Regulatory and safety issues on maritime and air transport: briefing by Department

Meeting report

TRANSPORT AD HOC COMMITTEE
15 June 2004
REGULATORY AND SAFETY ISSUES IN MARITIME AND AIR TRANSPORT: BRIEFING BY DEPARTMENT

Chairperson:

Mr J Cronin (ANC)

Documents handed out:

Department of Transport presentation
Presentation: Maritime Transport Regulation - Five Years Ahead.

SUMMARY

 

Two presentations were made on the South African aviation industry and maritime transport regulation. Regarding the former, concerns were expressed about the availability of suitably trained and experienced aviation staff and specialists. The dynamic nature of the aviation industry was highlighted which required constant adjustment. A problem in the maritime industry was the difficulty in attaining equity targets in some highly specialised job categories. Concern about apparent exorbitant salaries being paid to South African Maritime Safety Authority (SAMSA) executives was expressed. It was agreed that the National Sea Rescue Insitute (NSRI) was inadequately supported by government funding.

MINUTES
Department presentation
Ms Wrenelle Stander (Director-General: Transport) mentioned during her PowerPoint presentation, that, as elsewhere, the Air Traffic Navigational Services Company (ATNS) was commercialised but not privatised. The South African Civil Aviation Authority (SACAA) received a government subsidy of R5.5 million to fund an accident and investigation unit. Of 60 international licence holder, only four were active. The integration of military and civilian airspace in South Africa was the second case achieved in the world. Infrastructure upgrades had been completed at Johannesburg International Airport and would shortly commence in Cape Town. A satellite-based air traffic management system would be established soon. Much effort was being put into the integration of regional air traffic control systems in Africa.

Mr Riad Khan (General Manager: Aviation and Maritime Transport Regulation) started his slide presentation with a table showing the budget breakdown for 2004/05 (not made available as a hand-out). He gave the assurance that an expanded safety regulatory framework for the fishing industry would be phased in slowly and carefully. They were monitoring maritime industry trends such as increased draft requirements. Only two South African ports, Richards Bay and Coega, had 16m drafts.

Discussion
Mr D Schneemann (DA) asked about recruitment and what was being done to retain trained staff.

Mr S Farrow (DA) asked why the Airports Company of South Africa (ACSA) with its R1.8 billion budget, had not been corporatised, and whether the 10% option given to ATR had been taken up. Had steps been taken to prevent the issuing of fraudulent licenses as had happened before? What steps had been taken by the Civil Aviation Authority to increase security, especially after the 11 September 2001 attack in New York?

Ms Stander claimed that during November 2003, the visible delays at airports had been addressed, and delays were down to an average of only 20 seconds. International controllers were hired for 12 to 18 months to relieve the training situation, partly because of the transition to the Eurocat system. About 190 air traffic controllers were optimal, and at the time 213 controllers were available for work. An airspace expert had been brought in by the Air Traffic and Navigation Services (ATNS) company from Gatwick Airport to re-organise air space. ATNS had thus far effectively dealt with the service delivery challenge. They had also started the Educats programme for air traffic controllers to 'stream' them into one of the three activity sectors, namely Area, Approach or Aerodrome, so they become useful in a shorter period.

Mr Farrow asked whether South African trained staff had been "poached" by offers of remuneration in dollars. Also what were the intentions for the future of ACSA?

Ms Stander replied that the incentive scheme provided for a lump sum payment at the end of five years' service. At the Johannesburg control tower, a whole new management team had been installed. South African trained controllers were highly sought after.

In relation to ACSA, the question related to Initial Public Offering (IPO) and the 10% share option, and exactly what were the intention with the company, she commented on the 10% share option had mentioned that that the agreement was updated two years ago. The date to trigger an Initial Public Offering (IPO) and to take the further 10% option was supposed to happen in April of this year, but the date was shifted to December 2004, allowing any of the parties involved to trigger the IPO and take up 10% share option . She added that they have already established an interdepartmental committee comprising Department of Transport and Public Enterprises. At this stage they were busy looking at how they can take this particular matter forward. They will be inviting labour on to that committee.

 

In reply to a question, Ms Stander replied ACSA was corporotised and partially privatised .

The Chair did not see the logic in selling off a corporatised, and partially privatised, company while profits were being made. In the USA and the rest of the world airport companies were not privately owned, which made sense to him.

Mr Farrow was concerned that employment equity and black economic empowerment was not moving head, but remained stable at 4.4%. How would the financing of the proposed King Shaka airport be sourced?

Ms Stander stated that all of ACSA's investments in infrastructure were financed from cash flow, which resulted in gearing of only 18%. A committee comprised of management, government, shareholders and labour was working on the empowerment issue.

Mr Khan commented that the best interests of the country were foremost and the correct balance had to be found.

Ms Stander explained that in the network, there were just three profitable airports. On the issuing of authentic licencing, the examination system had been computerised, fingerprinting, and different colours for different licences had been introduced. The International Civil Aviation Organisation (ICAO) had visited to South Africa twice. The fifth amendment by the Civil Aviation Authority (CAA) of regulations was in progress and would be advertised. It included provision for the national security plan.

Mr Farrow asked whether staff complements with the required technical expertise were adequate within the CAA. Qualifications attained at technikons were not applicable and a massive staff shortage remained. Some 42 vacancies had been mentioned. Ms Stander promised look into that issue and report back later.

Mr B Mashile was concerned that there were no effective timeframes for attaining equity targets in job creation.

Mr Schneemann expressed his appreciation for SAMSA's professionalism, but he enquired whether they were learning from experiences such as the most recent damaged tanker incident, and whether there was sufficient capacity to deal successfully with demands. Regarding sea search and rescue, the National Sea Rescue Institute (NSRI), a voluntary organisation that rendered important services, was not supported adequately by state funding.

Mr Farrow was very concerned about SAMSA where there were reported conflicts of interests among Boardmembers. The cadetship, aimed at transformation, was costing R4.5 million per year for 29 cadets. Astronomical salaries were being paid from executives down, and salary adjustments of nearly R4 million had been made. Would that organisation report directly to the Committee? A forensic audit had been ordered by the Auditor-General in January 2003 to be completed by August 2003, and nothing had yet materialised.

Ms Stander replied that an increase in shipping and maritime tariffs had not been agreed to. In September 2004, both the SAMSA and CAA boards' terms ended, and nominations would be solicited. She offered to follow up on the forensic audits.

Mr Khan replied that timeframes for equity targets for historically disadvantaged individuals were met by state enterprises. However, the majority of ships were not South African, with non-South African personnel. A local crewing strategy had been devised whereby cadets could train on lower-class vessels for work in higher-class vessels. It was a battle to convince foreign shipping to employ South African crew, because they preferred to place their own nationals. In the construction of port infrastructure, labour-intensive methods were used wherever practical. South Africa lacked a coast guard and therefore had to co-ordinate private and state assets in meeting crises such as the recent damaged ship. South African companies had been wonderful in committing their resources and working together. Increased capacity would depend on the development of the shipping industry. Only 5% of the expenditure of the NSRI had been subsidised by government. They were doing excellent work, saving lives, preventing pollution, and also training young jobless people from the townships for rescue work. The Minister was reviewing the level of state support.

Ms N Mbombo (ANC) was sceptical about the chances of disadvantaged young people getting into learnerships.

Mr Farrow suggested that a toll-free number for the NSRI be created. For the previous two years, he had wanted to get a copy of the Smit-Pentlow agreement with SAMSA. All his attempts had been to no avail.

Mr Khan replied that all the state emergency service institutions would be trained on how to alert the NSRI. .

Regarding the Smit-Pentlow text, the Chair referred to a similar situation in Australia. It seemed that the excuse of protection of commercial interests was used for not divulging these agreements which could concern large amounts of public money.

Ms Khibi Manana (Acting Deputy Director-General: Transport Policy and Regulation) said that the Maritime Charter, which had been finalised, had black economic empowerment as one of its key components. Clear targets had been set by government, labour and industry. The maritime industry was very specialised, so career road shows had to be organised to inform particularly women and disabled people. The Charter had been signed and copies would be made available.

The Chair stated that building up a South African shipping register was crucial. A report on the Committee findings would be drafted and prepared for submission to Parliament.

The meeting was adjourned.