In a virtual meeting, the Cross-Border Road Transport Agency (CBRTA) presented its 2020/21 Annual Report. The Committee welcomed the report and congratulated CBRTA on receiving a clean audit for the sixth consecutive year. The Committee noted that CBRTA achieved only 67% overall performance for 2020/21, which was a significant drop from the previous year’s 93% performance. Only 40% of the Administration targets were reached. The financial report had a significant 34.7% under-expenditure, yet over-expenditure on law enforcement.
Members asked about the progress of the case involving the suspension of the former CEO Sipho Kumalo; the ongoing work on the Linking Africa Through Transport project, the violence of local truck drivers towards foreign cross-border truck drivers, if the Department and CBRTA had worked to improve the regulations after the N3 blockade initiating the July 2021 unrest; issuing of permits, and the high number of vacancies in the organisation.
Cross-Border Road Transport Agency (CBRTA) Annual Report 2020/21
Ms Adila Chowan, CBRTA Board Director, stated that CBRTA recorded a clean audit for 2020/21 which is in line with CBRTA’s clean audits over the last five years. Despite the difficult Covid-19 circumstances, CBRTA recorded significant achievements in pursuit of its legislative mandate and key administration for the sixth successive year. The Agency achieved 67% of its pre-determined objectives notwithstanding the difficult environment in which it had to operate. There were no material findings of unreliability in the performance information of the Agency. No findings of material non-compliance with key relevant legislation were made. The Agency declared an R48.5m profit representing a huge increase from 2019/020. She attributed these achievements to the implementation of cost-cutting measures and a reduction in some operations by the Agency.
CBRTA Acting CEO, Mr Lwazi Mboyi, spoke to the structure of the organisation, its operating environment and challenges, 2020/21 performance, social responsibilities, financials and audit. In outlining its mandate, mission and vision as an economic cross-border road regulator, he pointed out that the Agency would be reviewing its mission and vision in the coming months in accordance with the recommendations of the Board.
There are 19 commercial border posts. The Border Management Authority will consolidate the different agencies CBRTA works with, under one umbrella for coordination of cross-border operations at a single point.
The major problems CBRTA identified is that of an unlevel and non-harmonised operating environment and inadequate policy implementation which constitutes a hindrance to the free flow of cross-border movement of goods and people and an increase in red tape and bureaucratic bottlenecks. As a result, CBRTA has set an objective to solve the problem by creating comprehensive and consistent viable economic regulation of the cross-border transport industry.
• CBRTA has identified key performance areas to improve the regulatory regime by emphasising quality rather than quantity of regulation through the development of Operator Compliance Accreditation System (OCAS) that identifies high performing operators in the sector as they work through the borders.
• Improve cross-border roads compliance with relevant regulations by implementing a Smart Law Enforcement mechanism which is able to identify offending transporters. This system has been piloted with huge success.
• The need to have safe cross-border road transport working through the Cross-Border Road Transport Regulatory Forum set up to harmonise policies across the SADC region.
• Implementing transformation by promoting operators from previously disadvantaged communities.
• CBRTA is proposing the introduction of cross-border road transport charges in line with international best practices.
• Provision of cross-border road transport information accessible to operators in the sector. They propose setting up a training academy and launching an online permitting system which they may export to regional partners as well to help improve and harmonise their systems.
CBRTA achieved only eight of its 12 targets partly due to the impact of Covid-19. Those unachieved targets were outlined including Research and Advisory targets.
Some of the targets achieved included the revision of the registration module; efficient smart law enforcement was launched at two border posts; creating a road safety strategy, despite delays in the implementation of the online permit issuing system this has finally come on stream. Zimbabwe, Zambia, Mozambique, Botswana, and DRC are the major recipients of permits. There was a significant decline in the number of permits issued and a decline in the number of prosecution of offenders, due to the impact of the Covid-19.
As part of its Social Responsibility, CBRTA had information-sharing sessions in Limpopo and Gauteng, social investment projects in some schools. Some social responsibility projects were constrained by the Covid-19 pandemic.
Financial Report for 2020/21
CBRTA was able to finance its business and its assets exceeded its liabilities so the agency remains a going concern. There was a decrease in the liabilities of the agency. Operating expenses declined over the period leading to an overall decline in expenditure. The agency received its sixth consecutive clean audit from the Auditor General beginning 2015/2016.
Mr M Rayi (ANC, Eastern Cape) congratulated CBRTA for the clean audit maintained for the sixth time. He expressed disappointment about the unresolved status of the CEO and some other executive members who have been suspended. This matter should have been at the top of the agenda and an update given to the Committee on progress about these suspensions.
Mr Rayi raised concern about the vacancy rate which was too high. He asked about the targets that were not met in the previous annual report on new revenue streams. The CBRTA in their previous annual report claimed that the target was not met due to challenges in appointing a quality development facilitator. He requested an update on the project plan called the sale of information as well as the Integrated Cross Border Management System (ICBMS) project which CBRTA had promised in their 2019/20 Annual Report would be operational before the 2020/21 Annual Report.
Mr Rayi mentioned that CBRTA should update MPs on what they have done so far on the Leading Africa Through Transport project raised in the previous annual presentation, which was directed at improving Africa’s economy. He expressed his satisfaction with current report except that he is concerned about the drop in the issuing of permits to bus and tourist operators. He welcomed the new Board.
Mr T Brauteseth (DA) referred to over-expenditure of R4.3m on law enforcement in Programs 2 as well as over-expenditure in Programme 3 and 4. He also raised concern about significant under-expenditure where only 34.7% of the budget was spent on Research and Advisory. He requested an update on the matter as well the reason for the delay in the procurement process, and to identify those who are responsible for procurement. In Programme 1 Administration only 40% of the targets. He read from the report that the target was not reached due to the delay in the appointment of service providers. He asked who was responsible for the appointment of service providers and if that person has been held accountable. He demanded there should be real consequence management.
The Chairperson noted the Research and Advisory and Administration performance and requested that the Committee should be given some indication if this has improved, especially the indicator of developing border road transport and trade facilitation. One concern raised by the Committee is the approval of the commercialisation of information. The Chairperson asked if they have procurement plans as part of their strategy for their KPIs.
The Chairperson referred to the decrease in general performance which he believed could have been a result of the pandemic. He asked if they have been able to make a significant adjustment to improve their performance outputs.
The Chairperson raised the challenges of addressing foreign truck drivers. He asked CBRTA to update the Committee on how they are handling and minimising the tension among truck drivers which could affect the performance of CBRTA. Taking the July 2021 unrest into account, CBRTA should update the Committee on how the tension and unrest impacted on their performance and inability to meet some of their targets.
The Chairperson noted that the Department of Transport assisted in mitigating the tension between local and foreign truck drivers that resulted in the N3 blockade. He asked if CBRTA has had the opportunity to engage with the Department on regulations. The Chairperson cited a key responsibility of the entity is to ensure a smooth relationship in regional trade and he referred to the alleged discrimination against foreign truck drivers. He emphasised the impact of regulations on the vision of the Committee in developing a free continental trade.
Ms Lerato Molebatsi, CBRTA Deputy Board Chairperson, replied about the suspension of the former CBRTA CEO and other executive members, saying that the process had already started at the CCMA but the CCMA noted that it had budgetary constraints in that financial year and so the case could not be heard. During the process, Mr Kumalo had completed his term of office as CEO. The Board did not make any effort to renew Mr Kumalo’s tenure. When CCMA resumed the process on 1 April 2021, the Board invoked section 162 of the Companies Act in the case of Mr Kumalo and the case was brought to court. Mr Kumalo only responded to the Board just a few days before this meeting opposing the application. The CEO’s case is being dealt with according to section 162 of the Companies Act to declare him as a delinquent director so that he does not sit on any other board.
Mr Mboyi replied that the Covid-19 pandemic not only impacted their business but across the whole value chain and some of the other transport agencies, especially in 2019/20. Covid-19 was the first major impact that the company had. They were still recovering in the year under review.
Mr Mboyi noted a major challenge was that Covid-19 regulations meant most of the staff were working from home, and it did not have the resources to ensure that the staff had the right tools of trade. They have learned from this and have subsequently found ways of working around these challenges. He acknowledged that Covid-19 had a major impact on their business in the year under review and 2021/22 but promised that there will be an improvement going forward.
Mr Mboyi acknowledged that CBRTA promised in the previous year to launch the ICBMS which indeed has been launched and it is operational. However, the company was still busy looking at some of the leading problems which are not major at this point. The public that the company serves appreciates the new system since they do not have to come to the offices to get their permits but can easily apply online now.
On the Linking Africa project, Mr Mboyi replied that the company has met with the AU Commissioner for Infrastructure taking forward some of the provisions of the Linking Africa Plan. CBRTA had been advised to connect with the departments of trade and industry in Africa as partners in this process, as well as departments of transport and departments of international relations. A department of commerce had recently replied to the CBRTA to strengthen its partnership with it. Meanwhile, CBRTA was still waiting for the Department of Transport to sign and finalise the AU letter and other components of the Linking Africa Plan submitted to them. All other provisions that are critical to the operationalisation of the Linking Africa Plan are currently being implemented especially those that do not have major policy implications.
However, Mr Mboyi said there are hardcore challenges that will be faced by CBRTA in actualising the dream of the Linking Africa Plan such as bringing on board all these departments from other African countries in the region. He admitted that the work is a bit slow, but that it was moving forward. CBRTA was approached in 2020/21 by the Department of International Relations and Cooperation (DIRCO) on components of the Link Africa Plan that could be used on the continent and they have been having discussions on the ICBMS. There are about three countries that have shown interest in working with South Africa. The ICBMS project is now working whereas in case of the Linking Africa Plan, progress has been made but the hardcore infrastructure and system operations were still a bit of a challenge. The work of CBRTA will be easier if the AU comes on board because the target was for it to take up the Linking Africa Plan as a continental project. The project has approval from the SADC ministers of transport.
Mr Mboyi replied about the crisis between local and foreign truck drivers stating that there has been a two-way approach to this within the transport fraternity under the leadership of the Minister. The Minister has been driving the process together with the Minister of Labour to resolve the truck driver crisis. The concerns raised by the truck drivers and the challenges they experience are being dealt with. The CBRTA is working closely with the security cluster to ensure the challenges raised by the foreign truck drivers are attended to. CBRTA is working closely with SAPS in tasking the regulator forum to address the challenges affecting cross-border truck drivers. There is ongoing work within the Departments of Transport and Labour and within the transport fraternity to address this crisis. CBRTA has a great interest in the peaceful resolution of the conflict because just like the July 2021 crisis, all acts of violence amongst truck drivers do have a direct impact on CBRTA business. Mr Mboyi assured the Committee that the Department is working hard together with the security cluster and the transport fraternity to ensure the crisis between truck drivers is resolved.
Mr Mboyi replied highlighted some of the challenges raised by the CBRTA Board. There were also infrastructural challenges especially with the ports. Some neighbouring countries like Namibia are developing their port infrastructure, working with the Chinese government to develop this infrastructure. Mozambique is developing their port of entry. The Port of Maputo is one of the major ports at the moment. Most of the chrome coming from Limpopo province now goes through Maputo. This indicates an important need to address the development of infrastructure and challenges from a security point of view and to address their systems and polices by making them efficient. Otherwise, neighbouring countries will provide alternatives which will have a great impact on the business economy, trade and the transport fraternity. These are some of the challenges that the Board is currently dealing with and plans are in place to get the challenges resolved. The Select Committee would be notified in due time on the outcome.
Dr Nchaupe Maepa, CBRTA Chief Operations Officer, replied about the large number of vacancies that did not improve during 2020/21. CBRTA started that year with 153 employees. There were nine appointments and five terminations so 157 people were employed at the close of that year. There is a need for CBRTA to do an organisational redesign that is fit for purpose. Therefore, the organisation has decided to advertise positions only critical positions. There is an ongoing organisational redesign and the final outcomes will be communicated to the Committee.
Dr Maepa responded about revenue streams. The cross-border charges being championed by CBRTA are both due to harmonisation and a key revenue stream for the organisation. About R10bn has been generated through cross-border charges on commercial vehicles to the country. The other prospective revenue stream is through the training academy. However, CBRTA has been experiencing challenges in the appointment of quality development facilitators. Efforts are being made to collaborate with other training institutions to facilitate the process.
Dr Maepa indicated that the information platform CBRTA is developing is aimed to serve as a revenue stream. The platform has been launched. The purpose of the platform is to generate revenue through the commercialisation of information in accordance with the CBRTA Act.
Dr Maepa replied that there was a delay in the procurement and appointment of service providers for Research and Advisory due to the impact of Covid-19. It was difficult to advertise the tender at that time. However, CBRTA recovered and was able to develop the system a few days before this meeting.
Mr Silence Mmotong, CBRTA CFO, replied that the over-expenditure is a result of the inability of the law enforcement agency to collect the fines charged to cross-border road users for non-compliance. This has to be deemed as irrecoverable expenditure. However CBRTA has been engaging with the Road Traffic Management Corporation (RTMC), its sister agency that works with CBRTA on law enforcement. Its data collection capacity had been raised. RTMC has developed a Track and Trace Unit which is responsible for tracking and collecting fines as well as issuing a warrant of arrest to ensure that the recovery of fines is improved. RTMC is in the process of operationalising the Track and Trace Unit. CBRTA is hopeful that this approach will help to improve the over-expenditure.
Mr Mmotong added that over-expenditure included expenditure on the renovation of technological devices, IT and the boardroom infrastructure to maintain the communication process with stakeholders and neighbouring countries who are partners during Covid-19 pandemic.
The team concluded the response by reiterating the fact that some of the challenges faced by CBRTA will remain until the operationalisation of law enforcement is addressed. This point was strongly emphasised by Mr Mboyi.
Ms Molebatsi highlighted that the CBRTA Board have visited almost all the borders posts except one and that the visit reveals work very much needed to be done on compliance. She agreed with Mr Mboyi that the RTMC law enforcement unit poses both financial and operational challenges to CBRTA. It was her appeal that all concerns raised by the Committee should be resolved because it will impact other departments such as SARS and Home Affairs.
The Chairperson thanked CBRTA and the Committee for holding CBRTA to account on behalf of the general public. He thanked the Committee members for their consistency in ensuring that the work of the Committee continues.
The meeting was adjourned.
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