ATC140711: Report of the Portfolio Committee on Transport on Budget Vote 37: Transport, dated 10 July 2014
OF THE PORTFOLIO COMMITTEE ON TRANSPORT ON BUDGET VOTE 37: TRANSPORT, DATED 10
The Portfolio Committee of
Transport, having considered Budget Vote 37: Transport reports as follows:
The Portfolio Committee on Transport
considered the 2014/15 budget of the Department of Transport (the Department)
on 8 July 2014. This report contains a summary of the Transport budget
allocation and the strategic objectives of its programmes with Committee
findings and recommendations on the budget.
MANDATE OF THE
DEPARTMENT OF TRANSPORT
The Department of Transport
is tasked with providing safe, reliable, effective, efficient and fully
integrated transport operations that best meet the needs of freight and
passenger users. At the same time, the Department is entrusted with providing
the infrastructure and services in a manner that is efficient and affordable to
the individual and corporate users, as well as the whole economy. In addition,
it is mandated with ensuring safety and security across all modes of transport,
including non-motorised transport.
In an endeavour to
discharge its mandate effectively and efficiently, the Department has organised
itself into the following programmes:
Integrated Transport Planning;
Maritime Transport; and
In terms of the
Departments structure, it was suggested that it boded well for the creation of
jobs, the development of the countrys urban and rural communities, as well as
the improvement of logistics.
The programmes of the Department are structured in a manner
that will assist them to discharge their mandate in an effective and efficient
. It stands to reason that no economy can thrive
without developed road, rail, maritime and aviation infrastructure networks.
Indeed, no economy can develop unless its transport sector plays its part in
facilitating the movement of people, goods and services throughout the economy.
OVERVIEW OF THE 2013/14
The adjusted budget
allocation for the Department in the 2013/14 financial year was R42.4 billion.
Of this amount, transfers and subsidies accounted for R41.4 billion.
At the end of the First Quarter for the
2013/14 financial year, the Department had transferred R8.6 billion or 20.8 percent
of the total available budget for transfers. Transfers to the Provinces and
Municipalities at the end of the First Quarter for 2013/14 were R3.4 billion,
the majority of which was for the Provincial Roads Maintenance Grant: Roads
Maintenance and Public Transport Operations Grant transfers.
At the end of the Second
Quarter for 2013/14, the Department had spent 43.4 percent of the budget on
Provincial and Local Governments, 28.6 percent on departmental agencies and
accounts, 24.3 percent on public corporations, 1.4 percent on goods and
services, 1.3 percent on households and 0.9 percent on the compensation of
The Department developed,
inter alia, the National Transport Master Plan (NATMAP). Subsequently, NATMAP
was presented to Cabinet which then resolved that there was a need for further
review by the Inter-Ministerial Committee and consultations with the
Presidential Infrastructure Coordinating Commission (PICC).
Up to the Third Quarter for
the 2013/14 financial year, 100 percent of the budget allocation for the
Provincial Road Maintenance Grant (PRMG) had been spent. Similarly, expenditure
on the Public Transport Operations Grant (PTOG) and the Rural Road Asset
Management Grant (RRAMG) was at 100 percent respectively. However, there was
under-expenditure of R200 million in the budget allocation for the Public
Transport Infrastructure and Systems Grant (PTISG). Under-expenditure in the
Public Transport Networks Operations Grant (PTNOG) stood at R50 million.
In the Third Quarter, the
Passenger Rail Agency of South Africa (PRASA)
the Bridge City Rail Project, which was subsequently launched by the
Department. Under the PRMG, 40.7 km of roads had been rehabilitated in
Mpumalanga. The finalisation of the National Airports Development Plan (NADP)
was in progress and consultations had been held with the South African Civil
Aviation Authority (SACAA) and the Eastern Cape pertaining to the Mthatha
Airport. In public transport, particularly pertaining to Integrated Public
Transport Networks (IPTNs), the preliminary designs were in progress at
Ekurhuleni, while in Msunduzi planning had been completed and awaiting the
go-ahead to start construction. The National Scholar Transport Policy had been
submitted and approved by the Social Cluster in October 2013.
Under the Taxi Recapitalisation Programme,
the Department reported that 2 752 taxis had been scrapped during the Third
Policy Priorities for 2014/15
In terms of the
outcomes-based performance management framework adopted by Government, the
Department contributes mainly to the development of an efficient, competitive
and responsive economic infrastructure network (outcome 6). In addition, the
National Development Plan (NDP) accentuates the necessity of sound economic
infrastructure as a necessary condition for economic growth. The countrys
transport infrastructure is thus a key priority. The major recommendations of
the NDP are to improve public transport planning and integrate it with spatial
Furthermore, the NDP
underscores asset management and design institutional arrangements to ensure
safe, reliable and affordable public transport. It also puts emphasis on the
revitalisation of the commuter rail fleet.
The capital transfers to the Passenger Rail Agency of South Africa
(PRASA) will ensure that the commuter fleet is renewed over a ten-year period
from 2015/16 and that the necessary complementary investments are made.
the NDP highlights the need to focus on integrated transport systems which
integrate all modes. The Public Transport Infrastructure and Public Transport
Network Operations Grants
therefore seek to ensure that
this objective is attained and that planning is achieved in cities. The
investment into the maintenance and upgrade of the provincial and national road
and rail infrastructure and IPTNs within 13 cities is in line with the
objectives of the NDP.
The budget allocation of
the Department seeks to respond to the cardinal issues raised in the NDP. This
is evidenced by R21.6 billion (44.4 percent) and R15.0 billion (30.9 percent)
of the budget allocation which go to the Road Transport and Rail Transport
programmes respectively and R11.3 billion (23.2 percent) that is allocated to
the Public Transport programme. This augurs well for economic growth and
especially job creation. In
addition, it will stand the country in good stead for attracting investors and
tourists. Besides attracting investment, improved public transport will also
reduce traffic congestion and vehicle accidents.
The 2013/14 budget figures
stated below are based on the adjusted appropriation since the revised
estimates are not published for the sub-programmes.
Of the R635.3 billion of
the total appropriation by vote, the Department of Transport receives R48.7
billion in the 2014/15 financial year. This budget allocation constitutes 7.7percent
of the national budget. Compared to R42.4 billion adjusted or main budget that
the Department received in 2013/14, the 2014/15 budget allocation increases by
14.9 percent in nominal terms and 8.2 percent in real terms.
An amount of R47.8 billion
(or 98 percent) of the Department total budget is in the form of transfers and
subsidies to its entities such as the South African National Roads Agency
Limited (SANRAL) and PRASA, as well as in the form of conditional grants to
provinces and municipalities for public transport infrastructure.
The budget allocation for
the compensation of employees increases from R344.2 million in 2013/14 to
R383.4 million in the 2014/15 financial year. The average departmental
expenditure on the use of consultants and professional services (business and
advisory services) is set to decline from R451.6 million in 2013/14 to R312.9
million in 2014/15. This translates into a decrease of R138.7 million or 30.7 percent.
In this regard, the most noticeable decrease is in the Civil Aviation
programme, of which the budget for the use of consultants and professional
services was R169 million in 2013/14 and currently set at R12.8 million, a
decrease by 92.4 percent. However, communication-related expenditure is set to
increase by 84.6 percent, from R9.3 million in 2013/14 to R60.4 million in the
current financial year.
programme provides leadership, strategic management and administrative support
to the Department through continued refinement of organisational strategy and
structure, in line with appropriate legislation and best practice. This
programme has five sub-programmes:
For the 2014/15 financial
year, the Administration programme receives an allocation of R382.9 million,
compared to R362.4 million in 2013/14. This translates into an increase by 5.7 percent
in nominal terms, but an actual decrease by 0.5 percent when taking into
account the effects of inflation (real terms). The most noticeable increase is
in the Office Accommodation sub-programme which increases from R39.8 million in
2013/14 to R46.5 million in 2014/15, indicating an increase by 16.8 percent
in nominal terms and 10 percent in real terms. This can be attributed to
the fact that the Administration will embark on the recruitment of additional
personnel as it expands its portfolio of responsibilities and establishes a
project management office.
The largest share of the
programmes overall allocation (i.e. 48.5 percent) goes to the Corporate
Services sub-programme, followed by 18 percent allocated to the Management
sub-programme. This allocation lends credence to the Departments stated
spending focus on the two sub-programmes over the medium term, namely, the
provision of operational and administrative support to the Department.
Programme 2: Integrated
This programme manages and
facilitates national sector planning. It also formulates policies and
strategies. In addition, it coordinates regional and inter-sphere relations,
including providing economic modelling and analysis of the sector. The
programme comprises the following sub-programmes:
Macro Sector Planning;
Modelling and Economic Analysis;
Research and Innovation; and
Integrated Transport Planning Administration Support.
The budget allocation for
the Integrated Transport Planning programme increases by 2.7 percent in
nominal terms, from R79.1 million in 2013/14 to R81.2 million in the current
financial year. However, the overall expenditure decreases by 3.34 percent in
real terms, when taking inflation into account.
The exponential increase is
in the Logistics sub-programme that increases from R11.9 million in
2013/14 to R20.8 million in 2014/15, indicating an increase by 74.8 percent in
nominal terms (64.6 percent in real terms). This sub-programme is entrusted
with developing and coordinating the implementation of freight logistics
strategies. This is aimed at unblocking bottlenecks in the freight logistics
system and related supply chains, with particular emphasis on integrating
elements of the system across all modes. The proposed Durban-Free State-Gauteng
Logistics and Industrial Corridor that was announced by President Zuma in his
2012 State of the Nation Address is part of this endeavour and it is equally
mentioned in the NDP.
Programme 3: Rail
The Rail Transport
programme facilitates and coordinates the development of sustainable rail
transport policies, infrastructure development strategies and economic and
safety regulations. Moreover, it supports and monitors the oversight of rail
public entities and the implementation of integrated rail services. Five
sub-programmes fall under this programme:
Rail Infrastructure and Industry Development;
Rail Oversight; and
Rail Administration Support.
In 2013/14, the budget
allocation for the Rail Transport programme was R11.2 billion and it increases
to R15.0 billion in 2014/15, indicating an increase by 33.8 percent in nominal
terms and 26 percent in real terms. The programmes overall allocation constitutes
30.9 percent of the Departments budget.
The Rail Oversight
sub-programme receives the biggest share (99.8 percent) of the Programmes
budget allocation, which is R14.9 billion and up from R11.2 billion allocated
to it in 2013/14. This sub-programme is responsible for making transfers to the
Passenger Rail Agency of South Africa (PRASA) and the Railway Safety Regulator
(RSR). For the 2014/15 financial year, R14.9 billion is transferred to PRASA,
while R51.5 million goes to the RSR. Transfers to PRASA are for replacing the
signalling systems and ageing rolling stock, as well as upgrading the rail
The budget allocation for
the Rail Operations sub-programme declines from R7.9 million in 2013/14 to R7.1
million in the current financial year. This translates into a decrease of 10.1 percent
in nominal terms and 15.4 percent when taking inflation into account.
Programme 4: Road
The Road Transport
programme develops and manages an integrated road infrastructure network. It is
also entrusted with regulating road transport and ensuring safer roads. In
addition, it oversees the road entities. The programme is divided into five
Road Infrastructure and Industry Development;
Road Administration Support; and
Road Engineering Standards.
Expenditure on the Roads
Transport programme increases from R19.6 billion in the 2013/14 financial year
to R21.6 billion in 2014/15, translating into an increase by 10.6 percent in
nominal terms and 4.1 percent in real terms. The programme receives the largest
share of the Departments budget, that is, 44.4 percent, but declines in
overall share from 46.2 percent the previous year.
The largest share of the
programmes allocation, that is 99.6 percent, goes to the Road Oversight
sub-programme. This sub-programme is tasked with, inter alia, transferring
funds to the South African National Roads Agency Limited (SANRAL), the Road
Traffic Management Corporation (RTMC) and the Road Traffic Infringement Agency
In the 2014/15 financial
year, an amount of R11.9 billion is transferred to SANRAL, of which R7.5
billion is allocated to the non-toll network. The SANRAL transfer also includes
R3.7 billion for current payments and R665.5 million is allocated to the coal
The allocation to the
Provincial Roads Maintenance Grant (PRMG) is to the tune of R9.4 billion. Of
this amount, R7.9 billion is set aside for road maintenance and R602.3 million
for disaster relief. In addition, R803 million goes to coal haulage road
network maintenance. This budget allocation suggests that the Departments
spending focus will be on the development of roads and road infrastructure, in
line with the NDP. For their part, RTMC and RTIA are allocated R176 million and
R15.3 million respectively to promote safety on the countrys roads.
Programme 5: Civil
The Civil Aviation
programme is responsible for facilitating through regulation and
investigation the development of an economically viable air transport
industry that is safe, secure, environmentally friendly and compliant with
international standards. Moreover, it oversees the aviation public entities.
The Civil Aviation programme comprises five sub-programmes:
Aviation Policy and Regulations;
Aviation Economic Analysis and Industry Development;
Aviation Safety, Security Environment and Search and
Aviation Oversight; and
Aviation Administration Support.
The programme budget
decreases from R243.3 million in the 2013/14 financial year to R148.3 million
in 2014/15, which is a decrease by 39.1 percent in nominal terms (and 42.6 percent
in real terms). The decrease is largely attributable to the fact that an
additional amount to the tune of R104.8 million had been allocated to the
upgrade and refurbishment of the Mthatha Airport in 2013/14 and there is no
budget allocation for this purpose in 2014/15.
The allocation to the
Aviation Policy and Regulations sub-programme decreases by 14.7 percent in
nominal terms and 19.7 percent in real terms, down from R26.5 million in
2013/14 to 22.6 million in 2014/15. Despite the decrease in the programmes
overall budget, the budget allocation for the Aviation Economic Analysis and
Industry Development sub-programme increases noticeably by 31.4 percent in
nominal terms and 23.7 percent in real terms. In 2013/14, the allocation for
this sub-programme was 8.6 million and it increases to R11.3 million in
Programme 6: Maritime
The Maritime Transport
programme coordinates the development of a safe, reliable and economically
viable maritime transport sector through the development of policies and
strategies and monitoring of the implementation plan. It also oversees the
maritime public entities. Five sub-programmes fall under the Maritime Transport
Maritime Policy Development;
Maritime Infrastructure and Industry Development;
Implementation, Monitoring and Evaluations;
Maritime Oversight; and
Maritime Administration Support.
For the 2014/15 financial
year, the Maritime Transport programme is allocated R110.6 million, up from
R104.4 million in 2013/14. This budget allocation increases by 5.9 percent in
nominal terms, but decreases by 0.2 percent in real terms.
The exponential increase is
in the Maritime Administration Support sub-programme which goes up by 179.8 percent
in nominal terms and 162.9 percent in real terms. The allocation in this
sub-programme increases from R2.4 million in 2013/14 to R6.7 million in
2014/15. However, the largest portion of the programmes allocation, that is
55.6 percent, is in the Implementation, Monitoring and Evaluations
sub-programme which increases from R54.1 million in 2013/14 to R61.5 million in
2014/15. This indicates an increase by 13.7 percent in nominal terms and 7 percent
in real terms. This allocation is intended to, among other things, implement
the National Ports Act (No 12 of 2005), as well as reduce the levels of
pollution and the number of accidents and incidents at sea.
Programme 7: Public
The Public Transport
programme is tasked with transforming land transport systems by developing
norms and standards, regulations and legislation. It also develops empowerment
systems within the public transport sector. Furthermore, the programme
facilitates institutional planning and capacitation to guide the provision of
sustainable integrated public transport networks in both urban and rural areas.
Finally, it regulates national transport services and seeks to improve the
management of scholar transport. The Public Transport programme comprises six
Public Transport Regulation;
Rural and Scholar Transport;
Public Transport Industry Development;
Public Transport Oversight;
Public Transport Administration Support; and
Public Transport Network Development.
The budget allocation for
the programme increases from R10.8 billion in 2013/14 to R11.3 billion in
2014/15, translating into an increase by 4.9 percent in nominal terms (but a
decrease by 1.2 percent in real terms in 2014/15). The noticeable increase is
in the Public Transport Network Development sub-programme which increases by
41.2 percent in nominal terms and 32.9 percent in real terms. This is in line
with the Departments endeavour to promote and improve public transports
accessibility and reliability, as recommended in the NDP.
The programmes budget
allocation constitutes 23.2 percent of the Departments budget, down from 25.4 percent
in the 2013/14 financial year. There is marked decrease in the budget
allocation for the Public Transport Administration Support sub-programme which
decreases from R16 million in 2013/14 to R7.8 million in 2014/15. This
indicates a decrease by 51.2 percent in nominal terms and 54.1 percent in real
terms. This is attributable to the number of vacancies owing to the
organisational structure changes.
its deliberations the Committee noted the following:
That the Departments
Medium Term Strategic Framework responds to the NDP.
That the road
infrastructure repair backlog was R149 billion and that most provincial and
municipal roads were in dire need of maintenance. The Committee further noted
that, while 40% of South African roads are in a very good and good condition,
60% of the road network are in poor condition and requires upgrading and
That the National Scholar
Transport Policy has still not been finalised by the Department.
The improper and unsafe
transportation of farmworkers remains a concern for the Committee.
the completion of the Moloto Rail Development Project was critical for public
That there is discrepancy in the
allocation of public transport subsidies.
That the Department put in place outreach programmes to
attract interest in the
Maritime and Civil Aviation
That the position of Director-General (DG)
was not filled, as well as a number of senior positions (Deputy Directors-
General) in the Department. The Committee is concerned about the impact of
vacancies on service delivery.
the Department intends submitting certain pieces of legislation for
deliberation by Parliament.
the funding model of public transport infrastructure be further explored.
That there is lack of monitoring of transfers
of grants to provinces and
That the Taxi Recapitalisation Programme
(TRP) was taking place at a snails pace owing to issues raised regarding the
inadequacy of the taxi scrapping allowance.
In response to the
observations, the Committee recommends that the Minister gives consideration to
That the Department closely monitor and
evaluate the utilisation of grants that are provided to other spheres of
government for road infrastructure development and maintenance.
The Department should monitor whether Provinces
and local spheres of government utilise their funding allocations for the
intended purpose. The Committee further recommends the synergising of
Integrated Transport Plans (ITPs) of provinces and municipalities with those of
The Department should ensure the
standardisation of road infrastructure developmentacross all spheres of
That the Department, where possible,
assess the current timeframes of the Moloto Rail Development Project and
commence with the development work on this corridor.
That the Department, in its pursuit of
radical transformation of the transport industry, explore the viability of a
public transport passenger subsidy. The Committee further urges the Department
to, in conjunction with the Department of Labour, review the conditions of
employment in the taxi industry.
That the Department ensure that its
performance indicators and targets in the Annual Performance Plan(APP) are
specific, measurable, achievable, realistic and time-bound (SMART).
That the policy bottlenecks be resolved
as a matter of urgency.
That adequate and sufficiently skilled
human resources be in place in the Department and entities. The Committee
further recommends that the filling of senior management positions, especially
that of the Director-General, be finalised within 90 days of the adoption of
this report by the National Assembly.
That the Department create awareness
about the Charters for the various modes of transport.
That the Department indicate when it
intends submitting the pieces of legislation to Parliament so that the
Committee can plan accordingly.
That the finalisation of the development
of the National Scholar Transport Policy be fast-tracked. The Committee further
recommends that implementation of the Policy resides with the Department of
That the Department increase its
monitoring and evaluation of transfers of grants to provinces and
That the TRP be expedited in order for the
taxi industry to be integrated with the public transport programme that is
The Committee, having considered
Budget Vote 37: Transport, recommends that the House considers its report on
Report to be considered.
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