Department’s Annual Report 2006/7: briefing

TRANSPORT PORTFOLIO COMMITTEE
6 November 2007
DEPARTMENT’S ANNUAL REPORT 2006/7: BRIEFING

Chairperson: Mr J Cronin (ANC)

Documents handed out:
Department of Transport Annual Report 2006/07 presentation
Department of Transport Annual Report 2006/07 [available shortly at www.transport.gov.za]

Audio recording of meeting

SUMMARY
The Department of Transport presented their Annual Report which reviewed 2006/07 activities, audit outcomes, performance information and its staff establishment. The Director General presented the report and focused on issues such as the adjustment of the budget, reprioritization and under expenditure.

Members were informed of new activities that were undertaken during the financial year. Audit outcomes looked at non-compliance with legislation, matters of governance and corrections to financial statements.

Performance information focused on transport policy, research and economic analysis as well as transport regulation, public transport and integrated planning. Staff establishment matters included vacancy age analysis, personnel establishment and employment equity.

Members discussed issues concerning the integration of the Gautrain development, challenges associated with vacancies within the Department and projects that were undertaken. They also looked at problems around coordination and improvements in public transport. All these issues were then tied to 2010 and whether South Africa would be ready with regard to transport.

Members of the Committee and the Department of Transport agreed that planning was important but that implementation would have to start if they were to be ready for 2010. 

MINUTES
Mr Cronin noted that the Director-General could not be present the next day when the meeting on the Department’s Annual Report continued. He added that the DoT had prepared a very comprehensive report but that due to time constraints, the DG would have to highlight the important issues.

In reply to Mr S Farrow (DA) asking if somebody would be in the DG’s place who could be held accountable for issues raised the next day, Ms Mpofu stated that the Chief Financial Officer as well as other DoT members would be there the next day to respond to questions.

Department of Transport (DOT) presentation
Ms Mpumi Mpofu, Director-Genera, looked at the highlights of the Annual Financial Statements. She spoke about expenditure trends and adjustments made to the budget. Adjustments included rolling over funds from the previous year because of capacity development, receiving late invoices for oil pollution prevention services, the integrated rural mobility access project, issues concerning the taxi recapitalisation programme and the scrapping of old taxi vehicles. The DG explained that an unavoidable expenditure in the form of additional bus subsidies occurred because of the increase in the fuel price.

She also spoke about expenditure trends in terms of reprioritisation and under expenditure. Reprioritisation included the shifting of funds across programmes for capacity development, corporate support and human resource management. Under expenditure occurred with regard to the scrapping of old taxis, the taxi recapitalisation project, rural mobility and access projects, vacant posts that could not be filled, as well as special investigations into driver and vehicle testing centres.     

Ms Mpofu noted new activities that were undertaken during the financial year. Some of these were the establishment of the Independent Ports Regulator, the Maritime Trilateral Agreement between India, Brazil and South Africa, the conversion of taxi permits into operating licenses, appointing a scrapping administrator for the scrapping of old taxi vehicles, the development of a Public Transport Plan and the completion of a Performance Indicator Framework.

Ms Mpofu addressed the Audit Report for 2006/07, noting what steps had been taken to ensure that a previous qualification would not recur and what matters of emphasis had been identified and what action had and would be taken to rectify these. These matters dealt with an internal audit plan, a fraud prevention plan, irregular and wasteful expenditure not being reported, and monthly reports in terms of the Division of Revenue Act.

Ms Mpofu reported on performance targets and outputs and explained what DOT had achieved in terms of actual performance for each of their seven programmes:

• Transport Policy, Research and Economic Analysis

These included completing amendments to Road Transport Regulation to improve safety requirements of vehicles transporting passengers, completing a Draft Maritime Transport Policy and developing Merchant Shipping Regulation. According to Ms Mpofu, the DoT was devoting a lot of their attention to research and development. They also increased access to social and public amenities by the development of a school bus transportation strategy.

• Transport Regulation and Accident and Incident Investigation

The DG stated that they were making progress in road transport regulation, Civil Aviation regulation, maritime regulation and draft merchant shipping regulation. She said that they had completed the rail regulation which included a framework of economic regulatory requirements for the rail sector and a framework for a reformed rail sector.

• Integrated Planning and Inter-sphere Co-ordination
The Municipal transport plans were completed for all municipalities and the Transport Action Plan for 2010. The DoT was working on planning regulations, integrated rural mobility access and the upgrading of roads, amongst other items.

• Freight Logistics and Corridor Development: A Railway Economic Regulatory Framework was near completion. The DoT had completed an identification and assessment of various national and provincial corridors. They were also looking at a revival of branch rail lines.

• Public Transport

Cabinet had approved the Public Transport Strategy and Action Plan. The DoT completed a National and Regional passenger rail line, officially launched the taxi recapitalisation project and was looking at new taxi vehicle models.

• Public Entity Oversight and Economic Regulation

In line with public entity oversight and economic regulation, the DoT improved corporate governance by ensuring that all performance agreements were signed by all public entities and that they submitted quarterly reports. A Road Accident Fund (RAF) Amendment Act was also assented to and a Transport Indaba was held during the October Transport Month.

• Administration
Monthly workshops were held concerning expenditure and budgets with the aim to coordinate inputs for budget planning processes. All budget submissions were completed in time.

According to Ms Mpofu, the DoT was experiencing a vacancy challenge with respect to management services and positions. They were in the process of improving the position on vacant posts by engaging in research with regard to different methods of staff retention and a comprehensive talent management strategy. The DoT was also involved in a Youth Volunteer Programme and transport career guidance.

Ms Mpofu addressed the issue of disabilities in the workplace. She said that they were monitoring the mainstreaming of disability in the policies, strategies and programmes of the Department but that they were not at the level that they should have been.

The DG noted the measures that were to be taken to reduce the vacancy rate. A vacancy reduction project was incorporated in to the 2007-2010 strategic plan and the filling of vacant posts was incorporated into the managers’ performance agreements. They would also enhance training and development initiatives.

Ms Mpofu reported that the DoT was well above public service targets with regard to the percentage of black people and women at senior management level. They were, however, under target for the number of people with disabilities at all levels. 

Discussion
Mr Farrow identified four big issues that needed attention. The first one was the vacancy rate and capacity issues. The second issue concerned the bus subsidies, specifically with regard to public transport. Linked to that was problems with the taxi recapitalisation and preparedness for the FIFA World Cup. Mr Farrow also wanted to concentrate on the Gautrain issue.

Mr M Moss (ANC) said that the Committee would have to discuss the disability issue.

The Chairperson said that they would start with the public transport issues and tie it in with issues related to 2010.

Mr Farrow, on the matter of the construction of the Gautrain rail, asked if the department had interacted to the point where they had persuaded or convinced the Gautrain operators that they were effectively doing what the Minister had called for, which was a fully integrated service between themselves and Metrorail.

Mr Farrow commented on the realignment of Centurion. It was a critical project but there was no coordination. The Committee needed details of what was being done and who was in charge of that project.

The Chairperson asked if there were other issues concerning Gautrain. He wanted to know if it was effectively integrated, specifically with regard to the realignment of the proposed route that ran along the Metrorail alignment.

Mr B Mashile (ANC) asked if crucial sections of Gautrain would be completed in time.

Mr Farrow commented on budget issues. He specifically focused on problems with bus subsidies saying that they brought about high costs and were not a particularly good service to those in rural areas. Considering all the money being put into the project, they should focus on putting a system in place that was more effective. 

Mr Farrow also questioned taxi recapitalisation. He wanted to establish the role that they would play in the subsidies scheme. What were the reasons for the slow roll out as targets had not been met.

Mr Mashile wanted to know what the response was to taxi recapitalisation in rural areas. He wanted to know which groupings had responded to the taxi recapitalisation.

Mr Farrow commented on issues relating to the readiness of the World Cup. He said that they should be focused on public transport specifically looking at infrastructure and development. Mr Farrow said that he was concerned with how people would get from the host cities to the venues. He also expressed concern that they would not be ready for the World Cup in general as he could not see any coordination taking place between sectors of public transport in all host cities, the Provincial Department and the National Department. There seemed to be confusion with people not knowing which roles and functions to play. Mr Farrow addressed the bus issue once again, and said that the purchasing of buses was supposed to be part of a business plan which would be linked to and included in all the integrated planning that was taking place in every host city. He said that there was no way that they could form a public transport company in order to start the project because there were legislative processes that had not come together.

Mr Farrow warned that they would fall short if the department did not become the coordinating body. He said that there were too many vacancies and major capacity issues that they needed to deal with. Mr Farrow stated that no one was accepting the responsibility for key issues and decision making.

Ms N Knunou (ANC) commented that most of the host cities had problems concerning capacity. She said that they needed to make sure that these problems were taken care of. Ms Knunou also stated that she was worried about the vacancy rate and that regular check ups were needed to ensure there was progress. She then raised an issue concerning Gautrain. Ms Knunou wanted to know what contribution the private sector was making toward Gautrain.

Mr Moss stated that he was told that Gautrain would be completely disability friendly. He said that if Gautrain could be disability friendly, then they should use that as an example for taxis. This would be convenient as taxis traveled to almost every destination, including squatter camps. Mr Moss said that the Minister had informed him that every twentieth taxi would be disabled friendly. He warned that this would not work; buses were also inaccessible to the disabled. Mr Moss informed members that disabled people wanted to know what Parliament was doing for them in terms of transport.

Mr Mashile wanted to know if there was any progress made in terms of colour-coding public transport.

Mr Farrow reminded the Committee that there was a certain amount of the budget allocated to funds for capacitating of the department. He wanted to know if that money had been used. The money was supposed to be used to provide the department with more technical support.

The Chairperson stated that transport was an important aspect of 2010. He also stated that transport discriminated against the abled as well as public transport was not very good due to the lack of support. The Chairperson said that 2010 could not be delayed any longer; focus was needed to gain momentum. He questioned whether there were skilled bodies in place that were focused on the project. The Chair stated that there was a great capacity problem which included a lack of skills. He wondered whether they would have to admit that it was a challenge and then hire in skills from other countries.

The Chairperson also discussed the issue concerning buses. He said that a lot of the transport would be intercity and that buses would travel to and from these places but warned that there was a shortage of buses. The Chair wanted to know how quickly they could get a thousand buses in to the country and what would happen to them after they were not needed.

Mr Mashile raised an issue concerning the decommissioning plans of the buses. He also wanted to know what the plans were for the buses after they were not needed.

Ms Mpofu responded to issues regarding the integration of Gautrain. She said that the Cabinet had moved it from being a Provincial project to being a National project. Ms Mpofu stated that the DoT was working with Gautrain on a plan to become the backbone of the public transport network. They specifically interrogated issues around the feeder network and drew up a plan which said that Gautrain was approved on the basis of the integrated plan. According to Ms Mpofu, they may be facing potential challenges based on how the plan was integrated.

The Chairperson stated that Ms Mpofu’s last comment was vague and questioned which challenges she was referring to. Ms Mpofu replied that she was suggesting that the detailed plans may or may not have aligned themselves to the conditional approvals. They were still to prove whether that was the case. The DG informed members that the department would engage and deal with the issues as alignment was critical with respect to Gautrain being the mass mover.

The Chairperson commented that the Committee needed to be alert on issues raised. He noted that Provincial money was being was not being spent. The DG stated that money was being drawn down as projects were being undertaken. Ms Mpofu stated that a report could be given on the projects that were undertaken, where they were and why they were done.

Mr Farrow stated that he always felt that if the money was going to the department then payment should be made on progress. He informed the Committee that he was worried about whether or not there were people on site who kept track of the developments that took place. Mr Farrow said that the Committee was consciously aware that there were certain things that took place irrespective of whether testing was done. He told the DoT that the Committee needed reassurance that there was somebody at the department who was physically on site to take note of what was happening on a daily basis.

Ms Mpofu responded to the issue concerning Gautrain management. She informed members that the decision-making authority over Gautrain was a political Committee. According to Ms Mpofu, the Committee was collapsed because a Gautrain Management Agency was established. This new Committee would draft Gautrain to its completion. 

The DG then tackled the disability issue. She said that the issue had started with Gautrain and that Gautrain should be used as an example of what could be done. Ms Mpofu informed members that a policy concerning disabilities was drafted by the department and that they should understand the extent to which the state could insist on particular levels of disabilities being catered for. She said that they should be able to reach the target set out for them by the government. But, when it came to buses and taxis, it was a different case. According to Ms Mpofu, not all of them are owned by the department or the government, many are privately owned. A direct implication was that the department was forced to gain a policy requirement so that the private owners’ could align themselves with disability requirements. Ms Mpofu warned that they could not certify that every taxi would have disability access because of the financial implications.  She also warned that the fewer vehicles the department owned, the less influence they would have. Ms Mpofu said that the department could negotiate with them.

The DG informed members that Cape Town had piloted a “Dial-a-ride” team. According to Ms Mpofu, project was proving successful and the disability sector was satisfied with it. She also informed members that they were having problems with taxis where seats were taken out to accommodate the disabled as the seats were being put back. The department was looking at solutions to this problem as they aimed to provide access to public transport for all people, including those in squatter camps. The DG said that they were committed to public-owned transport but that private transport was proving to be a challenge.

Ms Mpofu addressed the issue of bus subsidies. She commented on the bus subsidy environment saying that it was substantially reformulated. Ms Mpofu spoke about the Road Based Public Transport Subsidy System which integrated buses and taxis in to a single system and looked to a new subsidy mechanism. The only challenge was having to wait for the amount of money that they would receive for it. The DG told members that new system took buses and taxis on an integrated basis.

The Chairperson told the DG that the Committee would need a substantive briefing on the new policy that she had introduced. He wanted to know how it linked to shifts. The Chair stated that the network notion was critical and that they needed to understand how the new take on subsidies would reinforce and not undermine the plans for public transport.

Ms Mpofu responded to comments on 2010. She stated that a 2010 Action Plan was released at the Transport Indaba in 2006 and that this was the last document that was in circulation. The DG then informed members that they were now in possession of a detailed operational plan that would inform people about airports, buses, taxis and other means of transport.

She also told members that the department had played an influential role in match scheduling as well as the land transport issue. Ms Mpofu said that they required about one thousand buses, three hundred of which would accommodate families, two hundred luxury coaches, three hundred and fifty semi-luxury coaches and one hundred and fifty for other commuters.

The Chairperson commented that the department needed to look at capacity. Ms Mpofu agreed saying that they needed to look at what they could do with the capacity. The Chairperson stated that an instrument was needed, specifically a parastatal instrument, which would be able to purchase the buses required for 2010 and then be able to manage them.

The DG agreed with the Chairperson, saying he was absolutely correct. She said that the reality was that 2010 had to happen but that the rest of South Africa had to keep functioning. According to Ms Mpofu, they did not want to remove assets from other sectors for their own use as the country would need to function as it usually would. She agreed that they needed an instrument that would facilitate a major acquisition.

Ms Mpofu also addressed the colour-coding of public transport. She said that this applied more to taxis than anything else. The DG informed members that the taxis would be white, they would have South African flags on the side and they would only be allowed to advertise on the back windows.

The DG commented on the Taxi Recapitalisation Programme (TRP). Ms Mpofu stated that the TRP had been slow for many years but that it had improved. Necessary consultations were made in the industry to achieve consensus and things were improving.

Ms Mpofu informed members that there were Committees and subCommittees checking on the progress made by the transport Committee. In the rail sector, responsibilities were given to Metrorail and they prioritized certain areas. The DG stated that Cape Town faced challenges as it required the coordination from all surrounding metropolitan areas. Discussions were being held concerning the relationship between land vehicles and tourism. Ms Mpofu said that metered taxis would play a critical role and that several teams of consultants were being used to translate the transport action plan in to an operational plan.

According to the DG, the department faced a major challenge in that they were struggling to confirm secured accommodation areas for 2010 so they could not effectively plan traveling routes. They needed to get the details from cities so that area of concern could be finalised. Ms Mpofu indicated that another challenge was the training of taxi drivers.

Ms Mpofu stated that investment should have increased along with the capacity to operate. She also acknowledged the issue of capacity challenges. The DG said that there were issues concerning the host cities. They were trying to adhere to rules given by FIFA but restrictions made operational planning difficult.

Mr Mashile commented that there was the view that they were good at institutional planning and readiness but that they could not deliver.

The Chairperson agreed and stated that it was a major challenge to be faced. He acknowledged that the Committee would have to look at the operational report to be able to assist the department.

Chairperson Cronin thanked the DoT for very comprehensive report. He stated that they had done very well.

The meeting was adjourned.