DoT 2019/20 interim audit; Economic Regulation of Transport Bill; PP Report on Toyota Quantum Panel Vans; with Deputy Minister

Meeting report

The Chairperson welcomed everyone back after the parliamentary recess.

Input by the Deputy Minister

The Deputy Minister of Transport, Ms Dikeledi Magadzi, said that the Department felt both elated and cautious about how it has performed regarding the audit. As seen in previous years, some state-owned entities (SOEs) are having challenges and others are excelling. It is believed that things will get better as they proceed.

Deputy Minister Magadzi said that one challenge in the Department is the number of vacancies. The Department is busy making sure that those vacancies are going to be filled. There have been repeat findings by the Auditor-General of SA (AGSA). The Director-General (DG) will be able to indicate which systems have been put in place so that the Department can say what challenges there are, particularly with repeat findings in some of the SOEs and probably in the Department too.

Deputy Minister Magadzi also said that the Department is elated that there is progress regarding the audit. The Department is also cautious to keep working on the systems and perfect them, following the prescripts of the law. The Department will be getting guidance from the Chairperson and his team so that the systems in the Department can be perfected.

Briefing by the Department of Transport (DOT) on its Interim Audit for the 2019/20 Financial Year

Mr Alec Moemi, DOT DG, said that the audit outcomes for the 2019/20 financial year show some significant improvement compared to the findings of the previous financial year, but overall the financial statements present fairly. The Department achieved an “unqualified audit opinion, with some matters of emphasis” once more.

The DG offered a proverb from the Lingala people of the Democratic Republic of the Congo: “Do not matter much about where you fell, but concern yourself more with where you have tripped.” The logic is that if you do not know what tripped you in the first place you will keep tripping each time you cross that path. This was the message the DG took to the executives in the Department. The Department must look into the things that caused the audit to not be clean.

The DG said there were five matters of emphasis, “a,” “b,” “c,” “d,” and “e” (see document). AGSA noted the issue of special adjustment budget for the first matter, “Subsequent Event” (see document), that was allowed in terms of section 16 of the Public Finance Management Act (PFMA) and tabled by the Minister of Finance.

Matters “b” and “c” are closely linked. The AGSA picked up errors in the previous year, i.e. 2018/19. When the books were closed, the errors were not properly indicated. This speaks to the principal-agent relationship that the Department had. The error impacted the opening balances of the following financial year, i.e. the one that ended in March 2020. The misstatements became material because the principal-agent arrangements of the previous financial year were not disclosed.

Matter “d” is about the issue of the buying of furniture. Manufacturers must make at least 60-70% of the furniture locally in order for them to qualify. When the Department did procure furniture, it procured from local suppliers, but the value-chain was not followed up on fully. When the manufacturer delivered its products, it turned out that they were not made locally. This was picked up earlier in the course of the audit and since then the matter has been corrected. This won’t be an issue in the future.

Matter “e” is related to the issue of the Telkom watch-keeping services as well as the fleet management contract. The second issue was declared “irregular,” but the Department and the AGSA do not necessarily agree on that. This speaks to two key events that took place. The first was the Global Citizen Conference, hosted by South Africa. The second event was the BRICS Conference. The DG explained that what normally happens for both these events is that DIRCO indicates if and when transport must be arranged for heads of state.

For example, if a conference is scheduled to take place from 3 - 5 November, DIRCO says that heads of state might start arriving on 1 November and the last departure might be on 10 November. For security reasons, itineraries are not known to the Department. The Department has to be on standby. The Department has to hire cars and drivers and be ready to receive the passengers. If there are 12 delegates, 12 cars will be hired, effectively from 1 November until the last day of departure. The AGSA argues that the cars should only be hired for the duration of the actual conference.  However, what the Department is doing is in line with global standard practice. The question the Department put forward to the AGSA in this regard is what happens when a delegate arrives and a car and driver are not ready? Even DIRCO cannot give the Department the exact travel dates of delegates. Delegates’ itineraries are only shared with the Department at the very last moment.

The AGSA says that any money spent on cars and drivers outside of the actual conference dates is irregular expenditure. In the interest of finalising the audit report, it was agreed that this finding would stay put, but it has been referred to the office of the Accountant General for further clarity. It is anticipated that this will continue to be a problem in the future when heads of state do meet up again post COVID-19. President Cyril Ramaphosa is given this type of service when he travels abroad. These driving companies often impose a 100% cancellation fee. The DG said that the Department would not want to embarrass the country and have it in the headlines that a head of state who was invited to South Africa had to wait six hours because the Department of Transport was not ready. He said that the Department was acting in accordance with class A protocol that is provided to heads of state.

Focusing on slide six of the presentation document, the DG again stated that the Department has achieved an “unqualified audit opinion, with some matters of emphasis” each year for the past three years. The audit committee provides assurance; an internal audit also provides assurance; the Executive Authority, i.e. the Minister, also provides assurance. The Accounting Officer, i.e. the DG, also provides assurance. The key findings are management matters. The AGSA said that senior management provides some assurance.

The quality of submitted financial statements was “yellow,” i.e. “concerning”. One of the issues leading to this outcome was the corrections made to the financial statements.

The DG reported that there has been significant improvement in the area of financial health. He said that the overdraft had been narrowed down and furthermore stated that by the end of the current financial year, it is predicted that financial health will be listed as “green,” i.e. “good.”

The DG said that the quality of submitted performance information is and has always been “green.” Save for the issue raised about procurement and the issue raised about the two conferences, supply chain management is “yellow.”

The AGSA found that there were some issues with Human Resource (HR) management concerning appointments. The DG reported that this issue had been dealt with and cleared. The big concern has been the filling of the vacancies. He said three of the four Deputy Director-General (DDG) posts that were outstanding had been filled. They were now going to cabinet for approval and that the fourth one was busy being finalised. The DG informed the Committee that vacancies at a lower level were also being filled. He said that the Department is on track with the target. The Department told the Chairperson that they would fill the 77 vacant posts by the end of the financial year and the remainder of them by the end of the new financial year.

Mr Moemi informed the Committee that there has been significant improvement to the area of information technology, but there are still some issues. For instance, the AGSA found issues with the governance framework. Those issues have now been attended to and it is anticipated that this area will become “green” in the next financial year.

The area of effective leadership culture has been labelled “green” by the AGSA.

The area of oversight responsibility is “yellow,” as some of the entities are still struggling.

The AGSA recognised that the area of HR management is okay, in spite of outstanding vacancies.

The AGSA recognised that the policies and procedures are in place and that the controlled environment is improving.

Mr Moemi said that in the previous financial year, the area of audit action plans was red, i.e. “intervention needed.” Based on this, he said that plans were put into place and implemented and because of this there were no repeat findings for this financial year and the area of audit action plans improved to “yellow.” He said that having cleared most of the errors, hopefully this area will turn green in the next financial year.

The DG said that the area of IT governance was also “red” in the previous financial year, but had improved to a “yellow” status. The Department is confident that by the next financial year, risk areas and the status of drivers’ internal controls will both be “green.”

Regarding proper record keeping, the DG said that the Department’s records were up to date and up to standard. He also said that the Department has a proper system of record management.

The DG was pleased to announce that the area of processing and reconciling control did not change remains “green” from the previous financial year.

He said that the area of regular reporting has been challenging and that there are no financial statements for this area due to prior areas, therefore the area remains “yellow.”

Mr Moemi pointed out that there was no change in the area of compliance monitoring. He said that it remained “yellow” too because whenever there is an overall finding of “irregular,” the area immediately becomes yellow. In closing he said that the area of IT system controls remained “yellow and all three areas of governance are “green.”

Discussion

Mr L Mangcu (ANC) said that while the DG said the presentation would cover a comparison between the past three financial years, he did not see a comparison being made, except in the total outcome. He said it would have been very nice to see more comparisons, “pound for pound.” He also said that he was very concerned about the annual financial statements. The quality of financial statements was a recurring issue.

Regarding root causes, he said that this was not the first time that “management did not perform adequate reviews to ensure that the submitted financial statements are accurate and adhere to the applicable financial reporting framework” (slide six of the presentation). Mr Mangcu requested more information about this.

Referring back to the issue that the DG spoke a lot about of hiring cars, Mr Mangcu asked what other issues there were in terms of a supply chain.

Mr Mangcu expressed concern that the oversight responsibility under leadership on slide six of the presentation was “yellow.” This made him raise the question of whether this the oversight over the entities. Raising this question he highlighted that entities such as the Passenger Rail Agency of South Africa (PRASA), especially for this financial year, were in serious trouble.

Mr C Hunsinger (DA) said it sounded like the Department should have had a clean audit. He acknowledged the improvements. He said that there was a general feeling of satisfaction about the measures put in place. The closing balance from the 2018/19 financial year differed significantly from the opening balance of the 2019/20 financial year. Seeking clarity, Mr Hunsinger asked the Department to explain what the exact amounts of those opening and closing balances were. Why the deficiency could not be resolved.  At what stage of the audit was the deficiency discovered and what were the repercussions in terms of the misstatement which was accepted in the 2018/19 audit. He also wanted to know if the misstatement was discovered or pointed out.

Mr Hunsinger also pointed out that the DG gave a skilful explanation of note 26 of section 38 of the Public Finance Management Act (PFMA). However he noted that it was actually an old note, but was presented as if it had just come out. The note refers to the responsibility of revealing and allowing things to be investigated. He asked why there was resistance to follow the note. Check the transaction and if it is fine, no explanation would be necessary and the audit would have gone smoothly. There must be more to this. He asked if the DG share more about this.

In terms of all the “yellow” and the intention to improve to “green,” Mr Hunsinger said that there appears to be a need for internal reviews. He then asked what the internal reviews were and what measures the DG would undertake in order to improve the “yellow” areas.

Response 

The DG said a full comparison has not been done, and this was because the presentation was a PowerPoint and so the whole population was not included but instead an overview was given. He said that everyone should have the full report, in which there was more detail.  The DG apologised saying that a full comparison would be requested and that additional information would also be provided.

On the issue of the quality of the financial statements, the AGSA said that the 2017/18 financial year required intervention. In comparison, the AGSA said that 2018/19 financial year was just “concerning” which was an improvement. If there had been no errors in the 2018/19 financial year, there would not be discussions about the quality of the financial statements now. He said that the error that was picked up was not an error in the 2019/20 financial year, but was in the 2018/19 financial year and that the AGSA only picked it in the latest audit.

Mr Moemi explained that when one goes back to correct a previous year’s error, which is protocol, it is unavoidable that the current year will be impacted. The books of the year with the error have to be restated and republished because there was an issue with the principal-agent relationship. He said that the Department clearly did not disclose that prior to now.

At the closure of the previous financial year, there were about 59 different vacancies across all entities that needed filling. The DG said that by the end of the current financial year, by the 31st, half of the vacancies had been filled. At the present time, all vacancies have been filled. He said remaining is the PRASA board, which would be going to cabinet the following week. The Cross-Border Road Transport Agency (CBRTA) board would also be going to Cabinet the following week. He said that there was one vacancy on the South African National Roads Agency’s board and that the closing date is Friday 9 October, so the position was about to be filled.

There have been two resignations on two boards, including that of the Road Accident Fund (RAF). The term of the board of the Road Traffic Management Corporation (RTMC) is coming to an end and that the process of advertising this would start now. The DG confirmed that by the end of the next financial year, 100% of board vacancies would be filled.

At the time of 1 March, there were a number of vacant CEO positions. By the end of the current financial year, most of those vacancies would be filled. Mr Moemi confirmed that CEOs have been appointed at the Airports Company South Africa (ACSA) and to the RAF. The process for appointing a CEO for the Ports Regulator of South Africa (PRSA) is underway and the process for appointing a CEO for the South African Maritime Safety Authority (SAMSA) would begin soon. The only vacancy left would be that of the CEO of the CRBTA, which will be appointed by Cabinet.

The DG confirmed that candidates for the vacancy at the Air Traffic Navigation Services (ATNS) have gone for competency assessments and would soon be going to the Ministry. The Department had been hard at work and it was not easy.

At 31 March, PRASA did not have a full-time board or full-time CEO, which is significant. The AGSA acknowledged the strides of the Department.

A more robust and rigorous process was put in place to do the job of filling vacancies. There are requirements for the first time, e.g. a person must be fit and proper, and not an insolvent. The DG confirmed that the Department went further this year, e.g. a person must have a minimum of five years experience in the sector. He said that if the Department is looking for a chartered accountant, the Department wants one with five years experience. For some of the sensitive jobs, the Department did vetting. For some, a lifestyle audit was also done. The Department was clearly determined to do a proper job of filling vacancies. He said that the Department was proud of the board appointed to SAMSA because it is a difficult sector with so many skilled South Africans leaving the country. The people appointed were of the correct calibre and fairly represented women, youth and people with disabilities.

The DG said he had spoken about three issues to do with irregular expenditure. On the issue of local content in terms of procurement of furniture, which involves two companies, he said that the Department accepts this finding. It was a failing of the Supply Chain Management Practitioner (SCMP) that the Department does not dispute. Requirements were ignored and a written warning has been issued to the Practitioner.

The DG confirmed that the Department was unhappy about the “irregular” finding of the fleet management issue. He said that there was a difference between normal car hire and fulfilling obligations and supporting foreign delegates. This service also applies to state funerals. The DG set out the following scenario say a person passes on a Tuesday and the President wants to bury that person on the Saturday. The Department will get the news via a formal announcement that will most likely be made on the Thursday. The level of officiality is carefully considered. If it is a national funeral, the class is also considered and shapes the type of support provided. If it is a class A official funeral, the Department’s obligations are huge. The time frame between the announcement and the delivery of vehicles is only a few hours if there are memorial services as well. For this reason the DG emphasised that it was not easy.

He said that the purpose of the business was misunderstood. It would be a disaster if an official needed the car for longer than predicted but had to return it. The DG said that maybe there should be discussions with the AG and get a practice note issued for clarification. These audit standards are particular to this department and not across all departments, which is unfair.Mr Moemi said that dealing with heads of state is important and that there was no way that delegations of high risk countries like Russia, for example, would say when they arrive or leave. Those details are stored with military intelligence up until the very last moment.

On the question of why an investigation was avoided, the DG said that nothing had been swept under the rug. He confirmed that the Director of fleet management was undergoing a disciplinary hearing. A forensic audit was conducted, completed and findings handed over. The first two hearings had taken place in front of an independent chair. The employee and the representative have asked for a postponement in order to study the findings of the forensic audit. Mr Moemi said that process was grinding.

The AGSA noted in the report that there were no findings on consequence management, i.e. nothing was swept under the rug. The process of charging the DDG, who was the acting DG at the time, is unfolding. A letter has been sent to the person requesting that they explain themselves to the Minister and give reasons why a disciplinary hearing should not be held. The DG said that the person was not being charged in their capacity as DDG, but rather in their previous capacity of acting DG. The exchanges between the Minister and the Presidency have been shown to the AGSA. He said that the court was clear about the fact that career incidents of DG’s were determined by the Presidency. Therefore, the Minister has written to the President requesting either that action is taken or that the Minister is given permission to take the matter further him.

There are some other irritations that are minor to do with fruitless expenditure but do not impact the audit report. This may look like a no-show, where a person was booked to go somewhere and the Department has paid for the person’s flight and hotel, but for some reason the person did not pitch. Mr Moemi confirmed that a disciplinary hearing would take place if something like this happens. The Loss Control Committee (LCC) recommends that costs are recovered from the no-show person. Unfortunately, due process has to be followed and the AGSA picks up on these types of incidents, unfortunately, because it has the dedicated capacity to do this.

The DG confirmed that there was an internal audit planned, but that there were not enough hours to look at the whole population. That is part of the combined assurance framework. He said that internal audits were not normally done, especially not for things that the Department knew the AGSA was going to look at. This answers the question to do with the stage at which errors are picked up. The DG said that the internal audit action plan was approved with the audit committee only after the Department received the engagement letter from the AGSA.

For instance, if the AGSA says it is going to investigate contract management, then the Department would not audit that area and other things will be looked at instead. Another example is Occupational Health and Safety (OHS), which the AGSA does not normally audit. The DG said that an internal audit will look at that. He said the adopted framework is the combined assurance framework. The AGSA checks the independence and the level of robustness of the internal audit. It checks to see if it has been compromised by management. So the AGSA and the internal audit rely on each other.

The DG again confirmed that when an error is picked up, it is not possible to go back to fix it. Instead, the Department has to make sure the error is not repeated, which is the path the Department has been on all along.

On the issue of internal reviews, the Department asked what one could do as an Accounting Officer to make sure the “yellow” areas become “green”. The DG said he joined the Department in August 2019, which was far past the mid-point of the financial year. He asked to see the audit action plans and to see the issues that had not been addressed for a long time. He also focused on issues that were repeat findings. He wanted to address these issues first and as a result there were no repeat findings in this audit. The Minister and Deputy Minister said they were happy that there were no repeat findings this year. For example, the issue of local procurement has already been addressed and the AGSA confirmed this.

The DG also reviewed the challenges in the finance section and in the internal controls section. Where appropriate, policies have been amended and updated. Where appropriate, he said new mechanisms have been created to control those issues. New policies have been introduced where policy was lacking, including in the area of Information and Communications Technology (ICT).

The DG said he intends to get rid of auxiliary services, which includes contract management. Instances of duplicate transactions had been noted in that area. He said it was not a major issue, but there was no need to wait until it becomes a major issue to act. He said he wants to centralise all contracting functions and contract management under the same director. That will help to avoid duplicate transactions.

Two of these matters, one to do with fleet management, are not part of auxiliary services, but are part of corporate services under the Chief Operations Officer (COO), not under the Chief Financial Officer (CFO). Contract management has been put up there too. The DG said he wants to streamline everything under the CFO. The Department has made this commitment to AGSA. The Department has told the AGSA what their intentions are and the Department has signed a new engagement letter for the next audit for the 2020/21 financial year. The audit action plan includes some of the commitments made to correct errors.

The AGSA highlighted some issues in the management letter that it wanted to follow up on in the next audit. The AGSA saw that the Department had already started working on the issues. The Department agreed with the AGSA on two things. First, as part of its value act, the AGSA will have a joint workshop with the Department on ICT matters. ICT auditors from the AGSA will bring key areas of concern to discuss. A gap analysis will be done. This is a proactive measure, long before 31 March 2021. The AGSA will bring a checklist. Any gaps will be addressed so that there are fewer areas in “yellow” next time.

The DG said that the Department has been strengthening itself. It has been filling the vacancies in finance. He said that people were being moved around. Some people did not like it, but change is not easy. He said that the Department was committed to getting a clean audit in the next two years.

Controls have also been strengthened. Staff have been complaining because it is not easy. It is tedious and tough, but it should not be easy for people to act wrongfully. He said consequence management has increased the level of consequences. Currently, the internal investigation unit was dealing with four investigations. Most of the investigations have come from whistleblowers, not the Department. The internal systems are robust. The DG confirmed that when the matters under investigation are substantiated, the Department does act. If they are not substantiated, the necessary staff members are cleared.

The Chairperson thanked Mr Moemi for his robust comments and said he had faith in the Department’s efforts to continue making improvements. He wished Mr Moemi good luck and said his work will be supported.

Further discussion

Mr Hunsinger raised an urgent matter that arose on the weekend relating to cancelled flights. An Emirates flight was cancelled.  Because of this, other airlines raised a concern about South Africa’s lockdown level 1 regulations, that state that crew will be treated the same as passengers in terms of requiring quarantine. This is different from international regulations which do have different requirements for crews and passengers. He said that the economy and tourism need to get going again, but in a safe manner. He then asked to what extent the Department has reviewed the country’s regulations to get them in line with international standards. The International Aviation Industry has specific standards. The South African regulations were clearly not aligned in the way that they were announced on Friday 2 March.

The Chairperson said that Mr Hunsinger’s question was not in line with what was asked of the DG, but some clarity on the issue would be appreciated.

The DG said that many of the countries that have opened up their aviation sectors completely and that quickly came out of lockdown, are going back into strict lockdowns, including the UK, Italy, parts of France, parts of Japan and parts of Germany. The International Civil Aviation Organisation (ICAO) published a non-binding advisory that countries sign and are bound by. He said that there is advice about how operators should handle specific matters. Each country who signed has to consider the advice. It is a single advisory, but it affects high-risk countries as well as low-risk and non-risk countries. However the DG said that, one size does not fit all, so the advice should be adjusted to suit the different countries.

Emirates is insistent on following the advisory regarding South Africa. Yet, they will not behave like this with the UK or the USA. Emirates is still travelling to Germany at the moment even though Germany is on strict lockdown again. Mr Moemi said that people try to have their way with African countries and that they tend to threaten and embarrass South Africa in the media.

South Africa has a two-fold responsibility: to open up fairly and to open up responsibly. Opening up South Africa has to take the health and safety of its people into account. The UK, the USA, Italy, France, Japan and Germany all have better healthcare systems and hospital capacity than South Africa. Mr Moemi pointed out that unlike South Africa, these countries have significant reserves. Their economies can withstand a second strict lockdown. South Africa could simply not afford to do that. If South Africa acts irresponsibly and is forced into a second strict lockdown, the country is doomed. So, the ICAO standards cannot be accepted blindly.

International airlines rotate their crews. South Africa does not attempt to control this. International airlines may take a crew that has just flown to a high-risk country and use the same crew to fly to South Africa the next day. South Africa does not have control over this. Even the mitigation measures that are in place are not 100% foolproof.

The DG said that if a country is considered high-risk, it should not be accepting casual or leisure travellers, including researchers and businessmen and excluding tourists. There has been false reporting in the media about the Department of Transport’s directions. The Department is following the regulations published by Cooperative Governance and Traditional Affairs (COGTA), which have been approved by the National Coronavirus Command Council (NCCC) and say that a no older than 72-hour old COVID19 negative test result is required from passengers. Several other countries also insist on this.

He said that the reason the regulation was so delayed is that the Department did international benchmarking. ICAO said that airlines may test crews every seven days. That is it. Just a suggestion. Mr Moemi said that it would be disastrous if South Africa followed this suggestion. Emirates flies to other countries that have the same conditions as South Africa, but they intimidate South Africa. One must frown upon this behaviour. South Africa has to stand its ground and be firm when there are double standards.

Another false report said that many airlines are cancelling. This is not true. For example, neither British Airways nor Qatar Airways has cancelled. Everybody is flying here with these conditions. The DG said that when the Department pointed out Emirates’ double standard to them, they said that those other places are offering an alternative of self-quarantine. South Africa is going to stick to ICAO’s advice.

The DG said that it is ridiculous to allow people from high-risk countries into South Africa because they would have come into contact with so many people. Passengers have two choices. One, provide a negative, no older than 72-hour, COVID19 test. Those people will be given some freedom of movement, e.g. they can go to bars and restaurants. Two, self-isolate in a hotel room and provide the Department with the hotel’s information so that the Department can monitor. Emirates prefers the self-isolation option.

Mr Moemi informed the Committee Members that crews on Qatar flights arrived with their 72-hour COVID19 tests ready. People were being scanned and no one was complaining. The standards are the same for O.R. Tambo International Airport and King Shaka International Airport. The Department stayed silent, in which there was a lot of dignity. Emirates is terrible. When it said that it will reinstate their flights to South Africa, it did not issue another statement saying it has ended its boycott of South Africa, which is unfortunate. But South Africa moves on and maintains its dignity.

Deputy Minister Magadzi and the DG were excused.

Consideration of submissions on the Economic Regulation of Transport Bill [B1 – 2020] and confirmation of dates of public hearings on the Bill

The Chairperson said there were three late submissions by two companies and one entity: SASOL, OUTA and Transnet. He said that because the dates for public hearings had not been approved yet, the late submissions would be accepted.  The Chairperson asked if the others agreed that late submissions should be accepted.

Mr Mangcu had no objection to accepting the late submissions. He said COVID-19 would be used as an excuse and it would be a fair excuse. There are also no legal preclusions. Mr Mangcu then asked if the legislation or framework supported accepting the late submissions. He said that if the law was not being broken, he supported accepting the late submissions. He wanted to know what the process is, i.e.: what the critical steps are and lastly what the deadlines was for the steps.

The Chairperson said he would explain the process in due time.

Mr L McDonald (ANC) said that Mr Mangcu had raised much of what he was going to raise. He said that it was good that more people and companies want to attend the public hearings. He agreed with Mr Mangcu’s view that if there was no law being broken, late submissions should be accepted.

Mr Hunsinger said that the DA did not have an objection to accepting the late submissions. The DA is interested in collecting as many ideas as possible for the development of the Bill.

The Chairperson said he could see no objections to accepting the late submissions. The next step would be to set dates for public hearings, where the submissions will be heard. He said it would take a whole day. The Committee would then meet again to begin shaping the Bill, clarifying things and making add-ons, and then taking it forward.

Mr Mangcu said he looked through the responses and looked at who would be impacted by the Bill. He noted the responses with concern. He did not want to suggest that the taxi associations did not know about this because they would be affected. The trade union movement had not made any comments. No consumer or passenger associations had made any comments.  He expressed that this is gravely concerning. He asked what the steps going forward would be considering everything. He said he was open to correction if there was anything he had misunderstood.

The Chairperson said that Mr Mangcu’s concern was fair; pointing out that submissions had been requested from people who would be affected by the Bill. He said that a lack of submissions may show that people agree with the Bill, or are late or are ignorant. People should respond to these types of things that request participation. South Africans commonly react and disagree only after things like Bills are finalised. He expressed that people who will be affected by the Bill should take the opportunity to be a part of the public hearings.

Mr Hunsinger said it is valuable to know that this public hearing does not have to be the only opportunity for public participation. He said that it was up to the Committee to decide if there will only be one opportunity for public participation or not. He also said it is important to allow the development of the Bill so that more content is added so that a framework with content could be formally published in a gazette. This would promote further involvement and participation by those being directly affected.

Ms M Ramadwa (ANC) said that the method of communication needs to be improved regarding public hearings. Other stakeholders like passengers, trade unions and taxi associations do not participate in public hearings. She wanted to know if the Department was communicating properly with everybody. She noted with concern that some stakeholders and members of the community do not have the same technology that the Department uses. This should be considered when communicating about this Bill.

The Chairperson asked Ms Ramadwa what method of communication she suggests.

Ms Ramadwa suggested using community radio stations and local newspapers.

The Chairperson asked the Committee Secretary what methods of communication the Department uses.

Ms V Carelse, Committee Secretary, said that Bills are advertised in all languages in a number of newspapers, including the original newspapers. The Parliament website, Twitter and Facebook are also used with the awareness that not everyone has an email account. Some people use their phones to check Facebook and because of this the Department tries to ensure that the link is forwarded as far as possible. Ms Carelse said that no radio campaign was created for this Bill, but the information was forwarded to the people in communications as it is normally a decision that is made by the parliamentary communication services.

The Chairperson asked if it is possible to connect with radio stations that reach all demographics of South Africa i.e.: could a radio campaign be created in the future.

Ms Carelse said that, that would be a decision made by the PCS and it would be based on their budget. Because the Bill is a section 76 Bill, so it would still be advertised when it goes to the National Council of Provinces (NCOP). There will be public hearings for this Bill in all nine provinces.

Ms Ramadwa said she was happy because the Bill is a Section 76 Bill.

The Chairperson said that everyone should encourage people in all nine provinces to participate as South Africans do not participate a lot.

The dates of the public hearings are: 20 October, 21 October, 23 October, 27 October, 28 October and 3 November.

Mr Mangcu asked if it is possible to look at the dates in the context of the Portfolio Committee’s programme as the programme was too stressed out. He said that the programme was directly linked to the dates of the hearings.

Consideration and Adoption of Draft Fourth Term Committee Programme

Mr McDonald said that he was concerned because the fourth term is quite long. Two Committee meetings are planned and there is no time for oversight. He said that while it is not regular for Portfolio Committees to have oversight in the fourth term because of the amount of work, the times are not regular. There are serious issues within many of the entities. It would be wrong not to make time to do robust oversight, especially for entities that directly affect communities, the poorest people and ordinary Black people who rely on the Department to make sure these entities function properly.

Mr Mangcu agreed with Mr McDonald that it would be wrong not to make time to do robust oversight. During challenging times, such as the current times, people get absorbed into a system that says, ‘no one cannot do this thing or that thing.’ He said this thinking should be rejected. As elected public representatives, he said that it is their responsibility to go out and see what the reality is, because the to-do list is endless.

The next meeting is scheduled for 13 October and the one following that is on 20 October, covering the Economic Regulation Bill.

Dates of the public hearings were nicely compressed, but he wanted to know why the public hearings were not going to last a full day each. The example he gave was to look at Tuesday, 20 October where the hearing is scheduled to end at 12:30pm. He asked what about slotting it into another one in the afternoon?  He said this could be done for all the hearings, so that the proceedings can be compressed, deal with the issues and move onto the next thing. If this is possible, the whole programme from Tuesday, 10 November onwards would be impacted because deliberations will be added.

Opening up another window should be considered. An NCOP process should not be entirely relied upon. It is a source of pride to be able to go out and meet South Africans and to make sure their inputs are truly considered. If the hearings are compressed, space will open up to do oversight. It would be great if the Chairperson could facilitate this. It would be a terrible indictment not to do oversight.

The Chairperson said that a session in which a medium-term plan of action was decided on earlier this year.

Ms Carelse said that nothing is impossible in terms of the programme, but approval is needed from the House Chair and the Chief Whip when the House is sitting. If the Committee wants to go on oversight, dates have to be identified and an application has to be made to the House Chair and possibly also to the Chief Whip.

Ms Carelse’s advice to the previous Committee was that Committees should try to organise oversights on Fridays because Friday is a Committee day. She said that normally, Committees are allowed to sit during the sitting of the House to deliberate on legislation and it has happened in the past. The Committee has to inform the House Chair now that there are provisional dates for the hearings. It is possible to add an afternoon session. When the Chairperson submits an application to the House Chair, the application will also go to the Chief Whip for approval.  She said that Parliament does consider issues of legislation priority, which will work in favour of the Committee’s application. There is a good chance of sitting while the House is sitting or later in the afternoon.

Adv A Nel, Committee Content Advisor, said that the plan agreed to for the fourth quarter includes the Budgetary Review and Recommendation Report (BRRR), legislation before the Committee, the NCOP input on revised legislation, if that is received, and the Department’s second quarter report. Those are the only items agreed upon when planning for the fourth quarter.

The Chairperson said that two Committee Members are for the compression of the programme to create some space for oversight. It would be really hectic and require discipline from all Committee Members.

Mr Hunsinger gave his approval for the compression.

Ms Ramadwa gave her approval for the compression, adding on that what is happening on the ground dictates what Committee Members must do, which is why the oversight is necessary.

The Chairperson asked Ms Carelse to get the application form.

Ms Carelse said that she will need to know where Committee Members want to conduct oversight because a full plan must be presented to the House Chair and Chief Whip.

Mr McDonald suggested visiting some of the hotspots where PRASA has been looted and destroyed by thieves. This would also be an opportunity to see the new intervention of security guards that the Department has brought in and see if it is helping and reversing the destroying of state property. He added on that there are so many people who are having problems renewing their car licenses, which is an issue that must be addressed.

Mr T Mabhena (DA) said that the Department needed to visit PRASA in terms of the vandalism. The Department need to get a comprehensive plan in terms of what PRASA is planning on doing to rescue the situation. There are other issues there, such as the insourcing process. He said that there was a situation where former security guards were shifted. In a previous meeting the Chairperson was concerned about this issue and the Committee said they would follow up.

There are severe and significant problems with the Electronic National Administration Traffic Information System (eNaTiS). Currently, no one in Gauteng can book a slot to renew their drivers’ license. It is impossible for people to use the online system. Physically visiting a few provinces to check up on this is a good idea. Unfortunately, the extension did not cover those licenses that expired during lockdown. It only covered people until the end of August. This Committee should notify the Department that it needs to extend the validity of those drivers’ licenses until January 2021, not only because people were maybe reluctant to renew, but also because there were structural problems.

As seen on the news, a total shutdown and ungovernability in Mpumalanga has been proposed with regards to Moloto Rail Corridor. There are ongoing sit-ins by at the Union Buildings by concerned residents.

Mr Mabhena said he is not sure how the Portfolio Committee on Transport would approach the issue. Maybe a visit would be a good idea to see what is actually going on. The Committee is constantly told that the project is going forward, but there seems to be a difference between what is happening on the ground and what is being told to the Portfolio Committee.

Mr Mabhena said there was one other issue he had in mind, but he would leave it for another time.

Mr Mangcu wanted to be more specific about a topic that others had touched on. They have been to Gauteng and the Western Cape before and one is picking up things about a rail not happening in Kwa-Zulu Natal (KZN). It could be a consideration that they could do in terms of KZN.

Mr Mangcu fully agreed on the eNaTiS issue.

A burning issue is rural roads that have deteriorated and whose maintenance is lacking, in two particular provinces: the North West and the Eastern Cape. The issue is brought up in context of the upcoming summer holidays and summer rains. This issue should not catch them out. Since coming to this Committee, requests for a presentation from the Department of accidents have been made. It seems like one will never come.

The Department needs to say what it is going to do in preparation for accident season, which is already starting in KZN. 15 people died in one car accident last week. That was not the first one. There needs to be a focus on this area. Mr Mangcu linked the accident to the rural roads in the Eastern Cape and North West province on top of what his colleagues said.

The Chairperson asked if amendments could now be addressed.

Ms Carelse said there was a briefing on the National Road Traffic Amendment Bill scheduled for Friday. Is it possible to bring that briefing forward to next week so that more time can be freed up on the program?

The Chairperson liked the idea and said that it may be possible. He told Ms Carelse to request approval from the Chief Whip and the House Chair. The programme must be taken as a living document for now.

Mr Mangcu said there were many people in the meeting who did not have names, but just types of phones. Can this be addressed going forward? People need to know who is in the meeting. It is only fair to know who is in the meeting.

Decision on Processing of the Public Protector report investigating the illegal conversion of goods-carrying Toyota Quantum panel vans into passenger-carrying minibus taxis to transport members of the public for reward

The Chairperson said that a decision was made in the previous meeting about the Public Protector’s report in terms of the illegal panel vans, which was that a sub-committee should be formed and that will be able to look into additional matters that were not covered in the Public Protector’s report. That will appear in the minutes for 4 September. The item is on today’s agenda so it can be concluded. What are some of the ideas as to how the sub-committee should be formed?

Mr McDonald said most of the discussion about it has already been done. All that is left is to actually establish the sub-committee now, as well as to schedule it in to the programme somehow. There should be enough leisure days in the previous programme that it will be possible to slot it in and deliberate. It is a very important issue because it addresses serious issues and latencies in the report and what the Department is scheduling for this taxi report from the Public Protector.

Mr McDonald suggested that the sub-committee be established and have maybe five or six Members, or as many Members as the Chairperson feels would be representative of everyone.

Mr Hunsinger said he feels the same as Mr McDonald. He said he really appreciates the Chairperson allowing for a sub-committee to be formed. It is important to mention that the sub-committee cannot make any decisions, but merely reports to this Committee. All decisions in terms of reference and of what should be included would always be sound boarded against the Committee. It would consist of fewer Members. Everything must be reported to this Committee and it can only be directed from the bigger Transport Portfolio Committee unless a particular mandate is given. The Chairperson should bring competent submissions to the Committee.

The Chairperson confirmed that all final decisions will be made by the Portfolio Committee, which consists of 11 Members, so the sub-committee can consist of five Portfolio Committee Members. That will make it easy for the Portfolio Committee to take a decision. He suggested that Mr Mangcu, Mr Hunsinger, Ms N Nolutshungu (EFF), Mr i Seitlholo (DA) and Mr McDonald be part of the sub-committee. With no objections, the sub-committee was formed. Does the sub-committee need a Chairperson?

Ms Ramadwa said she thinks that the sub-committee would decide itself.

The Chairperson agreed, but also suggested that Mr Mangcu be the sub-committee’s chairperson because he would have an objective view. He wished the sub-committee the best. No stone should be left unturned. One must work for the people. He said he was sure the sub-committee would find time to do the work even though the program is tight.

Committee Minutes dated 1 September 2020

The Chairperson said that there were issues referred back to the Department, but today the minutes will be dealt with. He did not find anything wrong with the minutes.

Mr Mangcu said that he also did not find anything wrong with the minutes. But, in moving that these minutes be adopted, he wanted to raise a major concern once more. Each and every minute produces things that should be done by the Department, but Mr Mangcu has not seen any of them coming. The issue of non-responsiveness from the Department really needs to be deliberated. He moved for the minutes of the meeting on 1 September be considered a true reflection.

Ms Ramadwa proposed that all the issues be written down and sent to the Department to reduce the time waiting around for a discussion to happen. She moved to adopt the minutes

Mr McDonald moved to adopt the minutes. The Department never responding and never keeping to its timetables on its promised reports-back to the Committee has really become an issue. The Committee has not received any promise, report-back, letter or question since November or December last year (2019). This begging cannot continue. There must be consequences. He begged the Chairperson for a decision to be made about bringing the Department to book. It is a constitutional right to have oversight over the Department and the Department infringes on the Committee’s ability to do oversight by not responding to the Committee’s questions.

The Chairperson acknowledged that a letter should be written to the Department reminding the Department of all the decisions the Committee has made and ask for a report-back within ten days or 30 days so that there is a record saying it will be done.

Committee minutes dated 4 September 2020

The Chairperson said that the minutes for the meeting ofv4 September  showed that the Committee deliberated on the Public Protector’s report. These minutes pushed for the formation of the sub-committee. The Chairperson said he did not see anything out of line with the minutes.

Mr McDonald moved for the adoption of the minutes.

Mr Mangcu moved for the adoption of the minutes. He said that he had three issues he wanted to raise. First, in the last year, the Committee had a briefing from the AGSA before the Committee met the Department, meaning the Committee had first-hand information from the AGSA. That did not happen this time. Is there a reason for that or was last year a once-off since it was the start of a new Committee?

Second, he did not recall getting a research report from the Committee’s very capable team that is supporting the Committee in this endeavour.

Third, in responding to one of the questions raised by Mr Mangcu, the DG said he was sure that the Committee had received the full AGSA report. This linked directly to the first issue raised by Mr Mangcu. The people do not eat a clean audit report or an unqualified audit report. They do not drive on those things while the roads are terrible. The AGSA report is one of the tools that the Committee can use. The Committee needs to find time to critically scrutinise the report even though it is from 2019/20 financial year.

Last year the Committee raised that it wanted the AGSA’s assistance in linking the audit outcomes to service delivery. Has there been service delivery? The Committee highlighted the issue of PRASA when the AGSA said it was going well with the oversight of the Department. Does the Committee want to agree on that? The Committee can only do that once it has critically engaged with the AGSA and its full report. Mr Mangcu pleaded with the Chairperson that the Committee move away from ticking boxes. What will happen is that there will be a beautiful, glossy annual report of the 2019-20 financial years, yet there are no roads, the issue of e-tolls has not been resolved and PRASA’s infrastructure is being finished, for example.

Mr Hunsinger agreed with Mr Mangcu. It is important to align the Key Performance Indicators (KPI) with what the Committee observes. Clean audit findings refer to compliance and the Committee needs to make sure that the alignment is there with service delivery, which is a totally different experience when ones walks outside to see the results.

Mr Hunsinger wanted to comment on the point raised about vehicle registration and the availability of offices supporting this. He said he has information saying that over half a million vehicles are still unregistered. Vehicle licenses and registrations expired on 22 September -after the last date for renewals was extended until 31 August. He submitted to the Committee that the Committee approach the Department with a formal request, from the Portfolio aside, to consider extending the validity to 31 January.

The motivation for this is that the Department has extended two other categories of registration, one for trade licenses until the end of November, and the other one for the validity period of drivers licenses, Professional Driving Permits (PDP’s) and learner’s licenses until 31 . People are currently confronted with huge fines of thousands of Rands. Vehicle fleets have tens of thousands of Rands in fines, which is unfair because a lot of them made effort to register the vehicles, but because of the restricted services it could not happen. A lot of people had to leave queues and are now driving vehicles that are not registered.

He requested that the Chairperson ask for support within the Committee to formally approach the Department from the Portfolio Committee’s side to extend the validity of registration of vehicles until the end of January 2021.

The Chairperson asked for a show of hands in support of this important issue.

There was a sufficient majority in support of this plan.

The Chairperson said, in response to Mr Mangcu, that there had been a slow take in approval of the programs because apparently The Committee is still going to deal with the matter of the annual report around 15 November where the Committee will have proper guidance from the AGSA.

Ms Carelse said that a letter has been sent to Parliament to inform Committees about the delay in the tabling of financial statements and the report. Last year the Committee dealt with the Annual Report and financial statements of the entities and the Department around October. In a normal year, the financial statements would have been tabled by 30 September There is a delay in the tabling of those statements by two months [due to COVID19], which means that the AGSA can only report on those once they have been tabled. The deadline for tabling of Annual Reports and the financial statements is around 16 November. Once the Department’s report has been tabled, the AGSA will come and brief the Committee as in previous years. Then the Committee can decide how many of the entities will be called for hearings based on the financial statements and report, because when the reports are sent to Parliament, the Committee is obligated to report to the House on those reports. A programme has to be created for those engagements with the Department, the AGSA and the entities the Committee has called on. The program can only be finalised after 16 November.

The Chairperson said that at that point, the Committee will then engage with the office of the AGSA on the other matters that Mr Mangcu raised.

Ms Carelse confirmed this and said that the AGSA did inform Parliament about the delay and that the briefings will now be taking place only in November.

Mr Mangcu said he accepted the explanation and the process. He said that something was raised earlier that links to the programme, to what is being said and to the alignment. He said that he had heard somewhere about an Amendment Act of Road Traffic, but as far as he knows, the Committee has not received any legislation other than what is already being dealt with. He said that he had heard that something had come through the back door. Can the Chairperson assist with this?

The Chairperson said that Ms Carelse could assist.

Ms Carelse said that that Bill had been duly tabled by the Minister in June. It is the National Road Traffic Amendment Bill. The other one that was tabled on the same day by the Minister was the Transport Appeal Tribunal Amendment Bill. Both are Section 76 Bills. She said that she would resend the information to Committee members.

The Chairperson said that a Committee Member was missing. He said that he had been formally told that Mr C Sibisi (NFP) was moved to another Committee and there is a new Member who is meant to be a part of this meeting. The Chairperson implored that the new Member begin attending the meetings properly. The whereabouts of Mr Sibisi should be found out too to check if he is still a Member of this Committee so that the Committee gets a clean slate.

Ms Carelse said that Ms F Khumalo (ANC) has been attending meetings and is present in this meeting. Mr Sibisi always gets the invitations, but he is an alternate Member not a full-time Member. He did accept the meeting invitation yesterday, but he was not present in the meeting.

The Chairperson took the opportunity to formally greet Ms Khumalo and asked her to turn her camera on so that everyone could see her face. She did not respond.

The Chairperson commended the Committee for this period with which it has conducted itself, in which issues were raised. He said that he believed the Committee would be able to deal with the fourth quarter. He said he hoped the new sub-committee Members would do the Committee proud.

Ms F Khumalo (ANC) managed to unmute her microphone and greet everyone. She expressed gratitude in being part of the Committee.

The Chairperson adjourned the meeting.