TRANSPORT PORTFOLIO COMMITTEE
23 May 2007
MINISTER OF TRANSPORT ON e-NATIS AND GAUTENG MONORAIL

Chairperson: Mr J Cronin (ANC)

Documents handed out:
Briefing on eNatis presented Department of Transport
Minister Jeff Radebe briefing to the Transport Portfolio Committee
Statement by National Minister of Transport Jeff Radebe on Monorail Proposal by Gauteng Province
Department Press Statemnt: 31 May 2007

SUMMARY
The Minister gave a briefing on the status of eNaTIS as well as an explanation for the problems that had occurred with the system. He stated that due to the overload of transactions when the system commenced, capacity problems had been experienced. Interventions had been implemented and the current status of the system was stable and aside from possible power outages, no problems were experienced. The capacity of the system had been enhanced and more transactions can take place.

The Minister, commenting on the proposal of a Gauteng monorail, said that the Department, Director General and himself had not had any prior knowledge of this proposal before the media announcement. None of the proper procedures had taken place and therefore the proposal could not be seen as viable.

The Minister said that the Auditor General's December 2006 report that had warned of an 80% possibility of failure of the eNaTIS system when it was launched, had not been sent to the Department or Ministry. The Auditor General had sent it to the Road Traffic Management Corporation. This report had not been given to him or the Director General, and therefore he could not comment on its contents. However would study the Report and return to the Committee.

MINUTES
Opening remarks by Chairperson
The Chairperson noted that the Committee had invited the Department to explain the problems with eNaTIS, but before he spoke on this matter, he asked the Minister about the announcement made earlier in the month by the MEC of Finance in Gauteng, of a major projected public transport monorail system that claimed to be able to transport 1.5 million people from Soweto to Johannesburg on a daily basis, that would cost R12 billion to build.

Statement by Minister of Transport on Monorail
Minister Jeff Radebe said that on the 17 May 2007, the Finance and Economic Affairs MEC in Gauteng had addressed the media and announced the proposal of a monorail between Soweto and Johannesburg. It implied that the project had been approved by the Gauteng Province, that the feasibility study had been concluded, and the project would commence in September 2007. The project was supposed to led by a Malaysian consortium and was a private sector investment of R12 billion.

He had since been inundated with enquiries about this proposal. He categorically stated that he did not know anything about the proposal until it was announced in the media. The Director General, Ms Mpumi Mpofu, was also unaware of the project until it was announced. She had called the Director-General of Gauteng Province after the announcement to get more information and she could therefore confirm that the province had not consulted, sought approval, nor discussed anything with the Ministry or the Department.

The Minister was informed that the Malaysian consortium [Newcyc Vision] met with the Director for Public Transport Strategy, Mr Ibrahim Seedat, of the Department of Transport on 4 December 2006, the Director for Public Transport Strategy and he had referred them to the province and municipalities, at the early stages of the proposal.

He reminded the Committee that in December 2005 Cabinet had approved an Interim Rail Plan that had consolidated Regional Rail Plans. One of these plans was for the Gauteng Witwatersrand region that included Soweto. None of those plans included the proposal for a monorail.

At the Transport Indaba held in Soweto in October 2006, the Public Transport Strategy and Transport World Cup 2010 Action Agenda had been submitted, and neither one contained a proposal for a monorail.

In February 2007 the President stated in his State of the Nation Address that it was the government’s intention to introduce Bus Rapid Transit (BRT) systems in the implementation of the Public Transport Strategy. Aligned with that, the Minister of Finance increased the allocation for the transport sector by more that R2 billion for the Medium Term Expenditure Framework for BRT and buses.

The lead BRT project was the Rea Vaya proposal led by the Johannesburg Metropolitan Council for which the main corridor was Lenasia to Soweto to Parktown - the same area for which the Monorail was proposed.

On 7 May, he had met with the Mayor and Mayoral Council of the Johannesburg Metropolitan Council to discuss public transport and throughout that meeting, the proposal had not been discussed.

The National Land Transport Transition Act (NLTTA) specified rail as a national competence and proposals for rail were to be made through the Municipal Integrated Transport Plan (ITP) to the Minister of Transport. For instance, the Gautrain was supported by and received the go-ahead by the late Minister Dullah Omar.

The Legal Succession Act mandated that the SARCC was solely responsible for the provision of commuter passenger rail and they could appoint others on their behalf. The SARCC had not appointed this rail operator on their behalf.

The Rail Safety Regulator Act required an official licence for infrastructure development, station development and for train operations before any operation was approved. This was not provided. It was also unclear what procurement process was followed to secure this particular contract or arrangement to facilitate transparent competitive tendering for this project.

Discussion
The Chairperson commended the Minister on his statement and fully supported him. The Committee had also never been briefed on the issue. The government had made R10 billion available for transport infrastructure development, in the run up to 2010. They needed to be especially vigilant of international operators that sought to influence major decisions by claiming to meet all the costs of projects, but that would inevitably cost the taxpayers. This undermined the intermodal and integrated planning that the Minister had done as well as the importance of communication and consultation between the various departments and sectors that would be involved.

He said that the Committee had tried to establish some facts about this Malaysian consortium and had discovered that they had gone bankrupt in Kuala Lumpur, which was the only project they had put up and that project only had a passenger load of 70 000 and not 1,5 million, as they had stated, using the same technology they were proposing now, They had also proposed other projects without effective mandate, one in Putrajaya, and the Chairperson showed a picture of abandoned empty infrastructure. They had gone ahead with construction but neglected any operational sustainability. The Committee had been worried that this announcement was made without any consultation and proper process.

The passenger numbers were not logical as the total commuting population in Gauteng was 1.5 million and it was not a high volume. He expressed his concern and outrage at the action that cut across all implemented procedures.

Minister on eNatis
The Minister read his briefing to the Committee (see document). He explained that the tender for the eNaTIS had been issued in November 2000 and awarded in February 2001. It was awarded to Masye Phambili (Tasima), a consortium that consisted of a prime and two BEE contractors in July 2001. The contract, RT1194KA, was signed on 3 December 2001 with Tasima through a process that was led by the State tender board. The decision was contested in the High Court in February 2002 by one of the unsuccessful bidders. The tender process was reviewed and the court dismissed the application as there was clear indication that the awarding process was procedural. There were several reasons for replacing the old NaTIS with the eNaTIS. The old system was fourteen years old and could not continue to support the road traffic environment. The aged technology could not be maintained and it had become an unmanageable risk. NaTIS had become expensive to maintain and impossible to enhance and could not deal with the demands of long queues of people at service centres.

The eNaTIS system provided immediate advantages. It centralised road traffic management data, it eliminated fragmented small systems, it reduced the queues due to its ability to implement online transactions, it improved system security, lowered system operating costs, made interaction with the system easy and convenient for the public and there was rapid deployment of new software. It was considered one of the most advanced Traffic Management systems in the world. Similar systems were found in Europe and US but none had the sophistication of the eNaTIS in respect of Road Transport Management capability. It interfaced directly with SAPS, motor manufacturers, vehicle builders, vehicle importers, investigative agencies, financial institutions and insurance companies. Vehicles were managed on the system from factory floor to scrap yard. The introduction of fraudulent vehicles that were stolen or hijacked was eliminated and it was a powerful tool used by the entire motor and financial industry.

The total amount of records migrated from the old system to the new amounted to 4.6 billion, none of which were compromised or damaged in the process. The system was deployed on 12 April 2007 and had operated in a satisfactory manner except for one particular transaction, vehicle registration. The system was dependent on sufficient database capacity. The vehicle population had increased by 53% since the issue of the tender and the additional capacity had to be accommodated. When the system was deployed, it was overloaded by the huge demand for transactions caused by backlogs created during the five day migration period. The system had to cope with the usually high demand for transactions and the demand for backlog transactions. Services centres were reluctant to extend business hours beyond 08:00 – 15:00 to deal with the backlog.

The interventions that were implemented to deal with backlog were the increased capacity of the database by specialists that were brought in from the State Information Technology Agency (SITA), Oracle and HP. They were tasked to optimise the system and to ensure immediate system stability even during high peak periods. System stability and satisfactory performance was reached by the 8 May 2007. Since then the system has performed transactions at a higher rate than the previous NaTIS system and no system downtime had been reported except for one hour experienced on the 22 May 2007 due to a power blackout.

The current status of the system was that between 13 April and 7 May, eNaTIS performed an average of 326 000 transactions per day with 93% uptime. This was 13,4% more that the old system, which performed an average of 287 000 per day. After the interventions, eNaTIS had performed an average of 619 000 transactions per day, 115% more, with 100% uptime.

Minister on the Auditor-General’s report
Minister Radebe read his statement on this matter:

"A correction needs to be made regarding this report. The report in question relates to the “Information Project Management and Systems Development Life Cycle Controls Surrounding the eNaTIS System”. This management report was never issued to the Director-General of Transport. Instead the report that was received by the Director-General in February 2006 relates to the Information System Audit of the Network Security at the Department of Transport on the Natis and eNaTIS systems.

Audit processes are governed by a particular process where the findings have to be verified first then disputed or acknowledged before they are contained in a draft report which can be further discussed before a final one is issued.

These processes are aimed at protecting the auditor and the auditee.

The office of the Auditor General delivered the report in question for the first time only on the 22^nd May 2007 to the office of the Director General of Transport Department.

The Department will study this report in detail and give an appropriate response in due course."

Director-General of Transport on eNaTIS
Ms Mpumi Mpofu expanded on the statement given by the Minister by presenting a more detailed report which included scope expansion, contract governance, contract period and value, technical complexity. Graphic comparisons were made between the old and new systems, as well as the changeover concept. The reason for the system glitch was the overload of information on the three database servers. The intervention that was implemented was the introduction of a fourth server. A graph was then shown illustrating the average transactions per day by both the eNaTIS and the NaTIS (see document).

The project was challenged since the initial award in July 2001, when it was contested in the High Court. The mission critical system operated in an ever-changing environment. Since the release of the original tender specification, 100% growth on all aspects had occurred, and each of the nine provinces had to be accommodated with their unique requirements. At no stage could business continuity be compromised.

The subsequent results of these challenges were an increased price for new sites, new hardware and new software. At the request of the provinces additional requirements were included, which were financed by the provinces. Originally proposed hardware had to be upgraded.

Ms Mpofu concluded that the project was delayed from the onset by the court challenges, massive scope expansions in software requirements, users and sites which necessitated rescheduling milestones. The capacity constraints had been eliminated and ENaTIS was now stable and performed in accordance with the requirements. She had personally been on site to view eNaTIS, which was stable and performed in accordance with requirements, and slightly exceeded expectations.

Discussion
Mr Cronin identified certain issues to focus around them. The Committee was in agreement regarding the migration process and were quite anxious to complete that stage. They had not said that there should not have been a movement to the eNaTIS system. It was also realised that there are several stakeholders involved, many complexities and appreciated being reminded of them. The issue of the projected budget that had risen should not be queried to closely as it seemed it was a result of externalities.

However, something had gone wrong, it had become a matter of considerable cost. Delays of this kind were very costly. It had also led to enormous public frustration and embarrassment to the Committee and the Department. The Minister had apologised and attempted to communicate over the issue, although it had not always been done very well. Perhaps that was part of the problem, that understanding of issues was not clear.

He pointed out that not everything had gone wrong. There was only one area, vehicle registration that had experienced capacity problems with spikes in that area. It should not have been unexpected, as risk management should have prepared the system for any such incidences. What should be asked was why they were unexpected. This would then lead to questioning the capacity of the service provider. He asked if the service provider was the one who was at fault for not anticipating the capacity spikes.

It was assumed that the high court had dealt with the legalities and procedural issues, however the high court would not have dealt with capacity.

The next issue was that of governance and oversight. Was the department satisfied that the unexpected should not have been unexpected, and was that the fault of the service provider or the ongoing governance and oversight from the side of the Department?

The Committee had received a document from the Auditor-General that stated there had been three reports around management. He wanted to know if it was true that the Auditor-General stated in one of the reports, that there would have been 80% chance of failure if the system were launched with a big bang. It was the nature of the Auditor-General reports that it was not final and was subject to discussion.

Mr Cronin stated that in relation to the broader business model, the Committee had understood that the eNaTIS system would be part of a wider institutional framework in which there would be the Road Traffic Infringement Agency, the implementation of the administrative adjudication of the road traffic offences and that the force of funding would derive from that. However, since that was not running, was that why there was a R30 fee charged being proposed?

Ms Mpofu replied that there had been some progress. There had been the proclamation, which would see the transfer of that function concluded, particularly the establishment of systems for the Road Traffic Management Corporation (RTMC). Implementation would commence very soon. A pilot project would start in Tswane in September and then roll out to other parts of the country at a later stage.

Mr T Tsholetsane (CEO: RTMC) stated that there was a connection between Administrative Adjudication of the Road Traffic Offences (AARTO) and eNaTIS. They looked at using eNaTIS and not to create a totally new system. However in terms of the Road Traffic Management Corporation Act, any money generated by law enforcement must go into law enforcement. The R30 fee, which was approved by the Minister, was to finance any developments on eNaTIS. They had looked at all the sources of revenues and in terms of eNaTIS. It was discovered that in terms of information that was requested by certain entities they might be able to charge minute amounts as a fee. The interfaces, such as insurance companies, would pay more and the other entities would pay less.

Mr Cronin continued that there had been assurance that eNaTIS was stable and that any difficulties arising, besides a power shortage, would be from backlog. They anticipate that the backlog would be eliminated since the system is so capable. The Committee required assurance of this.

Mr B Mashile (ANC) questioned the reliability of the stand-by generator and asked was it possible to set the automatic generator on or off.

Mr Koekemoer agreed that the system had been designed to deal with power outages. What actually happened was during the power outage, the system was switched to the generator. The power came back, and the generator was switched off back to the grid, in that time a massive power spike was experienced and this damaged an important element, and that brought the system down. That had been rectified.

Mr S Farrow (DA) requested clarity on the presentation, as it seemed contrary to the information he had received from the Minister, when questioned about the project last year, on the project's costs and added costs. There also seemed to be processes that should have been followed and had not been.

Mr S Mshudulu (ANC) asked surely there should have been a way to persuade people to work extra time. He also asked about the power outages and whether this had caused information to be lost in the system.

Ms Mpofu replied that it was important to note that when a system of this complexity was established, the testing processes itself was extended. Several tests and a dry run were done in order to simulate what would happen. The graph showed the problem, as was experienced in relation to the experience. Unfortunately it was impossible to simulate 600 000 transactions a day. The precise volume could not be simulated. The nature of the problem was the inability to accurately run predictability of the system under those kinds of conditions.

Mr Cronin stated that Ms Mpofu was correct in her assessment. However many financial entities were transacting on a much faster scale. One on the reasons private sector providers were brought in was to deal with these kinds of issues. He did however accept her point that "they had to do it so they could know they could do it", it was the scale of it that was the problem

Mr Farrow commented that he was just as embarrassed as the rest of the Committee about this issue. He stated that he only wanted the truth. Every day there was article in the news stating that everything was stable, when it was not. It also stated that there was only one station, Langlaagte, that had experienced the problem. He was assured that there were other stations that had problems in the Western Cape where the system had crashed. These problems included the cables that burnt out. It all came down to whether this was verified in terms of the capacity to do what was required. There are many databases that had migrated over a shorter period of time and the system had to handle the load in order to created continuity to the public.

He was concerned that the Committee was being misled that it had achieved what it had meant to, when in fact it had not achieved it on the ground. The public would not be out there angry if it had done so. There are over two thousand stations in the country that operate off the system and they have threatened to sue for loss of profit. The presentation indicated that the massive peaks and spikes in the system came about during peak, but they came about as a result of backlog panic. Tasima employees stated that there was not enough time to run sufficient tests adequately with all stations. He asked that the Department admit that the system had failed. There must have been fear or concern as an Auditor-General report was done, and it stated that the system would fail. The public, and the service provider, and those transactors were aware of it.

Mr O Mogale (ANC) stated that from the presentation he could not tell what was the intended. What were the figures given to the service provider for the new system.

Mr Cronin suspected that the capacity issue was connected to the transfer issue.

Mr G Scheemann asked if there was any consideration given to phasing the system in and doing parallel testing.

Mr Koekemoer replied that the matter of a parallel run with the old system had been strongly considered. Upon investigation and when the migration plan was submitted, they highlighted many risks with a parallel method. To run the parallel method, they would have had to create eNatis in a very short period of time, so that it could run on certain models parallel to the NaTIS. Then as the models ran the records would have been brought across. In theory it sounded good but to implement that would have been difficult as the old NaTIS was fourteen years old, it was not developed along any industry standards because there were none back then. The three specific layers - front-end, application and database layer - were all merged into one layer on the NaTIS, which made it a complicated mesh of source code. There were few skills available on the old NaTIS system to develop a program to allow for the movement of records as they ran parallel.

He said they took a formal risk assessment and brought in the State Information Technology Agency and a new migration plan was devised. The new migration plan was not a big bang approach. All the hardware was first deployed separately, then all the network infrastructure was upgraded separately, then the disaster recovery centre and central database was built separately, then they did a test run of migration of data, and then they developed an application stream separately. Once all the streams were created, the last thing they did was bring all the data across. It was a once-off data migration process.

Ms N Khunou (ANC) asked if there was training of the employees to the satisfaction of the employers.

Mr Koekemoer stated that training was provided. There were many users who were used to the NaTIS systems. Provinces requested that they develop the front-end to look exactly the same. When the users started using eNaTIS it looked and felt the same as NaTIS. They had performed user acceptance tests and found that users adapted quickly.

Ms Mpofu stated that when the apology was issued, the Department and the Minister had acknowledged the problems that were in the system. From the period 12 April to 7 May, they had stated that there were big problems in the system. They were the first to acknowledge that. There was no pretension that suggested there were no problems, thereby misleading the Committee. However, in the presentation it was made clear that the interventions that were introduced had stabilised the system. Auditable data and not the Department, proved this. Since the problem was resolved, other problems had arisen, however the department had acknowledged that as well. The shut-down for five days had created backlogs which resulted in queues. Post that, several problems had emerged, however the system had been performing at an increasingly better rate. There had been reduction in the backlogs, due to the interventions. Other issues had also emerged of a technical nature that lay outside an eNaTIS system such as the TELKOM VPN line.

She said that they had not glossed over the problems that had resulted in people standing in queues. The department had apologised for the problems, and had auditable data that illustrated that the system performed 65% better than the old system. She did not want the Committee to have the impression that the Department had not recognised and corrected the problems, as it seemed that that was what the Committee member had insinuated.

The Minister stated that perhaps their project manager should explain more thoroughly the functions of eNaTIS, so that the Committee would not assume that the system was a failure.

Mr Cronin agreed with the Minister and said that the Committee did not think that the system was a failure. What had to be focussed on was what went wrong and if it was avoidable. It was presumed that migration of data of this scope was commonplace in the private sector. Did the private sector providers not bring that expertise with them?

Mr W Koekemoer (Project Manager: eNaTIS: Department of Transport) stated that one should not focus on 600 000 transactions as the number of the transactions was less important than the complexity of the transaction. He gave a simple scenario around vehicle registration. When a vehicle is registered, the financial institutions that would finance that vehicle had to be protected, the system then performed system validations to ensure that the vehicle was not financed under anybody else’s name, it checks to see if there are any administrative marks on the vehicle, or if it was not reported as stolen. It then queried manufacturer systems to find out which manufacturer had made the vehicle, it goes level lower and checked the vin number. It was a massively complex operation. They were not only reliant on their own system for that information but interfaced with other systems as well. The system performed 303 different transactions with different scenarios. What happened was that vehicle registration was the only transaction which could not be performed because it checked the most external data.

The Minister stated that when the story broke he was not in the country and he had tried to get hold of the Auditor-General report. He was in contact with the Auditor-General and he was surprised when it became public knowledge. It did appear that people were confusing many reports. The report that leaked to the media was a report that was done by the Auditor-General.

The Minister then read a portion of a letter given to him by the Auditor-General, Mr Terence Nombembe. In the letter it was confirmed by the Auditor-General that the report in question was never issued to the Director-General of Transport. Instead she had received a report related to the information systems of eNaTIS and he had apologised for the misconception. The Minister stated that he was then given the report. He would study it, and get back to the Committee.

Mr Cronin stated that there were two reports with similar titles. He asked if the other report contained a reference to the 80% possibility of failure.

Ms Mpofu stated that the report in question, dated the 22 December 2006, was not sent to the Department. The Auditor-General delivered the report in question to her for first time on 22 May 2007 and there was an indication in the report of the 80% possibility of failure and other recommendations. The other report was a normal quarterly report that said nothing about failure.

Mr Cronin asked if anyone in the RMTC had received the report.

The Minister stated that Auditor-General said the report had gone to the RTMC.

Mr Farrow stated that these seemed to be extra-ordinary reports and wanted clarity on who commissioned the report. It would have been a result of some nervousness within the Department, as someone had to have commissioned the Auditor-General to do the report. Because it put the onus on someone who did not report the findings in the report.

Mr Mshudulu stated that it put the Committee at a disadvantage to comment on a report that it had not seen. The Minister had asked for time to study the report.

Mr Cronin agreed with that comment. And stated that what was being said was that there was a report and that it had gone to the media before the Department had seen it. This had put them at a disadvantage and had caused embarrassment. This was a cause for concern because the Department or leading officials should have been alerted to the report.

The Chairperson asked the Director-General and the Minister for reassurance that they would thoroughly scrutinise the report. Entities answerable to Department were paid very well and if there had been a dereliction of duty it needed to be checked

Mr Farrow stated that the Director-General had mentioned a lot of the incurred costs were as a result of foreign currency increases. There was effectively a payment of massive interest related to non-payment on that contract over two years, which he understood was part of the increase. He required clarity on that matter.

Mr Koekemoer replied that the contract had a mechanism for interest that had to be strictly applied. They had to levy the interest. Subsequently they had approached the contractors and asked for the interest to be cleared because provinces had acquired additional equipment. They had received formal approval for the interest to be reversed and the amount had been paid back.

Mr Farrow asked if there would be amnesty for those who could not receive licences and such due to the system breakdown.

The Minister stated that those South Africans who, due to no fault of theirs, found themselves in such a situation, would be considered on a case-by-case basis. All the local authorities were aware of this and it was all in his statement of 4 May 2007.

The Minister mentioned the issue of backlogs. It should be taken into account that sometimes there would be an error and if people failed to correct that error they would state that the system was down. It was a case of employee incompetence that had aggravated the situation. Long queues were not necessarily vehicle registration problems only but civil servants who for their own personal reasons, did not want to do their job.

Mr Farrow noted that the contract was supposed to expire end of May, or was it going to be extended?

Ms Mpofu replied that they were due to see end of contract at the end of May, at that point system administration would be handed over. However because of what had happened, extending the contract was being considered so that proper hand over and finalisation of the contract could occur.

The Minister stated that all costs incurred after the problem was at the cost of the contractor.

Mr Bengu asked whether the contract contained a provision for the problem that had occurred.

Ms Mpofu stated that the contract had contained an arrangement that if a problem were to occur, they would make themselves available to help. The challenge was that they had to assess what the glitch period had cost them in order to move forward and what they required as support from the contractor.

Mr Cronin stated that the Committee would look forward to the response from the Minister and the Department regarding the Auditor-General report, he then adjourned the meeting.