Legal Succession to South African Transport Services Amendment Bill :deliberations & National Railway Safety Regulator Amendment Bill: Departmental briefing

NCOP Public Services

01 September 2008
Chairperson: Mr R J Tau (ANC, Northern Cape)
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Meeting Summary

The Department of Transport provided clarity and more comprehensive answers to questions raised on the Legal Succession to the South African Transport Services Amendment Bill. Clarification was given on Transnet’s move to a  freight only focus. The Department pointed out that this was aimed at creating a more efficient land based rail transport system would be created, allowing Transnet to focus on its core function whereas the Rail Commuter Corporation’s functions would henceforth fall under the Department. The Committee had been concerned about the deletion of the references to the State and Transnet’s relationship, but it was explained that the section would essentially fall away as a result of the shift in functions, and that the interests of the public were upheld in the revised Section 23, set out in Clause 5 of the Bill. The Committee discussed the Public Finance Management Act and the Corporation’s role. The Department emphasised the Schedule 3 status of the South African Rail Commuter Corporation and its dependence on the State for funding, and said that this Bill provided benefits to the public. The current deficit between the amounts received from fares and the running costs was being catered for in the Medium Term Expenditure Framework and assurances were provided that the Department would not raise fares to the detriment of the public, that it was fully aware that the less wealthy sector were using the rail, and that privatisation would not occur because of the State ownership of the rail system. The role of Autopax and its dual service provision system of Translux and City-to-City long distance bus services was explained. The Department further gave details as to the transfer of employees from Transnet, and assured the Committee that benefits and pensions would be retained, that there was not an intention to lay off staff, and that a restructuring Committee, with membership of unions and management, was in existence to effect a proper and efficient transfer.

The Department then briefed the Committee on the National Railway Safety Regulator Amendment Bill, outlining the responsibilities of the Regulator as overseeing the safety of railway operations and the promotion of rail as an efficient mode of transport. The clauses of the Bill were explained in detail. The need for provincial involvement was emphasised and there was a commitment from the Regulator to explore consultation in this regard. The functions of security and safety were clarified to Members in an attempt to differentiate between safety and the railway police functions. Members asked further questions seeking clarity on the definitions, the differences between risks and threats, the definitions of “incident” and “occurrence” and “accident”, and the role of the Regulator. The Committee further questioned governance and capacity of the Regulator, the role of the CEO and the Minister, the types of permits, why a non-refundable fee was being charged for applications, and whether the Bill covered mine railways under the ground. Members questioned the tagging of the Bill as a Section 76 Bill and wondered how the functions of the Regulator would impact upon the provinces.

Meeting report

Legal Succession to the South African Transport Services Amendment Bill [B43B – 2008](the Bill): Department of Transport (DoT) further briefing, and deliberations
The Chairperson stated that the previous meeting held between the Department and the Committee was inconclusive on certain issues and therefore the Department of Transport (DoT) made a commitment to provide clarity on these issues.

Mr Kubin Pillay, Deputy Director-General: Department of Transport, stated that he would respond to issues raised in the previous meeting of 27August 2008. These issues included Transnet’s focus on freight only; the deletion of sections of the Act, and how to ensure that the public interest would still be served; and the question of whether DoT and the South African Rail Commuter Corporation (SARCC) could guarantee that when services were transferred, travel would remain affordable for the masses.

Mr Pillay said, on the last question, that guarantees were not assured but he would start off with why there was a need to amend this Act.

Mr Pillay explained that details had been given previously on the core function of Transnet, its role in the economy, and the turnaround strategy. Transnet was moving from a diversified to a focused company aimed at ensuring efficiency in the freight system, and was aiming to leave non-core land based passenger transport to the DoT. Mr Pillay added that this was the reason why the amendment to this Bill was necessary, so that Transnet services were not considered lost or discontinued. The Legal Succession Act did not currently allow the Minister of Transport to operate passenger rail services, and the amendment was therefore necessary to give effect to the Transnet decision. 

With regard to upholding the public interest and the proposed deletion of Section 15 of the Act, he explained that with the move of the functions of the South African Rail Commuter Corporation, (SARCC) this Section would effectively become obsolete. There would not be a relationship between the State and Transnet (the company) because the obligation to provide passenger rail services by Transnet would have fallen away. The issue of the public interest, and the relationship between the State and SARCC, was dealt with sufficiently in the new Section 23, as outlined in Clause 5 of the Bill.

Mr Pillay stated that in the planning of rail functions, the DoT took a position that rail planning should be regionally driven. The current rail plan was developed through structures called regional steering committees, which were made up of Metro’s, provinces, the SARCC and the Department.

Mr Pillay said that there was close co-operation between the rail commuter services in provinces to ensure provincial involvement in rail planning. When Shosholoza Meyl came on board the provinces would be involved in the planning of services, as their current involvement was focused on commuter services.

With regard to the role of the Public Finance Management Act (PFMA) and the Corporation, Mr Pillay emphasised that SARCC was a Schedule 3 company, funded from the fiscus, so the revenues of the SARCC in terms of fares were not sufficient. There was a subsidy from the State in the form of a deficit subsidy. Fares would therefore be kept low, because as the deficit grew, the subsidy grew concurrently.  Borrowing could only be done with the full knowledge and approval of the National Treasury.

Mr M Mzizi (IFP, Gauteng) asked how borrowing was going to take place, and if it would be contained in the Act itself or in the regulations.

Mr Pillay said that currently the SARCC had borrowing powers because it was a State Owned Entity, and the government was a 100% shareholder. He reiterated that it was a Schedule 3 entity and therefore reliant on state funding. He said that borrowing was contained in the Act and not in the regulations, and was linked to the PFMA in terms of requirements and regulations.

Mr F Adams (ANC, Western Cape) said that the answers from the DoT had not indicated clearly how the public would benefit from this piece of legislation.

Mr Pillay said that the core function of the SARCC was passenger rail. National Treasury had made a guarantee, during the Medium Term Expenditure Framework (MTEF) to cover the shortfall of  R500 million for the current year. Transnet had refurbished locomotives to the value of R200 million and was converting a certain portion of their sleeper coaches to sitter coaches, to accommodate the maximum number of passengers over shorter distances.  From a strategic perspective a number of labourers used Shosholoza Meyl, so there was no incentive to raise fare prices.

The Chairperson asked if privatisation was mentioned in the earlier meeting.

Mr Adams said that it was not mentioned. He noted the experiences of British Rail and Kenya where the public did not benefit from the privatisation of the rail system.

The Chairperson asked for clarity on the issue of privatisation, because in this process the private sector had only one motive, that being profiteering.

Mr Pillay said that privatisation was not an issue for the DoT, because SARCC was a 100% State-Owned entity. Transnet was a Schedule 2 entity, and therefore did not rely on the fiscus. Mr Pillay reiterated that passenger rail services were fully State-owned and DoT would not consider privatisation. He noted that the British system had separated assets from operations, and the DoT was not intending to follow that route.

The Chairperson asked how City-to-City buses were going to be incorporated, and if this matter was finalised. 

Mr Pillay said that Autopax was part of the Transnet stable, and it was comprised of two types of services. These were Translux and City-to-City, which formed a part the network providing long distance bus services. The intention to take over Autopax was linked to the intention to locate part of it in the rail commuter corporation, to use it as a lever to address the provision of expertise across cities. Mr Pillay added that this would facilitate the implementation of the rural transport strategy. Currently, markets did not provide services in the deep rural areas, as they did not generate enough revenues. The design of the public transport subsidy had a strong focus on rail, and this was the role Autopax would play, to provide a support function to Shosholoza Meyl and  to develop transport from rail to land.

The Chairperson asked if monorail was to be brought back and legalised. He asked further how the element of control would be integrated.

Mr Pillay said that the intention of the Bill was not to deal with monorail.  The current design of monorail was being duplicated by the city of Johannesburg and paralleled services from Soweto to the Central Business District, and Park Station. A decision was taken that the function of rail had not yet been devolved out of being a function of the National Minister. The Department has decided that if provinces had proposals to get involved in rail they would have to work through the National DoT and the SARCC, and have feasibility studies done.

The Chairperson said that he appreciated the intentions behind Autopax. He asked to what extent it would become a part of the integrated public transport system and complement the taxi industry.

Mr Pillay said that there was no intention to create conflict between Autopax and the taxi industry, but rather to have supplementary services where these were lacking at present. Autopax was subject to the National Land Transport transition, and in that process there was leeway for objection by taxi operators.  The Department was looking at enhancing taxi operator services, as they transported more than 60% of people daily and this should be reflected in their market share.

Rev P Moatshe (ANC) asked if this shifting of services would affect employees, and what precautions had been taken to protect the interest of employees.

Mr Pillay said that the transfer of employees would be dealt with in Section 197 of the Labour Relations Act. He said that this meant that on the transfer of the going concern, employees would retain all existing benefits and pension. The first phase of consolidation was under way, with the transfer of Metrorail to the corporation, and there would be no job losses.  Mr Pillay noted that the current period was one of harmonization, and that during this period everything would remain constant. Negotiations with unions were taking place. Mr Pillay said that Transnet had a restructuring committee, which was comprised of employer organisations, Transnet management and unions to sort out all matters regarding transfers.

The Chairperson noted that Mr Pillay was on record as saying that no workers would be laid off, as there would be constructive engagement in terms of the current period of  harmonisation.

The Chairperson read the Motion of Desirability on the Legal Succession to the South African Transport Services Amendment Bill [B43B – 2008]. This was accepted.

The Chairperson then put the adoption of the Bill to the Members, all clauses having been considered and explained. Members voted to adopt the Bill.

Members further accepted the Report of the Select Committee on the Bill, after this had been read out by the Chairperson.

National Railway Safety Regulator Amendment Bill [B32B – 2008]: Department of Transport (DoT) briefing.
Dr Maria Koorts, Deputy Director-General, Department of Transport, first clarified that this was a Section 76 Bill. It sought to amend the National Railway Safety Regulator Act, which basically established this entity.  The responsibilities of the Regulator were outlined as overseeing the safety of railway operations, and the promotion of rail as an efficient mode of transport.

Dr Koorts turned to the Objects of the Bill. She noted that the ambit of a threat to safety would include behaviour. The Regulator could only act if there was a threat regarding particular operational activities, or structural situations. There was no defined behaviour that could lead to safety risks, so this would include particular risks to the Railway Safety Regulator (RSR) whenever such behaviour was displayed. 

Dr Koorts explained the types of permits in operation, in relation to which standards may be imposed. At present, there was one safety permit, but there were different types of operators and different kinds of permits that needed to be regulated. This made it necessary to make distinctions and to link fees accordingly.

Dr Koorts said that the specific reference to SABS 0228 had been removed to take care of possible future changes to the SABS standards.

Amendments to definitions were included in Clause 1. These included the substitution of a new definition of ‘network operator’. The new definition of “station” would include reference to places where passengers changed trains, or left the railway, and where modal exchange and commercial premises were located. This amendment would allow for crowd management and control. Clarity was provided on the distinction between a ‘train operator’ and a ‘network operator’, as the responsibility to control the movement of rolling stock was the responsibility of the ‘network operator’ and had been excluded from the definition of a ‘train operator’.

Dr Koorts stated that Clause 5 proposed to amend Section 7 of the principal Act. This would impose a duty on the Regulator to oversee safety in respect of transportation of dangerous goods. The existing Act necessitated  that  the RSR have a database to collect information. Ms Koorts said this was not the same as overseeing, and the RSR would like to emphasise the oversight function. 

The amendments contained in Clause 9 provided for additional fees for training and advice, and donor funding. These fees were not previously provided for. 

Dr Koorts said that Clause 12 amended Section 24 of the principal Act. The conditions for safety permits were now to be not only related to different categories, like train operators or network operators, but were related to the type of permit that would be issued.

Clause 14 proposed to amend Section 29, which could empower the Minister to make regulations, thereby making regulations more enforceable.

Dr Koorts said that the amendments in Clause 17 aimed to add specific powers for safety inspectors, given that they were considered the core safety net of the RSR.

The wording of all the new amendments was set out in detail in the attached document.

Discussion
Mr A Watson (DA, Mpumalanga) said that the presentation clearly outlined how the Bill was to be amended. He asked for an explanation about what the National Railway Safety Regulator was, where it was located, if it was part of the Department, and how it would impact on the provinces.
 
Dr Koorts outlined what the functions of this entity were, and stated that it was a Section 3(a) entity. It was not an entity within the Department of Transport (DoT), but it was a legal entity reporting, through its board, to the Minister of Transport. It bore the responsibility of ensuring safety within the rail sector.

Dr Koorts said that within the provinces there was a need to assess whether to establish railway networks or particular train operators. Whichever direction was chosen would necessitate that certain safety standards be met. Thereafter the safety permits required would have to be ascertained. The RSR would not necessarily engage with the public, but with network operators,  train operators, or associations where operators were represented.

Mr Mervyn Panzera, Safety Advisor: Railway Safety Regulator, said that because very few people had direct relationships with the Regulator, their presence in the provinces was limited to Johannesburg and  Cape Town. The future plans would hinge on funding and capacity for concentrated operations in provinces other than the two mentioned.

Mr Mzizi asked about the perceived similar functions of the Regulator and the railway police.

Dr Koorts said that the functions of the Regulator did not include policing of any issues other than safety standards, and the implementation of those safety conditions imposed by the Regulator.

Ms Kethabile Mabe, Legal Advisor, Railway Safety Regulator, said that the distinction was that the RSR was responsible for safety around railway operations, whilst the railway police were responsible for security issues. Security was located within another government department, and the Minister of Safety and Security.  Ms Mabe said that the RSR was established under an enabling Act that was managed by the Department of Transport to deal with safety matters that occurred within the railway environment, while promoting the use of rail.

Ms Mabe added that there was acknowledgement that in performing the necessary functions, the Railway Safety Regulator would of necessity need co-operation with other organs of the State, to ensure that there was not duplication or inconsistencies in the functioning of the Regulator. A Memorandum of Understanding had been entered into with the railway police, and they did attend forums to ensure that there was a harmonious working relationship that balanced safety and security.

Mr Mzizi asked what was meant by ‘dangerous goods’.

Mr Panzera said that the proposed amendment regarding dangerous goods stated that the same considerations would apply for all types of transportation for freight and passengers. The RSR was able to do an audit investigation and an inspection. Mr Panzera said that the proposal would also cater for instances involving dangerous goods, so that RSR would be given the capacity to attend to the process for the rail leg of a journey, and assess whether the goods were correctly loaded and packaged, as a failure to do this correctly could cause accidents. Currently the Act limited the situation to the railway section of the total transportation process, but when it came to dangerous goods there should be a wider application.

The same considerations for road and rail applied with dangerous goods, the difference merely lay in the volume being moved. The reference to the number of the standards had been changed. This was because previously only the definition of dangerous goods was being referred to in the Act. The definition had now been broadened. The Minister would announce any changes or new standards to operators.

Mr Mzizi questioned the duties of the CEO in regard to the annual reports of the Regulator, and also asked about the Minister’s role.

Dr Koorts said that with regard to governance, the CEO was not a different or additional structure to that of the Board. The CEO was basically accountable for compliance with the PFMA, and was regarded as the accounting officer. The Minister was the Executive authority over that particular entity.

Dr Koorts stated that annual reporting referred to the usual way the Railway Safety Regulator tabled their annual report to Parliament, and to the Minister. This report should be submitted to Treasury within five months. The RSR Act had not been in line with that requirement, as it had contained a three month submission period. This was why it was now being amended to five months, to bring it in line with the PFMA and Treasury requirements for all entities.

Mr Mzizi asked for clarity regarding the inclusion of the pneumatic tyres and other track systems in clause 2. . 

Mr Panzera explained that currently the Act referred to the gauge sizes between rails. Currently trains ran on 3 foot 6 inch gauges. The amendment would now allow the Minister to declare, as a railway, something that used less than that size. In addition monorails, trains and fixed rail or track systems running on pneumatic tyres could also be declared as a railway. That would allow
mono-rail or rubber-wheeled trains also to fall under the Act. The point was that the Bill was trying to be as inclusive as possible.

Mr Mzizi asked for clarity on the non-refundable fee referred to in Clause 11.

Ms E Mabe (ANC, Free State) said that operators were supposed to apply to for safety permits from the RSR. The application was made in the form of a Safety Management System Report, which was a document that outlined how operators were taking care of safety issues in their operations. The proposed amendment stated that a fee would be charged, which would include the application for a safety permit. Ms Mabe emphasised that the mere fact of submitting the application did not mean that the application would be granted. The Regulator may deny the application and not grant the permit, therefore did not do the work on the application. If the application was accepted, then the Regulator would start to do the assessment, and another fee would be charged later.

Mr Mzizi said that the Bill required that an application  to lodge an appeal should be made within 21 days, and he asked how that 21 days would be determined, and if public holidays would be included.

Ms Mabe responded that the calculation of the appeal period of 21 days was guided by the Interpretation Act. Public holidays were excluded.

Rev Moatshe asked for an explanation regarding ‘threats’ and ‘risks’.

Mr Panzera said that a threat was a situation which was unsafe, and a risk was the consequences of that threat.

Rev Moatshe asked about Regulators, operators, and different types of Regulators.

Dr Koorts said that there was an existing Regulator that had been operating for a lengthy period of time. She said the DoT was definitely not going to introduce an additional Regulator. Dr Koorts added that the DoT wanted to have some test when looking at safety from a standards point of view, so it could give the Regulators the kind of capacity and empowerment to act accordingly.

Rev Moatshe asked what ‘railway occurences’ would entail.

Mr Panzera explained that there was a decision taken to combine the concept of accident and incident and call it an “occurrence”. An incident would be, for example, when something happened that was incorrect but that did not cause an accident, such as a train going past a signal but not crashing. If the train went past the signal and then crashed into another train it was called an accident. Those two concepts together were called occurrences. Operators needed to manage occurrences because an incident could change into an occurrence. 

Rev Moatshe asked about network operators, and how they differed from one another.

Dr Koorts said that the strongest network operators were mostly from Transnet and the South African Rail Commuter Corporation (SARCC), because they had a lot of capital infrastructure, and were operating across the whole of South Africa. Those network operators must be regulated. Train operators would also include private operators, who may or may not use the networks of networks operators. Safety should be the priority in all these processes.

Mr Panzera said that about 255 permits were issued in this country, and at the moment a network operator was anybody in control of fixed infrastructure and who managed the traffic that ran on that infrastructure, including all mine tracks on the surface, as these were covered by the legislation. Everyone required a different permit. Train operators ran on top of the tracks, and could be the same as the network operator, or a different body.

Rev Moatshe asked for clarity regarding the types of permits in existence.

Mr Panzera said that there were different types of permits for the different tasks that were executed by trains, including construction permits and testing permits for when trains were being tested.

The Chairperson said that he was trying to make sense of why this piece of legislation was tagged as a Section 76 Bill, because rail services and rail operations were the responsibility of the National Minister. He asked if there were serious political issues not being disclosed that led to the amendments.

The Chairperson said that the principal Act acknowledged a relationship between occupational health and safety and security, but this was not illustrated by the amendments to the Bill and the Bill itself.

The Chairperson noted that with regard to the 255 permits mentioned, Chapter 2 of the Principal Act stated that rail did not apply to mines, and the Act also does not cover underground permits for mines.

Mr Panzera confirmed that the RSR was not involved in any underground rail, only rail at the surface of mines.

The Chairperson questioned the fact that the Bill did not mention the accountability of the Regulator to Parliament. The PFMA involved public money and the institution should therefore account to Parliament.

Dr Koorts said that with regard to accountability, this entity was no different from any other entity and it would table the annual report in Parliament.

Ms B Dlulane (ANC, Eastern Cape) also asked about the Section 76 tagging. She wondered if provinces could afford the budget of a National structure.  She asked further what measures were taken when deciding whether the Bill should have Section 75 or 76 status.

Dr Koorts thus said that she had no knowledge of any political motivation for the Bill, and was not informed about such motives. She emphasised that a new entity was not being created as work was done within the ambit of the existing Act.

Mr D Watson (DA, Free State) said that the Bill stated that the Regulator could approve gauges smaller than 600mm, and he asked if this would apply to rail gauges of pneumatic single track tyres.

Mr Panzera clarified that the current Act only referred to any railway system with a gauge bigger than 600mm, but if the trains were running on a mono-rail there were no gauge issues. The Act now included anything running on gauges other than 600mm.

Dr Koorts said that the Regulator would not be involved in policy making and was not involved in decisions about building railways. As distinct from the national and provincial Departments dealing with rail, the RSR only dealt with safety around the operations of operators. Dr Koorts added that Regulators did not implement policy, but merely enforced compliance with penalties.

Dr Koorts added that RSR hoped to address the challenges of rail in the country and the impact on the provinces, with the assistance of the provinces themselves. She added that any province could approach the RSR for clarity regarding potential operators in the provinces.

The meeting was adjourned.

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