Railway Safety Regulator & Cross Border Road Transport Agency: 2007/08 Budget & Strategic Plan

TRANSPORT PORTFOLIO COMMITTEE
28 March 2007
RAILWAY SAFETY REGULATOR & CROSS BORDER ROAD TRANSPORT AGENCY: 2007/08 BUDGET AND STRATEGIC PLAN BRIEFINGS

Chairperson: Mr J P Cronin (ANC)

Documents handed out:
Railway Safety Regulator Strategic Plan: 2007/8 – 2009/10 presentation
Railway Safety Regulator Strategic Plan: 2007/8 – 2009/10 [available later at www.rsr.org.za]
Cross Border Road Transport Agency (CBRTA) presentation
Committee Minutes of 20 March 2007
Committee Minutes of 28 February 2007
Committee Minutes of 14 March 2007
Committee Minutes of 7 March 2007

SUMMARY
The Railway Safety Regulator briefed the Committee on the 2007/8 – 2009/10 strategic plan and budget. The key challenges were the lack of funding, which hindered all aspects of effective regulations, and the inability of the Regulator under current legislation to generate profits from its activities. Lack of funding also contributed to the problem of skills transfer was noted. The Regulator's participation in the Gautrain project was seen as positive, but was also hampered by limited resources. Another critical issue was safety and security, but there were some problems in defining the role of the Regulator, which was engaging with other key role players. An Annual State of Safety report was being implemented and safety performance agreements were being adopted. There was a need to try to reach regional rail harmony. The approved allocation for 2007/08 was R27.26 million and the budget envisaged expenditure of R24.6 million. Questions by Members addressed the Metrorail accident figures, the need to work with the Committee more closely to apprise it of the budgetary problems, the basis of the models being used, the involvement with Gautrain, the sinkhole problems, and the reasons for derailments. The Regulator was asked for an executive summary of major accidents.

The Cross Border Road Transport Agency noted a decline in morale and revenue, noting that there had been five CEOs in the last nine years. There had been over spending for three out of the last four financial years. A major exercise at the Lebombo corridors for people travelling to Mozambique was described, that would involve customs clearance at a venue other than the border, and escorted convoys through the border post thereafter. The Agency's major challenges were cited as growing its revenue, developing interventions for dealing with HIV/AIDS, dealing with allegations of fraud and corruption, and finding and motivating staff. Members commented that the strategic function of the Agency was important and its work commendable. However, the developmental role must be stressed. Its priority must be contribution to regional and national growth in ensuring a smooth and regulated flow of traffic and people. The challenges mentioned were not priority areas. It should not be trying to deal with law enforcement and should rather focus on providing information on cross border movement, and liase with other responsible authorities. Members commented also that realistic goals should be set, that all stakeholders should reconsider the vision of the Agency, and that it was necessary to deal with matters raised by the Auditor General.

The Committee considered and adopted its minutes of previous meetings, with minor changes.

MINUTES
Railway Safety Regulator (RSR) Budget and Strategic Plan Briefing
Mr Mosenngwa Mofi, CEO, RSR, outlined the RSR’s strategic plan and budget for the period 2007/8 and 2009/10. The strategic thrusts lay in strengthening the regulatory framework, setting up an effective safety compliance regime, monitoring and evaluation, stakeholder management and sustainability. He stated that the major problems lay in establishing institutional capacity to undertake the full mandate, developing appropriate responses and harmonising railway operations and generating income. He stated that audits on railway operators were conducted at the RSR’s own cost. The reliance on retired railway engineers as inspectors was stressed as problematic due to the lack of long-term sustainability. The limited budget of the entity did not allow for implementation of a large skills transfer project. Mr Mofi stated that a critical issue was the developing of appropriate responses to rail issues and projects. The assessment of the Gautrain project was underway, but once again limited resources were problematic. He reiterated that over and above everyday activities the entity needed more funding to engage with key initiative programmes such as the Gautrain.

Another critical issue was safety and security. He stated that the problem here lay in defining the RSR’s role as it was mandated to perform a supporting role in security. However the RSR was engaging key role-players such as the South African Police Services (SAPS) and the Government Security Regulator (GSR). The RSR and GSR were formulating draft railway standards that would be adopted in the near future. In order to develop an appropriate response to the state of safety an Annual State of Safety report, covering 80%of rail operators, had been implemented. Mr Mofi stated that this report would be constantly improved and refined in order to strategically focus on urgent problem areas. He stated that the RSR was in the process of developing Safety Performance Agreements with major operators. The need for regional rail harmony within the Southern African Development Community (SADC) region was alluded to. Mr Mofi stated that a team was liasing with operators in Mozambique, Botswana and Swaziland.

Full tables were presented on market segment breakdown, operational sites per province, collisions and derailments, security related occurrences, incident costs, and fatalities. The state of railway safety was not improving, and the costs of incidents were rising. The risk profile of major operators was high, and there were poor human factor management practices and poor infrastructure and outdated technology. A table was presented of the proposed steps to develop regulations. Specific interventions were required for level crossings, crime and security, trespassing and informal settlements. The monitoring and evaluation steps were set out, and the steps in stakeholder management and operator support were tabled.

The approved allocation for 2007/08 was R27.26 million and the total revenue, with interest, would therefore amount to R27.41 million. This would rise to R29.7 million by 2009/2010. The budget envisaged expenditure of R24.6 million.

Discussion
The Chairperson asked about the steep climb in Metrorail accidents given in the presentation.

Mr Mofi replied that this was partially due to the inclusion of marshalling yard derailments in this report. He concluded that the state of railway safety was not decreasing. The cost of incidents was increasing and the risk profile of operators was unacceptably high. RSR would focus on high risk issues using a risk management framework. He reiterated the need to develop a revenue generation strategy for the RSR.

The Chairperson noted that the presentation was very comprehensive but asked that the hard copy contain more details and specifics. In regard to budgetary problems the Chairperson urged the RSR to work with the Committee to find ways to overcome the problems.

Mr S Farrow (DA) stated that he was under the impression that Canadian Rail was used as a basis for the RSR and asked if this was so, and if RSR was basing its projects on their experiences.

Mr M Panzera, Safety Advisor & Consultant: RSR, stated that RSR was creating a framework for future standards using the Australian standards as a model. He stressed that it was also paying attention to international successes and failures in the application of certain standards. He stated that it was using the Canadian model of co-regulation with the operators, but stressed the need to be aware of changes within the industry globally. The development of standard operating procedures was underway.

Mr Farrow asked for elaboration on involvement with the Gautrain project. He asked whether the R11 million surplus was a reason for not getting increased funding.

Mr Mofi replied that the RSR started running midstream around June/July 2005 and had not had time to spend the funds.

Mr Panzera stated that RSR was involved with the Gautrain project from conception and design and was currently addressing safety risks. Once it was satisfied it would be happy to give the go-ahead for the project. RSR was in weekly communication with Gautrain and was satisfied so far.

The Chairperson asked about the sinkhole problem in Centurion with regard to building a viaduct.

Mr Panzera replied that RSR were currently being informed about and evaluating the problem.

The Chairperson asked about the sinkhole problem with Metrorail.

Mr Farrow interjected that it was impossible to know what a construction would land on if viaduct footprints were to be put on dolerite ground. He stated that the Metrorail alignment was on the dyke.

Mr L Mashile (ANC) asked whether derailment was caused by poor infrastructure and outdated technology. He asked whether the incident report was the first one tabled by the RSR.

Ms N Mbombo (ANC) asked whether the increase in cost and number of incidents meant that the RSR did not have the capacity to investigate.

Mr Mofi replied that RSR needed to develop and implement very specific Safety Performance Agreements. He stressed the need for operator interaction in drawing up these agreements in order to target the specific problem faced. He noted that the bulk of accidents had been attributed to human error, being 45% of accidents, and that 33% were purely technical.

The Chairperson noted that the RSR had furnished him with accident reports.

Mr Mashile stated that if human error was the main cause there was no reason to argue about outdated technology.

The Chairperson responded that only 45% was attributed to human error and that in the case of the Lakeside accident there was a structural problem.

Mr Farrow asked Mr Mofi to furnish the committee with an executive summary of major accidents.
Mr Farrow asked why the RSR had not given Metrorail a suspension order due to lack of compliance on power. He urged that it should not be allowed to become the lapdog of the South African Rail Commuter Corporation.

Ms M du Plessis General Manager: Safety Regulation, RSR, replied that as far as key performance indicators (KPIs) were concerned Metrorail and Spoornet had been issued with temporary permits contingent upon two year KPI projection. She stated that the RSR would then audit them to ensure compliance and issue new permits.

Mr Mofi reiterated that the issue around enforcement was critical and stated that if RSR were not furnished with the tools for effective enforcement it could not carry it out. Spoornet had been issued with a 48 hour directive to fix the problem at the Eshoweni embankment in KwaZulu-Natal, so the RSR is taking action.

The Chairperson stated that the RSR had the Committee’s support for a firm approach.

Cross Border Road Transport Agency (CBRTA) Briefing
Mr George Mabuza, Chief Operations Officer and Mr Gilbert Phalafala, Chairman, CBTRA briefed the Committee on the Cross Border Road Transport Agency. It was intended to provide for cooperative and coordinated provision of advice, regulations, facilitation and law enforcement. It was represented by the Board, appointed by the Minister.

The core functions included the monitoring and enabling of a regulated flow of freight and passengers in the region, through the issue of permits. It must physically enforce compliance with the legislation. It was also to improve the unimpeded flow of freight and passengers. It had road transport agreements with Southern African Development Community members, and participated in forums. Unfortunately its performance had declined over the years. The Agency had a turnover of about five Chief Executive Officers in nine years and this was noted as a very embarrassing record that must cease. There had been a decline of morale and revenue within the Agency. The Agency had overspent in three out of the last four financial years.

It was noted that there would be a major exercise at the Lebombo corridor for people travelling to Mozambique during the Easter holidays. It had been decided that people would not be allowed to go to the border post for clearance. They would be driven by taxis from the different mines to the old Komatiport Airport, where they would be custom cleared. They would then be driven in convoy across the border without having to stop at the border post. They would be escorted by border officials in convoys of 25 vehicles, which would be a mixture of buses and taxis. No vehicle would be allowed to stop whilst the convoy was moving. The border post would be left to operate normally for all other movement of traffic.

Mr Mabuza noted that the agency was facing challenges in growing its revenue, developing interventions for dealing with HIV/AIDS, dealing with allegations of fraud and corruption and finding ways to motivate staff, fostering relations with other key role players in the Southern African Development Community (SADC) and in law enforcement. It would be holding a workshop to facilitate a turn around strategy and was trying to improve productivity and new models to grow income. The gender and demographic statistics were presented. The budget envisaged income of R31,3 million and expenditure of R33,7million.

Discussion
The Chairperson said that the vision of the Agency was to regulate the smooth flow of passengers and goods, to promote prosperity and encourage social and economic development within the SADC. He asked what was the strategic function or focus of the Agency and what would change in South Africa and the SADC if the Agency were to stop functioning? He noted that the exercise planned along the Lebombo Corridor was commendable, as no other body would have thought about doing if the Agency did not exist. Its main function was then to facilitate a smooth flow in a regulated way, emphasising not so much its regulatory function but the development, smooth flow and prosperity in the region. Regulation was not about raising money or competing with Zimbabwe. Zimbabwe was being harsh on its side because it was in dire economic straits. South Africa could not respond in kind even if this would create new revenue streams. The Agency was not a business but had a developmental role to play. He felt that growing the Agency's revenue was not important. What was required was shared growth in the economy, and the priority should be the Agency's contribution to regional and national growth in ensuring a smooth and regulated flow of traffic and people.

The Chairperson then noted that although the development of a strategy to deal with HIV/AIDS was a real South African challenge, it was nonetheless not a major priority area for the Agency. He felt that the staff was not motivated because it was unsure about what it was doing, and did not have a sense of professional contribution. He wondered if law enforcement was really the Agency's role. The Agency had a small staff complement and would never be able to deal with law enforcement. There was a need to deal with road overloading, but this was the responsibility of the provincial authorities and the Road Traffic Management Corporation (RTMC). The Agency's role was to put pressure on the enforcement authorities. It should not get side tracked by issues like HIV/AIDS and law enforcement. It should focus on providing information on cross border movements of goods and people and this entailed liaising with the Department of Home Affairs. This would help to develop a better understanding of what was happening in the region in terms of transport. in his view this was more valuable than raising R5 million from roadblocks. Transport was the heartbeat of the SADC economy.

Ms N Khunou (ANC) said that it was important to set realistic goals. The situation should not develop where there would be conflicts between the Agency and provincial authorities or the RTMC. She agreed with the views expressed by the Chairperson.

Ms N Mbombo (ANC) said that there were many taxis in Park Station, Johannesburg that travelled to different African countries. She hoped that such taxis were also accompanied to the borders when they went to other countries.

Mr S Farrow (DA) said that the Committee had not been able to come to grips with the Agency partly due to the high turnover of CEOs. The Agency should get all stakeholders round the table and have a fresh look at its vision because it was way out of line with the role and function of the Agency. There was a conflict in terms of the functions.

Mr O Mogale (ANC) said that the report of the Auditor General had raised a number of issues within the Agency. The Board should look at those issues. All departments had to deal with HIV/AIDS. The Agency was still trying to find its way.

Mr Phalafala thanked the Committee for its contribution. He said that he knew that he would get most of the answers to challenges facing the Agency from the Committee. The Agency would be focused and could not try to function like a business. He would not spend most of his time writing proposals to Treasury asking for more money. Time should be spent on turning the prevailing situation around. The Agency would break even and not make loses. The Committee should have been asking what would have happened if the Agency was run efficiently and effectively. It would have built the best relationships with the neighbouring countries and business partners.

Consideration and Adoption of Committee Minutes
The Committee considered and adopted its minutes of previous meetings. Some minor changes were made to the minutes.

The meeting was adjourned.