Department of Transport 2019/20 Quarter 4 performance; with Deputy Minister

Meeting report

Opening remarks by Deputy Minister

-Deputy Minister of Transport, Ms Dikeledi Magadzi, thanked the Committee for the opportunity to present the Department of Transport’s fourth quarter expenditure. She stated that there had been underspending on a few items and that the Director-General (DG) would speak to these.

She informed the Committee that it had been a very busy year at the Department, with the appointment of new political heads as well as a new DG. The appointment of a permanent DG, after many years of acting appointments, was a step in the right direction.

She indicated that she was confident that the Department had managed to address salient issues that it faced such as the Passenger Rail Agency of South Africa (PRASA) matter, the downgrade of the South African National Roads Agency (SANRAL) and the Airports Company of South Africa (ACSA).

Briefing by the Department of Transport on its Fourth Quarter Financial Expenditure 2019/20

Mr Alec Moemi, Director-General of the Department of Transport (DoT), briefed the Committee on the Department’s fourth quarter financial expenditure report.        He informed the Committee that the Department had seven programmes that had been allocated about R64 billion; about 99% of the budget was used.

On the administration programme, the Department underspent on vacancies and managed to clock in savings on goods and services. The Department was able to decrease the vacancy rate from 10% to 8%. The National Treasury (NT) agreed to provide the necessary funding for the posts.

He indicated that the Department could not proceed with finalised interviews due to the Covid-19 pandemic.

In integrated planning, the Department underspent on the regional corridor strategy. This commenced but had to stop as a result of the lockdown. This programme would only resume at lockdown level one.

The Department had also underspent on the review of the Merchant Shipping Bill and a feasibility study on tugboat services.

On road transport, the Department underspent on the Shamba Sonke programme and on civil aviation; it also underspent on watch-keeping services due to a reduced contract amount. This related to the monopoly of Telkom on the data and radio services the Department required to implement services. South Africa (SA) was bound by international treaties to keep 24-hour watch of the oceans. Telkom charged about R120 million for this service but the Department was able to reduce these costs to about R50 million.

On public transport, he indicated that the Department underspent mainly on transfers and subsidies due to slow spending of the taxi recapitalisation programme. Many beneficiaries had complained that the R195 000 provided by government was way too little. Government explained that it was not its role to buy taxis for operators; its role was merely to provide a subsidy that could be utilised to buy a brand new taxi. By the time the lockdown was implemented there had been a considerable spike in applications. The matter had now been resolved with the South African National Taxi Association.

The Department did not allocate funding to the Nelson Mandela Bay (NMB) for the Public Transport Network Grant (PTNG) as per Section 216, sub-section 2, of the Constitution.

On rollovers, the Department had a rollover amount of R335.965 million. The rollovers included an amount of R98 million that had been withheld from the NMB for reasons mentioned above.

Discussion

Mr C Hunsinger (DA) thanked the DG for the presentation. He expressed his excitement about the plan to revive the Arrive Alive Campaign and saw this as a positive sign.

He also asked the DG why the DG never replied to WhatsApp messages he had sent to him.

Turning his attention to the suspension of funds to the NMB, he pointed out that NMB commuters had been deprived of reliable public transport. He wanted to ascertain whether there were alternative avenues to address the issues in NMB.

He added that there were about 13 cities that operated Bus Rapid Transit (BRT) services that cost the fiscus about R40 billion since its inception. The budget expenditure on the BRT continued to illustrate high expenditure, yet the DoT had never received a detailed report on the actual expenditure in each city and where these stations were located at. He requested the DoT to consider providing a report that detailed this relevant information that also included how many buses were also currently in operation.

He also indicated that he had reliably learned that security companies that were contracted to PRASA had not been paid. This had resulted in these companies abandoning their positions that in turn led to an uptick in vandalism at stations during the lockdown period. He called for an investigation. PRASA had taken R2 billion from the budget allocated for the refurbishment of coaches. These funds would now be used to pay for utility bills and court challenges. He requested an explanation from the DoT on why this decision had been taken.

Mr L McDonald (ANC) congratulated the DoT on having been able to record savings for the fourth quarter.

He lamented on the lack of BRT services in Mangaung when the city had received regular transfers from the DoT for this purpose. The poorest of the poor are suffering, he echoed. When will Mangaung be dealt with?

He pointed towards the 100% spent on rail services as ‘smoke and mirrors’ as this did not translate into actual service delivery. He also called for a breakdown on the funds spent on goods and services and the service providers contracted to PRASA. He called for an end to white monopoly capital.

Mr P Mey (FF+) questioned how it had been possible for the DoT to convince Telkom to reduce a tender from R150 million to R52 million.

Mr T Mabhena (DA) labelled the underspending on filling vacancies a chronic challenge at the DoT. He stated that the DoT could not blame Covid-19 pandemic for not being able to fill vacancies. He asked that all critical vacancies should be filled.

Mr Mabhena requested clarity on whether the DG announced that money meant for the taxis would be spent on the resuscitated Arrive Alive campaign. He also criticised the application process for the taxi recapitalisation programme as cumbersome and littered with red tape.

On the PTNG, he stressed that Treasury had been empowered to the transfer of funds to entities where there had been irregularities and incapacity to spend these funds. He asked for an update from the DoT on the cities the DoT had engaged on the PTNG and whether these cities had been supported by the DoT. He wanted to see buses on the road so that people could utilise cost effective transport modes.

Mr K Sithole (IFP) thanked the DoT for its presentation. He expressed his concern that funds earmarked for public transport improvement had been redirected to fund the Arrive Alive campaign. According to Mr Sithole, the Arrive Alive Campaign had been an utter failure.

He questioned the underspending on programme one and two of the DoT and saw it as a clear case of nothing being done. He asked to be given a timeframe of when vacancies would be filled.

He also asked to be briefed on the disagreements between South African National Taxi Association (SANTACO)

The Chairperson called on the DoT to fill all outstanding vacancies. He also requested the DoT to provide the Committee with a breakdown of how many black owned businesses benefitted from transport related grants in each province.

He cautioned the DoT not become accustomed to rollovers. Rollovers were indicative of mismanagement and should not be tolerated – even during the Covid-19 pandemic.

Responses

The DG replied that the DoT had no intention of becoming accustomed to rollovers. The DoT had to apply for rollovers otherwise the NT would have taken the money back.

On the taxi recapitalisation programme, he stated that the Department had processed several applications in the months leading to the end of the previous financial year. The DoT had also reached an agreement with SANTACO on all outstanding bottlenecks.

He promised the Members that he would like to reappear before the Committee to present the reprioritised budget in view of the Covid-19 pandemic.

He added that the DoT stood ready to provide a detailed breakdown of BRT expenditure and black economic empowerment figures. These figures would have to be sourced from the respective metros as the DoT was not privy to such information.

On the Section 216 notice and the NMB Metro, he added that the DoT did not want to punish anyone nor did the DoT want to encroach on government entities. The NT invoked Section 216 against the NMB Municipality for inefficiencies unrelated to the DoT and the BRT programme.

He expressed solidarity with the residents of the NMB, but blamed the metro for the position it found itself in.  

On Mangaung, he added that the Metro had not been placed under administration. Mangaung’s problem had been that it did not have the capacity to start its own BRT system. Members need to make their own value judgement on whether Mangaung gave value for money. The DoT had concerns about Mangaung and hoped that the AG will investigate matters in the Metro.

He informed the Committee on the DoT’s Integrated Public Transport Networks (IPTNs) engagements that the DoT had with the following cities:

• Ekurhuleni
• Buffalo City
• Johannesburg
• Tshwane
• Mangaung
• Polokwane
• Msunduzi
• Mbombela
• Rustenburg
• eThekwini
• George and
• City of Cape Town

The DoT wanted to understand what challenges these cities experienced. Various issues had been discussed and invitations extended to these cities to utilise the DoT’s expertise. To date, only Rustenburg had taken the DoT up on the invitation. The DG explained that many cities did not want to sign up for assistance.

Concerning the 100% expenditure rate on rail transport, he added that the bulk of the rail transport budget was transferred to PRASA on an annual basis. The DoT thus did not have “control” over the budget per se and counted on PRASA to spend the funds on allocated projects. This was the reason why it showed 100% expenditure. He lamented on the woes at PRASA.

In view of the above, one of the key mandates of the PRASA administrator had been to assess what was needed as a matter of urgency.

Regarding the R2 billion reallocation, he explained that the DoT’s understanding had been that PRASA would not be spending the money immediately on refurbishment.

He indicated that the DoT was ready to conduct interviews to fill critical vacancies. However, events (Covid-19) had overtaken that process.

Some vacancies had been filled and this led to a marginal decrease in the vacancy rate from 10% to 8%. The Department of Public Service and Administration (DPSA) was also engaged. He pushed back against assertions that the DoT was hiding behind numbers.

Responding to the question on the Telkom tender, the DG informed the Members that Telkom was the only entity that could provide watch keeping services. Telkom currently linked all 64 light houses stationed in South Africa.

The DoT negotiated with Telkom and put forth a strong case. The DoT argued that the Competition Commission came out strongly against the monopolistic behaviour of cellular companies. Telkom concurred with the DoT’s views and granted the rebate.

The DG did not agree with the Chairperson on rollovers. He explained that the DoT had the capacity to spend the money and that this had never been in doubt.

Follow-up comments and questions

The Chairperson commended the DoT for being able to convince Telkom to lower its fee to R52 million.

Mr Mabhena informed the Chairperson that the DG did not answer Mr Hunsinger’s question about why the DG never responded to Mr Hunsinger’s WhatsApp messages.

The DG explained that there were certain protocols in place that dealt with communication between Parliament and government departments. He stressed that he could not account to individual Members; he was only accountable to the Committee as the oversight entity. He called on Members to communicate with his office and emphasised that he was not that active on social media. He did not regard WhatsApp as official government communication and called on Members to send an official letter instead.

Mr Mabhena took offense to the response by the DG. He was at pains to explain that as a Member of Parliament, he and any other Member had the right to contact any accounting officer of a department. He said that other DGs made themselves available to Members and asked why the Transport DG thought himself as being special. He castigated the DG and stated that the DG was a government official. He cautioned him against developing a mentality of “us against them” as he shared the same goals as the DG.

The DG took exception to the comments by Mr Mabhena. He replied that his mother always told him that he was special, thus he believed that he was. He was adamant that he would not tolerate anyone telling him that he was not special.

At this stage, the Chairperson intervened. He added that a Mr Mabhena had communicated with the Department outside of a Committee meeting. It would thus be unfair to expect the Committee to deal with the matter.

The Chairperson cautioned against Members engaging accounting officers directly. He said that as the Chairperson of the Committee, he should be made aware of any substantive engagements. He requested Members and the DG to not use the meeting platform for these grievances.

The meeting was adjourned.