Integrated Public Transport Network (IPTN) status report

Meeting report

Integrated Public Transport Network (IPTN): Director-General opening remarks
Mr Mthunzi Madiya, DoT Acting Director-General, noted that each city-wide network was meant to be finaliSed in five-yearly phases with the aim to convert 20% of passengers onto IPTN services. Twelve cities were listed as pilot projects for the transport strategy to demonstrate the transformation of public transport service. This new reformed public transport system was aimed to deliver integrated, sustainable, accessible and affordable public transport. Moreover, the new system was meant to influence the transformation of the minibus taxi industry and bring integrated fare collection as a model for public transport. The total annual budget provided for the public transport network grant is around R6 billion to assist with the implementation of these new IPTN. All twelve pilot projects were expected to be concluded by 2020.

Most cities have been delayed and the DoT is currently only funding ten municipalities through grants to implement a phased public transport network.

Three cities have been suspended from receiving grants until the end of 2022/23 as they have been underperforming. However, these cities did receive funds to close out projects from 2020. Thereafter, DoT decided to introduce interventions such as peer-to-peer knowledge transfer, standardized frameworks for cost and revenue, templates for grant applications, intensified grant monitoring, and ministerial intervention to improve IPTN performance and implementation.

Most projects are being undermined by the mismanagement of funds, and lack of ethics and accountability in municipal government which results in poorly organised and inefficient systems and structures observable in some cities. DoT has developed a capacity-building programme for municipality officials to assist in building skills in local government and strengthen municipal knowledge which will assist to hold cities accountable. The readmission of suspended cities requires the city to provide a detailed IPTN grant spending report, provide proof of capacity availability, affordability assessment proposals, and should pass its audit to be granted further funds subject to the availability.

Integrated Public Transport Network (IPTN): DoT progress report
Mr Ibrahim Seedat, DoT Director: Public Transport Network Development, provided an update on the IPTN roll-out. In an overview of ten cities, colour codes described progress in each city. Of the ten cities, six were coded as green, two were yellow and two were red:
- Green (operational and expansion of services) Johannesburg, Cape Town, Tshwane, Ekurhuleni, George, Polokwane
- Yellow (operationally ready to launch) Rustenburg, Mangaung
- Red (immediate intervention) Nelson Mandela Bay, eThekwini.
- Suspended cities: Msunduzi, Mbombela, Buffalo City.

Mr Seedat gave a summary of the recommended interventions for each city, which municipality or area services need to be extended, proposed launch dates for these services, and the administrative and political interventions needed for each.

Common interventions and challenges in most the cities are:
Interventions
- Monitor progress and monthly operational readiness for new phases and report back to Minister
- Ministerial intervention and oversight

Challenges
- The capability of the cities to ensure and enforce compliance
- Delays in negotiations.
- Resistance from other stakeholders. Illegal taxis taking passengers from the system
- Budget constraints and internal capacity issues
- DoT presented two overarching recommendations to the members

Directive by Minister to include launch and performance targets by each municipality stating:
- Increasing passenger numbers, launch of new services and extension of services milestones
- Compliance with Automatic Fare Collection (AFC) Regulations
- Universal design and access
- Finalisation of industry transformation/transition processes
- Prudency and value for money, zero tolerance for corruption.

Ministry to provide dates for:
- Immediate bilateral engagements with eThekwini and Nelson Mandela Bay – before end of March or in April 2022
- Immediate engagements with three cities due to launch – Polokwane, Rustenburg, Mangaung – before end of March or in April 2022
- Launch of the City Forum where all cities will be invited – Quarter 1 of 2022/23
- IPTN Steering Committee for Gauteng city-region – June 2022 to meet every six months
- Annual Ministerial-Mayor-MEC IPTN Forum each October to discuss state of public transport

Discussion
Mr M Rayi (ANC, Eastern Cape) stated that this is the first presentation on the IPTN rollout and that it would have perhaps been better if they had had the strategy presentation first so they understand the strategy. Some new Committee Members do not have a background on the strategy. He questioned the difference between public transport and integrated public transport and suggested that the opening remarks of DDG Madiya should be provided in writing to the Committee as this contextualises the IPTN. On the rollout itself, there are some challenges in each of the cities, though some are better than others. He suggested the cities meet together to share best practice. He acknowledged the Ministerial-Mayor-MEC IPTN meeting but this is an annual meeting and perhaps this forum should be changed to a quarterly meeting given the challenges.

He asked about amending the legislation so that the provincial DoTs are able to intervene because there is no legislative framework in some areas. He asked for the reason for the suspension of three cities – Buffalo City, Nelson Mandela, and eThekwini. He asked if the grant monies given to cities for the project are accounted for and for how long the ministerial interventions have been in action.

Mr T Brauteseth (DA; KZN) agreed that there is a need for ministerial intervention in eThekwini. The project started in 2013 when he was still the councillor there and the promise was that it would be completed in 2016. Six years later there is still road infrastructure that needs to be completed and there has been no bus on the Go Durban route. In December 2021, despite opposition, the Go Durban project was granted R205 million for unforeseen expenses. The real issue is there has been a massive conflict between the taxi industry and Go Durban which is what has led to all the delays, through taxi violence, protest action, and threatening of workers on-site to stop building. DoT needs to involve all stakeholders, including taxi associations, to find an urgent resolution.

Mr M Dangor (ANC; Gauteng) asked if something will be done in Rea Vaya in Gauteng where some stations are not working, some are in a bad state of repair and some have been stripped. He thinks when there is a change of administration, there tends also to be a change of emphasis. Secondly, he asked if the taxi issues have been resolved in Johannesburg and Tshwane.

The Chairperson asked how much has been spent thus far of the initial R6 billion set aside for the IPTN. He questioned to what extent supply chain and contract management challenges affected project delays and if these have appeared as a cause of concern in the audits. He suggested that the IPTN cities should be requested to draft a ten-year plan on how they plan to execute their projects. He questioned the role of DoT in capacity building of the cities to ensure lack of capacity is addressed. Underperforming cities can learn from the cities that have progressed.

DoT response
Mr Seedat acknowledged that DoT has also noticed around 2014/ 2015 that the city was good at launching and building infrastructure but not so much at maintaining and keeping up the appearance and quality of infrastructure. They really value the feedback of Members and would like to get their feedback in writing to pass on to the city and also use it as a point of reference.

In the current legislative framework, the Division of Revenue Act states – in providing a conditional grant – that the national department transferring the funds is not the implementing agent. Instead, its role is to monitor, track spending, and make allocations. When it comes to penalties, the national department needs to write to the city and give it seven days to respond on why the national department should not withhold funds or stop funds for that year or even suspend the city. He highlighted that the role of the national department is mostly around support and monitoring and assisting the city in executing its policies and procedures.

On eThekwini, the city was supposed to be up and running in 2016, but the challenge is that negotiations have broken down between the city and the eThekwini Management Taxi Council (EMTC), which is a combination of taxi regional leaderships. DoT recently met with the taxi industry and they think there is room to work with the leadership and get operations running but the challenge is that the city would have to compromise on the ownership of the busses.

On the suggestion to have regular ministerial meetings, Mr Seedat noted that this was proposed, and they are looking at some dates with the Ministry. He explained that they are hoping to have regular bilateral forums which will assess the implementation challenges and to have an annual forum on ITPN broader issues.

Mr Lucas Malila, DoT Senior Manager, replied that there had been ITPN interventions before. DoT had accompanied previous Transport Ministers, the last being Minister Blade Nzimande, to eThekwini and when they got there the Mayor and City Manager "could not attend the meeting". They also went to Msunduzi and George with three previous ministers and with the current minister to try to intervene. Some of these interventions are not new, but they are trying to have these standardized so that challenges can be managed more proactively.

He stated that where there is political instability the programmes become stagnant. In Nelson Mandela Bay the political instability of the past five to six years has been unprecedented. Every time there is new political leadership, they change programme heads, and the person who has been driving that programme is moved or suspended. This kind of arrangement does not allow for consistent accountability which makes it difficult to hold programme managers accountable. Political and administrative stability are a challenge in Nelson Mandela Bay and this has a negative impact on service delivery and ITPN is not immune to these challenges happening at the city level. He accepts that the ministerial intervention should be standardised and those engagements should involve all key stakeholders.

Similarly, capacity is linked to political stability. He gave the example of Msunduzi where due to high turnover or retention challenges, there have been so many different people leading the programme. Sometimes they have capacity, but then they are removed. Even though the IPTN grant provides funding for capacity building, the issue is the utilization of that capacity.

Mr Malila explained that the main reason for the suspension of Buffalo City was the delays in providing its financial report and the City was focusing on upgrading the Qumza Highway. The Buffalo City suspension was to give it time to regroup and work on its plan and foundation. Of the suspended cities, only Msunduzi, Mbombela, and Buffalo City have been making advances for readmission. In contrast, in Nelson Mandela Bay many officials have been charged with corruption, and at one stage National Treasury commissioned an investigation into corruption. The issues in Nelson Mandela Bay are linked to political and administrative instability as there is no city manager and the municipality took time to hire a CFO. In closing, he agreed that there is a need for quarterly ministerial meetings and noted the request for another meeting to take the Members through the public transport network strategy.

Mr Eric Skosana, DoT Director: Conditional Grants, gave an update on the suspended cities:
- Buffalo City was suspended in 2020/21 and it remained with its R71 million of 2019/20 funds which the city said would be adequate to complete the Qumza Freeway infrastructure works. The city is still reporting on a quarterly basis on its performance.
- Msunduzi municipality was allocated R134 million in 2020/21 and it has been completing its project using those funds. Recently in 2021/22 Msunduzi requested an additional R11 million due to a shortfall which was granted so it can finish up its project.
- Mbombela municipality was supposed to give the transfer officer a credit commitment schedule but it was delayed. However, in anticipation of the schedule, the transfer officer advanced R20 million to it with the approval of National Treasury. The municipality is not cooperating in providing the required reporting on the initial R20 million and on the reallocation of R198 million in line with the grant framework. The municipality’s inefficiency in complying with the requirements of the IPTN grant is the reason the city was suspended.

Mr Skosana said the expenditure from 2008/09 to 2021/22 was R51.8 billion out of R71.3 billion in allocations according to the records kept as the cities submit financial reports to the transfer officer. No corruption had been discovered to date because of the manner in which the grant is transferred and managed. The transfer officer transfers funds to the receiving officer of the municipality who then has the responsibility to use the funds prudently and send financial reports. The municipal council and other governing structures play an oversight role in the use of the resources.

Mr Rayi asked if the Minister had requested a forensic report on the Free State ITPN project.

Mr Seedat replied that indeed the Minister has taken a decision to institute a forensic investigation into the IPTN project management as they realised that Mangaung has spent more than R500 million on professional services and there is nothing to show for it. He wrote to National Treasury in April requesting intervention and it promised it would appoint the service provider that is going to look at Mangaung. A Chief Director has also been deployed to go and assist there.

The Chairperson thanked the Director-General and his team for the engagement.

Deputy Minister of Transport, Ms Sindisiwe Chikunga, apologised for joining the meeting late due to loadshedding. She will contact the Acting DG and hear what was raised in the meeting and try to implement the suggestions within the budget constraints in working with the municipalities.

The Committee adopted the minutes for the 23 March, 3, 11 and 18 May. The minutes of 20 April were not adopted as a Department report on the “anti-corruption hotline” still needed to be sent to the Committee.

The Chairperson informed Members that he received a letter from the Office of the Chief Whip which states that the Select Committee scope will be expanded to planning and monitoring. He will have an engagement with the broader team first to understand what is expected of them and will include this agenda item in the next meeting. He adjourned the meeting.