Road Accident Fund Amendment Bill [BX-2011] update; Airport Company of SA and Civil Aviation Authority: Strategic Plans & budgets 2008-11

Meeting report

Road Accident Fund Amendment Bill: Update by Department of Transport (DOT)
The Chairperson asked that the Department of Transport should update the Committee on the status of the Road Accident Fund Amendment Bill.

Dr M Koorts, Deputy Director General: Public Entity Oversight and Border Operations and Control, Department of Transport, noted that in a previous session the Department had discussed the regulations and the consultation process.  The consultation process had now been finalised and was now at a point where the approval of the Minister was necessary for the new regulations and the new Act to be processed. However, the document could be tabled until the judgment in the Marius Kruger case was finalised. Following a second legal opinion the Road Accident Fund might consider taking the risk and proceeding with the finalisation of the Bill and regulations prior to the outcome in that case.

Advocate De Waal, Legal Advisor to Department of Transport, explained that the Marius Kruger case was brought on the grounds that the incorrect provisions of the statute had been put into operation. A challenge to the legislation was brought in the Constitutional Court in February but the outcome was not necessarily a hindrance to the Bill being implemented. The consultation process could be explained.

The Chairperson asked that the procedural issues be concentrated upon at the present time and he asked what the risks would be and what would be gained by taking these risks.

Adv De Waal responded that because the wrong provisions were put into force Parliament would need to go back and correct these procedural errors.  The risk would be that an interdict would be brought, but this would not necessarily affect the commencement of the Bill.

The Chairperson asked what the time delay was likely to be.

Adv De Waal replied that there was some threat that the personal injury lawyers and others in the legal profession might seek an interdict preventing the commencement of the regulations.  Once an interdict application had been launched, there was a possibility that the matter could be delayed for around a year.

The Chairperson then stated that even if there was a risk of an interdict this in itself would not cause delay. He asked when the Constitutional Court would be likely to rule on the matter.

Adv De Waal stated that it would be between four and five months.

Mr S Farrow (DA) stated that he understood the delays but that the amendments also included uncontested matters. He asked if Parliament could not go back and separate out those aspects that were not contested and could be put into operation, and cited the capping and foreign currency claims as items of concern. He said that the status of this Bill made the board irrelevant at this time, and he asked if the board was legally active.

The Chairperson stated that the report about the consultation process for serious injury had taken a long time and had involved two departments and stakeholders. It had been finalised, but was likely to be challenged. The procedural matter in the Marius Kruger matter was another issue.
The question was whether there was a risk of being in contempt of Court if the matter were to be brought back to Parliament. The question was if the Committee could move ahead and the conclusion was that it could do so.

Adv De Waal asked if the Committee wanted to implement the cap for foreign claims at the present time.

The Chairperson replied that this was the case.

Adv De Waal replied that Section 17 was replaced with a new section, which was very long, and if it were to be split up into different portions it would need to be brought back to parliament for that.  There would be some difficulty then in how the new Amendment Bill would be handled.

Ms N Khunou (ANC) stated that it had been a long time since the recommendations. The status of the Bill needed to be changed and there were problems with the Road Accident Fund (RAF), which had been waiting for two years for the Serious Injuries Report to be finalised.

The Chairperson asked how the process could be moved forward as swiftly as possible. If the Section 17 portion were to be changed this would involve its own procedures and delays and it would become a new Amendment Bill.  The challenge lay around the definition of ‘serious injury’.  He asked if that would undermine the implementation of the entire Bill or just aspects of it.

Adv De Waal replied that there were many consultation requirements that had not been complied with until February or March of this year.  From a legal standpoint the Department was worried about a pre-emptive application for interdict shortly before or after the regulations are implemented. The delay, were that to happen, would be several months to a year. The consultation requirements needed to be met in the process. The major challenges would concern the common law claim and the cap on general damages for serious injury.  This would not prevent the system from coming into force.  Further concern had been raised on the training of doctors on the new assessment method, and training needed to be done.

Dr Koorts stated that there was a concern by the Department whether the RAF were able to implement and effectively operate the procedures but that in the consultation process they had said that it was possible that by 1 July 2008 they would be able to implement the process.

Mr Farrow asked about the status and appointment of the Board and who held accountability for this.

Dr Koorts replied that that was the reason that the RAF attended the Constitutional Court hearings and requested a finding on that matter.  Procedurally the process was flawed as a legitimate board was not chosen, and the ratification of the board needed to be done first.  The Minister’s approval was given for the board and the Marius Kruger case would not have bearing on this. There must be full procedural correctness when approaching the Minister. The Department wished the Minister to implement the legislation. 

South African Civil Aviation Authority (SACAA): Strategic Plan and Budget 2008-11
Mr Colin Jordaan, CEO, South African Civil Aviation Authority, presented the strategic plan and budget, focusing on issues that were brought up by the Portfolio Committee in the previous budget hearing. It was reported that a new CEO was appointed, who was more technically qualified, and the roles of the CEO and Commissioners would now be consolidated in the draft of the current legislation.

Details of the plan were given (see attached document) and it was reported that South Africa had been performing better as compared to the international average performance, and had received a Category 1 status from the Federal Aviation Administration (FAA) findings.  The International Civil Aviation Authority audit had shown that South Africa had been performing better compared to the average performance of other countries.

Mr Jordaan reported that the SACAA experienced challenges in three major areas of International Regulatory Compliance, including findings by the International Civil Aviation Organisation (ICAO) and the Federal Aviation Administration (FAA), Industry oversight and in the finalisation and implementation of outstanding regulations as well as revamping of the promulgation process. She expanded upon each of these, noting that there had been speedy resolution of all FAA and ICAO audit findings, implementation of safety management systems and separation of the Air Safety Investigation Unit from the CAA.

A Ministerial Task Team and CAA Project team had been formed and was ensuring speedy resolution of audit findings. There would be legislative amendments to address certain issues.

Oversight issues included the roles and functions of the Commissioner and CEO of SACAA, oversight of the Non Type Certified Aircraft (NTCA) sector, and adequate oversight of numerous South African operators and organisations in foreign countries. Statistics were tabled to indicate the results of oversight, showing a general decrease in accidents in 2007/8, except for Gauteng. The interventions were fully set out in the presentation. Further challenges included the industry’s readiness for implementation of the Global Navigation Satellite System (GNSS), improving industry surveillance, lowering the accident rate and applying appropriate enforcement and training. There were plans to finalise all outstanding regulations and technical standards.

An overview of the organisation and its key drivers was given in the form of a table. The financial statements were presented, showing revenue of R201 million as against expenses of R210 million. It was explained that the 2007/08 costs included a much higher staff complement at a technical level. There was a global shortage of pilot and technical skills with high demand. Other operational costs had increased as a result of anticipated enforcement action.

SACAA was currently undertaking feasibility studies to procure a site that may be developed soon after 2010, before the current lease expired.

Discussion
Mr B Mashile (ANC) asked why an aircraft could not fly to Durban in the wet weather.
 
Mr Jordaan replied that it could possibly have been an Interlink flight on a non-scheduled airline.  It would have been dangerous for them to fly in the evening, as there was no radar in those aircraft.

Mr Mashile asked whether SACAA were informed about any non-compliance.

Mr Jordaan replied that there was non-compliance with regard to infrastructure. The international compliance codes were different from those in South Africa.

Ms Khunou asked if the staff were given competitive salaries.

Mr Jordaan replied that the Authority had to increase the salaries of the pilots, as this was a specialised skill.

Ms Khunou asked how customer satisfaction was being dealt with.

Mr Jordaan replied that all queries with regard to customer relations were dealt with via a private company, AFCON.  There was now a website being developed to improve customer service within the airline industry, and help to reduce delivery time.

Ms Khunou asked if the same aircraft were inspected all the time, or if all the aircraft were rotationally inspected.

Mr Jordaan replied that there was a master surveillance plan in place, and month by month all the major airlines were inspected.  All the ten major airlines were inspected every year and there was training for inspectors being done.  Twenty two inspectors were deployed for two weeks to conduct inspections and this had proved to be effective. Reports back showed that a good standard was maintained.

Mr Jordaan stated, however, that the Authority was unhappy about the number of Nationwide aircraft that were back in service and stated that this company’s original maintenance plan for their aircraft was very bad.

Ms Khunou asked about the FAA, and if any others were found non-compliant, and what the reason was for that.

Mr Jordaan replied that Air Traffic and Navigation Services (ATNS) regulated all airport operators and the licensing of all Air traffic controllers.

Mr Farrow congratulated the team on a well-handled presentation.

The Chairperson asked why there were now more planes grounded more frequently and what the status was on this issue.

Mr Jordaan replied that more planes were grounded because of aircraft maintenance. Parts for the planes needed to be ordered from Europe, and no extra stock was carried as the stock holding would be too high.

The Chairperson asked why the role of the commissioner and CEO were combined and what the difference between them was.

Mr Duke Moorosi, Chairperson, SACAA, replied that in terms of the Act the CEO would report to the board and the Board would report to the Minister.  Internationally these roles were changing and the aviation industry had now combined both those roles.

Mr Farrow asked for clarity on the role of the Commissioner and the CEO.

Mr Moorosi replied that the Commissioner’s role was to decide on a course of action and to implement it. The role of the CEO would be to manage the operations and report to the Board of Directors.

The Chairperson asked why there were more staff shortages.

Mr Jordaan replied that the recruitment of engineers was very good, but that the qualifications for pilots were very specific.  There was now a retention policy in place that aimed to keep the more skilled pilots (the upper third of the market) employed in South Africa.

Airports Company of South Africa (ACSA): Strategic Plan and Budget 2008-11

Ms Monhla Hlahla, CEO, Airports Company South Africa, indicated the achievements made by ACSA, outlining the improvement on structural issues, which included ramp handling, the sorting out of old agreements binding airports in the past, and delivery on the largest capital expansion project.  The Company borrowings had grown from 7% to 60% and the total revenue had also increased.

The strategy for ACSA was based around efficiency and customer focus.  The apron space at the airports would now be made available for the parking of aircraft.

Ramp handling remained a challenge since ACSA was not directly involved in that service. ACSA was to issue a third license where a strict provisional clause would be put into place with regard to performance, if this was inadequate then ACSA could terminate the contract.

Full details of the strategic plan and budget and financial spending, in the form of tables, were contained in the attached presentation document, which included comparisons to previous years.

Discussion
Mr Mashile asked about the airplane that had recently become stuck in the sand and asked if there was a response from the engineering division of the airport with regard to that particular airplane.

Mr John Neville, Acting Group Executive: Aviation Services, ACSA, replied that the problem had been pilot technical error, as the pilot had tried to turn the plane while going too fast and this caused the airplane to go into the sand.

Mr Mashile asked about the negative impact that baggage lost on the Nelspruit and Johannesburg routes would have on the industry.

Ms Hlahla replied that baggage management was necessary and that new contracts were signed. However, the transition between the new and the old contracts had not gone so smoothly.  The reconciliation of the bags needed to be done by the airline, and ACSA could only advise how this should be done.

Mr Mashile asked how the contracts would be issued.

Ms Khunou asked about the theft and handling of baggage and if anything had been done in that regard.

Mr Bongani Maseko, Group Executive: Operations, ACSA, explained that two new licenses were issued with regard to baggage control, and a third was issued in June.  ACSA had strict guidelines how those companies should be managing the control of baggage and if these guidelines were not met the contracts could then be canceled.  The issue was being monitored at present.  In Europe the performances of the airlines with regard to baggage control and other related issues were posted to a public website and this was also being proposed for the South African airlines so that the clients could monitor their performance.

Ms Hlahla explained that there was also a large amount of pilferage happening from other destinations before the baggage reached South Africa.  This remained a challenge in the industry.  However, when a client checked in their baggage late, the chances of the baggage being directed to the correct flight were reduced, as it still had to go through a few procedures before being placed on the flight.

Mr M Moss (ANC) explained that the service to disabled passengers had deteriorated in Gauteng and that there were considerable changeover problems in the provision of disabled facilities. This service should be improved.

Mr Maseko replied that a Service Level Agreement was signed on the 1 March 2008 and this included the handling side of the baggage.  One company had fired 68 people because of impropriety and the pilferage in SAA had decreased by 50%.  In the hand over, there was a shortage of passenger assistance units (PAUs) for the disabled, and SAA together with Swissport had not placed an order.  The lead-time for the PAUs was about three to four months.  A meeting was conducted with the disabled community in March.  There were equipment deficiencies because of the historical contracts and only six airlines had ordered the equipment by June 2007.

Ms Hlahla stated that ACSA leased the equipment to SAA as it had placed a last minute order for the PAUs, so that the passengers would not suffer.

Mr Farrow asked where the responsibility would fall with regard to having the correct equipment in place.

Ms Hlahla replied that in the transition phase the biggest challenge had been with SAA, as they had wanted to self-handle the equipment issue.

Mr Farrow asked if the equipment shortage was the responsibility of ACSA or of SAA.

Ms Hlahla stated that the responsibility for the license conditions stood with the airline however ACSA tried to regulate that as much as possible.

Mr Farrow asked if there were any norms and standards laid down for equipment.

Mr Maseko replied that the norms and standards were laid down by ACSA, and the airline and Ramp Company would take responsibility for the provision of the equipment.  The airlines did not order enough of the PAUs in time, as the lead time was longer than in Europe, and they did not want to have extra stock on the balance sheet.

Mr Moss stated that it was very difficult for the disabled to travel by air, as they were not considered.  There had been many bad experiences.

The Chairperson agreed that the PAU issue was not satisfactory.  The core problems seemed to be in the transition from one company service provider to another.  SAA and its relationship to the service providers seemed to pose a problem and this was more critical as it was a State Owned Enterprise. He said that a report should be compiled with regard to the services provided and the co-ordination in the State Owned Enterprises needed to improve.  This could be raised in a number of ways.

Mr Moorosi reiterated that if a passenger checked his luggage in at a late stage there would be a high risk of it not being put on the correct flight. A suggestion was made to publicise the statistics of all the airlines on a website so that the passengers would know which airlines would be reliable. Under the new legislation, if a bag was opened a criminal charge could be laid against an employee by ACSA, not only by the client, who, in many cases, was now in a different country and could not return to press the charges. This was a very strong deterrent to tampering.

Ms Khunou asked about the number of airport accidents that had been reported and if there was capacity to be able to handle those that occurred.

Ms Khunou asked if there was enough apron space on the runways for the additional airplanes to park.

Ms Hlahla replied that there was enough apron space in the airports, but that there was currently a global shortage of technicians.  There was also currently a challenge in the construction sector and management support structures were needed so that the work could continue.

Mr Neville replied that more space was needed at La Mercy airport, as well as in Durban.  The charter flights would need to be diverted to make more apron space available.

Ms Hlahla replied that in most airports the airdromes had not been used and the space available in every airport would vary in size, and could be used in the expansion of the airports.

Ms Khunou asked about the transport to and from the airports and whether that infrastructure was going to improve.

Ms Hlahla replied that public transport to and from airports was a challenge and that the transport needed to be safe and secure as well as accessible.  The initiatives now being put in place needed to extend beyond 2010 and the infrastructure needed to be leveraged on this point.

The Chairperson interjected that in most cities the airports were city based and that the cities needed to coordinate better planning with regard to land transport. There seemed to be a lack of coordination between the provincial government with the cities concerned and all role-players needed to negotiate a holistic plan in this regard.

Ms Hlahla replied that the ACSA was beginning the process of engagement with all role-players in the province, as well as involving the opinion of experts.

The Chairperson stated that there would be an impact on OR Tambo International Airport and its people because of Isikula and its partnership with them.  There was no clear public transport plan and any plans made should be linked together.  The danger would be if there was no communication between the different spheres of transport.

Ms Khunou asked about the Broad Based Black Economic Empowerment (BBBEE) that was taking place in ACSA.

Ms Hlahla replied that there was a challenge in visibility of the BBBEE empowered shareholders, but that all the partners that managed the businesses were being engaged with and expanded.  The tenders were all considered on a BBBEE basis.

Mr Farrow asked if there was a possibility to provide partnerships and integration in transport.  He also asked if the regulator would increase the tariffs and if there was sustainability in the integration of all the transport methods in view of the needs of 2010.

Ms Hlahla replied that the market needed to be used for maximum utilisation of funds so that the infrastructure could be expanded. The possibility may occur that shareholders funds would need to be used in the future for this purpose

Mr Farrow asked about the integration of the slice policy with regard to passengers.

Mr Farrow asked if the metro was involved in investing capital for the OR Tambo airport’s extra runway.

Ms Hlahla replied that there would be an OR Tambo masterplan put in place for total utilisation of the runway space and to make the airport more efficient. This decision was driven by the need for growth. She added that the financing structure needed to be explored, and there might be a possibility the shareholders in the future would have to shoulder the balance in order for the company to grow.  The funds would need to be ring fenced so that they would be used in the correct areas. The testing of the new infrastructure would happen between December 2009 and March 2010.

Mr Neville interjected that the terminal in Johannesburg was in the last phase and La Mercy airport was at various phases of its upgrade. All these would all be finished by December 2009.

The Chairperson congratulated ACSA for not passing the buck with regard to the disabled passengers and for recognising and taking steps to rectify the situation.
 
The Chairperson asked if there was more co-ordination on the floor of the airports and if the staff knew who was coordinating the different sections of the floor.

Ms Hlahla replied that the visibility of staff members on the floor would be increased and that the staff members would also be informed of the ACSA manager in each area of the floor.

The Chairperson asked if there was a plan in place to increase the signage visibility, especially before March of 2010, saying that this must include La Mercy airport and Cape Town station.  The signage was important and there was a need to plan accordingly.

Ms Hlahla replied that an overhaul of the signage was under review and passengers using the areas would assist in the evaluation and implementation of the signage and easier flow of foot traffic in all the terminals.

The Chairperson asked about the implementation of electronic gates in the airports, and stated that this had not yet changed.

Ms Khunou asked about the condition of the buses, remuneration and the length of hours of the bus drivers, and if better conditions could be found for them.

Mr Maseko replied that even though the buses to and from the aircraft may look old they were still compliant with all standards.

The meeting was adjourned.