Transport Strategy and Budget 2008/09

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07 May 2008
Chairperson: Mr J P Cronin (ANC)
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Meeting Summary

The Department of Transport provided an in-depth look at its Strategic Plan and Budget and its performance as a department. The most important priority for the department was the implementation of its transport plan for the 2010 Soccer World Cup. It had taken a deliberate decision to overlap its public transport strategy with its transport plan for the 2010 World Cup and it did not see those as two separate programmes. The World Cup would develop affordable public transport services between airports and cities and this would remain as a legacy as would the extended bus services connecting people to railway stations.

The point that was emphasised was that South Africa needed an efficient, low cost, transport system in order for the economy to function properly. There were concerns about changing global conditions and the energy crisis. The budget for bus subsidies was set at R40 million. This was much less than expected and the Department was still engaging with Treasury. Fuel price adjustments alone would swallow most of that.

The Committee agreed with the Department that reducing its 35% vacancy rate was hampered by the shortage of specialised skills. Various suggestions were mooted by the Department such as the public service limiting the movement of staff within a two-year period to slow down job-hopping. Also the Committee agreed that it was a false saving to pay inadequate salaries

Meeting report

In presenting the DOT Strategic Plan 2008/09, Ms Mpumi Mpofu (Director General: Department of Transport) was accompanied by Mr Mawethu Vilana (DDG, Transport Logistics); Mr Mathabatha Mokonyama (Acting DDG: Integrated Planning and Intersphere Coordination plus Coordinator for 2010) and Mr Dan Pretorius (Chief Financial Officer).

DOT Strategic Plan
Ms Mpofu said that it had become more complex to determine priorities because the external mandatory processes largely dictated what could actually be delivered in a particular financial year or Medium Term Expenditure Framework (MTEF) period. Their approach was to look at the department’s mandate, the Cabinet/Lekgotla priorities identified for clusters relevant to Transport, and the 24 Apex Priorities from the State of the Nation Address. They interrogated the budget allocation for the MTEF three-year period because if it was not budgeted for, it was not achievable. So it was what could be done practically without asking for more funding.

The DOT vision had been reviewed as ‘Transport, the Heartbeat of Economic Growth and Social Development’ as recognition of some of the critical social interventions that had to be made. Shova Kalula, public transport and others that were the core of rural transport initiatives were more social development than economic. She went over the DOT Focus Areas:
- Research and development
- Regulatory environment
- Integrated Planning
- Implementation of transport logistics
- Public Transport
- Appropriate monitoring mechanisms for public entities.

The January 2008 Cabinet Lekgotla resolutions relevant to DOT were identified:
- The Integrated Infrastructure Plan
- Implementation of the industrial policy
- Implementation of Public Transport Key Action Plans, includingTaxi Recapitalisation, the subsidy system and investment plans, and also included rail and rail revitalisation issues
- Road Accident Fund
- Implementation of the Rural Transport strategy and implementation of Shova-Kalula
- 2010 FIFA World Cup – progress, challenges and interventions required
and various other inter-cluster activities.

Ms Mpofu said that the Minister arrived at the conclusion that the most important priority for the department was the implementation of the 2010 Soccer World Cup. DOT had taken a deliberate decision to overlap the public transport strategy and implementation and action plan with the 2010 World Cup and did not see those two as separate programmes. The prioritisation of the 2010 World Cup was the prioritisation of public transport implementation, except it defined between now and 2010 the areas where it would be done – the cities and accommodation areas.

Ms Mpofu identified the Cluster Priorities and the 2008 Apex priorities relevant to Transport. She made the following additional points while going through the Powerpoint presentation:
▪ International Relations, Peace and Security Cluster Priorities
DOT’s participation in IBSA to promote better air transport services, ship facilities and the creation and establishment of the Super South-South Highway on the maritime side. All the countries of IBSA had agreed that whilst it remained Brazil-South Africa-India, there was a dotted line to China because of South-South cooperation and G77 agreements.
▪ Economic Cluster Priorities
- The De Hoop Dam Pilot Project in Limpopo which was an example of integrated infrastructure planning.
- The Electricity Shortage Intervention Plan required a specific Transport response and DOT committed themselves to reduced electricity consumption at airports and other identified areas. DOT also volunteered conversion to solar energy for traffic lights, road lights and even security lights in certain areas of airports.
- Increasing economic efficiencies to reduce the cost of transport. A proposal was being submitted to the Cabinet Lekgotla for discussion. In the light of current fuel issues, they would have to reflect on whether those things were achievable in the current climate.
- DOT was required to produce a proposal as to how it could promote industrial development using the Transport sector. They had identified the areas of rail, manufacturing of buses, but more importantly the manufacturing of rail system parts as an area for intervention. Another area was the manufacture of bicycles as a contribution to industrial development that would facilitate the Shova Kalula programme. Public Transport was identified as the area that must generate manufacturing capacity that could be a contributor to the Industrial Policy Strategy.
▪ Governance and Administration Cluster Priorities
- Capacity of the state, skills assessment and capacity development was a very important area and DOT would continue to work accordingly and meet the overall government targets set.
▪ Justice Crime Prevention and Security Cluster Priorities
- Crime Prevention and Public Safety, which included security on rail systems and Arrive Alive programme.
- Upholding National Security - increasingly more on the aviation sector.
- World Cup 2010 and organisation around that.
▪ Social Cluster Priorities
- Second Economy Interventions
- Comprehensive Anti-Poverty Strategy
- Social Crime Prevention: Arrive Alive programme and alcohol abuse as it affected crime and road safety.

Overview of Budget
Ms Mpofu provided an extensive review of the budget. She indicated the allocations for 2008-2009 rather than the whole MTEF and highlighted new areas:
▪ A new amount of R500 million had been allocated for the incorporation of Shosholoza Meyl that was to enable the consolidation of Shosholoza Meyl under Metrorail, so that DOT finally had all the building blocks of what was called Passenger Rail Service under one roof. This concluded the consolidation of Passenger Rail Services. That allocation only related to current liabilities within Shosholoza Meyl, it did not include any new funding or any capital expenditure programme for Shosholoza Meyl so that was an issue for negotiation with National Treasury for next year. This year they would be working on the institutional issues of receiving Shosholoza Meyl, which started on 1 April, finalising the sale agreement, concluding the issues of moving staff, dealing with issues of pensions, other liabilities, moving people across, and only in the next financial year would they be able to do capital investment of any form.
▪ R200 million was allocated for Taxi Recapitalisation in 2008-09.
▪ A potential area of shortfall was Bus subsidies of R40 million. Ms Mpofu indicated DOT received much less than expected and they were still engaging with Treasury. With the fuel price adjustments alone that R40 million would be utilised.

Treasury had allocated a budget but had conditions and prescribed certain areas of concern to be dealt with in that particular MTEF period. Ms Mpofu identified these eight matters highlighted by the Minister of Finance. She also talked about the ten areas of under-expenditure in 2007/08

Management Issues
Ms Mpofu reviewed Departmental Structure with post activation according to the budget received. There were 668 posts activated and 352 posts inactive. There was a vacancy rate of 35% and these vacancies were tabulated. The DOT’s Employment Equity status was tabled. The presentation also provided the following information: Filling of Posts timetable, Turn-Over Analysis, Learnerships, Bursaries, HR Interventions, Job Standardisation/Job Evaluation, Status of its Performance Management and Development System (PMDS)

DOT 2007/08 Performance Highlights & 2008-09 Performance Indicators
Past achievements and immediate targets achievable this financial year were highlighted for:
▪ Programme 2 Transport Policy & Economic Regulation
▪ Programme 3 Transport Regulation and Accident & Incident Investigation
▪ Programme 4 Integrated Planning & Intersphere Coordination
▪ Programme 5 Transport Logistics and Corridor Development Branch
▪ Programme 6 Public Transport
▪ Programme 7 Public Entity Oversight and Border Control
▪ Programme 1: Administration, Management, Financial and Communication Services

Ms Mpofu made the following additional points while going through this part of the presentation:

- Traffic Cops would be classified as essential services and operate on a 24-hour basis, this involved the Department of Labour in respect of longer hours and working conditions.

- The Draft Plan for a Manufacture, Repair and Maintenance Division of the Aviation Industry in line with industrial policy. The aviation sector was a potential area for growth. South Africa was placed in a very good position to provide those services. The European Union had implemented bans on the basis of safety of many airlines and aircraft on the Continent. New emission standards were also emerging internationally. This would mean quite a lot of work needed to be done on aircraft and DOT believed SA was capable of providing that capacity on the continent. But it was still early days in terms of how DOT would be able to establish the industry; it needed incentives in industrial policy and investment to develop that area. It was not something that would be achieved in the next couple of years, but post 2010 would become a major feature.

- Framework developed for Low Cost Carrier infrastructure and support supply of transport access to airports was to respond to the new growth of affordable airlines and growth of aviation as a preferred mode of travel, particularly long distance. Airports have not responded meaningfully by providing or allowing for the provision of public transport facilities to airports. For example currently if Mango charged R150 ticket Johannesburg to Cape Town on a special, the person who is going to jump onto that Mango flight living in Soweto would probably pay R300 to move from Soweto to get to the airport to get that flight; that did not make sense. Hopefully with the 2010 strategy that would be an issue that would come to an end. DOT was opening up airports for public transport facilities, operation of taxis, buses and in some instances even rail – Gautrain was one example. DoT did not get the money for the rail extension to the airport in Cape Town, but the BRT system was on the cards for airport to city transfer. There would be taxi ranks, bus ranks, public transport facilities at an airport. That type of air transport service was here to stay, government must respond by supporting it so people would have access to affordable air transport services.

- Integrated Infrastructure Plan was not a Transport Integrated Infrastructure Plan but a Government Integrated Infrastructure Plan for which DOT was the lead department to coordinate other government departments – Water, Electricity, Rail, Transnet and others on the energy side.

- Rollout framework for 2010: Now that plans for Fan Parks were available and cities had indicated where those Fan Parks were, DOT was focusing on the non-motorised transport (NMT) elements for Fan Parks, which would basically mean paving, bicycle pathways, because fan parks were largely meant for local populations to get to particular areas. There would be public transport facilities as well, but it was really around creating a conducive environment for people to get to the fan parks, walking, cycling and using other modes of transport other than the norm.

- Bicycle manufacturing plant related to Shosholoza Meyl and to Shova Kalula as part of the industrial policy strategy to facilitate the establishment of bicycle manufacturing capacity in the country. 20 000 bicycles procured and distributed in the interim

- The order for buses was finally out. The background to the Autopax bus company was DOT stated intention to acquire the bus company and create an integrated passenger service around Shosholoza Meyl in the future. In the short term it would serve for 2010. In the medium term after 2010 to serve the purpose of being integrated into Shosholoza Meyl and passenger rail services. The legal framework for that was going to be the amendment of the Legal Succession to the South African Transport Services Act, recognising that buses were part of the SARCC stable.

- The people who were affected by the KZN court judgement reached last year had particular implications as to how DOT proceeded with that balance, and had implications on the cut off date of the conversion process.

- Arrive Alive Campaign: DOT was very reluctant to review the brand because it was one brand that was well known. The challenge was not the brand, the challenge was whether the citizens of the country were complying with the laws of the road and a behavioural issue, and the emphasis was going to shift to behavioural change.

- SANWIT (South African National Women in Transport) was launched in October last year.

Mr Cronin thanked Ms Mpofu for the comprehensive report and for getting through it so efficiently.

Ms N Nkabinde (APC) said it was always a pleasure to listen to the DG and asked her for more information on SANWIT. She asked when the National Youth Leadership would happen. She asked what was DOT’s relationship with its agencies like as a lot of agencies had problems. She referred to the Road Accident Fund (RAF) which had serious financial problems. She was concerned at the mention of under spending of R14 million on RAF restructuring in slide 36. There had been problems with RAF coming to Parliament. She wanted to ensure that people living in the rural areas were not left out of DOT’s strategy. Finally she asked for clarification on the Barn Owl internal audit system.

Mr S Farrow (DA) had several questions:
1. Under Legislative Proposals, he was surprised to see the DOT still had legislation such as the Black Transport Services Amendment Act and the Transport Services for Coloured Persons. They should have been repealed long ago.
2. He understood the Road Traffic Management Corporation (RTMC) were primarily responsible for road safety and incident reporting yet the DOT had a directorate that also did that. He asked whether there was a replication or whether that staff should effectively fall under that agency to ensure consolidation of incident and accident reporting in the country.
3. He noticed DOT was paying the Special Investigation Unit R18 to R23 million per annum over the next three years. He had requested a report to this committee as to the effectiveness of that unit. Should it not be in the departmental strategic plan to look at how one could secure the current credit card licence itself against fraud. Alternatively, one could invest R20 million into CCTV cameras in the various licencing centres.
4. There was a recent news report to the effect that a R300 million payment was outstanding on the Gautrain and he wanted to know how it worked. It had to be in the department’s budget; it was a vast amount of money that would now be subject to claims from the taxi industry, who he believed were also entitled to that subsidy, as were bus operators. The Committee should be seeing a plan in front of them as to how that was going to work, whether the operators or the agencies of those operators were the right people to subsidise, or whether the passengers were. How did it work? Did the province run it or the Metros or the department? Were we just passing money down the line and hoping that something would happen in terms of that?
5. He felt the target of reducing staff vacancies from 35% to 17% was possibly a tall order but he had a problem as to how those necessary skills were going to be filled.

Mr M Moss (ANC) was concerned about the national youth leadership and the maritime school in Cape Town; and asked what was the department’s contribution to the National Youth Programme. If Transport was the heartbeat of the economy then youth should be central and should play a much bigger role.

Ms Mpofu responded to the issue of SANWIT, indicating that they had had a very successful launch with 1093 women from across the country. There were business representatives, community grouping representatives, from aviation to bus operator to taxi operators. Important as an outcome of that was the implementation of programmes. They had identified some mechanisms for women empowerment in transport and were able to pass on the information about SANWIT itself, its business plan and what it intended to do with individual chapters and each particular province. They did need support from government, structured engagement, indication of opportunities and DOT would facilitate and support women empowerment in the transport sector.
DOT did consider the BEE Charter as one of the important elements through which some of this empowerment would happen but it was also about meeting targets of enabling and maximising women’s participation, and scarce skills development training.

On DOT’s contribution in respect of Youth: there was the training of volunteers for 2010. Provinces and cities had forged ahead in implementing that programme of setting up volunteers and training  people in the area of road safety primarily, and as marshals for 2010. Johannesburg and Tshwane had launched their programmes recently. Those initiatives were happening on the ground and primarily in those areas identified for youth empowerment. Other important areas for youth development were the Extended Public Works Programme (EPWP). Having done SANWIT, they needed to arrive at a similar achievement with respect to the youth.

The issue around agencies and the RAF particularly was an important one. They had a big challenge around finalisation and implementation of some of the RAF matters. One of the challenges had been consultation with the Health sector, specifically around the instrument for determining compensation. There was consultation with the Health sector; DOT was now in consultation with the Medical Aid sector and the Medical Council sector. There were further consultations to be held between DOT and the Department of Health in order to finalise.
DOT also had the misfortune of a court case preventing it from proceeding with the legislation amendments and regulatory framework. There was a vibrant legal fraternity in this country that was very vocal on RAF matters. DOT was not in full control of what happened in respect of the regulatory framework, particularly when legal action was taken that precluded it from being able to deal with some of the matters.

DOT would be making progress, discussion was happening with the RAF around their financial situation which looked specifically at the fuel levy and other mechanisms. The question was to what extent did you continue pumping money into the RAF where the results of the turnaround strategy and closing the gaps were moving at the slow pace that they were. It was like pouring water into a leaking bucket.

DOT’s understanding was that RAF had been quite successful in dealing with the caseload and reducing the backlog. Even though they may not have made a significant dent in the financial situation, they had definitely made a significant dent in the caseload. Once it was defined under what circumstances a person could claim, that would automatically narrow down the number of claimants significantly, and also the compensatory amount paid out.

DOT had a rural development strategy. It had been taken to Cabinet previously and they had wanted greater interaction with other government departments. This had been done – with Agriculture, Land, Energy and other departments – so that it was not just driven by Transport as a rural transport strategy, but as an integrated plan.

The Barn Owl was an internal audit system – the Chief Financial Officer would input on it.

The RTMC issue was what DOT did with its agencies. It established agencies but DOT retained responsibility for RTMC policy. The same applied to aviation.

Mr Cronin was concerned about duplication. The Civil Aviation Authority investigated their own incidents and accidents. Arrive Alive and the statistical reporting coming from RTMC was doing exactly that.

Ms Mpofu clarified that they had people who had been transferred to the RTMC that were involved with practical implementation and reporting functions. Those that remained in the department were involved with oversight and the regulatory framework functions.

DOT was quite happy with the progress made by the Special Investigating Unit and would share specific outcomes with the Committee at a later date. Not only did the SIU deal with the cases but their reports also identified the loopholes that made corruption easy. They specifically identified the structural process engineering that was required to overcome this. DOT was taking those recommendations on board.

Regarding credit card licences, DOT had started the process for the next contract for credit card licences. Government generally was waiting for the consolidated HANIS programme and they would take guidance from that. If a decision was taken from the Home Affairs side not to proceed with that, that would have implications for DOT’s certification. She understood they had now finalised their ideas on what they wanted for the new ID card.

The new road based public transport subsidy document was finalised in 2007, had gone to the Transport Lekgotla and was discussed there comprehensively. They would present this to the Committee at some point because it gave a sense of what they had planned initially and what was agreed to. It was the basis for the financing of an integrated road based public transport subsidy, both for buses and for taxes. Unfortunately it had not been allocated additional funding. Provinces were responsible for subsidies for the specific operator on the basis of agreements they had. National level had an oversight function in monitoring the implementation and in some instances inspections where it was thought the relationship between what was paid out and the service delivered was not aligned.  Generally the big thing about the bus subsidy was it was an area facing severe constraints and severe challenges in meeting the demands for providing bus services. It formed the top priority on DOT’s agenda for deliberations with Treasury; they were hoping to get an adjustment to the bus subsidy this year.

The mechanism of operation was the operator claimed from the province, province paid on the basis of services provided. It was very much passenger based with the consequence that the operator overloaded. They were looking at trying to close those loopholes by converting it to a simple passenger based subsidisation mechanism, ensuring it did substantially cover the capital requirements and find other ways of dealing with the operational subsidisation.

The Transport Department was looking at what really was the best way to subsidise. Was it people, was it vehicles, the capital outlay or what - and how best to do the connection that was verification, testing, inspection, monitoring?

Mr Cronin said that he had been impressed with what he had read about an integrated public transport plan although this had not been presented to them yet. Also there was the National Land Transport Bill coming which would deal with the whole issue of Transport Authorities, Operating Licensing Boards, the subsidies and what was going wrong with them, like the bus subsidies. They were all aware that it had been a disaster and that was why Golden Arrow looked as it did, they were not recapitalising because of contracts that were temporary,  that had to be renewed and so forth. The system was not encouraging and hopefully RTD legislation would make a wonderful contribution to clinching this transformation.

Ms Mpofu responded to the vacancy rate question. DOT understood that government had done an overall assessment of the vacancy rate in government. 35% might look like a lot but they were not in the worst category. The challenge was this was an area of specialised skills. However, they must set that target of 17% and they would do everything in their power to try to meet that target by March 2009. They would indicate what they needed to be able to achieve that target, from government. Certain flexibilities were needed in the system for professional staff and greater flexibility around salaries; because people would be there for two months then leave for double pay elsewhere. The important thing was to have strategies in place to meet that plan. What did they need from Home Affairs to import some of those skills from elsewhere? From TETA to train people quickly once they left the universities? And from DPSA such as limiting the movement of staff within two year periods to slow down job-hopping?

Mr Cronin interjected that this was borne out by the information in the presentation. The department was largely a quality and regulatory department. The reason the senior posts were not being filled was these were highly specialised skills that were very scarce in our country. The Committee would strongly support the point the DG was making about flexibility. It was a false saving to pay inadequate salaries. It was also important because not filling the top positions, meant people at the middle and lower level would not be getting proper leadership.

Mr Dan Pretorius (Chief Financial Officer) explained that the Barn Owl audit system had been implemented and people had been trained. The Internal Audit Unit was using the Barn Owl audit software in full this year to perform the internal audits. It kept track of all the audits performed, the comments, the follow-up actions. The value of that was that it kept track of how risks assessments changed over the years and of all the audits that had been performed, what actions had been promised, what actions had been implemented and not implemented. So over a number of years one would be able to backtrack and see what was done about identified weaknesses. It kept an electronic history and statistics on all the internal audit actions.

Mr Mokonyama answered the question on outdated legislation. The National Land Transport Bill (NLTB) was framework legislation, covering almost everything related to land transport services and operations. In addition, the NLTB process would be a clean up exercise to ensure the repeal of all such outdated legislation.
Mr S Mshudulu (ANC) was concerned that although NDOT was doing well on 2010 World Cup matters and such, there was a need for the national department from time to time to give guidance to the provinces so that they also played their role. There was no synergy even though it was said that Integrated Development Plans (IDPs) and Integrated Transport Plans (ITPs) should always be aligned. He was pleased to hear corruption to do with driver’s licences was being addressed. There was corruption and he was not sure how the Minister was going to monitor this. The public transport issue was something municipalities could not be divorced from. The National Department of Transport and provincial local government, including SALGA, must make sure that there was progress, because there was no progress. He proposed that that the Minister talk on TV and give a toll free number that people could call when they saw corrupt licensing activities.

Ms B Thomson (ANC) referred to the reasons given for the under spending which were not pleasing, especially the issue of bicycles. Under the scrapping allowance item, funds were allocated on 31 March and were expected to be spent by 31 March. There was no way funds could have been allocated and expected to be spent in the same month. She asked whether there were any plans for buying new passenger trains, not refurbishing, given the outdated technology on existing passenger trains. The DG had mentioned that luxury buses would be used from the airports to the cities, She asked whether a similar service could be put in place as bridging transport to stations, which would also make sense.

Mr Farrow was wondering whether the strategic plan could be achieved. His understanding of strategic plans was to determine the what, when and how. On the resources, there was the manpower on the one hand and the money on the other. A lot of risk had been identified about unavailability of funds. How could this be achieved without the availability of funds flowing or capacity or commitment there? People should not be in the department if they did not have commitment to the job. The fact that there were even comments that there was no cooperation by staff shattered him.

He referred to the under expenditure relating to SANTACO. There was quite a lot of money there and they were all concerned about the taxi industry and the recapitalisation, but not to transfer R20 million to SANTACO, was to him an indictment. On the other hand, if they could not comply and there were no conditional issues relating to that transfer, they must get around the table and talk to these people. You cannot give public money to an agency like SANTACO if they cannot produce receipts as to how it was spent.

He asked for clarification on the R30 million transaction fee that would cover the cost of maintaining the system, and yet in the budget R67 million was allocated and increasing over the next three-year period for that purpose.

Referring to bicycles, he said that this Committee, in the era of the late Mr Dullah Omar, went to Holland and there were all sorts of MOUs for the transfer of bicycles, for maintenance and repairs, skills and development of SMMEs in the process – what happened to those bicycles? If SA was going to put up a manufacturing plant and develop 200 000 bikes a year and they were not maintained and looked after, you might find the bicycles that came out were now sitting on scrap heaps somewhere – that would be defeating the object of what they were trying to do in the Shova Kalula programme.

On the matter of the Autopax purchase, he asked exactly how many buses were coming over and what was the actual mix at this stage for the requirements for the Airport-City shuttle. There were 100 luxury buses already finalised in December 2007? What was the business plan, where were they going, and how were they going to be used? A newspaper reported much confusion as to who was going to be paying for these buses, whether the province or the metro would get them, whether they would be used for BRT purposes. He asked for clarity.

Ms Nkabinde said that the DG had referred to the training within the taxi industry with an allocation of R6 million. What type of training would that be and would it be done nationally, province to province? She also asked for clarification on bursaries and how they could assist students to access those bursaries. The recruitment of key personnel and drivers – were they volunteers or were they going to be paid. How was that going to be done, so that they could alert people in their constituencies about this.

Ms Mpofu responded on under spending that the overall percentage was 1.3% under expenditure of the total budget.

On the issue of new passenger trains, 515 coaches were refurbished last year. They were engaging with Metrorail, and with Shosholoza Meyl now on board, they would have a new investment programme for the entire rail sector that would include the purchase of new trains. This budget only enabled refurbishing, but in terms of timing in the post 2010 period, they would be looking at new passenger trains. A number of things had to be done. They did not complete an exercise indicating the roll over for the new passenger rail investment framework. There was a debate going on around new technology. In the last couple of months Cabinet had also approved the Moloto Rail Corridor Project which would be done on standard gauge, and that basically linked it to Gautrain. Importantly, they were engaging in making that a standard across the country. Current rail operators were too scared of engaging in standard gauge because they looked at the financial implications and said it was too expensive, but government was moving towards a policy framework that would say: If you are doing new projects, do them on standard gauge. They were discussing this in the SADC and AU context where the general agreement was that new projects should be standard gauge. With Shosholoza Meyl coming on board and Autopax being an additional service to integrate those passenger rail services, they were going into a new phase of long-distance and commuter passenger rail services, including bus feeders. They were planning for it now and implementing it post 2010.

Ms Mpofu responded to the issue of luxury buses. DOT was aiming for the purchase of 1200 buses for 2010. The legacy component looked at the specifications for the 1200 buses. There were 210 of them earmarked for the first LOC category of people in the World Cup – the players, referees, officials, sponsors, the top VIP category. They would fast track that because LOC required that. The second category was the 450 semi-luxury buses required by Match Hospitality, the company appointed by FIFA to source accommodation and sell match tickets on behalf of FIFA. It required transport services for those people who had bought tickets and stayed in those lodges that they accredited. The third category was normal commuter transportation for inter city travel.

The legacy component of the agreement was that they would allocate those buses back to municipalities or provinces where they were required. DOT had a particular challenge in relation to airport-to-city travel in some areas but not in Cape Town because both the airport and the balance of the facilities were within its boundaries. The challenge in Ekhuruleni was that it was not defined as a host city, it lay outside of Johannesburg and the service was provided for Johannesburg. In Ethekweni with the airport being at La Merci there was a challenge as there were no current transport services to La Merci. The legacy component was factored into the specifications with post 2010 in mind. Thus part of the ordering and planning had firmly embedded in it the legacy redeployment of those assets to particular routes later. The provision of bus services for 2010 between city and airport would not be removed afterwards because they would serve another purpose, that of affordable public transport services to airports.

Ms Mpofu responded to the question about Autopax, saying they were not attempting to restructure Autopax and its current fleet for 2010. That was too big an exercise and could not be achieved before 2010. DOT was using the institutional capacity of Autopax to deal with 2010 and injecting the 1200 additional assets into Autopax so they could run the business of deployment and managing that service. It was just increasing their fleet over that period. DOT agreed with Transnet that in the interim they would be starting to do the restructuring plan. Autopax was going to go into the SRCC stable and would provide extension services to rail services where this did not exist. Others would be deployed to enhance their team in host cities that needed more. Others would be kept in the inter city services where required.

DOT was going to start to prioritise rural transport as beneficiaries of these particular buses. They believed the public transport strategy and action plan sufficiently covered urban areas and metros had sufficient to be able to do it themselves. DOT’s legacy programme must start to benefit the rural areas. There was a proposal by SAFA to see if they could get a section of these buses, one per SAFA region. They were negotiating at this point but it would not be for free.

Mr Cronin said obviously with 1200 buses, there was a need for at least 2400 drivers as part of the plan, and maintenance staff. He asked whether there was maintenance capacity in Autopax. Perhaps Ekhuruleni should have been declared a host city. The Airport to Johannesburg route cried out for extension because it went to Eastgate and stopped at the border of Ekhuruleni. It was a role that BRT might be able to play. The private sector complained that they were not being properly consulted. Understandably there was no way they could purchase 1200 buses, these were the extra that were required.

Ms Nkabinde noted that the Airports Company South Africa had addressed them the previous day.  Earlier on she spoke about communication between the department and its agencies. When supplying buses to the airport, would there be enough parking lots?

In reply to Mr Farrow asking if there was a document on logistical plans for how and where dispersal would take place, Mr Cronin said it was on its way.

Ms Mpofu stated that what was important about the bus plan was it formed a constituent part of the 2010 modal plan and was very detailed. The bus drivers would be three per shift and the travel routes had all been done. The important thing was they had an agreement with the Southern African Bus Operators’ Association (SABOA) that they were not buying, DOT were buying. SABOA had indicated that they might be able to make available some 250 buses of their own fleet but they could not guarantee this. DOT assumed they were not getting any free buses from the SABOA group. DOT agreed with them that what they would make available to DOT were their depots, repair centres, their entire infrastructure network. The detailed driver plan indicated the start of training was July 2008. Those that were trained by end of 2008 must go and get practice until the Confederation Cup. Due diligence of Autopax was done and it gave a sense of what was available. The issue they were dealing with now was the business plan and how to incorporate it.

Ms Mpofu revisited the Ekhuruleni story and the airport. At one stage this issue around airport transport had been raised. ACSA was responsible for developing their master plan, they had done so and it had been discussed, and one of the amendments to that master plan was a public transport facility at the airport as a standard practice. In that arrangement, when they had the stalemate between the two cities, it was ACSA who said that they liked this business of operating buses to and from airports, could DOT possibly extend it to them as a potential business opportunity. They could not agree to give that to ACSA because it was public transport and public transport must be the responsibility of the local authority. DOT said their mandate was not about being a bus operator, so it reverted to the municipalities. DOT hoped the issue that would resolve this was the soon to be established transport authority in Gauteng. That was the plan and it was not going to be a Johannesburg Transport Authority, it’s a Gauteng-wide transport authority.

The Ekhuruleni issue was not about willingness, it was just an issue about whether they had steered themselves to be a host city; they were identified as a co-hosting city but this was never followed up and they themselves had not shown a commitment to that. DOT thought they could solve that, the Transport Authority could be the solution in not cutting the functional area. The same problem existed between Johannesburg and Tshwane.

DOT was absolutely certain that the manufacturing capacity was on track. DOT would be able to come back to the portfolio Committee with a comprehensive operational plan.

Mr Mokonyama clarified the issue of the bicycles and provided an understanding of the different numbers. DOT gave themselves an ambitious target of 500 000 per year because of the challenges that existed. There was currently a shortage of about 3 million bicycles for learners, but the reality was they could not gather enough resources. They revised the target to 60 000 but in the past they only had about R30 million so the target was then revised to 36 100. That was why the money was not spent but the money was committed and orders placed for the 36 100 bicycles at a cost of R30 million.

In reply to Mr Cronin asking what had happened to the Netherlands, Mr Mokonyama said that they still cooperated with the Netherlands, and they had been here recently. The initial plan with them had been to buy bicycles and containers and deploy them in rural areas. These were neglected by the provinces and those workshops were not sustained. That was why they were investigating the possibility of manufacturing them locally, providing after-sales service and maintenance workshops.

Mr Cronin agreed that had many job creation possibilities.

Mr Mokonyama said the Holland model collapsed because it could not be sustained by provinces and it could not have remained a pilot project forever. National had carried it for two years but it could not be sustained. There were still containers out there but there was no management and no repairs.

Ms Thomson commented that that was just money down the drain.

Mr Mokonyama said the new approach was to reuse the same containers.

Mr Cronin said that what they were not hearing was the shift to local manufacture itself.

Mr Mokonyama said that the bicycles would be a grant but users will have to maintain them. Shop owners would repair at cost to the users. That minimum cost would sustain the continued usage of the shop itself.

Mr Cronin thought the original idea was that province would administer this.

Mr Mokonyama agreed that provinces were supposed to administer, fund and sustain the containers and pay the managers because it was supposed to be a free service to the users but unfortunately province did not have sufficient funds to sustain that.

Mr Cronin thought what was perfect in the model was the free grant and user’s own maintenance.

Ms Nkabinde referred again to under expenditure and suggested that in future for any programme or project, they need to have money, plans and capacity. The bicycle project was a good example of needing to check if they had capacity in their business plans. Before giving them money, one had to check if they were ready.

Mr Mokonyama said that this time DOT would itself be buying.

Ms Mpofu answered the question about taxi recapitalisation underspending. She said that what was meant was DOT had realised that it was running out of money for scrapping. Since they thought they were short of money, they asked the scrapping agency to slow down and they slowed down too much. Thus DOT remained with the R7 million under spent. There were now new arrangements.

Mr Pretorius added that the DG’s calculations on underspending were correct. The total DOT budget had been R16 544 billion of which R216 million was underspent, being 1.3% of the total amount. On taxi scrapping, in the previous financial year DOT under spent R252,5 million on taxis which was rolled over and obtained a further special roll over to bring the budget to R570 million. When they realised they were going to fall short they shifted another R8 million to taxi scrapping which was paid over, but the scrapping agencies were still sitting with the R7,5 million as advance payment to them. They had to be paid in advance so that they could use the money to scrap taxis.

Mr O Mogale (ANC) had visited an area where the children had to walk very far to school and the department had responded by issuing bicycles.

Mr Cronin said that was a wonderful example, the Committee would being doing oversight in that area later that week and they would see if the bicycles were still there.

Ms Nkabinde asked for clarification on transport plans precisely for those with disabilities.

Ms Mpofu consolidated this question with the bursaries question. Her colleague explained that bursaries were internal staff, but they did offer external ones as well. They had a mechanism called the National Centre for Development, a partnership with nine institutions of higher learning in South Africa and gave the bursars grant funding in the faculties of engineering. Part of the difficulty experienced was to attract black students with maths and science. They started marketing in a girls school specialising in maths and science and there had been an increase. There were 142 people in the bridging course in the last financial year. He would provide the contact details of those faculties that marketed those programmes. There was also a body called TRACK that coordinated on behalf of universities.

On rural transport development the department had engaged in a number of initiatives and at the same time had revived a number of branch lines such as the line from Douglas to Delmas

On plans encompassing people with disabilities, Ms Mpofu referred to the fact that NDOT had guidelines in the form of a mobility and access framework, which they developed with Class A disability issues, like grips on the rails, and ease of access to the platforms. They translated those to minimum requirements for ITPs so it was the municipalities that had to indicate where the disability routes should be and whether it should be a dial-a-ride service or a full service or a percentage of a certain fleet in terms of operation. They definitely insisted on addressing disabilities minimum requirements but it was at local level where they could actually plan for this type of service.
Ms Mpofu suggested they return to report on driver’s licence corruption. There were also enhancements to the system which introduced computerised learner’s licences which should eliminate corruption. You sit in front of a computer, answer the questions, you are either right or wrong, and the licence is issued with no other human involved.

In the road safety environment, driver competence was identified as a particular weakness. Road worthiness and road conditions, the soberness of the driver, were dealt with, but not driver ability. They would be rolling out a new campaign around driver effectiveness.

Mr Cronin was concerned about the DG’s point on increased economic efficiencies in the light of the uncertain oil price situation. Things were going to get more costly in the transport line, how did one mitigate that? If one were talking about increasing economic efficiency it was a huge challenge but also a huge opportunity for this strategic plan: the salient centrality of public transport, of rural infrastructure, freight infrastructure and increasing efficiency such as putting serious money into bus subsidies as a way of saving money for the economy. Mr Cronin made the point that in the transport fraternity, one needed to be much more proactive and even aggressive about how important understanding logistics and how central public transport was because as a country, South Africa was extremely vulnerable. IBSA and all those things became so much more important and therefore there must be more central thinking transport.

Ms Mpofu agreed that in the past they had been in a very favourable global position. They needed to look at it in a different way. There was the energy crisis and the issues around climate change that were more pressing now than when devised initially. There was the food crisis. DOT was doing the exercise but even as they did it there were new conditions that kept emerging. The important point was SA needed an efficient, low cost, transport system in order for the economy to function properly. The other matter not touched on was tariff regulations, which was an important integral part of that exercise. She asked to return and discuss that issue. They were required to do a review of it and establish the elements that could be manipulated in those different economic indicators.

Mr Cronin thanked the DG and the department.

The meeting was adjourned.


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