National Treasury, DoT and identified municipalities on performance and expenditure of Integrated Public Transport; with Deputy Minister

Standing Committee on Appropriations

08 February 2022
Chairperson: Mr S Buthelezi (ANC) & Mr M Zwane (ANC)
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Meeting Summary


The Standing Committee on Appropriations and the Portfolio Committee of Transport invited the municipalities of Buffalo City, Msunduzi, Mbombela and Cape Town to brief them in a joint virtual meeting on the termination of funds allocated towards the Integrated Public Transport Network (IPTN) grant, in line with the recommendations made by the Committee in its report on the 2021 Division of Revenue Bill. The focus of the presentations was an overview of the IPTN grant expenditure and performance over the last five financial years, before the subsequent exclusion/termination.

The overview highlighted the challenges faced by the municipalities in spending and implementing the public transport network grant according to the grant framework. The municipalities provided detailed reasons as to why there was under-spending, in contravention of the requirements of the grant framework. The municipalities had to report on possible service delivery implications resulting from the termination of this grant on the daily livelihoods of the residents of the various municipalities and had to propose practical, implementable and measurable solutions that would result in the reinstatement of this grant for the benefit of the residents. They also had to provide any information that could be useful to the Committee as it continued its engagements with National Treasury on the termination of this grant to the Buffalo City, Msunduzi and Mbombela municipalities, and its implications on both their social and economic development, as well as the infrastructure for development requirements provided through this grant funding.

Meeting report

Chairperson Buthelezi requested that the briefings focus only on key issues. Apologies were noted from Ms M Ramadwa (ANC), who was traveling, the Minister and Deputy Minister of Finance, who were busy with the preparations for the State of the Nation Address (SONA), and the Minister of Transport, who had joined the President in Limpopo for a transport-related programme.

National Department of Transport Presentation

Ms Sindisiwe Chikunga, Deputy Minister of Transport, said the implementation of integrated public transport networks that enabled mobility of people to access sectors of economic activity, social infrastructure and amenities, was a central pillar in the service delivery mandate. Public transport touched the lives of ordinary South Africans and the poorest of the poor. The Department had a duty to deliver to them a system that worked and was responsive to their needs. She said the Department of Transport (DoT) and National Treasury (NT) were committed to that.

The integrated public transport network programme was funded from the public network grant allocations which were conceptualised from provisions of the National Land Transport Act and the public transport strategy in promoting the vision of an accessible, reliable and affordable integrated municipal public transport network. The grant's purpose was to provide funding for accelerated construction and improvement of public and non-motorised transport infrastructure and to support the planning, regulation, control management and operations of fiscally and sustainable municipal public transport network services. Municipalities were also expected to demonstrate enough capacity to implement and operate any proposed project and credibly demonstrate the long term fiscal and financial sustainability of the proposed projects.

She said the DoT, as the transferring officer of the integrated Public Transport Network Grants (PTNGs), was responsible for funding, strategic oversight and monitoring of the recipient public transport network municipalities. From 2010 to 2022, the Department ensured that municipalities were advised and constantly reminded to scale down on complex infrastructure and operational plans in order to minimise cost wastage and unnecessary delays.

The suspension of the Buffalo City Metro and the cities of Mbombela and Msunduzi was nothing to celebrate, as this had delayed the implementation of the public transport system that responded to their needs and aspirations, particularly the needs of the people. The Department collectively acknowledged the shortcomings that had led to the suspension of these cities they were committed to, making a concerted effort to get the cities back on the programme.

She said the airports would be reinforced by an accelerated service delivery ethos, which would guide how services were delivered in other cities ruling out other integrated public transport networks (IPTN). The Department had adopted a strategy that emphasised a more interventionist method of monitoring which went beyond writing letters and holding meetings and workshops. Moving forward, it would not hesitate to invoke the provisions of s 5(6) of the National Land Transport Act which empowered the Minister of Transport to intervene by taking appropriate action where a province or municipality failed to fulfill an executive obligation on matters related to public transport. Such intervention would take the form of a ministerial directive to the provincial executive or municipal council stating the actions required to meet its obligations, and such directives had to be complied with as provided for in the National Land Transport Act.

She said the DoT would ensure that all projects were firmly integrated in the plans of the metros' district municipalities as part of the district development model (DDM), which would allow closer scrutiny on progress. Measures were being put in place through the standardised sector which would be monitored by the Project Management Unit (PMU) in the Department to close the gap among the three spheres of government, and would work towards delivering the same outcomes in order to maximise the impact.

The DoT was committed to delivering services that people could see, feel and experience. A forum had been established with all cities implementing the IPTN programme. The forum would be at both a political level, where the Minister would meet with all the mayors, and at an administrative level, where the Director-General (DG) would meet with all municipal managers to tackle challenges and ensure speedy resolution of issues. It would be further enforced by a project management unit within the Department to develop the capacity to monitor and intervene in projects that were funded through conditional grants.

She said the DoT would introduce new measures that would ensure a more proactive and interventionist approach to assist cities to meet the conditions laid down by the National Treasury for their readmission into the programme. The goal was not simply to get cities readmitted, but to help them build the required capacity, plan and manage networks properly and timeously.  The suspension of the three cities meant a baseline budget reduction to the tune of R857 million, which was money that could have transformed the lives of many people.

The Department was doing everything in its power to prioritise service delivery through innovation. It would do more and would erase the extravagant spending on consultants with little to show.

NDOT and National Treasury Presentation

Ms Khibi Manana, Chief Director: Public Transport Network Development, DoT, and Ms Ulrike Britton, Chief Director: Urban Development & Infrastructure, National Treasury, addressed the Committee on the Department's programme monitoring, provided an overview of the municipal programme implementation performance and gave details of the service delivery impact, the interventions to improve grant performance and the budget facility for infrastructure (BFI) for the City of Cape Town’s Phase 2a.

Buffalo City Metropolitan Municipality (BCMM)

They said Buffalo City’s IPTN plan was a hybrid quality bus system, with minibus taxis as feeders. After slow progress since 2010 and a lack of championing over the years, the city was trying to fast track operations It had got stuck since 2010 due to legal disputes over procurement and subsequently city instability and a lack of prioritisation of the project by the city's new senior management, with a consolidated total allocation amounting to R314.3 million transferred to the BCMM between 2008 and 2013. The municipality had spent only a combined R7.9 million due to a prolonged litigation process. In 2019/20, the city was the furthest behind, with a best-case scenario of operations starting only in 2021/22. Consistent rollover requests had been allowed in an effort to assist the municipality to conclude projects linked to the unspent grant.

After the suspension notice, Buffalo City had confirmed that the approved rollover amount of R78.371 million from the 2019/20 financial year was adequate to provide for the balance of the PTNG commitments for the Qumza highway roadway construction, and the finalisation of the IPTN operations business plan.

There were no service delivery impacts, as infrastructure contracts were terminal by design. Funds had been provided to meet infrastructure commitments. The IPTN public transport operations were not yet ready to be launched. Affected operators and the compensation offer were still to be surveyed, and the vehicle operations company was still to be formed

Msunduzi Municipality

The city’s IPTN plan was largely a quality bus system with high volume and potentially viable corridors. The IPTN project had been mired in unsavoury spending since it was ramped up to implementation from 2013, during which period the Independent Development Trust (IDT) had played a project management role.

The city had several changes and instability in project management leadership due to suspensions. There were contract management challenges with some of the construction projects resulting in wasteful and fruitless expenditure. Only R94.5 million had been approved for rollover requests of an unspent amount R285.9 million between the 2015/16 and 2019/20 financial years. This was a result of the challenges in the municipality that affected the implementation of IPTN projects. The city’s unimpressive expenditure trajectory was demonstrated by an overall position whereby only R652 million (54%) was expended of the combined allocations amounting to R1.196 billion. 45% of the combined allocation was spent on construction of the public transport roadways. A total of R38.9 million had been spent for taxi advisor services to facilitate the formalisation and formation of an IPTN operations company, and yet no company had been established.
Msunduzi also initially procured project management services, and eventually appointed internal city staff.

Despite this capacity, the city still attempted to procure a PMU, and the Department had stopped this procurement Therefore, the city had no reason to attribute underperformance to a lack of expenditure on internal capacity and specialised professional services, for which adequate funding provision had been made. Several attempts through meetings were held with the City’s political and administrative leadership to raise concerns and the need to address matters delaying progress.  

In the 2020/21 reallocations gazetted in March 2021, the NDoT had motivated to National Treasury for an eventual allocation amounting to R134 million in full settlement of the municipalities' close-out commitments. To date, an additional R11 million estimated shortfall request was under consideration by the DoT, pending proof of expenditure on the initial R134 million.

There were no service delivery impacts, as infrastructure contracts were terminal by design. Funds had been provided to meet infrastructure commitments, but IPTN public transport operations were not yet ready to be launched. Affected operators and the compensation offer were still to be surveyed, and the vehicle operations company was still to be formed

Mbombela Municipality

The Municipality’s IPTN plan was a quality bus model reforming the existing subsidised bus service. It required an intergovernmental agreement between the city and the province, and final operator negotiations. The plan was correctly very light on infrastructure and involved a reorganisation of the existing large Public Transport Operation Grant (PTOG) service and fleet. This had been delayed and stalled for over five years due to the lack of intergovernmental cooperation between Mpumalanga Province and Mbombela, and the refusal by the major PTOG operator to cooperate to restructure the existing contract and the budget that went with it. The city had procured long-term consultants for project management services, yet this had not realised the programme outcome to date. Political intervention at the Premier, Ministerial and Member of Executive Council (MEC) level had not yielded results. Persistent rollover requests from the municipality were a reflection of the city’s inability to spend within the year and meant delayed achievement of milestones.

In January 2020 the municipality had projected an estimated R917 million contractual commitments bill. In March 2021, it had put forward a funding request to the National Treasury through the Municipal Infrastructure Grant (MIG) to alleviate the municipality’s R481 million commitments emanating from the suspension from the PTNG programme. In anticipation of an eventual higher commitments schedule, the DoT had supported an in-year (2020/21) PTNG reallocation through National Treasury amounting to R20 million towards the balance of the municipality's PTNG contractual commitments. The current commitments schedule submitted in January 2022 by the city indicated a total contracts' bill of R202 million, but a difference of R106 million required proof of contract extensions, so due diligence was still underway.

There were no service delivery impacts, as infrastructure contract commitments were currently still being met. The IPTN public transport operations had not been launched as they were still dependent on cooperation from the province and the bus operator. Affected operators and the compensation offer were still to be surveyed, and the vehicle operations company was still to be formed.

City of Cape Town Municipality

The City of Cape Town had applied for additional funding through the Budget Facility for Infrastructure (BFI) to fast-track the rollout of Phase 2A in the Metro South East. This allocation was to be apportioned to the city in tranches for not more than ten years.

The N2 Express service had resumed and would be part of Phase 2a as long as it was necessary, or until the Passenger Rail Agency of SA's (Prasa’s) mainline came on board. The city was still busy with infrastructure implementation, such as right of way, feeder routes, stations, public transport interchanges, open stops and non-motorised infrastructure. It would commence with bus fleet procurement, industry transition, and a vehicle operating company contract and formation.

See presentation attached for further details

Buffalo City Municipality presentation

Mr Sandile Booi, Director: Transport, Buffalo City, gave the Committee a year-by-year update of progress in the metro:

R33.1m rollover to 2017/18. Under-expenditure was due to the need to procure services.

Committed to Qumza Highway, transport register and the operational plan. Under-expenditure was due to the non-performance of a contractor.

Operation plan review and development of the IPTN plan, industry transition plan, public transport plan, the Universal Design Access Plan (UDAP) and the Qumza Highway upgrade. For the Qumza Highway, an additional budget of R 32 076 563 was directed from the Urban Settlements Development Grant (USDG), and R 9 455 082 from municipal funds.

Operation Plan review and development of IPTN plan, industry transition plan, public transport plan, UDAP, Comprehensive Integrated Transport Plan (CITP) review and Qumza Highway upgrade. Under-expenditure was due to the termination of PTNG funding, thereby impacting the appointment of service providers.

Review of operations and business plan, focusing on the CITP review, the Qumza Highway upgrade and Mdantsane access road upgrade.

See presentation attached for further details

Msunduzi Municipality presentation

Mr Madoda Khathide, City Manager, Msunduzi, reported that the project was currently 99% complete, and expenditure to date was also at 99%. No rollover application was anticipated. Reinstatement of the project was requested.

See presentation attached for further details

Mbombela Municipality presentation

 Mr Mxolisi Maseko, MMC: Infrastructure Development, covered a wide range of issues. These included:

• Funding allocations
• Challenges faced by the City of Mbombela on the IPTN
• Spending, implementation and operationalisation challenges
• Socio-economic implications of the PTNG termination on service delivery
• Infrastructure and development of the City
• Soliciting governmental interventions
• Discussions between the City and National Treasury on PTNG issues
• Proposed turnaround strategy to implement the MIPTN
• Governance approach
• Key operationalisation developments.

See presentation attached for further details

City of Cape Town Municipality presentation

The Mayor of the City of Cape Town, Mr Geordin Gill-Lewis, provided brief opening remarks.

The City of Cape Town (CoCT) presentation was delivered by Mr Carl Stroud, Director of Transport, who provided the Committee with information on issues such as the programme overview and scope; original BFI funding application; the background to rescheduling, the performance to date and lessons learnt; service delivery impact and timelines; stakeholder and intergovernmental engagements; the Phase 2A way forward and completed construction.

He said the Phase 2A objective was to improve the public transport offering between the residential and socio-economic hubs within the Phase 2A corridor and beyond through reliable services, predictable and shorter journeys throughout the day, and more affordable fares.

See presentation attached for further details


Mr C Hunsinger (DA) welcomed the coordinating forum and productivity assessments between mayors and capacity-building initiatives announced by the Deputy Minister. He had concerns with the beneficiaries of grants.  He said the importance of improvements to legislation should be passed on to the transport portfolio, specifically the National Land Transport Act because an improved relationship needed to be established in public transport management. He had heard that negotiations with taxi associations would often not go well. Through a formalisation process, the relationship could be improved. The formal relationship between buses, taxis and metered taxis, and Uber stakeholders could also improve.

He said that while suspension might be the remedy for a variety of debilities being identified, citizens were the hardest hit. There needed to be a more defined approach than a mere overall suspension. He recognised the three spheres of government and autonomy of governance, and the limitations brought by the separation of powers. He stressed the importance of the National Land Transport Act (NLTA) as overarching legislation to improve management

He said the content of the presentations had conveniently been an overview of the five years from 2014 to 2019 because the IPTN grants and track record from 2005 up to 2019 showed the same deficiencies sooner than the five years that had been presented. The expenditure percentage should be 100% and not 75%, and there had been a long track record of low expenditure and there was little to show for what had been spent. A large portion had been spent on consultants and paperwork that probably lay in drawers today. He asked how many budget variances the municipalities had executed on those grants. How much of the budget allocated on the buses had been diverted to other expenses? He asked if Treasury was aware of the allocated grant money being used for other purposes.

He recommended that the Portfolio Committee on Transport seriously consider relooking at the National Land Transport Act to improve the relationship between public transport stakeholders, particularly in relation to buses. Treasury should consider that transfers should be done based only on progress, instead of transferring everything all at once. Rollovers should not be allowed but additional applications should be considered, rather than allowing rollovers in principle, and the whole process should be governed by proof of evidence to see if money had been used for its intended purpose.    

Mr Z Mlenzana (ANC) said he would echo the sentiments of the Deputy Minister, and encouraged the DoT to implement what she had said the Department was ready to do. A situation could not be allowed where there was a lack of capacity to spend and to leave it at that. Through legislation, the Department had teeth to bite, as previously mentioned by the Deputy Minister, and it could not cry foul for so long.                         

He said the cities had not said what they were doing but had instead spoken of what they would do in the future. He wanted there to be deadlines before a budget was passed to prevent money not being used because of capacity challenges. He would be glad if there was 100% expenditure. He asked whether ordinary people were thought of when projects were suspended, and the impact of suspensions on job creation.

Mr M Chabangu (EFF) said he was concerned with Mangaung Metro, as he had not heard anything about that municipality. In 2021, he had visited the metro in connection with the bus rapid transport (BRT) system, and the finding was that only nine buses had been bought. The bus rank was at its foundation stage and had a rollover of R22 million, yet the people of the Free State did not have work, let alone service delivery. He asked what was happening, and said that if the money was never spent it should be taken to where it belonged, and those who had squandered the money must be made to pay it back.

Ms E Peters (ANC) said she was surprised that throughout the presentation there had been recognition by the metros of the economic spin-offs, as well as the benefit for the citizens of those cities in terms of accessible, affordable and reliable public transport, but the performance did not correspond with the statements made. Buffalo City had indicated that the delay would deny 200 people jobs. She asked whether National Treasury and the DoT, through their oversight and administrative responsibilities over the programme itself, were committed to ensuring the service could be fully running. It was painful to sit and listen to the varying degrees of implementation that happened across the cities.

She asked the Deputy Minister if she did not think it was about time the performance agreements of the different categories of responsible officials refer to the programme. She did not believe that the issues raised on the procurement of taxi advisory services and other procurement challenges that had been experienced, and delays caused by the engagement by the taxi industry, could be a reason. She believed that the infrastructure was equally as important as Eskom, and should not be allowed to fail primarily because it was the means to get people to their socio-economic development programmes. She said all the municipalities could learn from each other and there was no need to visit other countries for benchmarking. It was about time that the Department took responsibility for remedial actions and created capacity at the national department level to ensure the programme became a success. It should be one of the programmes they prided themselves with and looked forward to the different phases.

Mr A Sarupen (DA) said project management was key to the programme, and when it failed it resulted in missed deadlines and overruns of time, costs, etc. and these were the crux of the project failures. It was important to find out from municipalities how frequently delays in project management milestones, as well as costs, got communicated to senior managers so that interventions could be made. What also needed to be established were the steps taken in these projects to minimise cost overruns and keep projects within the budget. He asked how far ahead of the new financial year milestones were set in terms of the grants because what he saw was that the planning happened after receiving the grant funds allocated, which caused all sorts of delays. What measures had been put in place to ensure all targets were met in future? He asked the City of Cape Town how it managed to keep its projects on track and under budget, and what lessons it could share with other municipalities.

Mr P Mey (FF+) said that every municipality that received money from Treasury was a client of the Treasury, but taxpayers also wanted to see positive results. An example was that before the 2010 soccer World Cup, millions of rands were spent on new modern buses, but after the World Cup, they were parked in the northern areas of Port Elizabeth, now Gqeberha. Many questions had been asked as to why the buses were not being used and what would happen to them. What responsibility did the Treasury have to follow up and ensure that the projects financed by them were successfully completed, and how effective the projects were? He said there were too many incomplete projects. 

Ms N Nolutshungu (EFF) said she thought Free State and Ethekwini municipalities should engage the DoT to tell them what was happening in those municipalities. In Durban, there was infrastructure that had been incomplete for years. She wondered if the interventions that had been taken would yield any results. There was heavy reliance on consultants, as millions had been spent on them and there were problems with procurement, particularly in Buffalo City. She said there was corruption because of the tender process. She wanted the government to seriously consider the abolition of the tender system.      

Mr Mabhena (DA) said the reason behind the suspension of managers for the implementation of the specific BRTs in the City of Mbombela in the presentation had not given a clear picture as to what was being done by the municipality. The Msunduzi municipality had an internal project management unit, yet they had opted to advertise a tender for people to come and manage these programmes, and the DoT and National Treasury had had to stop the implementation of that tender. He asked what had prompted the municipality to go on tender for a project where it had an internal structure to do the work. Had the money that was purportedly spent been recovered? He asked who had approved that contract, and if the leadership was still in the municipality what consequence management steps had been taken against them, because this had resulted in greed and theft, and suspension alone was not enough.

He said Buffalo City Municipality had had a case settled out of court, and asked what the nature of the dispute had been that had prompted them to settle, how much it had cost the city. It seemed there was no consequence management in place, and asked if anything was being done.

He said the City of Mbombela had skipped all the phases and decided to go to phase 3b. Sometimes at local municipalities, people start businesses forums at the local level and make sure that they shift projects to suit some requirements of the municipalities, because there were some ward councillors who would cooperate. He asked what had prompted the municipality to move to phase 3b. They were citing technical issues that were vague.  He asked the municipality to specify what the internal complications were. He said people who were qualified needed to be hired to implement projects.

Mr K Sithole (IFP) asked if the municipalities had the capacity for project implementations. If they did, could they give a clear indication that they have this capacity, and the reasons if they did not have this capacity? It seemed as though there were no structures that dealt with interventions in all the municipalities. They were trying to hide behind the suspension of their funds, whereas they were behind the failure of project implementation. If there was a structure, how regularly did it sit?  He was worried about the intervention of the premiers and ministers in Buffalo City, KwaZulu-Natal and the Eastern Cape, because it seemed as though there was no political will to solve problems as there were no meetings mentioned to address service delays. 

 Mr L McDonald (ANC) said most municipalities were continuing the trend of spending millions on consultants where there was a clear Treasury note 3 of 15/05/2017, which strictly tells municipalities and the government to stop using consultants, yet the trend continues. Consultants did not put buses on the road. He said other municipalities should be given an opportunity to present to the committees as well so that the Department could see if it was getting value for money.

Mr X Qayiso (ANC) said he would have expected that when an amount was used for taxi advisors and there was a negative outcome, there would be a further elaboration on what would be done to get a positive result. Poor people were dependent on the success and implementation of the projects. The manner in which the Deputy Minister had presented showed a way forward to shape up the project. He asked what measures the DoT would implement at the national level to ensure clear coordination after the establishment of a project management unit at the national level. The project should have synergy for implementation of the project at all levels of government, and asked what the plan was.    

Chairperson Buthelezi said there were different expenditures at government level and the three cities had been picked mainly to look at the IPTNG grant. The reason for that was that the financials reflected that the IPTNG had been suspended for various reasons which had been shared. He asked other committees to look at other grants, such as the municipal infrastructure grant (MIG) grant. He would like to see the IPTNG grant being implemented, and the departments involved with local government should make sure that it happened. Government should work cooperatively so that duplication of projects would not happen. When he looked at expenditure records, the project management skills were next to zero in local, provincial and national government. If so much money was spent, there should be a desire to ensure that there would be training of project managers at all levels of government, because at this level it seemed as though the problems were going to be perennial. There should be in-house project managers and an emphasis on contract writing and project management. At Msunduzi, the Independent Development Trust (IDT) had been appointed to implement the project, but there was a view from the DoT that the IDT lacked the skill and experience for executing a project of this nature, and he would like to get comments regarding that.

He said there was no city that could survive without engineering, town planning and project management, and those skills needed to be invested in. He proposed that before the division of revenue bill was passed in Parliament, that the cities, together with National Treasury and the Department of Transport, present through the Portfolio Committee a combined plan as to how they planned on going forward because the Minister of Finance in two weeks would be presenting. He said consideration should be given to the improvement of grants.

Mr L Mangcu (ANC) said StatsSA clearly indicated in different reports how much was spent by the lowest income earners on their transports, compared to those who could afford it. In future, when these types of grants were to be suspended, the implications for the poor should be considered, as this deepened the crisis of the poorest of the poor. There should be more intense debates to see how the Portfolio Committee could pick up on some of these issues before they got out of hand. It would have been nice to have one or two municipalities refer to the use of their USDG.

He said he did not pick up on any municipality that had zoomed into the concept of transport-orientated developments, where it was known that not only were the funds being spent on improving infrastructure but also how they would bring people closer to economic opportunities. He asked how the apartheid spatial settlement development framework had been considered so that communities be brought closer to work. He asked the City of Cape Town municipality how the impact of the transport improvements would change the lives of the people in Khayelitsha, Phillipi, Nyanga, etc. He had heard of the disappointment of the taxi industry and asked if the CoCT could comment on that.         

Mr Chabangu, on behalf of Ms Nolutshungu (connectivity problems), said cost analysis should be done comparing rail and buses. The BRT system could not be the backbone of public transport. Buses were not sustainable and rail carried more passengers, so R7 billion should be allocated to Cape Town for rail transport instead of being allocated to bus transport. Busses were costly and did not help the poor of the poorest, as rail was the cheapest mode of transport. 

Ms Peters asked whether there was any collaboration between the Department of Cooperative Governance (DCoG) and the ministry to resolve the issues. She said there was an initiative through the Presidential Infrastructure Coordinating Council (PICC) in which the IPTN was one of the key programmes that were supposed to be coordinated by the Department of Human Settlements, as the custodian of one of the outcomes on the PICC. She asked whether that was still happening and whether there could be some support from the PICC with regard to this particular initiative.

She asked why engagements with the taxi industry were localised, with no uniform standard, as the taxi industry had national structures that could be contacted to ensure that the impasse between the taxi industry and the Department could be minimised. She said there were allegations that some of the causes of the impasse was because some officials were also part of the taxi operators, and asked if there had been an investigation done to find out who the culprits were in the DoT.    

Mr Mabhena said he noticed that the City of Cape Town had made considerable progress and had been able to save taxpayers money amounting R1.2 billion, despite the structural, implementation and operational challenges confronting some of the other municipalities. He said the capacity-building exercises that the City of Cape Town had developed, in collaboration with DoT and/or the National Treasury, could somehow produce a blueprint or guide on how best to navigate these challenges.

Mr I Seithlolo (DA) asked the mayors and senior managers of the municipalities whether they had received bonuses over the past five years.

Municipalities' responses

City of Cape Town

Mr Stroud responded to the question on whether there had been virements with regard to the PTNG, and if expenditure had been incurred against other non-priority aspects. He answered that this did not happen in the CoCt, as it abided by the conditionality of the grant framework, as well as the business plans as approved in terms of funding applications.

He responded to the question of how frequently the project managers were made aware of milestone delays as well as costs, saying that senior managers were made aware immediately as there was an escalation basis in place for the programme.

He responded to the question on steps taken to minimise cost overruns, as well as to monitor the budget, by saying that there was a solid master plan that worked, and which would be shared. It underlined the projects and programme activities with a master schedule, with all aspects of delivery meticulously in place. The City had a robust and experienced supply chain management that proactively engaged with demand plans, contracts required by dates etc, ensuring that the City got value for money. What helped the City was learning from the past.  There had been a rollout of phase 1 with MyCiti, and the BRT in response to the 2010 soccer World Cup, making it the main form of transport. He agreed that the focus should be on all forms of transport.

He said the City had done forward planning on the whole programme lifecycle from its inception and was guided by the Division of Revenue Act. They have made assumptions about growth parameters in the outer years. Covid-19 and the diminished fiscal envelope had not been envisaged and had required a response that had brought about a level of agility in understanding how to deliver on megaprojects of this nature so that there would not be cost overruns, and what mitigating factors were.

The lessons learned included ensuring stakeholder engagements on a continuous basis. He emphasised the need for permanent resources in the directorate, from senior managers right through to the lower levels, to make sure that there was continuity, and importantly that the skills set responded to the particular areas of expertise required and political buy-in to champion the process. Within the broader context, transport was not limited to bus or road transport -- there were many aspects to it -- and the only way to achieve programme success was to programme not only the delivery of infrastructure concurrently, but also to take into consideration industry transition processes, so that once a road was built one ensured the bus was delivered.

Mr Lungelo Mbandazayo, City Manager, City of Cape Town, said the last bonuses paid by the City were in 2009 for senior management. He added that the National Treasury was best to provide a blueprint, as the City was in constant communication and engagement with the Treasury.    

Buffalo City

Mr Booi said the municipality of Buffalo City had been shocked when the Minister announced that the grant would be withheld because three days prior to the announcement the municipality had had a meeting with the DoT to deal with some of the challenges. He appreciated the intervention made and hoped it would go in the right direction so that the people of Buffalo City would be able to access transport.

City of Mbombela

Mr Pat Msibi, Deputy Municipal Manager, responded to the question on why other phases had been skipped when the municipality went to phase 3b and said the phases represented different routes that had to be developed, and not necessarily the phases of the recruitment management process. He said when the municipality tried to implement the development of a route, there had been challenges that related to operators -- not necessarily business forums, but there were operators affected by laws, especially in the taxi industry. Priorities had had to be shifted after consultation with the DoT. There were project management complexities involving multiple factors that had contributed to the challenges of Mbombela. He requested that the Chairperson, National Treasury and the DoT assist the municipality to formulate a human resources (HR) structure that was going to assist in improving governance, as they believed that this was the only process that would enable them to achieve more.

Msunduzi Municipality

Mr Mzimkhulu Thebolla, City Mayor, said due to unrest, the municipality would have a shortfall and appealed to the DoT and the Portfolio Committee to assist. He said most of the people the municipality had started with were not there anymore, and no bonuses had been paid to them. There had been both political and administrative interventions for a turnaround strategy to change the way the municipality did things.

Mr Madoda Khathide, City Manager, said all forensic investigations were being monitored on a quarterly basis. Where there was fraudulent behaviour, the municipality was hell-bent on ensuring that it followed up on those issues. In terms of project management capacity, the municipality received good cooperation from DCoG. Experts were already on-site trying to assist the municipality, and there was support in grant implementation. The systems and structures were there, with support from stakeholders. The taxi association was cooperative, including ‘amadela ngokubona.’ Consequence management was being applied and cases opened where there were issues of fraudulent activity. He said there was new management and leadership, and they did not want to be judged by what had happened previously.

National Treasury

Ms Wendy Fanoe, ‎Chief Director: Intergovernmental Policy and Planning, said the Public Finance Management Act (PFMA) was designed to allow programme managers to manage, and to hold them accountable for their management decisions. It was important for Treasury to maintain the principle that programme managers must be held accountable. The budgeting system worked in a way where Parliament appropriated money through the Appropriation Act and the Division of Revenue Act to accounting officers. The PFMA set up clear responsibilities regarding this. Money transfers would not necessarily happen in one go, as there were ‘conditionalities’ set upfront before money flowed. She said the relationship between where people live and how they move was important.

Department of Transport

The Department said the Mangaung programme had been delayed, and the municipality was supposed to have launched its starter service in December. The municipality had started with test operations but was targeting to launch full services in March. The Department had already spoken to Treasury regarding the eThekwini municipality overspending, and last year there had been eight partial suspensions. eThekwini municipality had completed the structure in their 3a corridor. She said politics were playing a key role in the municipality and was delaying the launch of operations, and the DoT was considering what could be done at a local and national level.   

Deputy Minister's summation

Deputy Minister Chikunga said the IPTN had not been without challenges in all 13 cities and/or metros. The challenges may have varied, but they had been there. They included issues such as stakeholders, the taxi industry not being happy with some issues, environmental factors, reliance on consultations, etc. She said for infrastructure projects, any delay resulted in costs, whether it was caused or imposed as a result of underperformance, but it was costly and the Department and Ministry were paying attention to that.

Referring to the issue of officials owning taxis, and said that officials had to declare all their business interests annually, and the public transport branch was engaging with SAPS on the matter. The Department had received names of officials doing business with the state, and they had been handed to the police.

She said the project management unit (PMU) would be comprised of technical people. They may be engineers or project managers, but there would not be a one-size-fits-all when dealing with the challenges. There would be a forum for all cities implementing the IPTN programme at a political and administrative level to tackle the challenges and explore easy resolutions. The forum and the PMU would reinforce one another to deal with the issues at hand.

She said the Department would assist the three suspended cities to meet the requirements laid down by National Treasury for their readmission into the programme.

Chairperson Zwane appreciated the joint meeting called to see how the problems could be alleviated. Members heard there were many challenges that could be tackled jointly. He urged all to do what they were supposed to ensure service delivery on the ground – one should not wait for a crisis. Everyone must assist the municipalities and the Committees should be kept updated on the progress.

Mr Mabhena requested the outstanding questions should be answered in writing.

Chairperson Buthelezi thought the joint meeting was fruitful. The meeting was triggered by problems with the IPTNG and people on the ground not getting the services – this was of importance to both Committees. He urged the finding of a solution

The meeting was adjourned  


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