Department of Transport Adjusted Budget & Revised Annual Performance Plan; with Minister

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Transport

07 July 2020
Chairperson: Mr M Zwane (ANC) and Mr M Mmoiemang (ANC, Northern Cape)
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Meeting Summary

Video: Portfolio Committee on Transport, (National Assembly) 7 July 2020

In a joint meeting, Members were briefed by the Department of Transport (DoT) on its adjusted budget, from which a total of R4.6 billion had been cut. The Minister assured Members that the budget shifts did not represent a fundamental departure from its mandate, but had required the Department to change its immediate focus and place emphasis on stabilising service delivery in the “new normal.”

There had been a shift of R349 million from the goods and services and taxi recapitalisation programmes to fund the shortfalls in some of the Department’s entities. These included the Road Transport Programme, which had a baseline reduction of R1.756 billion from the Provincial Road Maintenance Grant (PRMG), and the South African National Roads Agency Limited (SANRAL), where the cut had been R1.095 billion.

The public transport programme had reprioritised 15% of the Public Transport Network Grant (PTNG) and the Public Transport Operations Grant (PTOG) to procure personal protective equipment (PPE) for public transport facilities and public transport. There had been a further reprioritisation of R1.135 billion from the PTNG towards the Taxi Relief Fund, while an additional R1.95 billion had been allocated to the PTNG from the R20 billion announced by the President to cover the shortfall from municipalities.

Members raised concern about the cuts to the road transport programme, but were assured by the DoT that funds were still being adequately allocated to roads. This had been a tough decision that the Department had had to make, but it had been based on its commitment to the policy objective of moving transport from road to rail.

Concern was raised about the cut to the PRMG, as Members felt that infrastructure development in the provinces was important to boost the economy during this tough period. There was also concern about under-spending of this grant by provinces and municipalities. The allocation towards the Taxi Relief Fund was welcomed, but Members wanted to know what would happen to the funds if the taxi industry did not accept the offer -- would they be reallocated elsewhere? They were told that negotiations were under way with the industry, and that the main intention for the funds was to relieve the hard hit taxi industry. The Minister said the Department was committed to the formalising, professionalising and inclusion of a subsidy for the industry.

Members asked about the 70% versus 100% capacity loading in taxis, progress on finalising the e-toll matter, the allocation to the Gauteng Freeway Improvement Project (GFIP), the merging of the Department’s entities, the DoT’s role in the cancellation of flights out of the country, the state of readiness as railway operations opened up, and reporting on Covid19-related procurement. It was agreed that they would meet again urgently to discuss the strike by freight drivers

Meeting report

Co-Chairperson Zwane greeted and welcomed those present. The Select Committee (SC) would join the Portfolio Committee (PC), as the meeting would deal with financial matters.

Co-Chairperson Mmoiemang said the Select Committee would be part of the meeting, but some Members were at a National Council of Provinces (NCOP) plenary and would join the meeting shortly.

DoT budget reprioritisation

Mr Fikile Mbalula, Minister of Transport, said the impact of the Covid-19 pandemic had a devastating effect on the economy and transport sector. The disruptive effect of this pandemic had been seen in our way of life and in the way government delivered its service delivery mandate. It was for these reasons that the budget presented in February this year had had to be adjusted to ensure the Department could fight the pandemic, but also to ensure that the economy stayed afloat.

The adjusted budget before Members sought to cushion a number of entities from the impact of the pandemic and enable the sector to recover. The budget was not only about cuts to necessitate the allocation of resources to the country’s critical touch points in the fight against Covid-19, but also the rearrangement of deckchairs to enable the Department of Transport (DoT) to respond better to the impact on the sector and entities.

The pandemic had further amplified the challenges confronting public transport. The divide between the poor who relied on public transport and the affluent, who had access to private vehicles, had been laid bare by the current circumstances. The interventions to ease the poor’s burden had to be mindful of their circumstances. Precisely for this reason there was a strong case for taxi relief support for an industry which was a major mover of people.

The DoT was mindful that intensifying investments in infrastructure would add momentum to restructuring the economy, and placing it on a stable footing more quickly. For this reason, the DoT would support its major entities such as the Airports Company of South Africa (ACSA), the South African National Roads Agency Limited (SANRAL) and the Passenger Rail Agency of South Africa (PRASA) in forging ahead with their infrastructure projects. The Department was equally mindful of the urgent task to consider the rationalisation of some of its entities as part of streamlining its approach of service delivery. This was a matter that was reflected in its priorities, as part of reimagining safety and security in the transport sector.

The budgets shifts did not represent any fundamental departure from what the Department aimed to deliver, but nevertheless shifted its immediate focus and required it to place emphasis on stabilising service delivery in the “new normal.”

The key elements in the adjusted budget that the DoT had paid attention to were the shift across programmes, from goods and services and taxi recapitalisation, of R349 million to fund the following:

  • the shortfall to the Cross Border Road Transport Agency(CBRTA) of R104 million;
  • the Road Traffic Infringement Agency (RTIA), in order to ensure adequate capacity to roll out the Administrative Adjudication of Road Traffic Offences Act (AARTO) of R200 million;
  • the Railway Safety Regulator (RSR) -- R15.8 million for Covid-19 procurement of personal protective equipment (PPE).

For the Rail Transport Programme, there was a baseline reduction of R1.021 billion, and R1.260 billion for the revenue shortfall, and for Covid-19, of R24.7 million.

The Road Transport Programme had a baseline reduction of R1.756 billion from the Provincial Road Maintenance Grant (PRMG), R1.095 billion from SANRAL, and a reallocation of R309 million for the shortfall, and R2.253 billion for the Gauteng Freeway Improvement Project (GFIP) shortfall.

The Public Transport Programme had a reprioritisation of 15% of the Public Transport Network Grant (PTNG) and the Public Transport Operations Grant (PTOG) to procure PPE for public transport facilities and public transport. There had been a further reprioritisation of R1.135 billion from the PTNG towards the Taxi Relief support, and an additional R1.95 billion had been allocated to the PTNG from the R20 billion announced by the President to cover the shortfall from municipalities.

The following entities had not received any additional funding allocations in the budget:

  • the Road Accident Fund (RAF);
  • the South African Civil Aviation Authority (SACAA); and
  • the Road Traffic Management Cooperation (RTMC).

In the Department’s further engagement with its entities and an analysis of their financials, considering the impact of the pandemic, the Cross-Border Road Transport Agency (CBRTA) and the Road Traffic Infringement Agency (RTIA) had revised their initial requests due to the decline in revenue collection from Alert Level 4. The CBRTA had collected only 77% of its projected revenue, which had reduced the initial request to R38.5 million as compared to the R104 million requested.

The RTIA had also indicated it would be generating revenue since it started issuing infringement letters, and the surplus from 2019/20 would sustain them until the end of August, which had reduced the initial request from R200 million to R80 million. Although the National Treasury (NT) had approved the initial proposal by the Department, the discussion continued on how to cover the unfunded shortfall of the RTMC and SACAA.

The changes were sent to NT, but due to time constraints for budget submissions it had been too late for it to include the changes. Apart from this, the Rail Safety Regulator (RSR) would also experience challenges as a result of the revenue shortfalls. The request for an amount of R17.2 billion for the revenue shortfall from the fuel levy had received an additional allocation. The Department had been unable to reprioritise the R17.2 billion within its allocation. Other requests for guarantees and refinancing were:

  • R3.5 billion for ACSA;
  • R15 billion for the RAF; and
  • R6.3 billion for the SANRAL.

PRASA’s operational losses over the past 10 years had put it under tremendous pressure, which had resulted in a requirement of R8.4 billion in funding which would form part of the adjustment budget process. The Department was currently engaging with PRASA in order to prepare a submission for the adjustment budget process later in the year.

As the Department traversed the path towards economic recovery, it was confident that its entities would recover sufficiently to continue undertaking the critical service delivery mandate necessary to support the resumption of economic activity.

Discussion

Co-Chairperson Zwane said there was no need for the Director General (DG) to present as well after the Minister but if needed, it was allowed. He asked if the DG wanted to add something.

An official said the DG would join the meeting in five minutes, as he was in another meeting and had requested the presentation be delivered in meanwhile. The presentation was in detail, but the Minister had already summarised the presentation.

Co-Chairperson Zwane said it was clear that the Minister had covered almost everything. He thanked the Minister and said it was clear that the Minister was aware of what was happening in the Department. His Co-Chairperson could begin chairing.

Co-Chairperson Mmoiemang asked if the Department was presenting or not.

Co-Chairperson Zwane said the presentation was complete.

Co-Chairperson Mmoiemang said that he was pleased with the good work done by the team led by the Minister on reprioritization, considering the impact of Covid-19. How would transport be repositioned to play its critical role in boosting the economy, given the comparative opportunities from the taxi recapitalisation orogramme, SANRAL, and its focus on toll and non-toll roads? How could the Provincial Roads Maintenance Grant (PRMG) be used to boost economic activity, especially in the rural parts of the country?

Mr L McDonald (ANC) thanked the DG and Minister for ensuring that not all the money had been taken from the transport sector. There was now a reduction of R4.6 billion cut by the NT from the Department, and he hoped the money was spent wisely during this difficult time, and that the entities noted that the money had to be used to service the people of South Africa and not their own pockets.

He welcomed the discussion on making all the transport entities and infrastructure of transport a national key point so that people would stop destroying infrastructure, as a lot of infrastructure had been lost during the Covid-19 period, which was expensive to replace and left a lot of poor commuters stranded.

Mr C Hunsinger (DA) thanked the Minister for being present at a multiple meeting, and said he had not seen previous Ministers attend meetings as much. Although it was a difficult situation due to Covid-19, in a way it was a good thing because now for the first time there was proper revision of the entire budget. One would have wanted this to happen under better circumstances, but serious consideration should not be given not just to the budget constraints, but to the structure as well. Interdepartmental and cross-departmental considerations also had to be noted. This included seriously considering the consolidation of state-owned enterprises like the RTIA and the RTMC, fo example. Final consideration also had to be given to consolidating PRASA and Transnet, as there was cross-invoicing of more than a R1 billion each year due to rentals between the two.

Referring to the further refinement that was necessary because of the current restricted budget, he proposed that there had to be insight into how PRASA would establish its priorities in their Administrator’s presentation with regard to service delivery, safety and security, capital programmes, modernisation, governance and revenue enhancement. He would like to these five priorities detailed in the budget, especially after the past few weeks’ oversight.

On SANRAL, he asked what the intention was of allocating R2.5 billion to the Gauteng Freeway Improvement Project (GFIP) e-tolls.

It was important that infrastructure projects continued, as they would enhance the economic future. For instance, the Mtentu bridge in the Eastern Cape could boost economic development in that area. He wanted to know how the budget had been reprioritised in the relation to infrastructure expenditure.

On the PTNG, he noticed that the 13 cities which had been awarded over R40 billion over the last 12 years had now been cut back to a budget allocation for 10 cities. Nelson Mandela Bay, Mbombela and Msunduzi had been excluded. This would leave many people without hope for a Bus Rapid Transit (BRT) system, and this had to be addressed in more specific focused meetings.

Mr M Rayi (ANC, Eastern Cape) said he appreciated the efforts made by the Department ensure the reductions did not affect delivery of the DoT’s mandate. With the easing of restrictions, some of the entities which generated their own revenue would get funds again and continue their programmes.

He understood the Taxi Relief Fund was a once off, but wanted to know how long it would be, and what would happen beyond that, as the extent of the Covid-19 pandemic restrictions were not certain.

Had any evaluation been conducted by the Department and Minister on job losses at each of the entities affected, and at the small businesses that depended on them?

Mr T Brauteseth (DA, KwaZulu-Natal) referred to the reporting requirements of the Department, and said he had sent written questions but had not yet received a response.

He commented that the Instruction Note 8 issued by NT on 19 March instructed all departments to report on all procurement done in the name of Covid-19, and essentially allowed departments to deviate from normal procurement procedures.

There had been lots of talk about PPE in the transport industry, and there had to be monthly reports from the end of April, May and June. When would the two committees receive copies of the three-monthly reports the DoT sent to Treasury?

Mr L Mangcu (ANC) said he want to persuade the Committees to send a well-wishing message to the Minister for what he had done so far within a very tough terrain of negotiating with the taxi industry. Not all that had been proposed had been finalized, but the R1.135 billion Relief Fund was there. He proposed that the Committee send the Minister and his team a message of support for an amicable way forward. Despite previous challenges, the Minister had tried to close the gap and no amount of money would ever be enough.

The Minister had to consider the opportunity, given the announcement by the Finance Minister, that going forward the budget would be zero-based. The Committee wanted to know the DoT’s thoughts on this ahead of the next budget cycle so that challenges exposed during the Covid-19 pandemic could be resolved in the budget.

The adjustments made were the best that could happen, and the Committee had to support this and the Minister’s efforts under difficult circumstances.

The fact that the PRMG and PTNG both had their allocations affected meant that Members of the Executive Council (MECs) had to be implored to spend the grant money first before other funding sources, considering the condition of roads in the country. This could be done with ministerial guidance through mechanisms such as the Ministers and Members of the Executive Council (MINMEC) meetings and other structures. It was important. as it was a huge opportunity to stimulate the economy.

Mr M Dangor (ANC, Gauteng) asked the Minister if there was progress on the e-toll matter. He did not expect it to be resolved today, but hoped it would be resolved sometime in the future.

Ms N Tolashe (ANC) said it was rare that a Minister could speak in detail about matters. The country and world were in difficult situation due to Covid-19, but she wanted the government to take advantage of the situation as it had exposed shortfalls in service delivery. Historical backlogs had to be addressed, and the current situation created an opportunity to introduce some drastic changes to the old way things were done. The opportunity to make drastic changes that would benefit citizens should not be missed.

She suggested that as far as the entities were concerned, there had been a manner of operation that was not being monitored well, which allowed them to do as they wished. She hoped the Minister would take the opportunity provided by Covid-19 to make changes in entities where necessary, because if the opportunity was missed it might not return.

She appreciated that the DoT had negotiated the process of taking funds away that had not been spent, as this was the law, but said that there had to be extensive coordination between the Department, the provinces and local governments. Money taken away often affected the poorest of the poor. There had to be preemptive action by the Department to inform the provinces and local government before unspent money was taken back so that these spheres could act and address the matter. Money not being spent by provinces and local municipalities was problematic. She appreciated what the DoT had done to mitigate the situation, so that not all the funds had been taken back, but there had to be a programme to indicate how best the money would be spent so the situation did not continue.

On the PTNG, she was concerned as money was being taken away from SANRAL, which had an important job and had to become stable. She wanted to see activism in the coordination of all stakeholders to end cases where SANRAL projects were stopped by insignificant matters. These kinds of problems had to be resolved through coordination.

She said the taxi industry needed to be transformed, as it was the only black industry in the country. It would not be easy, as there were former workers from the apartheid system and criminals, but there were also good people in the industry. It had to be transformed, as government could not be held to ransom by the industry. The work that the DoT was doing in this difficult terrain was good, but there had to be an intensified emphasis on transforming the taxi industry.

Mr P Mey (FF+) said he agreed with Ms Tolashe. Adjustments were necessary, but the road transport programme had been decreased by R2.6 billion. He believed that it was the most important entity in transport, as maintaining the national and provincial roads was a crucial component of the transport system and the economy. 77% of land freight in South Africa was on its roads, and a cut of R2.6 billion was too much.

Mr K Sithole (IFP) thanked the Minister for his effort to balance the budget, and for attending all the meetings at this juncture. On the PRMG cut and other cuts, he asked how the Department had arrived at these figures. He was worried about the provincial roads, as they had outdated infrastructure, especially in KwaZulu-Natal (KZN), Mpumalanga and the Eastern Cape (EC).

He asked how the 70% versus 100% passenger capacity in taxis would be addressed, as it was frustrating commuters.

How long would the DoT tolerate the taxi industry refusing the Taxi Relief Fund offer, as the money could be used elsewhere to finalise other projects?

Mr Hunsinger commented on the Taxi Relief Fund and the hesitance in making use of it, and asked for an indication of what would happen to this allocation from NT if these funds were not taken up. Would the funds be available in the broader DoT budget if not distributed by the deadline, if there was a deadline?

Department’s response

Mr Alec Moemi, Director-General, DoT, referred to the SANRAL and GFIP allocations, and said the reality was that the loans had been taken up and guaranteed by the state and underwritten as such. The liability existed whether there was rejection of the system or not, as the loans had to be repaid. If they were not paid, a default would be triggered which would affect SANRAL and trigger a cross default to SANRAL’s debt, which would be a risk to the fiscus. Therefore, a way of servicing that debt had to be found, and this tool had to be used until a solution was found. The solution was dependent on finding a solution to the e-toll impasse. The alternatives and allocations were only temporary, and final decisions still had to be made concerning roads.

T the Department agreed that the infrastructure projects needed to get under way, and since level three, SANRAL projects had begun again. The country needed SANRAL more than ever before to restart the economy.

On PTNG and the excluded cities, he said that those cities had not spent their allocated money for more than three to four financial years in a row. The decision was not taken arbitrarily, and work would be done to address the matter. The cities had opposed the return of their allocations, and NT had given them an opportunity to submit their spending plans, but they had not met these dates so the money had been taken.

The situation of Nelson Mandela Bay was different, as it had been under section 216(2) of the Constitution and would require the money when it was no longer under this section. The Department was negotiating the rollover of funds and had included it for this reason so that it could get back on stream at that stage.

Treasury Instruction Note 8 had been followed until a new instruction note about who should procure had been issued. The national DoT no longer procured for Covid-19, other than for itself as an employer, but generally no longer procured for the public. Procurement happened at the provincial and municipal level with the revised frameworks. 15% of the PTNG had been ring-fenced for the delivery of PPE and the cleaning of taxi ranks. At the provincial level there was a 15% ring-fencing of the PTOG to achieve this as well, and rural municipalities had a special allocation of R20 billion to procure for public transport. This was a mixed bag, and the DoT was dealing with the provinces on the matter.

The DoT agreed on the need for PRMG spending, and had interacted with provinces. NT had required that a portion of the money be ring-fenced for labour-intensive work on roads. Discussions were at an early stage, but the Presidential Infrastructure Coordinating Council (PICC) and the Infrastructure Office in the Presidency were coordinating part of this work and, beyond Alert Level 3, work would be able to commence.

On e-tolls, he said had touched on the matter, and perhaps the Minister could elaborate further.

He agreed with Ms Tolashe that it was not ideal for money to be returned to the national revenue fund, but the DoT was trying to claw as much back as possible and was asking for the funds to be reused separately. The challenge was with funds that were originally appropriated, not for the national Department, but for provinces and municipalities who had been unable to spend it. NT had a hard stance on whether the “Chinese Wall” money could be spent by the Department, surrendered or rolled-over for the same municipalities to spend. Covid-19 had placed the DoT in a better position, as there was a greater appetite and capacity enhancement to spend the money when it came in.

He agreed with Mr Mey that the cut of R2.6 billion for roads was not a good one, but it was either that or the trains. Trains had been chosen, because they were supposed to be the biggest mover of people and it was the stated policy objective to move from road to rail.

The current conditions were what they were, but solutions were being found and some cash had been injected into SANRAL to ensure the critical road network remained prioritised for freight logistics and the movement of passengers and goods within the Republic and across borders. It was important that the rail infrastructure was rebuilt, and investment made accordingly to make this the backbone of daily commuting.

In agreed with Mr Sithole on the reduction of the PRMG, but said it was the only alternative.

The issue of 70% versus 100% capacity in taxis was being attended to, and the Minister could speak further on the matter.

Minister’s response

Minister Mbalula referred to the zero-budgeting imperative, and said it would require streamlining on priorities and a focus on the outcomes with the greatest impact on service delivery. The five priorities presented earlier in the year gave a sense of how the Department intended to streamline its focus.

In a nutshell, these priorities became a vehicle to advance the apex priorities of the sixth administration in a focused manner. Public transport inclusive of the taxi industry, rail infrastructure, maritime and safety, were important cornerstones of the outlook going forward. 

In response to Mr Hunsinger about the R1.135 billion allocated for the taxi industry, he said that what would happen had not been decided yet. The Department was working on the basis that the money would be disbursed to the taxi industry. There were set processes for negotiation concerning matters they had raised. The Department would not want the money to go elsewhere except to be spent on the taxi industry in a form of relief in any way it could.

The 70% versus 100% loading capacity was being discussed. Covid-19 had impacted on the taxi industry in general due to less movement and transportation of people due to the lockdown, and from a financial perspective they had not been making any money. This was the reality that had to be considered.

He had been speaking to the banks, which had been responsive with their interventions on the payment holidays and alleviating the stress on taxi owners and operators. Once discussions had been concluded towards the end of the week, and the loading capacity matter was concluded, he would be able to give the public and Members a projection on how the package would be implemented in the Covid-19 context.

He was very clear that the mandate of the DoT to assist in the regulation of the taxi industry, and the inclusion of a subsidy for the industry, was an important cornerstone of the transformation project and the professionalisation of the industry. Formalisation could not be discussed without professionalisation, because professionalisation was about the conduct of the taxi driver and the outlook and conduct of everybody else who undertook the responsibility to work in this field.

The professionalisation of air travel had to find expression in the taxi industry as well. It would argue that it was formalized, but it was not fully formalised. It had been hard hit as it could not access loans and the Unemployment Insurance Fund (UIF) because its members were not registered companies.

It was an industry that injected over R40 billion into the economy annually and carried millions of citizens on a daily basis, but was not subsidised for the poorest of the poor. The terms of subsidy versus formalisation had to be negotiated and settled for once and for all, to get the industry going in comparison to other countries, where it was formalised and subsidised. This was the answer going forward.

The Covid-19 relief fund altercations were temporary, but the long term of objective of the Sixth Administration was to transform of the industry. He would come back, with the permission of the Chairperson, to brief the Committee on the work undertaken already on the path towards transformation before being interrupted by Covid-19. Whether the DoT still went along this path or a different one at the end of the day, his mandate was to bring a total settlement to the table on the subsidisation and formalisation of the industry. He did not want to return the money to the fiscus, but rather to invest it in the taxi industry in the form of relief. This was being discussed with the industry.

This past weekend, there had been discussion on finalising the 100% versus 70% capacity matter with conditionalities, which would come at a cost but had to be implemented for the safety of people. Tomorrow, the final report would be received and the National Coronavirus Command Council (NCCC) and Cabinet would make a final determination on the matter. He would report the final decision to the industry on Thursday.

The e-toll matter was finished, but the DoT was waiting for finalisation from the Cabinet and the Minister of Finance, because there were issues that had to be considered concerning the options on the table.The options to settle the matter were being considered and once Cabinet resolved on the issue, he would be able to report back. The matter had an impact on SANRAL’s balance sheet and the borrowing capacity of the Department. There had been progress, but the discussion was now at the Cabinet level and had passed the committee stages, but once it had been finalised the Department would be able to report back.

Regarding the Instruction Note, he said the report could be provided. He himself was considering how the money was being spent, especially the ring-fenced amounts for provinces to spend on PPE, because whenever he met with the taxi industry he heard complaints that there was a lack intervention when it came to PPE on the ground. He would discuss monitoring of the money and implementation in the provinces with the Department. He did not want corruption related to PPE in his Department. He wanted proper accountability, and wanted to know how money was being spent and how many distributions were taking place per taxi rank.

He knew what was coming in terms of the discussion on 100% capacity loading, because there had to be a clear strategy that he, the Deputy Minister and the DG would have to discuss about how distribution would happen.

More money would be needed, as it was still early days. The Corona virus was showing the DoT “flames” every day, and people were dying. The peak had been reached and it was a mess. Whatever was done would come at a serious cost, and every cent had to be accounted for.

Those who won tenders had to do a proper job and be held accountable. People had to be empowered, especially those in the townships. The government had to support those who could deliver Covid-19 procurement, such as masks. According to a report he had received on what the Department had disbursed, black-owned companies and small, medium and micro enterprises (SMMEs) had benefited.

A report concerning the Instruction Note could be provided. The Department had to be able to account for how the money had been spent monthly.

The Department was considering the merging of entities. He had been given a task by the executive to develop a rail and air strategy for the country, and this would affect the discussion around PRASA and Transnet, as well as the corporatisation of the Transnet National Ports Authority (TNPA). The TNPA discussions had to be finalised, as it affected the growth and expansion of the harbours in relation to it being recapitalised because of the non-implementation of corporatisation. The DoT was on track with this matter.

Minister Mbalula agreed that some entities had to be merged, and this would be accelerated and underpinned by discussions between the Ministry and the Department. At the executive level, NT was leading the DoT on the merger of some of the entities.

Follow-up questions

Mr Brauteseth thanked the Minister for his commitment on the issue he had raised, but said it was concerning that the DG was not aware of the responsibility. The Instruction Note was clear and stated that within 30 days of the expenditure was a clear guideline, so the DG’s statement that “if he had to, he would,” was problematic. This was concerning, as this was an area susceptible to massive corruption, as there was a deviation from normal procurement processes.

He wanted to raise a matter not related to the budget. He had been dealing with a few South Africans who had been cleared by the Department of International Relations and Cooperation (DIRCO) to leave the country, but had then had their flights cancelled. The blockage appeared to be within the DoT. He wanted to get clarity on the matter on the behalf of these citizens. These citizens were returning under the rules and allowed categories, but the flights had been cancelled before they could exit the country. Where were the blockages in the system causing this?

Co-Chairperson Mmoiemang asked for an update on PRASA’s readiness and on the protocols in place now that rail transport had started operations.

Department’s response

Mr Moemi said he wanted to clarify to Mr Brauteseth that he had not been heard properly. When he had said “if the Department needed to report, it would,” he had meant to Parliament -- he knew the DoT was obligated to submit monthly reports to NT. He had indicated earlier that the DoT was compliant with Treasury Note 8, and had submitted reports to NT.

He said the DoT had not blocked any flights. It worked in a work stream on border management with DIRCO, the police, state security, the Department of Home Affairs and other role players, which made collective decisions following the established protocols on how flights were provided and approved. At Alert Level 3, the borders remained closed, so there were no scheduled flights in and out of the country. The current system was an exploitation of the markets by airlines. In the current system, in the name of repatriation or even evacuation, different airlines globally arranged flights. Based on passenger booking numbers, they assessed the load to determine if they had sufficient passengers and when enough seats had been bought, applied for a permit.

In terms of the procedure, if it was foreign nationals in the country who wanted to go back home, their country of origin had to send a notice via formal diplomatic channels wherein that country indicated its intent to evacuate its own citizens. This went through DIRCO, which processed it and then brought it to the Border Management, and then a slot was determined based on available capacity.

Due to the closure of the borders, Johannesburg International Airport and its domestic terminal was the only airport being used as a gateway to process repatriation and evacuation. This, and the dilemma of internal leg flights and many airports being closed, was why the slots were limited. From this point of view, it took some time before the next slot was available and those willing to travel wanted to travel almost immediately. People made requests to travel at short notice, despite all the requirements and protocols that had to be followed.

A new issue had emerged of people who were not covered in the category of evacuation or repatriation -- South Africans who worked overseas and wanted to return to work in other countries. Initially this was not allowed, but now it was based on NCCC guidance, and mechanisms for this had to be put in place. Each person had to lodge an application individually with DIRCO, as the lockdown was still in effect. Many passengers did not follow this protocol, and bought tickets first and then the airline saw that it had sufficient numbers and then it applied for a permit, only to find that individual passengers did not have permits. This was a broad overview of the situation, but if he had more time, he would share more instances. It remained a difficult situation.

It was not the Department blocking flights -- it was working on assisting citizens throughout the world as quickly as possible with every application. The application was considered only once the border management work stream allowed it. Previously, some flights had been allowed, but if a flight landed and port health and immigration services were unavailable to process these South Africans, there were challenges. For example, there had been a flight from the United States, where people had been stranded on the tarmac. This was not a situation the Department wanted, so there was an interdepartmental approach to the matter. This was also why permits were issued only once there was complete compliance.

On PRASA readiness, he said the rail service had been allowed to commence service from 1 June, and the two main operators were the Bombela Gautrain Operation, as well as Metrorail on the part of PRASA. The plans had been assessed, and only the Gautrain had been ready and therefore allowed to proceed with operations. The Department had worked with PRASA for a full month to revise its plans and ensure it had social distancing measures in place, and that these had been implemented well. Money also had to be secured from NT to ensure PPE was available.

By its nature, PRASA had many train stations, some of which were very old and often catered for more people than their designed capacity. This meant the process took longer, as only a limited number of people could be on platforms, cones were required, and land behind train stations had to be reclaimed for queuing.

Rail service had begun with a limited service of only four lines -- Gauteng: Pienaarspoort to Pretoria; Western Cape: Southern Line from Cape Town to Retreat; and two lines in the Eastern Cape, which were the Port Elizabeth and East London lines. The current challenges had been considered, and the first week of operations had been reviewed. The DoT was pleased with what it had been able to achieve so far.

The pre Covid-19 scenario, where passengers were hanging on to the side trains, was no longer the case. From a capacity point of view, the new trains being utilized in Gauteng could take 3 500 passengers, but they were now carrying at 15% capacity, taking about 550 passengers. This meant more rolling stock was required but, in many cases, due to vandalisation of infrastructure, that had not been possible.

However, throughput could now happen only at 45 minute intervals between trains to prevent collisions, which limited the timetables. There was work around the clock to increase throughput to 20-minute intervals. There was tremendous support from commuters, who complied with the protocols when the train was full. There was less anger, and the first week had gone fairly well.

For the system to work, the lines had to be ramped up. The DoT would be attending to the KwaMashu line in KZN and the Northern Line in the WC, and then the New Canada Line in Gauteng as well as the Centurion Rail line. It would look at further lines as it went along. Rail service would never be the same again once this process had been gone through. This could perhaps be sustainable, and there was a glimmer of hope for the situation post Covid-19.

This was the state of readiness in a nutshell. The Rail Safety Regulator had been asked to make an assessment, and it had sent the DoT a positive report. Only one are had been highlighted, which was that security had to be improved on platforms and in trains. This was the only thing it wanted the Department to attend to, but otherwise the Department was holding up fairly well.

Closing remarks

Minister Mbalula said the Department had worked very hard to get the rail service going, but there would be strong monitoring in the context of Covid-19 and the opening of lines. The biggest threat at PRASA was security and once that was addressed, things would be alright.

Co-Chairperson Mmoiemang gave thanks for the presentation and the way in which questions had been answered. The Minister and his team’s interaction with the announcement made by the Minister of Finance on 24 June was appreciated. The work done by the Minister and DoT to mitigate the percentage that had to be readjusted was acknowledged. The team’s effort to pinpoint to NT where the reductions might not have the maximum impact, and the identification of areas which would ensure there was no deviation from the key indicators, had been noted.

The Members appreciated the good work done by the DoT under tremendous pressure from the taxi industry, as well as persuading NT to ensure that at least R1.135 billion was allocated to the industry for relief. The taxi industry was a vulnerable sector and was very close to commuters, so support had to be given to it. There was support for the Minister to ensure that the impasse did not worsen. There had to continued accountability concerning emergency procurement expenditure.

Co-Chairperson Mmoiemang wanted to adjourn the meeting but Mr McDonald requested to ask one final question.

The Minister and DG left the meeting.

Mr McDonald said there was a current problem with the Road Freight Industry Drivers Association that had interdicted drivers from striking today over the illegal use of foreign drivers in the trucking industry. This had become a real problem in SA, where companies employed foreigners so that they did not have to pay taxes or look after workers, as per the regulations. It could not be right that an association that was supposed to be protecting drivers was the same association that was interdicting drivers from having a stoppage. As much as foreign countries had assisted this country in transforming from a racist society to an open and non-racial society, it could not be right that companies employed foreign drivers when there was 32% unemployment.

There were many letters that had not been answered by the Department, and he requested that both Chairpersons write to the Department stating that Members could not wait forever for answers to questions, as they had oversight work to do.

He wanted to propose that all the Metro’s involved in BRTs should present their plans and current progress on BRT systems to the Committees.

Co-Chairperson Mmoiemang said there had to be a meeting with the team on these issues. It was a matter of meeting with the Minister and DG on the issues. Communication between the Department and Parliament had to be addressed, as responses were not given, which was the crux of the issue.

The truck matter was very urgent, and he asked if Members could agree that there needed to be engagement on the matter in the next few days. The previous year, a strike had been addressed swiftly by the Committee and Department. He hoped the same could happen again. There had to be a meeting on the matter in the next few days.

Mr McDonald agreed, and requested that in preparation for this, a meeting be scheduled to meet with Road Freight Industry Drivers Association before the Committees met with the Department.

The meeting was adjourned.

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