insight into key interventions across the Department’s seven Programmes i.e. Administration, Integrated Transport Planning, Rail Transport, Road Transport, Civil Aviation, Maritime Transport, Public Transport, in the meeting of the targets.
On the financials, Members were provided with insight into the liquidity of the Department’s twelve public entities as at the end of the 3rd Quarter 2017/18. The Airports Company of SA and the Air Traffic and Navigation Services topped the list as the healthiest. Total budget of the Department for 2017/18 was R59.7bn. Budget for compensation of employees for 2018/19 was capped at R496.7m. Transfers and subsidies made up 98% of the budget. The biggest chunk of transfers and subsidies went to Passenger Rail Agency of SA and the South African National Roads Agency.

The Chairperson emphasised the need for public transport in rural areas. Members asked why trains were being sourced from Spain when SA was manufacturing them in areas like Koedoespoort and Nigel. Everyone was on the same page that work was needed on the R573 Moloto Road. It was a hotspot for accidents. Members were however concerned that five years down the line not much work had been done on it. No progress was made. Members were concerned that it was becoming the norm for trains to be late in SA. It was a matter that needed to be addressed. Close to 50% of commuters no longer used trains. Members were convinced that if SA’s rail system was as it should be then the congestion on roads would be alleviated.

Members shared concerns about the high number of fatalities during the recent Easter period. Members asked Minister Nzimande what was being done to sort out the problems around the demerit points system for contravening drivers. The aim of the demerit points system had been to act as a deterrent. Minister Nzimande was also asked what the timeframes were for the filling of posts in the Department. 80% of the Department’s staff was in acting positions. Members were also concerned about the extensive use of consultants by the Department. Had skills transfer taken place? Members were shocked about the R179.9bn deficit of the Road Accident Fund in 2016/17. How had the Road Accident Fund been allowed to run up such a huge deficit?

Even though the Bus Rapid Transit System was in itself a good system, Members were concerned about it not being implemented properly in all areas of SA. Members asked for timeframes as to when the Bus Rapid Transit System would operate at full scale. Still on the Bus Rapid Transit System, Members asked why the recapitalisation of minibus taxis was still taking place and minibuses were being scrapped. The Department was asked how it held the South African National Taxi Council accountable on how it spent government funds given to it. When was government intending to stop funding the Taxi Council? Members were convinced that there were mischievous forces fuelling taxi violence in SA. Minister Nzimande was also asked whether efforts were being made to integrate the transport system amongst the Southern African Development Community countries.

Members asked for the reintroduction of programmes on road safety for pedestrians and also to continue with roadshows at schools. The Chairperson asked Minister Nzimande what plans were in place to deal with the controversial issue of e-tolls. It was clearly not working. Members asked how entities accounted for funds given to them. The Department was asked to provide timeframes for it putting into place an anti-fraud and corruption strategy. Members asked what was being done around transformation since young black women were complaining that it was not taking place. How did the Department ensure that funds from Provincial Road Maintenance Grants were used for road maintenance?
The Department was asked to provide the Committee with written responses to questions of Members that remained unanswered.

 

Meeting report

Opening remarks by Minister of Transport
Minister Blade Nzimande said that accountability was always a good thing and was glad to appear before the Committee. Interactions with Members were also enriching. The Annual Performance Plan (APP) was developed by managers in the Department of Transport (DoT) under the guidance of the Minister of Transport. All relevant policies, legislation and mandates were taken into consideration in compiling the APP. The DoT contributed towards four outcomes of the Medium Term Strategic Framework i.e. Outcome 4: Decent Employment through inclusive economic growth; Outcome 6: An efficient, competitive and responsive economic infrastructure; Outcome 7: Comprehensive Rural Development and Land Reform and Outcome 10: Protect and enhance environmental assets and natural resources. The DoT had identified some key areas of service delivery over the medium term and these included:

Efficient and Integrated Infrastructure Network and Operations
The National Transport Plan was the point of departure. The challenge was that SA did not have an integrated transport system. There also needed to be the promulgation of legislation and to establish a single Transport Regulator. In addition, interventions through infrastructure transport build were also required. Road maintenance in SA was also a huge challenge. A Provincial Road Maintenance Grant was in place. On infrastructure, the DoT supported the South African National Roads Agency (SANRAL). Minister Nzimande felt that the user must pay principle was controversial when it came to e-tolls. If the state was to be the funder where would the funds come from? The issue was a broader societal issue. A broader debate was perhaps needed. The issue was about how to raise finance for road infrastructure in SA.

One of the DoT’s targets was to upgrade the Moloto Road which connected the Gauteng, Mpumalanga and Limpopo Provinces. The upgrade would be a good job creator. On rail initiatives there was the Rail Moloto Corridor and a train manufacturing plant. There were some issues that had to be dealt with around the land on which the train manufacturing plant was to be built on. Other important matters included the implementation of maritime policy.

Building a Transport Sector that was safe and secure
Of great importance was the implementation of the Road Safety Strategy. The report on statistics over the recent Easter period did not look good. There were far too many fatalities. The main cause of accidents was drunk driving and speeding. Minister Nzimande said road safety programmes needed to target the youth. Road safety education and programmes were needed. The DoT was finalising the National Railway Strategy. Partnerships were needed on road safety and on public transport. There was an increase in pedestrian fatalities. 35% of total pedestrian fatalities were in Durban and its surrounding townships like KwaMashu. The Western Cape Government had done blood tests on pedestrian road deaths and had found that 60% of them had high alcohol levels.

Improving Rural Access, Infrastructure Mobility and Learner Transport Policy
Minister Nzimande pointed out that learner transport was managed differently in different provinces. He felt that learner transport should fall under the DoT. No disrespect was meant towards the Department of Education that was dealing with it presently. There was huge concern over drivers who transported learners whilst under the influence of alcohol.

Improved Public Transport Services
The Bus Rapid Transit (BRT) System had its own challenges. Minister Nzimande stated that the current contract for the Minibus Taxi Recapitalisation Programme was coming to an end.

Increased contribution to Job Creation
Minister Nzimande stated that President Cyril Ramaphosa always emphasised job creation. The bottom line was how many jobs would be created.

Key issues that required attention:
-There was a need to strengthen oversight over public entities. Minister Nzimande said that the DoT required a dedicated unit to perform oversight. Truth be told entities sometimes had more expertise than departments.
-There was also a need to ensure that board vacancies at entities were filled. The terms of most of the boards of entities were expiring. The DoT had to apply its mind properly and the first entity to be tackled was the PRASA. It was unacceptable that trains were late on a daily basis.
-The filling of positions within the DoT had to be prioritised. The constant reshuffling of Cabinet did not help as two Ministers of Transport had come and gone. As a result, filling of posts was delayed. He would endeavour to fill posts.
-There was a need to ensure that audit outcomes were taken seriously.

Discussion
The Chairperson said that on rural access and mobility the focus should not only be on learners. Public transport for rural areas was needed.

Minister Nzimande said that he would have to be assisted by the DoT to answer the questions of Members. He commented that he had been on a rollercoaster ride to try to understand the transport portfolio.

Mr W Faber (DA, Northern Cape) on train manufacturing, stated that the Committee had visited Koedoespoort three years earlier where trains were being manufactured for China. Train manufacturing was also taking place in Nigel. Why were trains for SA being sourced from Spain when SA was manufacturing them?
He agreed that the Moloto Road needed work as it was a dangerous road. The concern was that nothing was happening on it five years down the line. There was no progress. He often used trains in Cape Town and spoke to passengers. The main gripe was that trains were always late. Close to 50% of train commuters no longer used trains. If the rail system was as it should be then it would alleviate the pressure on roads.

Minister Nzimande said he was not sure what was happening at the train manufacturing plants referred to. He would however like to visit the plants. The Moloto Road matter was ongoing and a source of huge debate. A substantial amount of investment was needed on the Moloto Project. The Project could run into billions of Rands. There was still commitment to the Project. He unfortunately did not have any details but officials would be able to shed light over the matter. The backbone of the National Transport Master Plan was rail. Other modes of transport linked up with it. He was aware that trains were always late and he hoped that the new PRASA Board would be able to deal with the matter. He noted that PRASA was treated as an Automated Teller Machine (ATM) instead of it providing an efficient rail system.

Mr L Magwebu (DA, Eastern Cape) was aware of the media statement about the statistics for the Easter period. If there was to be better enforcement of laws and if drunk driving and reckless driving was to be made a Schedule 5 offence then an amendment to the Criminal Procedure Act was required. He asked Minister Nzimande what he thought could be done to deal with the challenges of the demerit points system that was applicable to drivers who contravened. The demerit points system was supposed to act as a deterrent but there were problems around it.

The Chairperson responded that the demerit points system fell within the ambit of the Administrative Adjudication of Road Traffic Offences (AARTO) Amendment Bill. The Bill was no longer in the hands of the DoT but was with Parliament.

Minister Nzimande on the demerit points system said that the AARTO Amendment Bill was before Parliament. 

Mr E Makue (ANC, Gauteng) on job creation, wished to raise two issues. The first was about why 80% of the DoT’s staff was in acting positions. He asked Minister Nzimande what timeframes he had to address the issue. He pointed out that job uncertainty created work instability. The second issue was that the APP showed that the DoT used consultants extensively. Members did not take too kindly to the use of consultants by departments. To what extent had skills transfer taken place?
He was concerned about the Road Accident Fund (RAF) having a deficit of R179.9bn in 2016/17. How was the RAF allowed to run up such a huge deficit? The RAF was essentially bankrupt. On the BRT System there seemed to be good stories to tell in George and Cape Town. However, township people complained that the BRT System was not available to them. It was a good system but proper implementation was lacking. Timeframes were needed as to when the BRT System would operate at full scale. There were talks about integrating the transport system amongst Southern African Development Community (SADC) countries. How could the Committee assist in unlocking things?

Minister Nzimande responded that the RAF deficit was at present sitting at R205bn. He noted that the post of Director General of DoT had been advertised. The closing date for applications was end of April 2018. Posts would be filled within the next 3-4 months. He had met the RAF and it was in actual fact bankrupt. The RAF had many challenges. The intention was to turn the RAF into a Road Accident Benefit Scheme (RABS). There was legislation to deal with the process. The legislation had been approved by Cabinet. There had been a great deal of debate around it. He urged the Committee to prioritise the legislation. By 2022 the deficit was expected to increase to R700bn.
He assured the Committee that he would look into the matter of consultants and the excessive use thereof. It was a government wide problem. Government had created too many agencies and hence experts were in demand. It was a challenge that government had to deal with.

On the BRT there had to be buy in from the taxi industry. The BRT was handled differently by different municipalities. There was no one size fits all. He said that South Africa’s SADC counterparts had asked for assistance on how to get their roads as good as SA’s roads were. President Ramaphosa on integrating road transport across SADC countries had spoken about a type of SADC SANRAL.

Mr Collins Letsoalo, Chief Financial Officer (CFO) on the RAF, said that the pay-out to beneficiaries could be in any amount. The difficulty was that claims were made against the RAF and not the guilty party. The intention was for the RAF to be replaced by the Road Accident Benefit Scheme (RABS). The RABS would be brought in as an insurance system.
 
Ms B Mathevula (EFF, Limpopo) said she had grown up in a rural area and whilst at school she was taught how to cross roads. She felt that the Department of Education should once again be teaching children how to cross roads. The DoT had also held roadshows in the past which was no longer happening. The roadshows had taught pedestrians to wear white in order to be more visible. The transport of school kids in bakkies was dangerous and she asked for timeframes as to when the matter would be dealt with.

 Mr Mathabatha Mokonyama, Acting Director General, responded that school kids were being educated.

Minister Nzimande said the issue was about how to main stream road safety into school curricula. Work was being done towards it. Roadshows to schools needed to be increased. He emphasised that provinces had to be engaged on scholar transport. Perhaps the DoT should have a say and influence it.

The Chairperson asked what plans were in place to deal with the issue of e-tolls. It was clearly not a success. He pointed out that SA Express was the only airline servicing the route Cape Town to East London. In 2016 SA Express had been grounded. He had spoken to the relevant Minister at the time and was told that aircraft should be replaced after five years. The practice was for aircraft to operate for ten years.

Minister Nzimande, on civil aviation, said the DoT was responsible for regulation and licensing. He had visited Air Traffic and Navigation Services (ATNS) SOC Limited which handled air traffic control and management solutions for SA and 10% of the world’s airspace. He wished to engage airlines. There seemed to be a pattern. Wherever South African Airways (SAA) exited a route then SA Airlink took over the route. He agreed to look into the matter. Affordability of airline tickets also had to be looked at.
The matter of e-tolls was being discussed. Some felt that e-tolls should be funded through the fuel levy. The debate on e-tolls was inadequate. Changes in the fuel levy impacted upon food and transport prices. A whole range of options was being considered on the e-toll debate.

Mr Makue suggested that the DoT in the interest of time keep its briefing to the point and stick to the actual Annual Performance Plan (APP) 2018/19.

Briefing by the Department of Transport (DoT) on its Annual Performance Plan (APP) 2018/19
Mr Mokonyama said that the DoT had 31 planned targets in total. The Committee was provided with insight into key interventions across the DoT’s Programmes.

Administration Programme
The strategic objective was to promote equality and equity within the sector through the coordination of empowerment initiatives for previously disadvantaged groups such as women, persons with disabilities, youth and children. The intention was to monitor implementation of the sector socio-economic empowerment programmes of the DoT, State Owned Entities (SOEs) and provincial departments of transport. Ten community outreach campaigns were planned on gender, persons with disability, youth and children.

Integrated Transport Planning Programme
The strategic objective was to formulate and implement national transport macro-planning legislation, policies and strategies. The intention was to monitor ten National Transport Master Plan (NATMAP) priority pilot projects. One of which was the R573 Moloto Road Phase 1. The plan was also to conduct the socio-economic impact assessment on the Revised White Paper on the National Transport Policy and submit the White Paper for cabinet approval.

Rail Transport Programme
The strategic objective was to develop and implement interventions aimed at improving rail transport operations. The intention was to conduct stakeholder consultations on the Draft National Rail Bill and process the Bill through the Economic Sectors, Employment and Infrastructure Development (ESEID) Cluster and Cabinet. To also conduct research on proposed access arrangements and pricing approaches to the Interim Rail Economic Regulatory Capacity. In addition to develop an implementation plan for the Private Sector Participation (PSP) Framework.

Road Transport Programme 
The strategic objective was to develop and implement interventions aimed at enhancing safety and security of road transport. The plan was to conduct stakeholder engagement on legislative inputs and proposals and to develop a draft bill for founding legislations of road entities. To also monitor the implementation of the National Road Safety Strategy and to conduct stakeholder engagements on the Draft Anti-Fraud and Corruption Strategy.

Civil Aviation Programme
The strategic objective was to develop and implement interventions aimed at improving operations in the civil aviation sector. The intention was to develop and ensure approval of regulations for the Airports Company of SA (ACSA) and ATNS Acts. To also process the Air Services Bill through the ESEID Custer, Cabinet committees and Cabinet.

Maritime Transport Programme
The strategic objective was to develop and implement interventions aimed at improving maritime transport operations. The plan was to conduct an audit of Operation Phakisa projects at seven commercial ports. With the strategic objective to develop and implement interventions aimed at enhancing safety and security of maritime transport. The intention was to process the Merchant Shipping Bill through the ESEID Cluster and cabinet.

Public Transport Programme
The strategic objective was to develop and implement policies and strategies aimed at improving provision of quality public transport infrastructure and services in rural areas. The plan was to develop Integrated Public Transport Network (IPTN) Plans in two district municipalities i.e. Vhembe and Nkangala. With the strategic objective to facilitate and promote the provision of sustainable public transport through the use of safe and compliant vehicles. The intention was to conduct cost calculations on the new Taxi Recapitalisation Programme (TRP) scrapping allowance and develop requirements for inclusion of scholar transport and cross border transport in the TRP.

Mr Mokonyama said that on risk management the DoT was performing well as systems had been put in place. Risk was being monitored.

Mr Collins Letsoalo, CFO, spoke to the financials of the DoT. Members were provided with insight into the liquidity of the DoT’s twelve public entities as at the end of the 3rd Quarter 2017/18. The ACSA and the ATNS topped the list as the healthiest. The total budget of the DoT for 2017/18 was R59.7bn. The DoT’s budget for compensation of employees for 2018/19 was capped at R496.7m. He noted that transfers and subsidies made up 98% of the budget. The biggest chunk of transfers and subsidies went to PRASA and SANRAL.

Discussion
The Chairperson said that if any of the questions of Members remained unanswered then the DoT should provide responses to them in writing to the Committee.

Mr Magwebu asked how entities accounted for funds that were given to them. He asked for timelines around the DoT putting in place an anti-fraud & corruption strategy.

Mr Letsoalo responded that the anti-fraud and corruption strategy was specifically tailored for vehicle testing centres and drivers licence testing centres. He noted that 19 000 drivers’ licences had been cancelled. He explained that grants were monitored and audits were done. The DoT had experienced issues with some provinces. In certain instances, grants were stopped.

Mr Makue, on the BRT System, asked why the DoT was still continuously scrapping taxis. The BRT process had started during the time of the then Minister of Transport Mr Dullah Omar. Why was the continued recapitalisation of minibus taxis taking place? He noted that there were mischievous forces fuelling taxi violence in SA. He pointed out that young black women were complaining that transformation was not taking place. What was the DoT doing to address the issue?

Mr Mokonyama explained that the South African National Taxi Council (SANTACO) was created in 1996 by an alliance of feuding taxi associations. There was massive violence at the time. Government decided to create a unified national council for taxis which was supported by government until it found its own feet. The SANTACO was thus born. Due to the informal nature of the taxi sector government decided to assist with the recapitalisation of taxi fleets. However due to dissatisfaction amongst SANTACO ranks members split from SANTACO to form their own groupings. One of the biggest and strongest groupings that had emerged was the National Taxi Alliance (NTA). The Taxi Recapitalisation Programme was designed to deal with un-roadworthy vehicles that should be scrapped. As time had passed it had to be decided on how to deal with the current taxis that needed to be scrapped. The process needed to be reviewed and needed greater involvement from the industry and government. A replacement strategy was needed. Taxi recapitalisation would continue to assist with the process. Perhaps an ideal solution would be to bring in big buses with taxi drivers being employed. He added that in the aviation industry the number of hours of flying time accumulated could be a barrier to entry for young black pilots. In the past many commercial pilots were former air force pilots. It was something the DoT was aware of.

Ms Mathevula on Provincial Road Maintenance Grants, asked how the DoT ensured that funds were used for road maintenance.  
 
Mr Letsoalo agreed that roads were in bad shape. The DoT tried to change the conditions of the Road Maintenance Grant.

Mr Magwebu said that funds to the tune of R21m had been given to SANTACO. Was SANTACO held accountable on how the funds were spent? When was government to stop its funding to SANTACO?

Mr Mokonyama responded that SANTACO was annually supposed to furnish audited financial statements and a business plan. On the issue of what the funds was used for he said that ownership in the Taxi Recapitalisation Programme process was to change. There would no longer be dependence on government. The DoT believed that the systems that it put in place would determine whether the SANTACO still needed operational funding. He stressed that the relationship that government had with the SANTACO allowed the DoT to still regulate the space. It was difficult to exactly say when the SANTACO would be self-sustaining.

The Chairperson reiterated that responses in writing should be provided to any unanswered questions.

The Committee adopted its Report on Budget Vote 35: DoT Annual Performance Plan 2018/19.

Committee Minutes
Minutes dated 13 and 20 February 2018 were adopted unamended.

The meeting was adjourned.

 

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