Department of Transport Quarter 1 & 2 Performance; Committee Report on RABS Bill

Meeting report

Committee Report on the RABS Bill
The Chairperson submitted the amended Committee Report for consideration.

Mr C Hunsinger (DA) said that the Report was not in its initial format and asked the Chairperson why the second version of the report differs substantially from the first one.

The Chairperson replied that in the previous meeting Members did not agree with the content and format of the Committee Report as initially drafted. The DA can raise this matter in the National Assembly if it had any issues with it.  

Mr L Ramatlakane (ANC) said he was satisfied with the second draft of the Report. He then moved for the acceptance and adoption of the Report.

Mr M De Freitas (DA) wanted to understand if the Committee decided about what the DA’s view was.

The Chairperson said the team captured what transpired in the previous meeting, and that was reflected in the Report.

Mr De Freitas wanted confirmation if the team that put the Report together decided on what the position of the DA is.

Mr T Mpanza (ANC) said that all issues captured in the Report were the matters discussed during that meeting and the Secretariat team put together what was discussed in the meeting. Therefore, it is not their view but that of the Committee according to the discussion that took place in the previous meeting. He supported the manner in which the Report was captured and agreed with Mr Ramatlakane to accept the report as the Committee Report.

Mr N Seabi (ANC) said that in the last meeting the word ‘reject’ was used [about the DA minority report ] and Members took a resolution that the minority view would be captured as the Committee deemed fit. Therefore, it was captured correctly, and he suggested they adopt the Report.

Adv M Mulaudzi (EFF) said that the EFF received the Report yesterday and it was thoroughly perused and the EFF was of the view that there was uncertainty on whether the legal and financial opinions were accepted by the Committee. The EFF looked at the several amendments that were made to the Bill which changed the initial outlook of the Bill. Therefore, it wanted to know if there was a further report from the actuaries about the viability of RABS and how it would be financially sustained.

The Chairperson said the Committee deliberated extensively on those matters and it agreed on the A-List (Committee proposed amendments) which was accepted a while ago. The EFF Members have not been attending the meetings and the Committee was not in a position to rehash the proceedings that have taken place since May. She asked Member to look at the A-List. In addition, the State Law Advisor was consulted thoroughly throughout the process.

Mr Hunsinger begged for the Chairperson’s indulgence to raise the important points. The EFF also requested an opportunity to raise input from its perspective. In light of Rule 166, this was the appropriate time to submit a minority report. According to Rule 288 the minority party is entitled to specify the reasons that there was no consensus. He asked the Chairperson to consider the request. In the Committee Report, there are only ten aspects from the DA minority report and the DA had raised about 30 matters it objected to.

The Chairperson refused to accept the EFF suggestions because the EFF Member did not attend any of the meetings where the Committee Report was deliberated on and considered. The EFF can raise these in the National Assembly

Mr Ramatlakane said that there seems to be an understanding that each party is supposed to submit a minority party, and that is not what the Rules convey. He made a proposal for the adoption of the Report.

Mr De Freitas irritably objected to the process and how the Committee dictated how the minority parties should express their views on the RABS Bill.

The Chairperson said that the Committee Report would not be populated by the views of the minority parties on matters that were responded to by DOT and deliberated on by Members. The DA and the EFF were welcome to raise their objections when they were on the podium in the National Assembly. The Committee Report was not open for debate as Members have been running around in circles on this matter for so long.

She put the matter to a vote and the ANC voted in favour of the Committee Report whilst the opposition parties, DA and EFF, voted against the Report.

The DA submitted its objection and the Chairperson noted the objection.

Mr Hunsinger put it on record as a point of order that the Committee Report was adopted illegally and violated the Rules of the National Assembly. What transpired in the meeting was an abuse of power by the Chairperson of the Committee.

The Committee Report on the Road Accident Benefit Scheme was adopted.

Department of Transport 2018/19 Quarter 1 & 2 Performance
Mr Chris Hlabisa, Acting Director-General: Department of Transport presented. He set out the unachieved targets (see document for details on Q1 and Q2).

▪ Under the Administration Programme, in Quarter 1 DOT aimed to conduct 10 community outreach campaigns. The reason for deviation was that the youth development programme career exhibition was shifted to Quarter 2 due to unsuccessful planning arrangements by Eastern Cape Provincial Department of Transport.
▪ For the Integrated Transport Planning (ITP) programme, the annual target was public awareness campaigns on the Green Transport Strategy to be held in nine provinces. The Quarter 1 target was hosting public awareness campaigns in three provinces. However, public awareness campaigns on the Green Transport Strategy were not hosted as targeted. The reason for this deviation was that the Green Transport Strategy was approved for submission to Cabinet at the end of the 2017/18 financial year and still awaits Cabinet approval.
▪ For the Rail Transport programme, the annual target was to submit the National Rail Bill to Cabinet. The Quarter 1 target was to conduct stakeholder consultations on the draft National Rail Bill, but Stakeholder consultations were not conducted as targeted because critical issues for the National Rail Bill has not been finalised. However, stakeholder consultations are to be prioritised once critical issues impacting on the Bill have been addressed.
▪ For the Road Transport Programme, the Access Road Development Plan was submitted to Cabinet. The target was not achieved because the Roads Policy Funding Chapter has not been completed. As for developing the Draft Bill for founding legislation of road entities, stakeholder consultations were not conducted on legislative input and proposals with road entities. Draft proposed legislative amendments from C-BRTA and SANRAL were received. The delays were due to internal processes and capacity challenges.
▪ As for the Civil Aviation Programme, draft regulations for the ACSA Act were submitted to the Minister for approval. The draft regulations were not presented to Exco as targeted due to internal processes. The same applied to the ATNS Act, although it was also submitted to the Minister for approval.
▪ Under the Maritime Transport Programme, the annual target was to submit the Merchant Shipping Bill to Cabinet. The Merchant Shipping Bill was not submitted to the Economic Sectors, Employment and Infrastructure Development (ESEID) Cluster as targeted. The draft Bill was submitted to Legal Services for State Law Advisor’s comments. The delays were due to prolonged stakeholder consultations.
▪ For the Public Transport Programme, the Transport Appeal Tribunal (TAT) Amendment Bill was submitted to the State Law Advisor for preliminary certification. The TAT Amendment Bill was not processed through NEDLAC as targeted due to prolonged consultation processes.

The finance report showed that the Road Transport Programme had an over expenditure of R179 million mainly due to the revision of the Provincial Road Maintenance Grant (PRMG) payment schedule. However the programme is under-spending on goods and services due to outstanding invoices for decade of action for road safety projects as well as delayed process for the appointment of service provider for the S’hamba sonke project.

The Public Transport Programme underexpenditure of R167 million was mainly due to slow spending on taxi recapitalisation which is demand driven, the revised payment schedule for the Public Transport Operations Grant (PTOG) as well as goods and services projects such as the Integrated Public Transport Networks in District Municipalities, taxi recapitalisation model review, National Land Transport Information System (NLTIS) upgrade, implementation of Shova Kalula Bicycle Project and other projects.

Discussion
Mr Hunsinger referred to the BRRR, and looking at the current situation, in all DoT entities the least number of clean audit findings was achieved and there was no alignment to the Department’s KPIs. There were three out of 14 entities with clean audits. This was worrisome. DOT planning and budgetary processes are brought into question by so much under-spending and in some programmes there is under- and over-spending within the same programme – he asked for clarity on this.

He applauded DOT for ensuring it spent its money on necessary programmes and projects and withdrew spending money where it was unnecessary. The biggest under-expenditure was on railways. To what extent are we going to see plans to ensure this is not repeated because it speaks to planning. What real interventions will be put in place? Lastly, how is DOT addressing the high vacancy rate?

Adv T Mulaudzi (EFF) said that hopefully DOT would strive for 100% in meeting its targets. On the ITP non-achievement– when is the campaign going to commence as we need the time frame for when it will start and which provinces are targeted? When is the rail transport performance going to be prioritised and rectified? As for the draft regulations for the ACSA Act and ATNS Act, what would be the next step after Exco had considered them? DOT needs to ensure there is a reduction in the vacancy rate in the next report.

The Chairperson said that the ATNS and ACSA Amendment Bills are with the Portfolio Committee and would be published for public comment as soon as the RABS Bill is concluded.

The Acting DG replied that the KPIs for DOT entities in terms of DOT oversight and involvement were discussed in previous meetings. The entities report to the shareholder. Each board as the accounting authority is held accountable on behalf of the shareholder for what is happening in the entity. As DOT we do engage with the entities in making sure that they work together but there are meetings with the Minister and CEOs and Chairpersons where the entities give updates on performance and are assisted. We do have a Governance Council which the Minister established to deal with matters of governance.

The underspending was not due to the lack of planning capacity within DOT but rather prioritizing the areas of focus for spending. As for the vacancy rate, there was a commitment from the DOT executive authority where the Minister said that he would like to appoint the DG so that the DG can appoint the DDGs. There is a process of sifting with a view to filling that post very shortly. The DG post will be concluded before the end of the financial year thereafter all the remaining vacant positions would be filled. We are optimistic that in the new financial year the vacancy rate would be addressed. The Minister wants the DG to appoint the DDGs. Once the DDG appointments are concluded and Cabinet approved, the Chief Director positions will follow.

DOT is not happy with the 65% achievement in Q1. It would now undertake to ensure that the targets are SMART. However, nine out of ten times DOT failed to meet its targets due to stakeholders that fail to provide the required information during the consultation process. Cabinet approved the ITP (Green Transport) and directed DOT to consult throughout all the provinces, and DOT has started with Mpumalanga, Limpopo and Western Cape. In Q3 and Q4 we will do Gauteng and the rest of the provinces.

DOT approached the Department of Performance, Monitoring and Evaluation (DPME) for the Socio Economic Impact Assessment Study (SEIAS) on the TAT Amendment Bill in Quarter 2. The next step is to go through to the DG Cluster and then to Cabinet.

Ms Danielle Mabula, DOT Acting Chief Financial Officer, replied that by the end of the financial year the under-spending would be addressed in all programmes. A revision of the procurement plan has been conducted in Quarter 2 and it was finalized in line with the adjustments. There are areas where DOT did not receive funds but those areas would be covered through the adjusted budget. We have done the revision. he DOT was over-charged on accommodation – and that invoicing was being corrected.

The critical area is PRASA, and apart from withholding the capital transfer for PRASA where there is no spending, PRASA is being assisted in its procurement plan and payment schedules.

Mr Seabi referred to PRASA where the budget amounted to R18 billion but cash projections per quarter on slide 71 shows an under expenditure of R6.1 billion. However, the DOT presentation said the money was not transferred to PRASA. So how was the money spent if it was not transferred?

Mr Sibande asked if DOT had a monitoring function in its programmes because there are potholes in many roads in the country. There is no clarity on how the money is spent for that and if money does not get utilized for what it is intended.

Previously there was collaboration with taxi associations coming closer to DOT to discuss national road safety programmes to minimise the challenges persisting on the roads. On slide 74 on public transport, can DOT provide more details on this programme.

The Chairperson asked if DOT had an annual capital expenditure programme for PRASA so that PRASA can be held accountable when it is not spending the money. There are no trains in the Western Cape and there is a shortage in Gauteng, yet the money is available and not utilised.

The Acting DG clarified about internal process delays and capacity. Internal processes cover a number of areas and those would be processes inside DOT where we consult amongst ourselves. Critical to this we have to consult throughout DOT but some DOT functions are not available to provide engagement and consultation swiftly. He referred to the lack of capacity and the need for reprioritising. We have to consult with the entities as they will be implementers of the Bills, and we cannot leave them behind. In some instances you will find that if the procurement process is not followed correctly, it is rejected.

Ms Mabula replied that at the start of the financial year, DOT takes its total budget and divides it over the four quarters, and that is for the cash flow projections. In Quarter 1 for PRASA, what happened was that DOT did not withdraw money from Treasury for the PRASA capital expenditure but only the operational budget of R2.2 billion and that was requested and transferred to PRASA. The reason DOT did not request money for capital expenditure was PRASA still had R14 billion in its account that was not utilised. DOT with Treasury is assisting PRASA to ensure that it utilizes its capital expenditure budget but the money will only be transferred once PRASA is able to utilise the capital that is still within PRASA. We have started to request money from Treasury to DOT so that should there be a need in PRASA for a capital expenditure we are able to transfer it immediately. In Quarter 1 the only money we had was for operations. The R2.2 billion was requested from Treasury and has been transferred to PRASA. That is why the CAPEX money is still reflecting under DOT. There is a Capital Expenditure Committee signed off by the Minister to assist PRASA with its capital expenditure.

Mr Hunsinger referred to the Railway Safety Regulator Report and the sanctions on manual train authorizations. In the past nine months manual train authorizations have increased from 35 000 to over 614 000 which speaks to broken signal equipment. This is about basic procurement. There is a long list of parts and equipment that are needed for railways and trains. Serious intervention is needed on this. 

The Chairperson said that DOT needs to start monitoring the spending on capital because PRASA is not utilising its capital expenditure.

The Acting DG replied that there are a number of programmes on the cards to address matters. The team established by the Minister is to solely implement the plans and ensure that the vandalism of trains is also addressed. The new PRASA Board is looking now into resolving these matters.

Mr Ramatlakane referred to the transfers for municipal expenditure. The Municipal Finance Management Act exists to ensure that the transferred monies are spent for the intended purpose. What is DOT doing to ensure that the failing municipalities get help?

He was concerned if the PRASA capital expenditure money was kept in the DOT bank account as PRASA had R14 billion for capital expenditure which it did not spend. Perhaps PRASA should be invited to answer these questions. There are a number of trains in the Western Cape that have now been parked because they were vandalized. It is extremely worrisome that resources are available but are not being utilized. PRASA said it would send a report on this but does DOT have its own analysis on this matter?

The Chairperson noted that DOT said that it was reviewing funding for the provinces, so have assessments been done to see what is happening on the ground? The Committee was informed that there are challenges; hence, the review. Can DOT update the Committee on its assessments? She asked about the challenges in the Green Transport programme. She also had concerns on DOT internal processes regarding the Amendment Bills. The ATNS and ACSA Amendment Bills were to come before Parliament in 2015 but it seems only now that the Bills see the light of day. Lastly, we have not yet dug deeper in the quarterly reports but we know that there are significant challenges in the DOT entities.

Dr P Maesela (ANC) said that looking at the report, he was not happy with the way DOT outlined its targets.

Mr Mathabatha Mokonyama, DDG: Public Transport, replied that the targets are phrased in the desired outcomes manner and that it is how they are generally written. As for the taxi recap programme, the new programme has the very same issues as the old one. We are finalizing the procurement of the new contract for the taxi recap which is much more improved than the previous one. We are reviewing the intervention because the one-size-fits-all does not work. Coupled with that was the challenge of non-compliance by municipalities. We are close to the process and where there is non-compliance, we withhold the money which is why there is under-spending. DOT has written notices to several provinces to withhold monies for municipalities that do not comply. Unfortunately that does not bear much fruit. DOT was keen for the Committee to know that where it does not get value for money for certain programmes by municipalities, it withholds funding.

The Acting DG replied about delays in internal processes that they are addressing vacancies both in the entities and DOT. The recruitment process has already started at the executive level. He noted that PRASA had submitted a report and they are meeting with PRASA next week to engage on the turn-around strategy and performance.

The Chairperson thanked DOT and said any outstanding questions should be responded to in writing.

The meeting was adjourned.