SA Railway Commuter Corporation, Railway Safety Regulator: Budget briefing

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
18 March 2005
SA Railway Commuter Corporation, Railway Safety Regulator: Budget BRIEFING

Chairperson: Mr J Cronin (ANC)

Documents handed out:
SARCC Budget presentation
Railway Safety Regulator Budget presentation
Railway Safety Regulator Budget (Excel document 1)
Railway Safety Regulator Budget (Excel document 2)

SUMMARY
The South African Rail Commuter Corporation briefed the Committee on its work. It was responsible for the operating commuter rail through its subsidiaries, which were, Metrorail and Intersite, which operated the stations. Challenges facing the Corporation were the ageing rolling stock, insufficient funds and inadequate security on trains. Members’ concerns included, amongst others, the need to utilise disused railway lines and the extension of commuter rail to other heavily populated areas outside major metropolitan areas.

In its briefing to the Committee, the Railway Safety Regulator noted challenges facing the operator which included shortage of skilled personnel, the inexperience of the Board members and the need to develop regulations around the transportation of dangerous goods by rail. Members concerns included rail accident causes and the unavailability of overhead pedestrian bridges in new settlements.

MINUTES
SA Railway Commuter Corporation briefing
Mr E Lekota, Chief Executive Officer, SARCC, gave a brief background about the company and noted that SARCC had had a problem with ageing rolling stock that needed refurbishment, especially in coastal areas where corrosion was an issue. That had led to more funds being spent on coaches and less on infrastructure. The Corporation had also been faced with the problem of crime on trains, but they had been working with the South African Police Service to address this. The SARCC had been looking at introducing closed circuit television inside commuter train coaches. The Corporation was involved in rail planning and line extensions with various municipalities and provincial governments.

Ms N Xaba, Chief Financial Officer, reported that the Corporation had received a qualified audit report for 2003/4 financial year. The qualification was as a result of the move to General Accepted Accounting Practice (GAAP). They had been forced to comply with the new system, which required changes in the auditing systems. Due to introduction of GAAP in relation to valuation, depreciation and impairment of the rolling stock, plant and equipment, the Committee could expect the qualification to continue until 2006. Profits from fares were transferred to Transnet even though subsidies were from the SARCC. One of the challenges facing the Corporation was inadequate funding and they were looking at various options such as project finance.

The CEO said that the SARCC was serving poor people but in the past rail planning was not aligned to spatial planning. They were planning extend commuter rail using the neglected Spoornet facilities. These lines would be used for freight and passenger transport. They were pursuing the use of commuter fares for reinvestment in building an efficient transport system.

Discussion
Ms B Thomson (ANC) asked who was supposed to be responsible for the security of commuters on trains.

Mr D Mabuyakhulu (ANC) enquired about the utilisation of the disused railway lines in Northern KwaZulu Natal which could benefit commuters who were currently using road transport.

Mr T Mbikwana, Executive Rail Planning, replied that the lines to which Mr Mabuyakhulu had referred, were long-distance lines and Shosoloza Meyl was the utility that serviced long-distance lines.

Mr Mashile (ANC) asked if there were any strings attached when SARCC transferred subsidies to Metrorail.

Mr Lekota answered that the Corporation as the insurer was responsible for security of the rail commuters. SARCC owned the assets, but Metrorail was responsible for implementation and the execution. SARCC was responsible for service and maintenance of the infrastructure. He added that the structure of the contract was unfair the SARCC.

Mr Anslie (ANC) enquired about whose responsibility it to ensure that trains were safe and secure. He also asked what kind of measures were taken to ensure that commuters were informed of changes in train schedules.

Mr Lekota replied that the SARCC was responsible for security but the funds were channelled to Metrorail. About R155 million had been made available for provision of security of commuters around the country. Metrorail had been complaining that the subsidy was inadequate. An audit report had revealed that security was concentrated around stations and around fare collectors. The SAPS would be deploying 100 police that would patrol the trains in the Cape Town area. Security was a major contributor to service levels, for example, burned trains reduced the number of coaches available for commuters. Announcements were done through loud speakers and 70% of stations were equipped with speakers. The SARCC planned to install sound-speakers and CCTV cameras inside train coaches.

Ms B Thomson asked what the SARCC had done for Limpopo rail commuters.

Mr Lekota replied that in Limpopo, SARCC had been discussing with the MEC for Transport about rail corridors that had been identified. He said that some provinces were even willing to contribute to funding

Mr Mashile said that he believed that the Corporation was not proactive. He asked how they felt about their relationship with Metrorail.

Mr Lekota answered that SARCC had lots of plans that had been developed to alleviate traffic congestion on the roads. Those plans to extend rail transport would be useless without funds. They had been discussing this with provincial officials. He added that they were not happy with their relationship with Metrorail.

The Chairperson said the Committee would arrange a meeting with the Department, SARCC and Metrorail to address public transport challenges. The Committee was interested to see the comprehensive national commuter rail plan. Furthermore, a good rail system should be an integral part of the multi-modal system.

Railway Safety Regulator
Mr S Khosa, acting Chief Executive Officer, said the Regulator was established to provide and promote safe railway operations in a responsible manner by applying best practice principles. The regulator was mandated to regulate every operator including private operators such as mine operators. The CEO said that all operators were required to submit a Safety Management Systems to the Regulator for approval. A challenge faced by the Regulator among others was to address the critical skills shortage. The Regulator also aimed to develop appropriate regulations on the transportation of dangerous goods by rail (see presentation).

Discussion
Mr A Anslie (ANC) asked about the cause of recent rail accidents. He asked if human error, faulty signalling or the ageing rolling stock had caused them. He enquired about the differences between safety and security, which one of the two was the responsibility of the regulator. He asked what had been the contribution of private operators to the regulator’s coffers beside the government subsidies.

Mr Khosa replied that the regulator was not responsible for safety but the South African Police Service had started with a pilot project where the police would patrol trains. The Regulator did not have the capacity to investigate rail accidents. It had been training staff to understand the safety regulations. The Act had made provisions for the Regulator to charge fees when they were issuing a safety permit. They still had to differentiate between types of operators, for example, what to charge small and big operators. The Regulator had to be careful because operators could end up passing the fees on to commuters.

Mr G Scheenman (ANC) remarked that the figures as presented were not tying up. There was R19 million for salary and wages while the budget allocation was only R20 million. He felt that the Regulator would never take off the ground.

Mr Khosa replied that expenditure compared to the projections would be made available to Members at a later stage

Mr Mashile enquired about funds that had been used before but were not reflected in this budget. He felt the proposed budget was too ambitious.

The Chairperson felt that Mr Khosa was a bit detailed with his budget presentation, but what the Committee required was the alignment of the Budget with the Strategic Plan. He added that the details were meant for Treasury

Mr Khosa replied that Baseline Budget was a Medium Term Expenditure Framework, developed in conjunction with the Board.

Ms B Thompson (ANC) asked for clarity on the state of the Rail Regulator Board. She asked whether the board was functioning or not.

Mr Khosa answered that they had a Board but it lacked the required skills which would equip them to understand the technical nature of rail.

Ms M Nxumalo (ANC) asked about the meaning of critical skills. She asked for more detail on the disused Komati Railway line.

Mr Khosa replied that Shosholoza Meyl, the long distance operator, should answer questions to do with the Komati line. Critical skills referred to technical, engineering skills and management skills.

Member (ANC) asked who was supposed to be contacted when residents of a new settlement near the Thabazimbi area wanted an overhead bridge.

Mr Khosa replied that the building of the overhead bridge depended on who owned that particular line, for example, if it was Spoornet owned the railway line then they were responsible for building the bridge.

The Chairperson remarked that it was not easy to set up a complex organisation such as the Regulator. The Regulator had already accomplished a lot, but the best argument for budget increase was performance. In their case the best argument for budgetary expansion should be to state that they were not able to act because of an inability to capture data without the necessary information technology. He said that members knew about problems associated with the Board even though the CEO had been diplomatic about it.

Mr Khosa invited members to the launch of the Safety Standards in Sandton.

The meeting was adjourned.