Department of Transport 2020/21 Quarter 1 performance; Civil Aviation A/B: Committee Report; with Deputy Minister

Meeting report

Deputy Minister’s opening remarks

Ms Dikeledi Magadzi, Deputy Minister of Transport, said the presentation of the quarterly report to the Committee was in line with the government’s evaluation processes, and the Department of Transport (DoT) appreciated the oversight of the Committee and its counsel.

She said the DoT had been heavily impacted by the Covid-19 pandemic and its lockdown effects, especially at levels five and four that had limited movement and thus decreased the demand for transport services. She pointed out the balancing of health requirements and the economic effects that the Department had undertaken in the first quarter. While the Department had targeted to spend R30 billion, this had been slowed down by the pandemic. However, it had put in place measures to mitigate this.

DoT’s first quarter performance

Mr Alec Moemi, Director-General (DG), DoT, said he would address the key highlights for the first quarter, areas for non-achievement and reasons for deviations. He would also discuss internal and external interventions in relation to COVID-19.

The Department had achieved 19 of its 35 targets, which represented a 46% performance level. The key highlights included the automated fare collection system and various studies and feasibility studies in maritime and civil aviation.

It had achieved 100% of its goals in rail transport, and 75% in civil aviation and Integrated Transport Planning. It had not achieved any of its goals in administration.

Some of the key highlights included the development of the Integrated Public Transport Ticketing programme, Memorandums of Agreement (MoA) between the DoT and academic institutions in aviation, and the development of the draft National Rail Bill.

He said COVID-19 was a key challenge that had caused non-performance. He explained the key reasons for deviations and the DoT’s remedial plans. The pandemic had various effects, such as no new hirings taking place during the period. On the other hand, however, it had also significantly reduced road fatalities.

He referred to the internal interventions, such as the distribution of PPE in the public transport sector, indicating the areas and the number of beneficiaries. The Department had spent 22% of its budget, and had underspent in almost all its programmes.

Discussion

Mr C Hunsinger (DA) thanked the Deputy Minister for the introduction and the DG for the presentation. He was impressed by the many reports and assessments, and asked that the Committee got to interact with them.  How did the Department choose the particular output indicators in the presentation? Were they randomly selected?

At the beginning of June, he had asked for a full list of Bills and amendments, as it was increasingly confusing as from time to time, they had to consider things that needed to be changed. He requested that the Committee should be provided with a list of Bills and amendments that also indicated the objectives of such changes.

The Committee had not received an update in relation to the Rail Economic Regulation and the White Paper on rail expansion. He commented that there had been issues of security companies not being paid, yet this was not reflected in any of the financials. How many companies had not been paid, and what had happened to that money?

He asked what was happening about fixing the trains. His impression was that there was very little going on.

He requested an update on how far the Department was with extending the validity periods of driving licences and vehicle disks.

There had been underspending on programmes five and six, which had also been the case in the fourth quarter of 2019/20. In his opinion, this pointed to a systemic problem because it seemed to be a carry-over from the fourth quarter, which had nothing to do with COVID-19.

He also wanted an update on the announced feasibility study on tugboat services. Could the DoT give an update on the review of the Merchant Shipping Bill?

He added that since 2018, there were on average 54 vacant board positions in the Department’s 12 entities. What was the action plan to fill these positions?

Mr L Mangcu (ANC) stressed the filling of the positions. He appreciated the challenges the Department faced in filing them, but commented that this had been a recurring issue even before the fourth quarter of the previous year, and there was need to close the matter.

On the issue of automated fare collection, he requested that the Committee receive a report of how much money had been spent by the 13 cities that had established such a system. What was the performance of such systems in the different cities?

He wanted feedback on the fixing of the trains. He was concerned with the vandalism at the train stations, especially in light of the non-payment of security companies. He wanted a report on why emergency security measures were not taken.

Regarding the reduction of accidents, he had requested a report from the DoT on their plans for the December and Easter periods. To date, the Committee had not received those reports.

Mr L McDonald (ANC) wanted clarity on the R6 million spent on Mangaung, as there had been no progress on it for the past 10 months. He wanted a breakdown on the expenditure for PPE. On the vehicle rentals for security staff, could he get clarity whether this was a total amount?

Ms M Ramadwa (ANC) said the presentation was very comprehensive. Her concern was that there were programmes in which DoT had underperformed, but it had not given timeframes as to when they would be achieved. All the programmes were important, so the DoT needed to have timeframes to ensure they achieved them by the end of 2020.

Mr T Mabhena (DA) observed that the low uptake of the scrapping of taxis did not lie with the taxi owners, but that the bottleneck was rather with the DoT. He said that many widows had their deceased husbands’ taxis, which could be scrapped, as the process was long and tedious.

Could the DoT give a timeframe on the feasibility of the tugboats? There had been an underexpenditure on the maritime contract.

What was happening with the Shova Kalula national bicycle project? The last time, they had been advised that the programme needed to be in the Department of Basic Education (DBE).

Regarding the transfers to provinces, he asked about progress on the R573, which the Committee had been advised the last time had been transferred to the national government. He pointed out that the road was now cracking up badly, exposing it to more fatalities and accidents.

There had been overspending on leave pay and donations. Was it R23 million, or 23%, overspent? Was it on leave or on donations? Which projects would the DoT resume? Could they give a list of these projects and revised timelines?

Mr Mabhena was concerned with the underspending on filling vacancies that had been there since 2018. Were there any timeframes for filling these vacancies?

He was worried about the delay of the Rail Economic Regulations, he asked for the timeframes on this. He was also concerned by the under-achievements of set targets as it would show the DoT was not achieving what it set out to achieve.

Some oversight had been done on PPE in Gauteng, and most of the taxi ranks they visited had said they had not received the PPE. Could the DoT provide a breakdown of the provinces and districts, and how much PPE had been distributed to those areas?

He asked for the DoT´s intervention in the grants to the provinces. What was happening to those funds?

Mr N Paulsen (EFF) wanted to find out how the DoT was using technology to assist in addressing the high levels of carbon emissions from the transport sector. What was it doing to encourage the manufacture and use of electrical vehicles as opposed to carbon-emitting motor vehicles?

There was a need to fix and improve the railway transport. This could reduce traffic. A concerted effort on the part of the DoT was needed to address this issue.

He sought clarity on the money spent on PPE -- was it paid to a service provider to distribute the PPE, or was it for the purchase of PPE that was distributed by the DoT? There was a need to get a list of the service providers that had provided the DoT with the PPE, and to establish whether it was actually supplied.

The Chairperson said there were certain questions that kept on recurring, and he wanted to emphasise them. There first was the question of the full list of Bills in the pipeline. The second was the issue of Mangaung, where there had been expenditure of R6.8 million, yet there were no buses, or only 10 buses, on the road. There was also the issue of the widows.

He added that there was a youth group that was meant to make a presentation on electric vehicles. He wanted clarification on this matter.

Mr I Seitlholo (DA) reminded the Committee that on 14 July, it had decided that the DoT would receive frameworks from different provinces in relation to their spending on provincial road maintenance grants before the DoT could dispense those funds to them. Had those recommendations been adhered to? Would the DoT receive the frameworks from these provinces and cities before allocating these funds?

DoT’s response

Mr Moemi started with the Shova Kalula bicycle project, and said it was part of transport, and not a programme of the DBE. It was part of the non-motorised transport provision, which also included animal drawn carts, whether by a donkey or by a horse. The DoT looked at the suitability and safety of such transport across different places that the programme was deployed. It was in conjunction with the DBE, the same way the Department worked with them on the issue of motorised learner transport.

He said there had been untold difficulties in the administration of learner transport since a decision was made for it to be provided by the DBE. A few years later after this decision was made, three of the seven provinces had handed the function back to the DoT. While the Department was administering the work, the money was sitting with the DBE. The DBE would then sign an agreement in the provinces with the provincial Department of Transport as an implementing agent on behalf of Basic Education.

He was not one of the proponents of this strategy, as he believed that the school system was an ecosystem that must be self-sufficient, so he would not have qualms about schools buying bicycles or arranging transportation.  He added that in the old days, schools ran school buses themselves and they were never run by the Department.  He was not opposed to the idea of schools providing bicycles to their own learners, although there may be a question of the teachers´ competency in handling such matters, as their competency was to teach learners.

However, teachers had a responsibility for guiding the youngsters to become well rounded individuals, so there was a no one-size-fits-all type of situation. There was a need to look at what was objective and what worked under different circumstances. The issue had been raised in the previous year’s budgeting process where it had been discussed and considered. 

The DG said that it had been a decision of the government that the programme should be part of the DoT. The budget had been given to DoT, and they had worked closely with the DBE to identify instances and incidents of children who walked long distances to and from their schools. The last time the matter had been raised, he had committed to checking where the programme should be located, and he could now confirm to the Committee that it was correctly placed in the DoT.

Referring to under-expenditures in the budget, he said schools had been closed and the DoT could not fairly distribute the bicycles during that period.  He invited the Committee to visit the warehouse where they had about 8 000 bicycles, assembled and ready for delivery, now that learners were going back to school. The only reason they were going slow on distribution was because they still had bicycles from the previous quarter.

The issue of widows was a very important and sensitive matter that was under discussion. The taxi industry could not have their cake and eat it -- they had to decide exactly what they wanted. On the one hand, the taxi industry complained that the widows were hard done by when the husband passed on. This applied even if the operating licence was in the name of the wife, and the husband was to inherit the taxi. He said the licenses were in the name of the proprietor, and not in the name of the business.  As a result, the rights that accrued to the licence died when the person passed on.

The DoT was urging the taxi industry to open businesses and register their taxis as an asset of the business. As such, the licences applied for would be in the name of the business so that the transfers could be made more easily. However, there was a reluctance to pay tax and a natural rejection of registering a business, getting the licence and transferring everything to the business.

The National Taxi Alliance had threatened the Department that it would seek a legal opinion and take the Department to court if it insisted on members opening businesses and transferring licences to the names of businesses. He said that as long as the taxi operators did not open businesses, there would always be a problem, because whenever the licence holder died, the widow would have to make a fresh application, so the issue would never end. He therefore suggested that the only solution was for taxi owners to open businesses and register their taxis, as they could not evade paying taxes forever. The issue was corporate tax, and not any other compliance issue. The DoT was keen to resolve the issue, but their suggestions had been rejected time and again. This was a solution that had to be achieved, as it would also assist in the future administration of a subsidy. 

Regarding Mangaung, the Department would insist on a report, and would transfer funding only according to what they thought needed to be done. He reminded the Committee that in the previous report submitted by Mangaung, they had indicated the aspects where they needed technical capacity in order to finalise the project. While there were straightforward options, such as cutting out Mangaung and stopping the project, it would defeat the purpose as there was money that had already been spent.

As promised, the Department would be firmer in dealing with such matters. He pointed out that the allocation had been for employing technical experts that they recognised Mangaung did not have. In cities such as Rustenberg, they would intervene. Although municipalities did not like them intervening, this time round they would intervene to ensure the project was in line with the timelines and schedules.

He said that whenever it was opportune for the Committee, they would like to be allowed to present a full presentation on the Bus Rapid Transit (BRT) system and its challenges, and what they were doing to meet them. He did not want to keep on presenting to the Committee on a piecemeal basis. It would be beneficial to deal with the BRT in totality, as there were various questions from different portfolio committees on the same topic.

Regarding the Bills in the pipeline, he said that while he had the list ready, he could not submit it to the Committee, as it had been submitted to the Presidency and the DoT was awaiting further guidance on it.

Cabinet had approved the Merchant Shipping Bill on February 12 for public comments, and it had been Gazetted for that purpose.

On the extension of the validity period of licences, he said the DoT had extended the validity of licences in the charter and tourism space for an additional six months. They were waiting for confirmation from the state law advisors. They were still talking to the Private Charter Passenger Association (PCPA) on the matter. In addition, the Department had indicated that they would extend the drivers’ licences, but on the motor vehicle disks, they would assess them.  They had noted that the post office uptake on the renewal of disks had been quite high. There had not been an overrun at post offices or long queues, as there was a fairly good management system and there was also a good spread of post offices.

He said there were two provinces that had not signed up to the post office -- the Western Cape and Mpumalanga. Mpumalanga had just concluded their agreement, and would then start operations. Western Cape had indicated that they wanted to expand to more municipalities and service centres, but there was still resistance to going with the post office.

The challenge with the Driving Licence Training Centres (DLTCs) was that once they had one positive case of COVID 19, they had to be closed down and fumigated. This had led to losing almost a whole week. The staff members also had to go into self-quarantine, delaying services at that level. The Department’s mitigation was simple -- through introducing online renewals, as well as the mobile kiosks. They had received the proposal from the Road Traffic Management Corporation

(RTMC) and had sent it to the Treasury for concurrence. They had already obtained approval from the shareholder committee of the RTMC and the Board. Going online was the solution, as COVID-19 was here to stay, and they would use courier services to deliver the disks, which would actually be cheaper.

He added that they had not experienced any difficulties with the actual disks, but rather with the actual licences. They had experienced a backlog, and would therefore extend the validity period to the end of January. They would discuss with provinces which were really affected by the revenue losses due to the postponement of renewals.

The fixing of trains was a big issue. The rail engineers had been working even during the level four lockdown. They had received a number of parts that had been ordered. The first batch of replacement parts had cost R480 million and a further R530 million batch of parts had since been bought. He added that as soon as the parts were bought, there had been an act of sabotage and trains in three of their depots had been burnt. This was a major challenge that had taken them back.

He said they had run out of parking space in their depots. This presented a challenge, as they were meant to receive new trains from their depot in Nigel. This had slowed down production, as there was no space to park the trains. They were supposed to receive five trains, but they were currently receiving one. They could not leave the trains outside, as it was one of the requirements of the insurance company underwriting them that trains had to be parked in the yard. He likened that to buying 30 cars when one had the parking space for only one.

Work had started on the Moloto road, despite the Department having indicated that they would start on the Limpopo and Mpumalanga side. He reminded the Committee that the delay was with Gauteng signing the project over, but as soon as they got the approvals, they had Gazetted it immediately. Unfortunately, by that time the road was in a bad state and Gauteng, knowing they would be transferring the road, had not done anything on it.  The DoT had just done a road condition assessment and was now ready to work on it, noting that some parts had to be done from scratch, while others touched on peoples´ property, and they had to be compensated as per the law. He had just signed the expropriation notices.

Regarding the Takeover Regulation Panel (TRP), he said the slow uptake by the taxis had been made worse by Covid-19. He also clarified that it was R26 million for expenditure on the total amount of 178 taxis allocated.

On the issue of tugboats, he said the Department was waiting for Treasury to agree on the amendment of the Levies Act. They had already consulted the industry, which was not hostile to a special tariff. It was a win-win situation for them, as their ships could be salvaged should they run into any trouble, and this would save them money. The salvage capacity would be beneficial to South Africa, as they were on the second biggest shipping route.

The Chairperson asked the DG to respond to the rest of the questions in writing. On the issue of the Bills in the pipeline where the DG had asked for guidance, it should be indicated that they were drafts. This would assist the Committee on that matter.

The Deputy Minister responded on the issue that most of the Department’s state-owned entities did not have boards. She said there were now only two -- the Cross Border Road Transport Agency (CBRTA) and the Passenger Rail Agency of South Africa (PRASA) -- where short-listing was ongoing. The rest had full boards.

Interim Report on Civil Aviation Amendment Bill

The Chairperson asked the Committee to consider the interim report on the Civil Aviation Amendment Bill that was meant to be tabled in Parliament as soon as possible in terms of the Assembly Act, section 4 (c). The reason for the reconsideration was the issue of the Insolvency Act, which had not originally been part of the Bill.

Mr Hunsinger said that the Committee was in agreement with the report, and hoped that Parliament would include everything the Committee had proposed. 

This position was seconded by Mr McDonald.  

The Chairperson concluded the first agenda by noting that the DG would respond to the matters in writing.

Mr Hunsinger agreed with the position that the rest of the responses should be in writing. He added that in response to the earlier issues raised, there was need for a joint meeting with Basic Education, as it was not proper to have a function being shared between two departments across nine provinces. This was a matter the Committee had earlier on indicated would be problematic. He also recommended that the Committee receive a progress report on the BRT.

The Chairperson concluded that the report had been accepted.

The Deputy Minister accepted the proposal for a joint committee meeting with the DBE. She also commented that there might be need for the Committee to have some oversight in the municipalities and provinces.

The meeting was adjourned.