Department of Transport 2021/2022 Quarter 1 performance; Railway Safety Bill: motion of desirability, with Deputy Minister

Meeting report

The Chairperson welcomed Members of the Committee and officials of the Department of Transport (DoT) to the virtual meeting. He accepted an apology from Mr P Mey (FF+) and invited Deputy Minister of Transport Ms Sindisiwe Chikunga to introduce the Department’s presentation.

Deputy Minister Chikunga acknowledged that COVID-19 had had a huge impact on the work of the Department and the transport sector at large. By the end of the first quarter the Department had spent R14.6bn or 22% of its annual budget for 2021/22. This amounted to underspending of R323m. It had achieved 74% of its quarterly performance targets. The aviation sector had been the most seriously affected by COVID-19 as it relied heavily on revenue collection from international travel, but road maintenance and public transport had also suffered, due to disrupted supply chains and local travel restrictions. The Taxi Recapitalisation Programme (TRP), meanwhile, had slowed down due to reduced uptake from the taxi industry. The Department would monitor its recovery on a monthly basis. By 15 August 2021, four out of nine under-performing areas had reported positive progress.

Briefing on 2021/22 first quarter expenditure
Mr Bosa Ramantsi, Chief Director: Strategic Planning, Monitoring & Evaluation, DoT, presented the Department’s first quarter performance per programme:

- administration (2/3 targets achieved)
- integrated transport planning (2/5 targets achieved)
- rail transport (2/3 targets achieved)
- road transport (4/6 targets achieved)
- civil aviation (2/2 targets achieved)
- maritime transport (4/5 targets achieved)
- public transport (10/11 targets achieved)

In total, 26/35 performance targets had been achieved. Mr Ramantsi discussed the Department’s successes and failures in some detail, as well as the reasons for failures and the measures being taken to correct them. He also reported the progress that had been made toward the Department’s annual targets per programme and its response to COVID-19. [See the detailed slide presentation]

Mr Makoto Matlala, Chief Financial Officer (CFO), DoT, detailed the Department’s first quarter expenditure per programme and per economic classification. He gave reasons for underspending where it had occurred. Transfers to the Road Traffic Infringement Agency (RTIA) and for the TRP accounted for the bulk of underspending. This was due to delays in rolling out the Administrative Adjudication of Road Traffic Offences (AARTO) system in the first instance and low uptake from taxi owners in the second. He presented the expenditure of Provincial Roads Maintenance Grants (PRMGs) and Public Transport Operations Grants (PTOGs) by provinces, as well as COVID-19-related expenditure and procurement plans by provinces and the national Department.

Discussion
Mr C Hunsinger (DA) asked the Department to clarify what it meant by saying that nine trains had been accepted “provisionally,” and requested that the Department give figures for passenger capacity rather than number of trains. He observed that the Department had reported 38 crashes involving non-commercial aircraft and asked how the Department intended to reduce this number. He asked for more detail on the corporatisation of ports as well as the Three-Foot Plan that was part of Operation Phakisa, as these projects had never been presented to the Portfolio Committee. He asked about the nature of the memorandum of agreement with the South African National Roads Agency Ltd (SANRAL) on the public transport integrated ticketing system which was being trialled in Rustenburg, Polokwane and Mangaung. He observed that only six out of 13 cities involved in bus rapid transit (BRT) projects had reported trip data. Had no trips been taken in the other seven cities? He asked what progress had been made on the transfer of the Driving Licence Card Account (DLCA) from National Treasury (NT) to the Road Traffic Management Corporation (RTMC). He asked for the reasons for underspending on the AARTO rollout. He asked who was responsible for the public transport grant monitoring business case and gap analysis, delays in which the Department had identified as the main reason for R96m underspending on goods and services. In general, he found the description of output indicators in the Department’s presentation confusing.

Mr K Sithole (IFP) was worried about the failed performance targets. The reasons given were not clear. He asked when the e-toll project was going to be scrapped, as it was not achieving anything. He was also worried that the Department had made no mention of scholar transport. The fact that it was run by DoT in some provinces and the Department of Basic Education (DBE) in others was causing problems. He was concerned that provinces did not seem to be spending PTOG funds on COVID-19 mitigation. He asked if there was a timeframe for getting feedback from NT on the DLCA transfer. He didn’t understand how the Department could plan for formalising the taxi industry without allocating funds to it, and observed that if the TRP was demand-driven as the Department claimed it meant that they didn’t know what was going to happen.

Mr L McDonald (ANC) asked for details of expenditure on capital and financial assets. He observed that despite the billions spent, passenger trains were still not running. He asked for clarity on whether the amount spent on taxi scrapping was R60 000 or R60m (slide 53) In slide 57 on COVID-19-related expenditure by Gauteng, a figure of 50 was given but it was unclear what it referred to. It was also unclear how the 170 000 litres of sanitiser had been distributed (slide 57).

Mr M Chabangu (EFF) asked for confirmation that the trains that had been accepted would be the appropriate size for the South African rail network. He asked what caused rail accidents and what mechanisms were in place to curb them. He recalled that when the Committee had visited a railway station in Pretoria there had been no security guards, only marshals, and asked for confirmation that security was in place at railway stations. He worried that the migration of freight traffic from road to rail was taking place too slowly and asked for a timeframe for this project. He asked what the general cause of underspending was and whether the Deputy Minister was satisfied with it.

Mr M Ramadwa (ANC) asked for an update on the BRT project in Mangaung and Polokwane. She observed that vacancies were being filled slowly and wondered whether the Department had assessed its impact on service delivery. She also asked the Department to explain why its payment to the International Civil Aviation Organisation (ICAO) had been delayed.

Mr L Mangcu (ANC) drew attention to the fact that OR Tambo Airport was often referred to as Johannesburg. He asked the Department to look into correcting this.

The Chairperson asked the Department to look into resuscitate plans to move freight from road to rail in the Moloto transport corridor.

Responses
Deputy Minister Chikunga admitted that the Department was not satisfied with underspending, even if there were reasons for it. She explained that most non-commercial aircraft accidents were caused by human factors such as poor maintenance. Some accidents had involved student pilots and the South African Civil Aviation Authority (SACAA) had put a some strategies in place to address this. The corporatisation of the ports would create a structure similar to SANRAL and the Airports Company of South Africa (ACSA) in the maritime transport sector. It would allow the board of the National Ports Authority (NPA) to take and implement decisions independently. The Operation Phakisa Three-Foot Plan was a plan developed by a wide range of stakeholders and the Department could brief the Portfolio Committee on it if desired.
 
Mr Alec Moemi, Director-General, DoT, observed that scholar transport was supposed to be administered by the DBE, even though DoT was in fact managing it in some provinces. He said that the engagements with NT were taking place at ministerial level. The wheel was turning although he could not say exactly when NT would deliver. He believed the Department had allocated sufficient funds to the formalisation of the taxi sector, although a lot of work would have to be done and funds for projects such as customer care training and professionalisation had not yet been allocated. Discussions with NT were ongoing and moving fast. He acknowledged that the TRP was demand-driven but pointed out that the Department could increase uptake through effective marketing. In particular, the consequences of failing to scrap an unroadworthy taxi were not being effectively communicated. He accepted that there were challenges in the passenger rail sector. Issues were being addressed one by one but much remained to be done. The Gibela Rail Consortium factory at Dunnottar was now capable of building five trains per month, although lower-than-expected demand had created some cash flow problems. He reported that construction on the Mabopane-Centurion rail corridor had begun. He assured the Committee that the trains it had accepted were of the appropriate size, adding that an engineering solution had been found to lower the oversized locomotives that had been bought some years ago. The main causes of railway accidents were vandalism and ageing signalling systems. Signalling systems were being overhauled across the country. A manual system was currently in place but the long term solution was an automatic system. He conceded that security of rail infrastructure was a challenge. Fortunately agreements with NT had been reached to release funding for security. It was not possible to give a timeframe for migrating freight from road to rail but progress was being made. Hazardous materials and explosives were no longer allowed to be transported by road and in total 10% of goods had been migrated. The Department was in talks with fruit growers, who were understandably cautious as they had very specific transport requirements such as refrigerated carriages. There was a need to reach agreements with specific industries to enable Transnet to invest in building appropriate capacity. The BRT project was progressing well in Polokwane. Buses had been delivered, although stations had not yet been built, the ticketing system had not yet been finalised and negotiations with taxi associations had not yet concluded due to steep demands from the associations. He said that the Department had filled 80% of its vacancies and most of the remaining vacancies were at senior management level. Conversations around reviving the Moloto rail corridor were ongoing, and the Department was currently awaiting an updated feasibility study and business case. He admitted that it currently looked doubtful that a rail service could be provided at an equal or lower cost than existing bus services. He said that further studies on e-tolls were being done but insisted that they remained an official government programme. He agreed to take up the matter of the name of OR Tambo Airport with ACSA but noted that there were international norms governing the naming of airports in particular contexts. When the name had changed, a compromise had been reached to retain Johannesburg as the airport’s callsign to avoid confusing tourists.

Mr Matlala noted that the budget and expenditure was reviewed monthly, according to the Public Finance Management Act (PFMA), and funds could be shifted where there was underspending. Entities had been instructed to re-evaluate travel and subsistence budgets in response to COVID-19, which had reduced the amount of travel required. The release of funds to the RTIA was also subject to the existence of a plan, which the RTIA had not completed in time, so it had requested that the funds be held until the second quarter. The public transport grant monitoring gap analysis and business case had been prepared but the bid adjudication Committee had requested that it be rewritten so that it could apply to all cities. Capital asset expenditure related to computers, office equipment and furniture, and financial asset expenditure mostly related to accounting for equipment that was written off. The figure of 50 (slide 57) referred to the number of items of personal protective equipment purchased.

Follow-up discussion
The Chairperson asked about transformation and empowerment in the Department’s appointments at SANRAL and the Passenger Rail Agency of South Africa (PRASA).

Mr Moemi replied that the Department had undertaken to drive transformation, especially in sectors such as maritime and aviation where it had been progressing slowly, and tremendous progress had been made at SANRAL over the last two years where over 70% of construction contracts had been awarded to black economic empowerment companies and companies that were part of its supplier development programme now received 30% of all contracts issued. More still needed to be done to support companies owned by women and disabled people. The Department would ensure that its entities reported their transformation plans and progress to the portfolio Committee. Notwithstanding good progress by SANRAL, progress was generally slow and it would be aided by a favourable tax regime, especially in aviation.

Mr I Seitlholo (DA) noted that the Department had not answered the question about the BRT project in Mangaung.

Mr Moemi conceded that a lot of money had been spent on consultants and professional fees at Mangaung. The Department was looking at ways to help and there were some positive signs from the new administration. If any irregularities were uncovered by the auditor-general these would be investigated by the Department.

Briefing on the Railway Safety Bill
Deputy Minister Chikunga recalled that the current Railway Safety Regulator (RSR) had been established in terms of the National Railway Safety Regulator Act of 2002. The Bill under consideration would repeal and replace this Act in response to more recent developments in the rail sector, such as the massive rolling stock investment programme currently under way. The Bill would recognise the role of rail operators in implementing safety measures, address key governance issues of the RSR and address concerns raised over time by operators. It would also remove perceived conflicts of interest and provide a flexible framework for managing railway safety, in particular by directing the RSR to oversee a framework of safety critical grades.

Mr Ngwako Makaepea, Acting Deputy Director-General: Rail, DoT, noted that human error had been identified as the cause of most railway accidents. He explained that the RSR would continue to operate with its objects and functions largely unchanged. He described the establishment of the board of directors, the funding of the RSR and the issuing of safety permits. He explained that the safety critical grade framework would make the RSR responsible for registering and evaluating institutions to provide safety training, for collaborating on the content of this training, and for maintaining a database of safety critical license holders. He described the procedure for determining safety standards, the safety management system, the means of enforcing safety standards, the protocols following a railway accident, appeals against decisions of the RSR, and the determination of safety regulations by the Minister. He listed the stakeholders consulted in the drafting of the Bill [See the presentation slides for full details].

Motion of desirability of the Railway Safety Bill and Committee business
The Chairperson read a motion of desirability of the Railway Safety Bill. Mr Hunsinger proposed the motion. Mr McDonald seconded the proposal.

The Chairperson suggested that the Committee reconsider its decision not to entertain the requests of certain individuals and organisations to be heard by the Committee. It might create the impression that it was uncaring.

Mr Mangcu supported the Chairperson’s suggestion. Mr Hunsinger also welcomed the suggestion and expressed willingness to meet them after hours if necessary. Mr Sithole also supported the suggestion and asked on what platform these engagements would take place.

The Chairperson said that the logistics would be confirmed.

The meeting was adjourned.