Cross-Border Road Transport Amendment Bill [B51A-2007]: Adoption; South African Rail Commuter Corporation Strategic Plan & Budget

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12 March 2008
Chairperson: Mr J Cronin (ANC)
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Meeting Summary

The Members concluded their deliberations on the Cross-Border Road Transport Amendment Bill.  The amendments empowering the Cross-Border Road Transport Agency to collect tolls and raise levies on behalf of the South African National Road Agency Limited were rejected and the issue of the setting down of passengers within one kilometre of the border was omitted from the Bill.  The Bill was adopted by the Committee, with amendments.

The Chief Executive Officer of the South African Rail Commuter Corporation presented the SARCC’s strategic plan and budget for 2008/09.  An overview of operations included the integration of Shosholoza Meyl, scheduled for completion by April 2008.  The key highlights for 2007/08 included the refurbishment of rolling stock, an increase in passenger trips and fare revenue, the deployment of railway police personnel and a decrease in security incidents.  New services launched included the Khayelitsha Express, Soweto Business Express and the Kei Rail Service.  Progress on the 2010 FIFA Soccer World Cup projects, the Moloto Rail Corridor, the rail link between Cape Town International Airport and the Cape Town city centre, the Bridge City development in KwaZulu Natal, the Intersite development of facilities for the South African Police Service (SAPS) at stations, the upgrading of rail stations and the construction of a bus terminus in Tshwane were reported on.

The challenges faced by commuter rail services were outlined, with particular emphasis on the current infrastructure backlog of R25 billion, aging and unreliable rolling stock and the major operational risks generated by overcrowding.  A three-phase strategic approach was taken and the initial stabilisation phase was expected to be completed by 2010.  Details of the grants, revenues and appropriations for the 2007/08 to 2010/11 Medium Term Expenditure Framework were provided.  For the period 2008/09, total income of R7.7 billion, operational expenditure of R5.1 billion and capital expenditure of R2.3 billion was projected.  The need for re-capitalisation of the commuter rail transport system within the next three years was considered to be a critical factor.

Members welcomed the integrated commuter plans that included provision for bus services in addition to rail services.  Questions were asked about rural development plans, the feasibility of the Kei Rail Service and the Cape Town airport link to the city centre, conditions at stations, changing over to wide gauge railways, security and crime at stations and on trains, progress on the Moloto Rail Link, Nelspruit and the Vaal Triangle and the development of skills.  Concern over the lack of long term plans was expressed.  Members agreed that current funding was sufficient to stabilise the operation but insufficient for investment in long term growth and the replacement of aged assets.

Meeting report

Cross-Border Road Transport Amendment Bill: deliberations and adoption
The Cross-Border Road Transport Amendment Bill [B51-2007] was discussed during previous meetings held by the Committee.  After the meeting held on 4 March 2008, the Office of the State Law Adviser (SLA) circulated the latest proposed amendments to the Members of the Committee.

Clause 3 empowered the Cross-Border Road Transport Agency (CBRTA) to collect levies and tolls on behalf of the South African National Road Agency Limited (SANRAL) and was rejected by the Committee.  The Long Title of the Bill was amended accordingly.

Clause 7(e) was amended by omitting the word “efficiently” and inserting the word “safely”.

The Committee found that the issue of putting down passengers within one kilometre of the border was a grey area and that such a provision would be unmanageable if it was treated as a cross-border issue.  Clause 16(d) was therefore omitted and Clauses 24 and 25 were rejected.

In addition, the National Land Transport Transition Act (“the NLTT Act”) required amendment by the addition of a new clause 23, deletion of subsection 2 of Section 46, the addition of a new Section 24 and the deletion of paragraph (p) under subsection 1 of Section 127.  Amendments to the NLTT Act would be addressed by the Committee at a later stage.

A technical correction was made to change the year of the Act from 2007 to 2008.

Mr L Mashile (ANC) asked whether all the cross-referenced clauses were amended as well.

The Chairperson replied that he had the assurance of the SLA in this regard.

Mr S Farrow (DA) referred to the request to increase the period from 28 days to 30 days that was made in the submissions but could not find such a period in the text of the Bill.

The Chairperson replied that the period was probably specified in the NLTT Act and not in the Bill.

The Chairperson confirmed that the Committee agreed to the amendments to the Bill and read the motion of desirability.  The motion was proposed by Ms Khunou and seconded by Mr Mashile.

The Bill was adopted by the Committee, with amendments.

Briefing by the South African Rail Commuter Corporation Ltd (SARCC)
Mr Lucky Montana (Chief Executive Officer, SARCC) introduced the delegates and presented the corporation’s strategic plan and budget for the 2008/09 period (see attached document).

The SARCC controlled 15% of the total rail network in the country, divided into five predominantly urban regions.  The average passenger trips per week day were 2.2 million.  66% of the available coaches and train sets were operational.  The book value of the assets held totaled R8 billion.

Metrorail was merged with the SARCC in May 2006 and the merger with Shosholoza Meyl was expected to be completed by April 2008.  The establishment of an integrated national passenger transport company was under discussion with the Department of Transport (DOT).

A summary of the key highlights for 2007/08 was presented.  415 coaches were refurbished, the number of passenger trips was 12.4% above target, the amount of fare revenue was 7.6% above target and the average punctuality performance was 86.2%.  The Khayelitsha Express and Soweto Business Express were successfully launched.  Customer satisfaction was rated at 70%.  The number of security incidents was 33% below target, 1814 railway policemen were deployed and 28000 arrests were made.  83% of the value of contracts was awarded to BEE compliant companies.  85% of the capital expenditure budget was spent, of which 93% was spent on rolling stock.  The 2010 FIFA Soccer World Cup projects were on target.  The Moloto Rail Corridor between Tshwane and Siyabuswa was approved by Cabinet, the Kei Rail Service in the Eastern Cape was launched, the feasibility study for the rail link between Cape Town International Airport and the city centre was completed and construction commenced on the Bridge City development linking Phoenix and KwaMashu in KwaZulu Natal.  The Intersite development of facilities for the South African Police Service (SAPS) at stations, the upgrading of rail stations and the construction of a bus terminus in Tshwane were in progress.

Mr Montana emphasised the enormous challenges faced by commuter rail services.  He warned that services remained on a knife edge, despite the ongoing improvements that were being made.  The lack of investment in the past resulted in a current infrastructure backlog of R25 billion.  The average age of trains was 40 years, resulting in a high failure rate, increased safety risks and a high level of frustration amongst commuters.  The overcrowding and risk of stampede resulted in huge operational risks.  The shortage of skills was a major issue.  The rail system failed to respond to spatial development and commuters continue to travel under difficult conditions.  Stations and trains were not accessible to disabled persons.  Fare evasion was reduced to 8.8% but overall customer dissatisfaction remained high.

The strategic approach was divided into a stabilisation phase (2007-2010), a recovery phase (2011-2014) and a growth phase (2015-2030).  The Medium Term Expenditure Framework (MTEF) and details of the grants, revenue and appropriations for the period 2007/08 to 2010/11 were outlined.  Budgetary ratios for 2007/08 and 2008/09 were included.  The integration of Shosholoza Meyl had a funding requirement of R1 billion, of which only R500 million was approved by Government.  Shosholoza Meyl operated at a loss of R300 million per annum.  Transnet however offered assistance by transferring an additional R200 million for the refurbishment of rolling stock, 127 locomotives and drivers to the SARCC.

Mr Montana presented the key strategic initiatives for 2008/09, including those for Shosholoza Meyl, improvements to the Priority A Corridors, an accelerated rolling stock program, the Gauteng nerve centre, a preventative maintenance program, the enhancement of operational safety, the 2010 projects, the skills development initiatives and the strategies for optimising asset value.  He concluded the presentation with an outline of the critical success factors required, with particular emphasis on the re-capitalisation requirements.

Ms N Khunou (ANC) expressed concern that legislation passed by the Committee was not being implemented.  An integrated transport plan where trains and busses were linked was welcomed.  She noted that activity appeared to be concentrated on certain provinces while other provinces such as the Eastern Cape, Northern Cape and Mpumalanga were neglected.  She asked what the rural development plan was.  She referred to the household survey conducted in 2006, which showed that 70% of commuters used taxis.  She wanted to know if the SARCC participated in the survey and how the 2.2 million passenger trips per week that was reported fitted into the survey.  She asked if a wellness programme had been done before, what was included in the programme and how the R9 million allocated for it was arrived at.

Mr S Mshudulu (ANC) remarked that skills development was one of the key performance indicators of a CEO.  He wanted to know how information about skills development could be obtained.  He said that the issue of spatial development was raised before and wanted to know which areas were targeted for development.  He mentioned that Members had a responsibility to monitor the application of resources and would like to know the challenges faced by the SARCC.

Mr S Farrow (DA) asked how the integrated passenger transport company would interact with the bus services offered by municipalities and metro’s.  He calculated that approximately 10% of coaches were refurbished per annum and that it would take ten years to refurbish all the coaches.  He asked what the lifespan of a refurbished coach was, assuming that normal maintenance took place.  He referred to the Tshwane/Bushbuckridge extension and the SADAC agreement on using a wider gauge.  He asked how the wider gauge would fit into the existing system and how the change from one gauge to another would be handled.  He was concerned that the Kei Rail Service would become a white elephant - the bus and rail trip took 12 hours but the same journey was only three hours by taxi.  He understood that Spoornet was reluctant to grant further concessions in the use of the railway lines and asked what was being done to improve the timeframes and do away with the bus service.  He remarked that there was a lack of directions at Johannesburg’s Park Station, security was shocking, there was no advisory service for enquiries and after 16.30 there was no information service to commuters.

Mr Montana explained that the rail plan was approved by Cabinet with the proviso that further detailed work was done on rural rail requirements.  SARCC came from a largely urban commuter background and he acknowledged that the needs of the Northern Cape Province were not adequately met.  The relatively small numbers of commuters in that province meant that rail developments were not economically viable.  Agreement was reached with Limpopo Province for the transfer of additional funds to extend rail services to rural areas.  SARCC was currently involved with the Provincial Governments to extend services to fast-growing Polokwane, between Rustenburg and Johannesburg and to conduct a feasibility study to replace the existing Bloemfontein/Botshabelo bus service with a rail link.  He acknowledged that the Eastern Cape was the most neglected Province in the past but more was being done following the introduction of the Kei Rail Service.

Mr Montana said that the rail plan included 40 new connections, some obviously over the longer term.  The amalgamation of Shosholoza Meyl allowed for some repositioning and the enhanced ability to make a direct contribution to rural development by opening up access to work opportunities for people.

Mr Montana said that the Kei Rail Service was not yet fully implemented.  The length of the journey was as a result of the difficult terrain and the use of an old, slower, refurbished locomotive.  Although the service design was not finalised, the Provincial Government was keen to implement the service.

The Chairperson asked why customers would prefer to take the slow train rather than the fast taxi.  Even if the train was safer and cheaper, it was necessary to find accommodation at either end.  He pointed out that there were both advantages and disadvantages to rail travel but that people in rural areas were in desperate need of public transport.  He was concerned over the long term sustainability of the Kei service and questioned whether the right decision was taken at the time.  He said that a bus service would have to be subsidised in any event.

Mr Farrow pointed out that the rail service was only between Amabele and Umtata and the problem was that Spoornet refused to allow passenger services to use their railway lines.

The Chairperson asked for clarity on the KwaNdebele / Moloto Corridor and the Vaal Triangle issues.

Mr Montana replied that the KwaNdebele / Moloto corridor involved four municipalities and three provinces.  An African Union decision was taken that any new projects implemented the long term integration agreement on the use of the wide gauge railway lines.  He explained that there was more than one option to allow for the change between narrow and wide gauges at stations.  The decisions taken arose out of the feasibility studies that were done and took account of both the advantages and the cost of the available options.  The current rolling stock was old and cannot be used for the new technology.

The Chairperson explained that the issue of the wider gauge was raised during an oversight meeting in Tshwane.  The concern was that the Moloto Rail Corridor ended to the north of Pretoria and not at the main Pretoria station.  This created a problem for the Tshwane integrated transport plan as provision had to be made for large numbers of commuters to be transported to the city centre in addition to the demands of the Gautrain / Metrorail interface.  He suggested that SARCC discussed the matter with the Tshwane municipality.

Mr Montana acknowledged the importance of the concerns that were raised by Tshwane but explained that decisions were taken at a high level and involved all the stakeholders.  There were land expropriation issues and alternatives such as connecting to the Mamelodi line and ending at Hammanskraal.  He pointed out that the Moloto Rail Corridor was still at the project phase and no final decision had been taken.

The Chairperson was pleased that consultation was taking place with all the stakeholders.

Mr Mashile asked about the nature of the interest of the Provincial Administration in the Moloto Rail Corridor.  He wanted to know if funds were made available or if interest was limited to consultation.  He asked if the current taxi operators were involved in the process and whether provision was made for taxi ranks at the stations.

Mr Montana explained that the Vaal area fell under the Southern Gauteng region and the community depended on the rail link to Johannesburg.  Sections of the line belonged to Spoornet and part of the problem was that the transfer of assets from Transnet to the SARCC was not done correctly.  Current projects included the re-development of three stations in the Vaal area.  The region was important and the matter was being addressed.  He gave the assurance that the service will not be shut down.

Mr Montana explained that both the Provincial Government and the district municipalities played significant roles in the development of the Moloto Rail Corridor.  The issues included maximizing investment opportunities along the corridor.  PUTCO was the main operator and the involvement of other operators needed to be carefully managed.  It was acknowledged that both taxis and buses operated in a system and it was imperative that all the stakeholders were taken on board.  There were some concerns with the scheduling of bus services and the matter was being discussed with the relevant municipalities.

Ms B Thomson (ANC) asked why the decision on the consolidation of passenger entities that was taken by Cabinet in 2004 was only now being implemented.  She asked how the SARCC measured its performance in addressing the skills shortage and overcoming the challenges listed in the presentation.

Mr M Moss (ANC) was concerned by the absence of a long term plan in the presentation and asked what was being planned for the next twenty years.  He wanted to know if the taxi rank was included in the upgrading of the Cape Town station.

Mr O Mogale (ANC) asked if the feasibility study for the link between Cape Town airport and the city centre had been completed.  He noted that many unforeseen problems arose after commencement of the Gautrain project and asked what problems were identified for the Cape Town project.  He asked if all the tourism and taxi operators and other stakeholders at the airport were taken on board.

Mr Mogale noted that the same figure of 28000 arrests was quoted in the previous report by the SARCC.  He asked for a breakdown of the type of crimes committed and whether the deployment of the 1814 railway policemen resulted in a reduction of the level of crime.  He understood that funds were made available for the introduction of closed-circuit television cameras to assist in identifying culprits and asked what progress was made in this regard.

Mr Mogale wanted to know what the status was of the cases where managers were suspended following train delays.  He asked what role was played by the Transport SETA in the development of skills.

Ms M Nxumalo (ANC) was concerned by the health hazard posed by the rats on Cape Town Station.  She asked why prima class was only available between Cape Town and Johannesburg and not to other destinations.

Mr Mashile asked what progress was made in providing commuter rail services for the Nelspruit area.  He wanted to know what sleeping arrangements were made for drivers on long distance train services.

Ms N Nkabinde (UDM) asked if the deployment of railway policemen had a significant effect on the percentage of fare evasion experienced.  She wanted to know what plans were in place to deal with the significant increases in numbers expected during the 2010 FIFA World Cup when overcrowding and the risk of stampede were already of major concern.

The Chairperson remarked that it was gratifying that SARCC was thinking along the lines of providing passenger services and was not limiting itself to providing rail services only.  He asked Mr Montana to comment on the point raised that although money was being spent, commuter services remained on a knife-edge and it was unclear whether enough impetus was created to break out of the vicious circle.

Mr Montana replied that spending money to address the short term issues was also important and the increased investment in the stabilisation phase was welcomed.  Railways were long term projects and it was necessary to invest now for the next 25 to 30 years.  Although there was an increase in the allocation, there was a concern that investment did not take place fast enough and the rate of change was too slow.  A further consideration was the quality of the investment.  He said that a strategic decision on the fleet must be taken sooner rather than later.  The inclusion of Shosholoza Meyl was important and the development of a long term plan that included a rural rail plan, future corridors and the assessment of future demand and growth areas was imperative.  He reported that a recent meeting with the Director-General of the Department of Transport to discuss future investment plans was positive.

Mr Montana explained that the refurbishment costs amounted to R3.5 million to R5.5 million per coach.  A second alternative was to purchase assembled coaches from foreign companies.  SARCC preferred to develop local capacity that could in time service the rest of the continent.  Tenders were therefore structured to protect the local industry and encourage growth and the development of skills within the country.  SARCC was in consultation with the Department of Trade and Industry on issues related to the industrial development plan as well.

Mr Farrow pointed out that the percentages of funds allocated to refurbishment and to the purchase of new rolling stock needed to be in balance.  It was clear that at some point in the near future it was necessary to allocate funds for the major buy-in of rolling stock.

The Chairperson agreed that the key message to National Treasury was that the allocation to commuter rail services was sufficient for it to remain stable but insufficient for it to make progress.  The vision was there but the long term financial commitment was uncertain.

Mr Montana conceded that stations were badly managed.  Standards of cleanliness and the maintenance of facilities were not at acceptable levels.  A change in strategy was implemented and a set of standards and responsibilities was developed for Intersite.  Station managers were now being appointed and were held accountable for the standard of stations.

Mr Montana reported that he received a monthly report from the Assistant Commissioner of Police in charge of the railway police force.  Arrests were made for crimes such as robbery, theft, assault and fare-evasion.  The crime prevention initiatives were running for the second year and it was apparent that visible policing had a positive impact on reducing crime.  Because of the overcrowding and the limited number of policemen, it was not possible to be everywhere all the time.

Mr Montana said that employees of the current contracted security company were all formally trained.  SARCC worked with both SASETA and the Transport Education and Training Authority (TETA).  Technical skills, in particular engineering skills, were most in demand and there was much room for improvement in the delivery of skilled personnel.

The Chairperson remarked that there were discussions underway to apply some of the funds held by the SETA’s directly to the technical colleges.  He gained the impression that TETA was not effective in delivering the skills required.

Replying to Mr Mashile’s question, Mr Montana said that the SARCC network development team was working on an assessment of the need for a commuter rail service in the Nelspruit area.

In response to Ms Thomson’s question, Mr Montana said that most of the problems identified in 2005 were attended to, Metrorail was absorbed in May 2006 and Shosholoza Meyl was expected to be absorbed in April 2008.  The period included the strike in 2005 and the introduction of salary parity demanded by the labour unions.

The Chairperson remarked that the Committee expected the legislation with regard to Shosholoza Meyl in the near future.  He noted that SARCC dealt with the challenges foisted on it in a relatively short period of time.  He asked if the expected numbers of passengers justified the development of the 4 km rail link between Cape Town Airport and the city.

Mr Montana replied that the feasibility study showed that the break-even point would be reached after three years.  He reported that a meeting was held with the Mayor of Cape Town to obtain the city’s transport plan.  The project was not expected to be completed by 2010 but it was being aligned with SARCC’s own initiatives over the medium term.

Replying to Ms Nxumalo’s question, Mr Montana said that the introduction of two trains between Johannesburg and Durban and a train between Cape Town and Durban was under discussion with Transnet.  Long distance services formed part of the Shosholoza Meyl services and the prima class was an important source of revenue.  Although the core business remained moving massive numbers of people, the extension of prima class was on the agenda.

In response to the Chairperson’s question, Mr Montana reported that after the incidents where trains were set alight in protest to train delays, the responsible managers were suspended and a board of enquiry appointed.  The board found that although the delays were exacerbated by heavy rain and storms, there were serious management deficiencies.  The corporation was not in control of the situation and did not have a risk strategy in place.  The managers were given seven days in which to respond and the matter had not yet been finalised.

The Chairperson commended Mr Montana for the action taken and drew a parallel to the burning of trains at Pretoria station.  He thanked Mr Montana for his presentation and expressed appreciation for the paradigm shift in the thinking of the SARCC and the honesty with which the challenges were presented.

The meeting was adjourned.


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