Freight Transport Infrastructure: department briefing

Meeting report

TRANSPORT AD HOC COMMITTEE
2 June 2004
FREIGHT TRANSPORT INFRASTRUCTURE: DEPARTMENT BRIEFING

Chairperson: Mr J Cronin (ANC)

Documents handed out:
National Freight Logistics System: Department PowerPoint presentation

SUMMARY
A four-person delegation gave a joint presentation entitled "The National Freight Logistics System". Delegates included:
Ms K Manana - General Manager, Transport Policy, Department of Transport
Mr M Vilana - Chief Director, Freight Transport Policy, Department of Transport
Ms S Groenmeyer-Editheji - Project Leader, National Freight Logistics, Department of Transport
Mr E Harris - Director, Logistics and Infrastructure, Department of Trade and Industry

The presentation highlighted the many challenges of developing an efficient freight system. The huge amount of funding that was required for infrastructure, the lack of an overall national freight logistics policy, and the difficulty posed by the numerous role players involved, compounded these challenges. In the ensuing discussion, Committee Members were assured about structures to improve interdepartmental communication and that with all key stakeholders.

MINUTES
"The National Freight Logistics System" presentation was divided into three areas: an overview of freight transport infrastructure and the overarching strategic challenges; a modal overview of rail, ports, road and border posts; and finally a look at the strategic initiatives of government.

Inefficiencies in freight logistics were largely a result of the lack of integration between the different freight modes. Lack of integrated national policy was a further concern. Infrastructure investment shortfalls, shortage of cargo handling equipment, slow and inefficient service, under-maintained roads and lack of security and capacity at border posts, were other challenges that faced the Department. Department initiatives included the development of a '2014 scenario plan', an overall National Freight Logistics Strategy, and implementation of a number of Corridor Strategies.

In conclusion, Ms Manana said that the Department had estimated the funds needed to provide the necessary infrastructure. These figures had not been presented to the Department so they could not revealed to the Committee yet. An Interdepartmental Task Team was meeting regularly. The concern was that current funding only allowed for the development of strategies but not for implementation. The message that has been passed to Cabinet was that government intervention was necessary. Additional funding was needed, not only from the Department, but also from the DTI, Department of Public Enterprises and the National Treasury.

Discussion
Mr Cronin asked Members whether they wanted to ask questions on the separate modes of transport or inter-modally. The latter was preferred.

Mr S Farrow (DA) asked how the Department was influencing the budget to ensure that funding was obtained. He also asked why Coega had not been mentioned and what impact this port would have. Mr Farrow also asked why the Department was not ensuring that funds were obtained for infrastructure investment. On the question of interaction between the various departments and modes of transport, he said that this has been spoken about for years and asked why it was still not happening.

Mr A Ainslie (ANC) said that it was clear that the challenges were huge. Regarding the Strategic Corridor initiative, he asked if the Department needed a 'pilot project' if the problems had already been identified. He also asked about the budget for border posts that only occurred for one year, and control of the chaotic conditions at these posts.

Mr L Mashile (ANC) said that if the Airports Company of South Africa (ACSA) moved so much cargo (522 530 tons per annum), why did it not feature in the presentation - or were airports now fully privatised? On the issue of provincial and national roads, he asked if only some roads were being developed.

Mr Cronin asked why Coega, the controversial La Mercia airfreight issue, and ACSA were missing in the presentation. There appeared to be a lack of coherence in terms of national freight policy and he wondered if this was because so many different players were involved. He asked whether provincial interests were pushing freight issues instead of an overall national strategy.

Mr Vilana replied that a once-off study had been needed at border posts to assess the tonnage of goods that were passing through in order to assess infrastructure needs. At present, the South African Revenue Services (SARS) that controls exports does not mark goods in tonnage weight.

Mr Harris responded on the Coega scheme. He said that in the absence of a national policy on freight, there would always be "disjunctures". The Department was working on a strategy plan, the deadline of which had been brought forward to the end of 2004. Although the Department was the lead department for freight services, DTI was a twin partner and there were nine different departments involved.

Mr Cronin asked if there were any plans to include key stakeholders and the private sector. Mr Harris replied that this was the case and that the transport sector had learnt by the lack of stakeholder participation. There had been moves to create an inclusive Freight Council or Forum.

Mr Vilana then showed a further slide on Inter-governmental Logistics and the overarching governance structure, which Members found useful.

Ms Manana said that Coega, La Mercia and ACSA were all on the Interdepartmental Task Team's agenda. Coega was being looked at as a trans-shipment hub. As present there was no airport infrastructural plan, but airports were being looked into for exporting goods of "international status". Interventions for the different Strategic Corridors were being investigated and prioritised.

Ms Manana then replied to the question about how the Department positioned itself with regard to the budget. She said that they had to interact with all the service providers in order to assess budget needs. The National Freight Logistics Strategy called for infrastructural plans, which, once approved, could be taken to National Treasury for funding.

Ms Manana said a pilot project involved assessing what practical steps could be taken to improve efficiencies in a particular area e.g. the introduction of a dedicated trains to service containers or the acquisition of more cranes.

Mr O Mogale (ANC) asked whether the inadequate security at border posts was because of a lack of security or a shortage of security staff.

In regard to the pilot projects, Mr Ainslie said that if the problems were so obvious, why couldn't things just get done?

Mr Farrow had a similar concern and questioned the Service Level Agreements. If these were in place, why was the Department not checking to see that the service was being provided?

Ms Manana responded that the purpose of pilot projects was to see if practical steps taken in a specific corridor actually worked, before such steps were implemented in all corridors.

Regarding Service Level Agreements (SLAs), Ms Manana said that many of the service-related problems were at the level of the firm and that the Department did not see the need to intervene at this level. She acknowledged that the monitoring capacity of the Department needed to be built up. The Department also needed to ask itself whether it was achieving its own policy objectives.

Mr Harris contributed that since the introduction of a Post Congestion Steering Committee, there had been some improvement at the Durban port. Such a Committee was also being introduced at other ports but there was still much room for improvement. The Department had been let down by companies that had signed SLAs, and that stronger interventions were necessary. In some instances, the SLAs had been found to be very inadequate. There were some elements on the ground that the Department was now beginning to understand, and action was being taken.

Mr Vilana said that it was true that security was lacking at border posts. The Border Control Operating Committee was looking at establishing 'border post villages' to create environments where staff wanted to stay.

Mr L Mashile (ANC) said that all these studies and pilot projects just made the backlogs worse. Some timeous interventions were needed.

Mr Ainslie questioned the need for the new Pondoland Road and asked it would suddenly increase tourism, when the exiting good road had not done so. Mr Vilana explained that the Coastal Corridor referred to in the presentation, was a shipping line and not a road.

With regard to the Corridor Approach, Mr Harris said that this was actually a network approach wherein the total supply chain was considered. Road links might not be fully realised by tourists as yet, but would be once the whole system was working in an integrated manner.

Mr Farrow commented on how the Department relates to and interacts with other departments involved in freight transport delivery. It helped to answer his initial concern about where the Department was going, the purpose of the many reports and studies, and the influence the Department had on the budget.

The Chairperson emphasised the need for interdepartmental input and co-operation with regard to freight. This was a challenge for the Committee and Parliament. It would be interesting to track the progress of the Freight Logistics Policy and he invited the delegation to return at a later date to inform the Committee of developments.

The meeting was adjourned.