ATC181024: Budgetary Review and Recommendation Report (Brrr) of the Portfolio Committee on Transport, dated 24 October 2018

Transport

BUDGETARY REVIEW AND RECOMMENDATION REPORT (BRRR) OF THE PORTFOLIO COMMITTEE ON TRANSPORT, DATED 24 OCTOBER 2018
 

The Portfolio Committee on Transport, having considered the performance and submission to National Treasury for the medium-term period of the Department and its entities, reports as follows:

 

  1. INTRODUCTION

The period under review took place against the backdrop of the initial phase of the implementation of the National Development Plan (NDP) (2014-2019). As part of its contribution to the NDP, the transport sector had to identify interventions aimed at accelerating service delivery, increasing sector job opportunities, rural development and skills development. Key priorities in this regard included investments in public transport, maintenance of roads and rail investments. These had a direct bearing on the Government’s drive to respond to the challenges of poverty, unemployment and inequality.

 

1.1        Mandate of the Committee

The prime mandate of the Portfolio Committee on Transport (“the Committee”) is governed by the Constitution of the Republic of South Africa, 1996 (“the Constitution”), in respect of its legislative and oversight responsibilities as public representatives. It is required to consider legislation referred to it and consider all matters referred to it in terms of the Constitution, the Rules of the National Assembly (NA) or resolutions of the House. It is also required to respond to matters referred to it by Government within its mandate. In addition, the Committee is entrusted with considering the budgets, Strategic Plans and Annual Performance Plans (APPs) of the Department of Transport (“the Department”) and entities that fall within the transport portfolio.

 

 

1.2        Purpose of the Budgetary Review and Recommendation Report

Section 77(3) of the Constitution stipulates that an Act of Parliament must provide for a procedure to amend money bills before Parliament. This constitutional provision gave effect to the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009). The Act gives Parliament powers to amend money Bills and other legislative proposals submitted by the Executive whenever the Executive deems it necessary to do so. The Act therefore makes it obligatory for Parliament to assess the Department’s budgetary needs and shortfalls against the Department’s operational efficiency and performance.

 

This review seeks to establish whether the Department and its entities have achieved their aims and objectives, as set out in their Strategic Plans, as well as whether they continue to fulfil their constitutional mandates within the year under review. The focus will be on highlighting the key achievements made, as well as challenges encountered during the 2013/14, 2014/15, 2015/16, 2016/17 and 2017/18 financial years, as reported in the Department’s and entities’ 2013/14, 2014/15, 2015/16, 2016/17 and 2017/18 Annual Reports and APPs. 

 

1.3        Methodology

 

The Committee engaged with the Auditor-General of South Africa (AGSA) on its audit findings of the Department and its entities as well as engaged with the Department and its selected entities on 10, 11,16 and 17 October 2018 on their performance and audit outcomes for the period under review.

 

The Committee selected to meet the following entities:

  1. Railway Safety Regulator (RSR)
  2. South African National Roads Agency Limited (SANRAL)
  3. Road Accident Fund (RAF)
  4. Cross-Border Road Transport Agency (C-BRTA)
  5. Road Traffic Infringement Agency (RTIA)
  6. South African Maritime Safety Authority (SAMSA)
  7. Passenger Rail Agency of South Africa (PRASA).

 

The following entities were not called to meet with the Committee, however, their Annual Reports and/or financial statements were tabled on time and were taken into account for purposes of the report:

  1. Ports Regulator of South Africa (PRSA)
  2. Road Traffic Management Corporation (RTMC)
  3. South African Civil Aviation Authority (SACAA)
  4. Driving Licence Card Account (DLCA)
  5. South African Search and Rescue Organisation (SASAR).

The Committee did not meet with the following entity due to the non-tabling of their Annual Report within the prescribed period:

  1. Air Traffic and Navigation Services (ATNS).

 

The BRRR details the analysis of the 2013/14, 2014/15, 2015/16, 2016/17 and 2017/18 Annual Reports and Financial Statements, strategic objectives, budget allocation and financial performance and the recommendations made by the Committee.

 

The BRRR is based on information accessed through:

  • The 2017 State of the Nation Address (SONA);
  • The Department’s Strategic Plan and APPs for 2013/14, 2014/15, 2015/16, 2016/17 and 2017/18;
  • The Department’s Annual Report and Financial Statement for 2013/14, 2014/15, 2015/16, 2016/17 and 2017/18;
  • The Strategic Plans and the APPs of the entities that fall under the Department, as well as their Annual Reports and Financial Statements for 2013/14, 2014/15, 2015/16, 2016/17 and 2017/18;
  • Quarterly reports of the Department;
  • The report of the AGSA on the audit outcomes of the Department and its entities;
  • National Treasury Section 32 Reports;
  • The NDP; and
  • Oversight visits by the Committee during the period under review.

 

 

  1. MANDATE OF THE DEPARTMENT OF TRANSPORT

 

The Department is mandated with maximising the contribution of transport to the economic and social development goals of society providing safe, reliable, effective and efficient fully integrated transport systems that best meet the needs of passenger and freight users. To attain this objective, the Department is entrusted with the provision of transport infrastructure and services in a manner that is efficient and affordable to consumers and the economy, while ensuring safety and security in all transport modes.

 

In an endeavour to discharge its mandate effectively and efficiently, the Department has organised itself into the following programmes:

•      Programme 1: Administration;

•      Programme 2: Integrated Transport Planning;

•      Programme 3: Rail Transport;

•      Programme 4: Road Transport;

•      Programme 5: Civil Aviation;

•      Programme 6: Maritime Transport; and

•      Programme 7: Public Transport.

 

In terms of the Department’s structure, it was suggested that it boded well for the creation of jobs, the development of the country’s urban and rural communities, as well as the improvement of logistics.

 

 

2.1        Strategic overview 2017/18

 

2.1.1     Strategic priorities of government

 

To execute its mandate, the Department is guided by Government’s commitments as set out in; inter alia, the NDP 2030, the New Growth Path (NGP) Framework, the Presidential Infrastructure Coordinating Commission (PICC), the Medium-Term Strategic Framework (MTSF) 2014-2019, as well as the SONA policy directives. The MTSF is utilised as the comprehensive five-year implementation plan for the NDP. The MTSF also serves as a mechanism through which all plans of Government institutions across the spheres of Government are aligned to the NDP.

 

The NDP has identified economic transformation as a catalyst for accelerated economic growth and job creation. This intervention will be better achieved through sustainable programmes that will stimulate productivity, improve efficiencies and accelerate elimination of inequality that exists in society. In response to the NDP, the Department will:

 

•           Demonstrate accelerated speed in delivery of services and operations;

•           Put together reflection on stakeholder engagement and buy-in;

•           Lay more emphasis on shared growth initiatives;

•           Reprioritise optimum resource allocation, distribution and usage;

•           Support diversification of trade patterns;

•           Support industrialisation beneficiation; and

•           Prioritise capacitating of designated groups with socio-economic skills.

 

Whilst striving for excellence and integration of sustained transport services, the Department and broader transport sector are crucial role players in the achievement of the NDP. In July 2014, Cabinet adopted the 2014-2019 MTSF, which continues to be used as the comprehensive five-year implementation plan for the NDP2030 vision. The MTSF also serves as a mechanism through which all plans of Government institutions across the spheres of Government are aligned to the NDP.

 

This has been entrenched in the Ministers’ Delivery Agreement with the President of the Republic of South Africa. The Strategic Plan is thus aligned with this agreement in order to ensure that all deliverables are budgeted for and fully implemented.

Of significance to the Minister and the Department are the following key outcomes:

 

Outcome

Sub-Outcome

Outcome 4: Decent employment through inclusive economic growth

Sub-Outcome 1: Productive investment is effectively crowded in through the infrastructure build programme

  • Ensure monitoring of off-takes by end users on the infrastructure programme

Outcome 6 – An efficient, competitive and responsive economic infrastructure

Sub-Outcome 1: Regulation, funding and investment improved

  • Establish a Single Transport Economic Regulator (STER)
  • Develop a Private Sector Participation (PSP) Framework for ports and freight rail, removing barriers to entry for private investment and operations within the context of Cabinet-approved policy and with an analysis of the implication of tariffs

Sub-Outcome 3: Maintenance, strategic expansion, operational efficiency, capacity and competitiveness of our logistics and transport infrastructure ensured.

  • Improve national transport planning to develop long-term plans for transport that synchronise with spatial planning and align infrastructure investment activities of provincial and local government and clearly communicate the State’s transport vision to the private sector
  • Ensure development and approval of the Integrated Transport Plan
  • Develop and implement approved plan and improve market share of containers on rail vs road, to ensure that we move road freight to rail
  • Improve and preserve national, provincial and local road infrastructure
  • Strengthen road traffic management
  • Improve public transport
  • Strengthen institutional arrangements for public transport

Sub-Outcome 6: Coordination, planning, integration and monitoring implementation of strategic integrated projects (SIPs) in the National Infrastructure Plan.

  • SIP 1: Unlocking the Northern Mineral Belt
  • SIP 3: South Eastern Node and Corridor Development
  • SIP 4: Unlocking economic opportunities in the North West Province
  • SIP 7: Integrated Urban Space and Public Transport Programme

Outcome 7 – Comprehensive Rural Development and Land Reform

Sub-Outcome 5: Increased access to quality infrastructure and functional services, particularly in education, healthcare and public transport in rural areas

  • Improve transport infrastructure and public transport in rural areas
  • Access Road Development Plan for improving rural road infrastructure implemented
  • District municipalities implementing the Integrated Public Transport Network Strategy

Outcome 10 – Protect and enhance our environmental assets and natural resources

Sub-Outcome 2: An effective climate change mitigation and adaptation response

  • Develop strategic policy and regulatory frameworks and programmes to promote a low carbon economy
  • Green Transport Strategy and Implementation Plan formulated and completed

(Table 1: Ministers’ Delivery Agreement with the President of the Republic of South Africa – information obtained from the Annual Report of the Department, p. 40 – 41

 

2.1.2     Strategic Priorities of the Department

 

Over the medium-term, the Department has undertaken to put more focus on improving the mobility and access to social and economic activities, maintaining the provincial and national road networks, upgrading and maintaining rail infrastructure, and improving public transport for rail and road commuters.  These activities contribute to the realisation of Outcome 6 (an efficient, competitive and responsive economic infrastructure network) of the MTSF.

 

In the current MTSF and in aligning its programmes to the NDP, the Department will oversee the manufacturing of a rolling stock factory by PRASA in Ekurhuleni that will ensure that over 65% of trains used in the country are built locally.  In addition, the Department has undertaken to upgrade the R573 Moloto Road with a view to improving access to economic opportunities and social space, as well as addressing the road safety challenges.  It is anticipated that the upgrade of the Moloto Road will create approximately 10 000 job opportunities, while the rolling stock jobs are estimated at 65 000. 

 

A further 7 900 jobs will be created from the Integrated Public Transport Network (IPTN) programme and another 61 000 jobs will be created as a direct consequence of the provincial roads maintenance scheme.  Furthermore, the Department will support the shipbuilding industry and enhance cargo volumes to ensure that this acts as a catalyst for the Oceans Economy (Operation Phakisa). The completion of these projects within the MTSF is envisaged to change the living conditions of South Africans and boost the country’s economic growth.

 

For its part, the 2017 SONA issued a clarion call for the creation of a “united, democratic, non-sexist, non-racial and prosperous South Africa”.  The then President Zuma had averred that this would be attained through the implementation of the NDP which seeks to respond to the triple challenges (poverty, inequality and unemployment). These social ills would, in turn, be addressed through “radical economic transformation” with a view to ensuring that all South Africans participate in the mainstream economy.  To this end, the State would use, among other things, “legislation, regulations, licencing, budget and procurement as well as Broad-Based Black Economic Charters”.

 

The work of the Department for 2017/18 was performed in line with the following strategic outcome-oriented goals:

 

•           An efficient and integrated infrastructure network that serves as a catalyst for social and economic development:

            - To achieve this goal, the Department developed policies and promulgated legislation that are set to drive investments for the maintenance and strategic expansion of the transport infrastructure network; and support the development of transport asset management systems in rural and provincial authorities. The drive of these interventions was to improve the efficiency, capacity and competitiveness of all modes of transport;

•           A transport sector that is safe and secure:

- The Department continued to promote and ensure implementation of policy interventions and strategies that sought to reduce accidents and incidents in the road, rail, aviation and maritime environments;

•           Improved rural access, infrastructure and mobility:

- Through the scholar transport and non-motorised transport interventions, the Department aimed to increase mobility and rural access in rural district municipalities;

•           Improved public transport systems:

- The Department ensured an effective, efficient, affordable and accessible public transport system in urban and rural areas through the development and implementation of IPTNs, establishment and strengthening of regulatory entities, refurbishment and acquisition of new rail rolling stock and upgrading priority passenger rail corridors;

•           Increased contribution to job creation:

- Implementation of Broad-Based Black Economic Empowerment (B-BBEE) and commissioning of labour-intensive projects by the Department increased the creation of jobs in the sector;

•           Increased contribution of transport to environmental protection:

-Reduction of green-house gas emissions through the use of more energy efficient modes of freight and passenger transport and promoting the use of cleaner fuels ensured that the impact of the sector on climate change was minimised.

 

Over the MTSF, the Department has identified key areas of service delivery to respond to the sustained and changed agenda of Government. These include:

 

2.1.2.1  Efficient and integrated infrastructure network and operations

 

The African Union (AU) envisions that by 2063 the necessary infrastructure will be in place to support Africa’s accelerated integration and growth, technological transformation, trade and development. This will include high-speed rail networks, roads, shipping lines, sea and air transport, as well as Information and Communications Technology (ICT) and digital economy. A Pan-African high-speed rail network will connect all the major cities of the continent with adjacent high ways and pipelines for gas, oil, water, ICT broadband cables and other infrastructure. This will then serve as a catalyst for manufacturing, skills development, technology, research and development, integration and intra-African trade, investment and tourism.

 

Investment in infrastructure over the medium term will be vital in addressing the challenges experienced in infrastructure maintenance and expansion, which is crucial for the stabilisation of the country’s economy and creation of new opportunities for growth, equity and employment. The current socio-economic challenges and the ever-changing environment facing the country and in particular the transport sector, cannot be overcome by the scope and resources of Government or any single role player. Enduring economic partnerships between Government and the private sector are needed to develop trusting relationships for integrated operations, investments and management of transportation infrastructure.

 

National Transport Master Plan (NATMAP) 2050

The need to develop a transport master plan was identified by Government in an effort to seek to improve the efficiency and effectiveness of a multimodal transport system that is well regulated and well managed within a multi-sectoral sphere of effective coordination. As a result, the NATMAP derives its main goal from the need for a multi-modal transport-planning framework that is dynamic, long-term and in line with future transport infrastructure supply facilities.

 

During the MTSF, the NATMAP has undergone a lengthy process of consultations with various stakeholders and the Cabinet approval process. In the 2017/18 financial year, 10priority pilot projects were implemented and monitored as part of the NATMAP roll out.

 

These included, among others, the National Road Safety Strategy, Upgrading of Moloto Road, Upgrading of Philippi Station, Green Transport Strategy, etc.

 

Single Transport Economic Regulator (STER)

The STER is meant to provide, enhance and guarantee private sector investments in areas that were exclusively State sectors. STER is also meant to manage the relationship between infrastructure owners and operators in a transparent manner in how tariffs are set, open up for competition in a regulated way and provide opportunities for access and competition for both the market and in the market.

 

During the 2017/18 financial year, the STER Bill was gazetted for public consultations and also taken through the Economic Sectors, Employment and Infrastructure Development (ESEID) Cluster. The Bill was approved for submission to Cabinet.

 

Transport Infrastructure Build Interventions

In general, the South African Government invested in the development of new infrastructure projects over the past and current MTSF.

 

In the current MTSF, the Department and its agencies will continue investing in the following areas:

  • Maintaining the National and Provincial Road Networks

The Department has continued to support SANRAL to allay investor concerns around regulatory uncertainty and the future of project implementation. Initiatives against tolling of national roads continue to be a challenge. The Department has mandated SANRAL to implement the ‘user-pay’ principle, which is in line with the NDP 2030. National road network is responsive to the needs of the nation and its people; and will remain sustainable with the use of a mixture of financing instruments – private sector funding (application of the ‘user-pay’ principle) for toll roads and public sector funding (government grants) for non-toll roads.

 

The road users will always be regarded as key stakeholders of SANRAL, and the affordability criterion is of great importance towards the successful implementation of some of SANRAL’s projects. Unaffordable transport can constrain people’s access to services and opportunities, and impose financial burdens on household budgets.

 

To deal with affordability challenges, the Department fully supports SANRAL’s application of a tariff discount regime for the regular or local user; and that the applicable tariff must always be less than the sum of the benefits to the user. In addition, the Department continues to support SANRAL’s efforts of minimising toll tariffs through the introduction of measures such as discounts, reduction of monthly maximum tolls and discounts to the violation accounts in the Gauteng Freeway Improvement Programme (GFIP).

 

In the provincial sphere, the S’hamba Sonke Programme (SSP) has resulted in various projects being implemented relating to preventative maintenance of provincial roads, fixing roads being damaged by floods, and maintaining roads that provide access to electricity generating infrastructure.

 

  • Rail Network Initiatives

The South African rail network is the eleventh largest in the world at 22 298 route kilometres, and total track distance of 30 400 km. Public sector railways comprise three (3) distinct vertically integrated entities, namely the Transnet Freight Rail (TFR) division of Transnet SOC Ltd (previously Transnet Limited), PRASA, and the Gautrain Management Agency. They fulfil distinctly different roles and responsibilities and have different objectives and service delivery requirements.

 

However, the absence of National Rail Policy has not allowed for coherent direction to guide development of the rail sector in alignment with rail’s global development trajectory. The fundamental purpose of the National Rail Policy is to give much needed direction to the rail sector and will consider the South African setting and its priorities, such as promoting the developmental state, socio-economic development, job creation, eradicating poverty, unemployment and under-development and positioning railways in market spaces that could serve as the backbone of the country’s logistics and mobility systems.

 

South Africa’s railway network is a national asset and its operational effectiveness impacts the whole economy and society. The National Rail Policy will guide performance improvement in all aspects of rail service delivery for passengers and freight customers, including quality, efficiency, volume, price and inter-modalism. It will drive reduction in the cost of freight services at national level through encouragement of modal shift from road to rail. It will also drive passenger mobility, through higher quality services with increased intermodal connectivity. The implementation of the National Rail Policy is given high priority as its significant contribution will not be limited to the rail sector, but will go beyond that to make significant positive impact on South Africa’s socio-economic development.

 

  • Integrated Public Transport Networks (IPTNs)

In 2015/16, municipalities continued to implement IPTNs and initial services have started in Tshwane, Johannesburg, Cape Town, and George. In the 2016/17 financial year, services started in a few other municipalities and an undertaking was made that the 2017/18 financial year would see services resume in Rustenburg, Polokwane, and eThekwini.

 

To date, the cities implementing IPTNs are carrying a combined total of over 100 000 passengers per weekday, have facilitated the procurement of nearly 1 000 vehicles worth over R3 billion, that are universally accessible for all users, especially the elderly and people with disabilities. These cities have constructed over 110 km of dedicated lanes and have committed over R2 billion to supporting affected minibus operators.

 

Over the MTSF, the Department will invest R19 billion in total in these municipalities. The target is to have services running in all 13 cities before the end of the Medium Term Expenditure Framework (MTEF) period in 2018/19, translating into an increased number of total weekday passengers carried to over 200 000 a day. In this regard, the cities of Mangaung, Msunduzi and Buffalo City will fast track planning and augment their implementation capacity.

 

  • Comprehensive Maritime Transport Policy (MTP)

South African’s length of the coastline is estimated to be approximately 3 000 km. In South Africa, the greatest challenge was the absence of maritime transport policy that needed to provide guidance to the industry. This MTP, approved by Cabinet in the 2017/18 financial year, aims to enhance certainty in the transport sector and the logistics market.

 

There are over 89 464 merchant ships trading internationally, transporting different types of cargoes and registered in 150 nations, thus growing marine international trade by 4% per annum. South Africa currently has four (4) ships on its Ship Register and there is commitment to grow the South African Ship Register through the creation of a conducive environment and providing incentives to ship-owners as an encouragement to set up offices and possibly register under the South African flag. Merchant Shipping Act is being reviewed to update it taking into account developing trends and challenges.

 

2.1.2.2  A transport sector that is safe and secure

 

Harmonisation of the traffic law enforcement

The Department is currently involved in projects that are intended to improve road safety and ensure that road users are safe and secure. The following interventions are geared towards improving road safety:

  • Requirement for the fitment of child restraints in all vehicles when transporting children;
  • Restriction for the transportation of persons for rewards in goods vehicles to ensure protection of persons being transported at the rear of a goods vehicle by requiring that the portion of the vehicle in which persons are being conveyed is enclosed to a height of 350 mm above the surface upon which such person is seated or at least 900 mm; and
  • Fitment of speed governors.

 

Other National Road Traffic Act (NRTA) initiatives that are currently underway include:

  • Finalisation of the legislation dealing with the regulation of driving schools;
  • The reviewing of the current prescribed alcohol contents in the blood specimen of a person driving a motor vehicle whilst under the influence of alcohol;
  • The review of the speed limit in areas where there is high pedestrian visibility; and
  • The reduction of the number of persons to be transported at the rear of the goods compartment of a goods vehicle.

 

National Road Safety Strategy (NRSS)

In the effort to improve road safety, the Department has reviewed the Road Safety Strategy.

The reviewed NRSS arises from lessons learned and premised on the United Nations (UN) Decade of Action for Road Safety. It seeks to provide an overall direction on the implementation of all road safety programmes, by ensuring alignment and integration across the wide range of specific interventions that are undertaken in the reduction of road crashes and fatalities.

 

Road Safety Educational Programmes

Educational Road Safety programmes are implemented to inculcate a culture of road safety by improving knowledge, skills and behaviour of road users. Within the current MTSF, four (4) road safety educational programmes were conducted namely: Learner Licences, Scholar Patrol, Road Safety School Debates and Participatory Technique.

 

Road Safety Community Programmes

In an effort to increase community participation in road safety issues, two massive community programmes were embarked upon namely; the workers’ and stray animals programme. These were programmes that sought to reduce work-related road safety incidents and combat road deaths that occur as a result of stray animals in Provinces where stray animals are prevalent.

 

Road Crashes and Fatalities

Currently, South Africa is faced with a number of road crashes, and the subsequent fatalities arising from these vehicle crashes. The crashes occur as result of drivers not obeying or abiding by the laws in relation to driving of a motor vehicle on a public road. Although road traffic injuries have been a leading cause of mortality for many years, most traffic crashes are both predictable and preventable. There is considerable evidence on interventions that are effective at making roads safer and countries that have been successfully in implementing such programmes saw reductions in road traffic crashes, injuries and fatalities.

 

Road crashes, injuries and fatalities are a public health problem and development issue. Low-and middle-income countries lose approximately 3% of the Gross Domestic Product (GDP) as a result of road traffic crashes. In recognition of the scale of this health and development problem, the UN General Assembly adopted a resolution in 2010that led to the establishment of the Decade of Action for Road Safety (2011–2020). The resolution called on Member States to take the necessary steps to make their roads safer.

 

The target of the decade is to reduce road fatalities by 50% by 2020. The World Health Organisation (WHO) was tasked with monitoring the situation by compiling a Global status report on progress made by the different Member States towards the achievement of the decade target.

 

The importance of road safety to the economy and society at large provides a coherent business case for decisive policies and strategies to address the pandemic in order to reach the targets as set out in the Decade of Action and the NDP. Studies reveal that the number of fatal crashes and fatalities is increasing at an average rate of 3% since 2013. Whilst these figures have significantly dropped since 2007, they however remain very high in comparison to other middle-income countries.

 

Changing road user behaviour is a critical component of the holistic “Safe Systems” approach advocated in the report. Adopting and enforcing good laws is effective in changing road user behaviour on key risk factors for road traffic injuries speed, drink–driving, and the failure to use helmets, seat-belts and child restraints properly or at all.

 

The role of safe infrastructure and safe vehicles in reducing road traffic injuries cannot be ignored. Road infrastructure is mainly constructed with the needs of motorists in mind, although the report indicates that 49% of all road traffic deaths occur among pedestrians, cyclists and motorcyclists. Real, sustained successes at reducing global road traffic deaths will only happen when road design takes into consideration the needs of all road users.

 

While vehicles in high-income countries are increasingly safe, the report provides worrying data showing that less than half of countries implement minimum standards on vehicle safety, and that these standards are notably absent in many of the large middle-income countries that are major car manufacturers.

 

The crashes are as a result of, amongst others, unroadworthy motor vehicles, speed in excess of the prescribed limit, or not appropriate for that particular set of circumstances, driving a motor vehicle under the influence of alcohol, disobeying road traffic signs and rules, lack of visible road traffic signs, the road infrastructure not developed, no account on the road safety implementation, and lack of adequate road safety awareness.

 

Furthermore, there is also an issue on fraud and corruption in the issuing of roadworthy certificates, drivers’ licenses and general law enforcement by traffic officers. In an effort to address and deal with this carnage, the Department has implemented a number of road safety interventions; such as developing and implementing legislation that requires certain vehicles to be governed by a particular speed. Children and passengers may not be transported at the rear of a Light Delivery Vehicle (LDV) for reward and at all times wear seat belts or the former be put in child restraints.

 

In terms of awareness, the Department has developed and implemented a 365-day road safety awareness campaign as well as a road safety strategy. The Department encourages partnership with all sectors and other departments in driving Education and Awareness programmes.

 

Roll out of the Administrative Adjudication of Road Traffic Offences (AARTO) Amendments

In terms of the AARTO Act, the RTIA is expected to play a critical role in forging a closer, more effective and efficient link between the enforcement and adjudication processes. It is intended to play the role of an independent adjudicator overseeing and enforcing the provisions of the AARTO Act. The RTIA is also expected to increase compliance with road traffic laws, as well as inculcate a new habit of voluntary compliance with traffic laws through educational programmes and mechanisms. Overall, the Agency is mandated to ensure the implementation of objective, transparent and fair administrative processes.

 

The AARTO process starts with the detection by a traffic officer of an infringement committed by an alleged infringer. Upon allegedly committing an infringement, an authorised officer or a person duly authorised by an issuing authority (IA), must serve or cause to be served on the allegedly identified infringer an infringement notice. During the 2012/13 financial year, a total of 3.84 million infringement notices were captured in the AARTO jurisdictional areas and this figure increased to 6.975 million during the 2013/14 period.

 

An Infringement Notice is served either in person or through registered mail to the alleged infringer. The AARTO process allows the alleged infringer to select any one of the following five (5) options to be exercised within a period of 32 days after having received such notice:

  • To pay the penalty, reduced by the discount amount contemplated, if paid within the set timeframe of 32 days; or
  • Elect to pay in instalments; or
  • Submit a representation; or
  • Elect to be tried in court; or
  • Nominate the driver or person in control of the vehicle at the time the alleged infringement was committed, if it was not the owner.

The elective rates by infringers over the past two financial years can be summarised as follows:

(Graph 1: Graphic as displayed on page 45 of the Department’s Annual Report)

 

(Graph 2: Graphic as displayed on page 46 of the Department’s Annual Report)

 

The statistics above indicate that there is an extremely low compliance rate with the provisions of the AARTO Act. Thus the RTIA continues with the overwhelming task of changing road user attitudes and perceptions.

 

In order to address the challenges mentioned above, the following measures may, among others, be pursued:

  • Introduction of the electronic serving of AARTO documents;
  • Improving the process for the delivery and collection of Enforcement Orders;
  • The blocking of certain electronic National Traffic Information system (eNaTIS) transactions for unresponsive infringers which will prevent them from registering new vehicles or renewing their driving and vehicle licences; and
  • Increasing the penalty amount.

 

National Railway Safety Amendment Bill

The medium term targets for the 2017/18 and 2018/19 financial years were to submit the Draft National Railway Safety Regulator Amendment Bill to Parliament. During the drafting process of the Bill, it was also recognised that provision has not been made for individually focused provincial consultations. Section 76 of the Bill encroaches on the concurrent jurisdiction of the province in relation to public transport. The project plan provided for a national workshop, however, individual stakeholder consultations sessions must be held with provinces to consult on the draft Bill.

 

National Railway Safety Strategy

The medium term targets on the finalisation of the National Railway Safety Strategy will be deferred to subsequent financial years following the approval of the National Railway Safety Act. The Act will inform the strategic direction of the strategy and therefore needs to be finalised prior the formation of the Strategy.

 

2.1.2.3  Improved rural access, infrastructure and mobility

 

Access Road Development Plan (ARDP)

People in South Africa often face great inconvenience and travel long distances to obtain the services and information they need from Government. They also frequently have to visit more than one service point to access related Government services. Improving service delivery, especially services that improve the lives of poor and marginalised people, remains a government priority. The NDP 2030 Chapter 6, which focuses on inclusive rural economy, puts extra emphasis on the rural areas to ensure that they are spatially, socially and economically well integrated – across municipal, district, provincial land regional boundaries – where residents have economic growth, food security and jobs as a result of agrarian transformation and infrastructure development programmes, and have improved access to basic services, health care and quality education.

 

The purpose of the ARDP and especially the first phase of the project is to highlight the gaps in terms of accessibility to the selected amenities within this report and to inform provincial, district and local municipalities of the needs to provide additional access roads to relevant amenities. The following amenities were selected to form part of the assessment process:

  • Education facilities: Primary and Secondary Schools;
  • Health Facilities;
  • Libraries;
  • Community Centres;
  • Places of Worship;
  • Municipal Offices;
  • Post Offices;
  • South African Police Services (SAPS); and
  • Cemeteries.

The ARDP arrays the overarching goals, vision, and objectives which would be reflected in the Integrated Development Plans and also in the Transport Master Plans of District and Local Municipalities.

 

2.1.2.4  Improved public transport services

 

Public transport confronts many challenges in South Africa. The majority of workers and the poor still live in displaced, dormitory townships distant from places of work and other amenities. As a result, the cost of mobility and time spent commuting between homes and work place is draining and difficult to sustain. To alleviate this challenge, the Department will strive to maximise its contribution to socio-economic goals by providing a safe, reliable, effective, efficient and fully integrated public transport services that best meets the needs of passenger users.

 

In the medium-term, the Department will continue with the planning and construction of universally accessible Bus Rapid Transit (BRT) Systems in identified local and metropolitan municipalities.

 

The Public Transport Strategy, as well as the Taxi Recapitalisation Programme (TRP), have been reviewed to enhance provision of integrated public transport solutions. The Department has also developed the Integrated Public Transport Turnaround Plan, which aims to optimise public transport service offerings in both rural and urban spaces.

 

Regulation of the Public transport has been enhanced through the amendment of the National Land Transport Act and development of new regulations.

 

2.1.2.5  Increased contribution to job creation

 

It is still the Department’s priority over the MTSF to ensure a balance between creating a stable and supportive environment for growth and investment while at the same time addressing the many structural challenges the economy and society faces. In addition to longstanding regulatory, infrastructure and skills weaknesses, inequality in itself has become a core obstacle to investment and growth. By extension, efforts to support growth must simultaneously ensure more equitable distribution and ownership of income. Employment intensive programmes and initiatives will receive top priority, especially those that target youth and women.

 

In the medium-term, the Department will continue to monitor off-takes by end-users of the infrastructure build programme. In the implementation of the Provincial Road Maintenance Programme (PRMG), the Department works closely with other spheres of Government to ensure adequate road maintenance.

 

Through the new Rail Rolling Stock Fleet Renewal Programme, which is aimed at revamping the ailing rail infrastructure programme, the manufacture and supply of new rolling stock is expected to create direct and indirect jobs over the 10-year duration of the contract. In the 2017/18 financial year, 58 interns were employed in the transport sector. Some interns were placed within the Department, some within sector State-Owned Enterprises (SOEs) and the rest in various municipalities.

 

The interns continue to receive undergoing generic, technical as well as life skills training in order to prepare them for the labour market. On an annual basis, the Department exceeds the Department of Public Service and Administration (DPSA) target of 5% of staff establishment. For this, the Department received a Recognition Award for Internship for 2011 to 2013 from the National Skills Authority (Department of Higher Education and Training).

 

2.1.2.6  Increased contribution of transport to environmental protection

 

The NDP 2030 vision is that by 2030 South Africa’s transition to an environmentally sustainable, climate change resilient and, low carbon economy will be well under way. The current MTSF (2014-2019), will focus on the creation of a framework for implementing the transition to an environmentally sustainable low carbon economy. This phase will include unblocking regulatory constraints, data collection and establishment of baseline information and indicators testing some of the concepts and ideas to determine if this can be scaled up.

 

In the medium term, the Department has undertaken the development of the Green Transport Strategy (GTS), which seeks to address the adverse effects and impacts of transport on the environment and concurrently address the current and future transport demands based on the principles of sustainable development.

 

The GTS will provide a clear and distinctive route of the environmental policy for the sector, by providing appropriate sector specific climate policy tools and corresponding mitigation and adaptations measures for the transport sector as well as a framework to implement the Transport Flagships within the National Climate Change Response Strategy (NCCRS).

 

The GTS will also utilise a basket of measures, which will address imperative issues such as fuel switching for the freight industry to assist with the high emission factor of this sector. The introduction and promotion of the uptake of cleaner fuels such as Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG) for freight vehicles will assist and support with the emission reductions efforts of the sector. The use of cleaner fuels should be supported by Intelligent Transportation Systems that can provide support for this initiative of introducing cleaner transportation and alternative fuel technology for the freight sector, whilst also collecting imperative mitigation data.

 

The Implementation Plan of the GTS will promote the uptake of “Smart Trucks” and then benchmark against the appropriate international standards to specify the performance required from the operation of a given vehicle on a network, rather than prescribing how the specified level of performance is to be achieved. This approach will allow more flexibility for vehicle designers to utilise innovative solutions and the latest available technology to meet the required performance standards and improve fuel efficiency.

 

2.1.3     Challenges

 

The following challenges were experienced by the Department during the year under review:

 

2.1.3.1  Rail transport

 

Delays in submission of the White Paper on the National Rail Policy to Cabinet impacted negatively on the consultative process of the Rail Bill. The Rail Bill process will be fast tracked in the new financial year in line with progress made towards the finalisation of the White Paper on the National Rail Policy.

 

For the year under review, the PRASA received R19.2 billion in transfers from the Department of which R13.7 billion is capital related. The capital portion of transfer payment to PRASA to the amount of R3.971 billion was not transferred to PRASA on recommendation from National Treasury in an effort to comply with Treasury Regulations and good public financial management practices because the objectives of the transfers to PRASA were not achieved by the entity.

 

2.1.3.2  Civil aviation

 

Lengthy consultative processes with industry and role players in terms of the National Airports Development Plan (NADP), National Civil Aviation Policy, the Airport Company and ATNS Amendment Bills and the Civil Aviation Amendment Bill. This is a challenge that is not new and was highlighted in the 2016/17 report.

 

2.1.3.3  Maritime transport

 

  • Sustainability of the management of the S.A. Agulhas 1;
  • The long-term framework of the fleet management of the Department of Agriculture Forestry and Fisheries vessels;
  • Maritime Security Coordinating Centre capacity for the vessel pre-clearance automation system;
  • Depleted telecommunications equipment for the Telkom Satellite contract for the Maritime Information System;
  • The Tugboat Feasibility Study (Public-Private Partnership, or PPP) and the need for a Government-owned Tugboat – funding constraints; and
  • Funding for the 2020 World Maritime Day Parallel Event.

 

2.1.4     Achievements

 

The following were recognised achievements by the Department during the year under review:

 

2.1.4.1  Administration

 

  • A total of 38 interns received training during 2017/18;
  • Total of nine (9) Gender, Disability, Youth and Children community outreach campaigns were conducted;
  • The Human Resource Development (HRD) Strategic Framework monitoring report 2017/18; and the draft Annual HRD Implementation Plan 2018/19 were finalised and submitted to the DPSA;
  • Action plans to address audit findings raised by the AGSA were developed and implemented; and
  • The annual monitoring report on Risk Management was developed and tabled at the Departmental Risk Management Committee.

 

2.1.4.2  Integrated transport planning

 

  • Monitoring of implementation of 10 NATMAP priority pilot projects process was conducted and a consolidated report was compiled;
  • White Paper on the National Transport Policy was approved for submission to Cabinet;
  • Draft Regional Transport Integration Market Access Strategy was developed;
  • The STER Bill was approved for submission to Cabinet;
  • Green Transport Strategy was finalised and approved for submission to Cabinet; and
  • Road Tariff Determination Framework was approved by the Committee on ESEID for submission to Cabinet.

 

2.1.4.3  Rail transport

 

During the 2017/18 financial year, a Memorandum of Understanding (MoU) between the Department and the Department of Public Enterprises (DPE) was developed. The objective of the MoU is to create a framework for the two departments to work together to ensure smooth implementation of PSP on a Pilot Branch line. The Kroonstad Cluster has been nominated as the pilot Branch line, which emanates from the feasibility undertaken as part of the Branchline Strategy. This Strategy seeks to create a framework for the revitalisation of strategic railway branch lines in the country, in line with the policy objectives in the Draft White Paper on Rail Policy. It is anticipated that the MoU will assist to expedite the process of implementing the PSP on the Kroonstad Cluster, which, if optimally revitalised, could impact rural economic development (job creation).

 

The Department produced a Draft White Paper on the National Rail Policy. The Policy went through comprehensive stakeholder engagements inclusive of Provinces and Rail Operators in the country. The Draft White Paper Policy thrusts are on two critical interventions namely: Rail Sector Investment and Institutional Repositioning. Rail Sector Investment set out to revitalise the country’s rail sector by investing substantially to establish a high performance rail sector and reduce transport sector harmful emissions. Institutional alignment will support the investment within the SOEs to improve the rail sector investment and performance. Bilateral meetings with key stakeholders are currently being undertaken.

 

The building blocks towards the adoption of a STER by the State have been preceded by the establishment of an Interim Rail Economic Regulatory Capacity (IRERC) for the rail sector. The functions of the IRERC have been formalised in terms of a MoU between the Department and the DPE. A Ministerial Task Team (MTT) was appointed to guide the strategic direction of the IRERC and make recommendations to the Ministers regarding guidelines and framework and capacity requirements relating to rail economic regulation. The MTT is implementing the work plan approved by the Ministers. Any capacity established by the IRERC will be migrated to the STER, once the STER legislation has been finalised.

 

The Railway Safety Bill was approved by Cabinet for public consultation in the financial year 2017/18. The Bill seeks to improve the regulatory framework by placing emphasis on railway safety, recognising operators’ role in managing and implementing safety measures, with the RSR promoting safety and ensuring compliance with such measures. The Department undertook comprehensive consultation with the railway safety arena. As part of the consultation process workshops were held in nine (9) provinces with critical stakeholders to solicit the inputs. The Department is in the process of incorporating the inputs received from the stakeholders.

 

2.1.4.4  Road transport

 

The implementation of the NRSS embedded on the pillars of the UN Decade of Action for Road Safety departs from the notion that Road Safety is a social ill and calls for a collective action. Therefore, road safety is everyone’s responsibility and it is in the interest of every role player to decisively implement.

 

In order to ensure that priority interventions identified in the Strategy were implemented nationally, a process of developing a detailed 365 Days Road Safety National Programme was embarked upon during the 2017/18 financial year.

 

This was to ensure that the implementation and monitoring of the Strategy was effectively conducted. The implementation and monitoring technique identified interventions aligned to the Strategy for all the nine (9) provinces to implement as outlined below:

  • Speed operations conducted;
  • Vehicles Safety operations conducted and intensified overload management; and
  • Drunken driving operations conducted.

The various community awareness programmes categorised and prioritised according to road user group conducted in all Provinces and continue to be implemented and monitored are as follows:

  • Community-based education and awareness programmes conducted aiming at non-motorised road user group;
  • Learner Safety education and awareness programmes heightened at schools;
  • Youth-related programmes intensified;
  • Workplace-related awareness programmes established which comprise key aspects that promote adoption of best practice for organisations and highlighting costs of doing nothing (from reputational, financial, employee injury point of view), and provide Road Safety tool kits guide or Manuals guide for action;
  • Public transport driver education heightened; and
  • Elevated events and interventions for high traffic seasons such as Easter and the festive season.

 

AARTO Bill:

  • The AARTO Bill was presented to the Portfolio and Select Committees;
  • Conducted presentation to the KwaZulu-Natal, Free State, Gauteng, North West, Mpumalanga, Western Cape, Limpopo, Eastern Cape provincial Legislatures in preparation for the Provincial Negotiating Mandates; and
  • Undertaken provincial legislature public participation in eight (8) of the nine (9) Provinces, in preparation for the Provincial Negotiating Mandates; thereafter submit to the NCOP.

Road Accident Benefit Scheme (RABS) Bill:

  • Presented the RABS to Cabinet for approval; and
  • Presented the RABS to the National Council of Provinces (NCOP). [The Department tabled the RABS Bill in the NA for consideration by the Committee.]

National Road Traffic Act:

  • Developed the National Road Traffic Amendment Bill and conducted consultation on the proposal of the proposed amendments of the National Road Traffic Act (No. 93 of 1996);
  • Undertaken consultative process with the Department of Planning, Monitoring and Evaluation (DPME) and Socio-Economic Impact Assessment System (SEIAS) Certificate; and
  • Conducted consultation at the National Economic Development and Labour Council (NEDLAC) and obtained a NEDLAC report.

Road Policy:

  • During the period under review, the Draft Roads Policy was presented to seven (7) Provinces including Executive Committees (EXCOs) and Members of the Executive Council (MECs), as well as Mpumalanga Economic Cluster Technical Committees;
  • The White Paper on the Roads Policy was subsequently submitted to and approved by Cabinet for public consultations;
  • A 30-day public consultation period was undertaken and stakeholder inputs were incorporated into the White Paper; and
  • The White Paper was then submitted and presented to the ESEID Cluster in March 2018 and subsequently approved for submission to Cabinet for approval.

Access Road Development Plan (ARDP):

  • Draft ARDP completed.

 

2.1.4.5  Civil aviation

 

The National Civil Aviation Policy was approved by Cabinet in February 2017 and policy gaps that had emerged since the last policy review process, amongst others, address civil aviation safety and security; air transport; airport and air space infrastructure, and aviation-related environment matters.

 

The National Aviation Transformation Strategy was approved for submission to Cabinet.

The draft Air Services Bill was submitted to DPME for initial Socio-Economic Impact Assessment (SEIA) and a certificate of approval was issued to permit the Bill to proceed for further authorisations within the Department. During the period under review, industry consultative meetings were held and stakeholder consultations were conducted on the draft Bill.

 

The ACSA and ATNS Amendment Bills were approved by Cabinet. During the period under review, an inception report for the development of draft regulations for the ATNS Amendment Act was developed and stakeholder consultations were conducted with ATNS, ACSA, SACAA and the Board of Airline Representatives of South Africa (BARSA). Draft regulations were then developed as targeted.

 

On 29 January 2018, the AU leaders launched the Single African Air Transport Market (SAATM). The SAATM, of which South Africa is a signatory, provides for the full liberalisation of market access between African states, free exercise of traffic rights, elimination of restrictions on ownership and full liberalisation of frequencies, fares and capacities.

 

The Department, together with the Western Cape Provincial Government, the SACAA and the South African Air Force (SAAF) commemorated the 2017 International Civil Aviation Day (ICAD) and a Career Expo, which took place at the Air Force Base Langebaanweg in Langebaan, Western Cape. ICAD is an annual event initiated by the United Nations (UN) and it is aimed at raising awareness about the importance of civil aviation as well as the role that the International Civil Aviation Organization (ICAO) plays in international air transport. ICAO is a UN specialist agency responsible for administering and standardising the world’s civil aviation activities. The commemoration comprised three (3) main events including an air show and a career exhibition. The career exhibition was attended by learners from the neighbouring communities.

 

2.1.4.6  Maritime transport

 

  • The 2020 World Maritime Day Project Implementation Plan was approved for submission to Cabinet;
  • SAMSA Funding Model was successfully completed;
  • The development of the Marina at Port St Johns was successfully completed;
  • Training on UN dangerous goods transport was successfully completed and certificates issued; and
  • Marine Court of Enquiries – Both Witbank (Baham Bay) and King Fischer have been successfully completed.

 

2.1.4.7  Public transport

 

  • Detailed IPTNs were developed in two (2) district municipalities, Bojanala and OR Tambo as targeted during the year under review;
  • The TRP Review Report was approved by Cabinet and the Implementation Plan for the Revised TRP was developed;
  • Framework for the Implementation of the Integrated Public Transport Turnaround Plan (IPTTP) was developed as targeted;
  • Draft Transport Appeal Tribunal Amendment Bill was developed;
  • Rural Transport Strategy was approved by Cabinet; and
  • Draft Integrated Public Transport Network plans were developed in Thabo Mofutsanyane and John Taolo Gaetsewe District Municipalities.

 

2.1.5     Significant events and projects for the year

 

2.1.5.1  Integrated transport planning

 

  • The Trans Kalahari Corridor Joint Law Enforcement was reported as having taken place over the period 19 to 26 November 2017; and
  • The implementation of South African Women in Transport Provincial Chapters in Limpopo and North West was planned to be part of October Transport Month for 2018 (which would be an event after the current 2017/18 year under review).

 

2.1.5.2  Rail transport

 

During the 2017/18 financial year, the major spending on the capital budget transferred to PRASA, was directed on the modernisation process to replace the signalling systems, ageing rolling stock and upgrade of rail infrastructure. A major achievement was on the rolling stock fleet renewal programme, a catalyst for the transformation of Metrorail as a whole, as part of the Government’s Comprehensive Rail Programme over the next two decades.

 

The three (3) main deliverables of the Rolling Stock Renewal Programme whose delivery cuts across the medium term were achieved as follows:

  • The construction of testing facilities, depots and test track were handed over to Gibela in June 2016;
  • The manufacturing process of the 20 train sets in Brazil was completed in August 2017, with the arrival of the last sets delivered to Wolmerton Depot; and
  • The construction of the local manufacturing plant (Local Factory), to manufacture 580 train sets in Dunnottar, Nigel has been completed. Manufacturing activities have commenced and it is anticipated that two (2) new, locally produced trains will be delivered in December 2018.

PRASA launched the new rolling stock on the Pienaarspoort to Pretoria railway corridor in

May 2017.

 

2.1.5.3  Civil aviation

 

The Civil Aviation Gender Summit was indicated to have been held in August 2018 in Cape Town.

 

2.1.5.4  Maritime transport

 

World Maritime Day was indicated to have been held in Port St Johns on 28 September 2017.

 

 

 

  1. OVERVIEW AND ASSESSMENT OF FINANCIAL PERFORMANCE

3.1        2013/14 and 2014/15

Table 2: Overview and Assessment of Financial Performance (2013/14 & 2014/15)

Programme

2013/14

2014/15

Final Appropriation

Actual Expenditure

Expenditure Percentage

Final Appropriation

Actual Expenditure

Expenditure Percentage

Administration

333 440

315 578

95%

390 889

377 489

97%

Integrated Transport Planning

74 913

66 373

89%

74 974

74 974

100%

Rail Transport

11 232 843

11 232 840

100%

15 035 507

15 035 507

100%

Road Transport

19 897 209

20 665 564

104%

21 810 020

22 202 862

102%

Civil Aviation

245 515

148 602

61%

160 966

160 966

100%

Maritime Transport

103 557

102 271

99%

101 742

99 623

98%

Public Transport

10 514 190

10 505 616

100%

11 196 571

11 195 677

100%

Total

42 401 667

43 036 844

101%

48 770 669

49 147 098

101%

(Source: Department of Transport 2014 and 2015)

 

The budget allocation for the Department in 2014/15 equalled R48.7 billion. Transfers and subsidies accounted for R47.8 billion and of this amount, the Department had transferred R14 billion or 29.4% at the end of the First Quarter. Another R3.3 billion or 16.4% had been transferred to the municipalities and provinces, the majority of which was for the PRMG or SSP: Roads Maintenance (R1.6 billion or 20% of the R7.9 billion)) and the Public Transport Operations Grant (PTOG), totalling R1.3 billion or 25.9% of the R4.8 billion.

 

Rollovers were requested as detailed in the table below:

Table 3: Rollovers 2014/15

  •  
  1.  

Programme 1: Administration

Transfers to Higher Education Institutions

3 281

Programme 4: Road Transport

Transfer to the RTIA

3 825

Programme 5: Civil Aviation

Review of the National Airports Development Plan

  1.  
  •  

7 771

(Source: Department of Transport (2015))

 

3.2        2014/15, 2015/16 and 2016/17

 

Table 4: Appropriation Statement for 2016/17

Programme

 

2016/17

2015/16

2014/15

Final Appropriation

R’000

Actual Expenditure

R’000

Over/Under Expenditure

R’000

Final Appropriation

R’000

Actual Expenditure

R’000

Over/Under Expenditure

R’000

Final Appropriation

R’000

Actual Expenditure

R’000

Over/Under Expenditure

R’000

Programme 1: Administration

365 182

365 136

46

422 169

420 824

1 345

390 889

377489

13 400

Programme 2: Integrated Transport Planning

77 054

77 054

-

88 764

88 762

2

74 974

74 974

-

Programme 3: Rail Transport

18 993 457

18 992 005

1 452

18 310 610

18 305 274

5 336

15 035 507

15 035 507

-

Programme 4: Road Transport

24 878 466

25 055 434

(176 968)

23 164 889

22 889 198

275 691

21 810 020

22 202 862

(392 842)

Programme 5: Civil Aviation Transport

258 267

210 427

47 840

150 383

145 284

5 099

160 966

160 966

-

Programme 6: Maritime Transport

156 386

153 561

2 825

143 674

142 874

800

101 742

99 623

2 119

Programme 7: Public Transport

11 557 042

11 550 042

7 000

11 334 588

11 328 571

6 017

11 196 571

11 195 677

894

Direct Charge Against the Revenue Fund

3 821

3 821

-

 

 

 

 

 

 

Total

56 289 675

56 407 480

(117 805)

53 615 077

53 320 787

294 290

48 770 669

49 147 098

(376 429)

(Department of Transport, (2016b) Vote 35: Annual Report 2015/16 Financial Year and 2017Vote 35: Annual Report 2016/17 Financial Year, Pretoria, Department of Transport.).

 

The budget allocation for the Department for 2016/17 stood at R56.3 billion. Of this amount, the Department had spent R56.4 billion by the end of the financial year, indicating an over-expenditure of R117.8 million. The biggest over-expenditure, to the tune of about R177 million, was in the Road Transport programme.

 

Transfers and subsidies accounted for R52.3 billion and of this amount, the Department had transferred R13.9 billion or 26.6%, mainly to public corporations and private enterprises by the end of the First Quarter for 2015/16. The Department had an available budget of R1.2 billion for operations. By the end of the Second Quarter, the Department had transferred R26.6 billion or 50.7% of its total available budget. These transfers and subsidies were mainly to PRASA, SANRAL, and to the provinces for the PRMG and the PTOG.

 

By the end of the Third Quarter, the Department had transferred R38.8 billion or 73.8% of its total budget, mainly to PRASA, SANRAL, provinces for the PRMG and the PTOG respectively, and to the municipalities for the Public Transport Network Grant (PTNG). A total of 98% of expenditure by the end of the Third Quarter had been under transfers and subsidies, as well as payments for financial assets, with the remaining 2% having been spent on departmental operations.

 

By the end of the Fourth Quarter of 2015/16, the Department had transferred R52.2 billion or 99.4%. These transfers had been made to public entities, provinces, municipalities, international organisations and households. Transfers to provinces and municipalities to the end of the Fourth Quarter of 2015/16 stood at 98.7% of the available appropriation. This was attributed to the withholding of the final tranche payment of the PRMG to KwaZulu-Natal for not complying with the conditions set out in terms of the Division of Revenue Act. The Department had transferred 100% of the PTOG and 100% of the PTNG to municipalities. What follows below is an analysis of how the Department spent its budget allocation per Quarter during the period under review.

 

Rollovers were requested as detailed in the table below:

Table 5: Rollovers 2016/17

Programme

R’000

Programme 3: Rail Transport: Interim Rail Economic Regulator

1 452

Total

1 452

(Source: Department of Transport, (2017)).

 

3.3        2017/18

Table 6: Appropriation Statement for 2017/18

Programme

R’000

2017/18

2016/17

Final Appropriation

R’000

Actual Expenditure

R’000

Over/Under Expenditure

R’000

Final Appropriation

R’000

Actual Expenditure

R’000

Over/Under Expenditure

R’000

 

Programme 1: Administration

415 254

407 466

7 788

365 182

365 136

46

 

Programme 2: Integrated Transport Planning

83 075

76 360

6 715

77 054

77 054

-

 

Programme 3: Rail Transport

19 333 199

14 515 158

4 818 041

18 993 457

18 992 005

1 452

 

Programme 4: Road Transport

27 138 175

27 118 369

19 806

24 878 466

25 055 434

(176 968)

 

Programme 5: Civil Aviation Transport

171 165

166 149

5 016

258 267

210 427

47 840

 

Programme 6: Maritime Transport

128 417

109 327

19 090

156 386

153 561

2 825

 

Programme 7: Public Transport

12 525 895

12 277 572

248 323

11 557 042

11 550 042

7 000

 

Direct charge against Revenue Fund

10 000

5 559

4 441

3 821

3 821

-

 

Total

59 805 180

54 675 960

5 129 220

56 289 675

56 407 480

(117 805)

 

                 
  •  

 

In 2017/18, the budget allocation for the Department stood at R59.8 billion and of this amount, the Department had spent R54.7 billion or 91.4% by the end of the financial year, translating into an under-expenditure of R5.1 billion or 8.6%. The biggest under-expenditure was in the Rail Transport programme. Of the R19.3 billion that had been allocated to this programme, the Department had spent R14.5 billion or 75.1% by the end of the reporting period, indicating an under-expenditure of R4.8 billion or 24.9%.

 

3.3.1     Programme 1: Administration

 

By the end of 2017/18, the Administration programme had spent R407.5 million or 98.1% of the R415.3 million that had been allocated to it, translating into an under-expenditure of R7.8 million or 1.9%. The programme underspent R7.8 million on the Compensation of Employees due to posts that could not be filled, after shifting R434 000 to the Integrated Transport Planning programme.   Because of invoices received late, the programme overspent R7.2 million on Office Accommodation that was covered by the shifting funds from the Public Transport programme.

 

3.3.2     Programme 2: Integrated transport planning

 

The budget allocation for the Integrated Transport Planning programme was R83.1 million and of this amount, the Department had spent R76.4 million or 91.9% by the end of the period under review, indicating an under-expenditure of R6.7 million or 8.1%. The programme slightly overspent its budget for Compensation of Employees, for which R434 000 was shifted from the Administration programme to cover its shortfall.

 

The Integrated Transport programme “saved” R5.7 million and underspent R1.1 million on Goods and Services owing to projects that had been completed in-house, namely:

•           Rollout of National Transport Master Plan Interventions;

•           White Paper on National Transport Policy;

•           Regional Transport Market Access Strategy; and

•           Single Transport Economic Regulator Bill.

 

In addition, the Road Freight Strategy could not be completed “due to delays in processes”. Debts written-off amounted to R148 000.

 

3.3.3     Programme 3: Rail transport

 

The budget allocation for the programme stood at R19.3 billion and by the end of the reporting period, the Department had spent R14.5 billion or 75.1%, indicating an under-expenditure of R4.8 billion or 24.9%. This under-expenditure was attributed to the fact that the last transfer payment to PRASA had been withheld due to consistent low expenditure by the entity on its capital programmes.  The programme also underspent R1.8 million on the Compensation of Employees as a result of the posts that could not be filled because a moratorium had been placed for most of the period under review.

 

The programme “saved” R3.8 million and underspent R2 million on Goods and Services owing to projects completed in-house or below budget, such as:

•           White Paper on National Rail Policy;

•           Interim Rail Economic Regulatory Capacity;

•           National Rail Safety Amendment Bill; and

•           Implement of the Branch line Model for Private Sector Participation.

 

3.3.4     Programme 4: Road transport

 

Of the R27.1 billion that had been allocated to the Road Transport programme for 2017/18, the Department spent 99.9%, translating into an under-expenditure of R19.8 million or 0.1%. The programme underspent R4 million on the Compensation of Employees due to posts that could not be filled. In addition, “savings” on Goods and Services amounted to a net R16 million owing to projects completed in-house or below the budget.

“Savings” were recorded against the following projects:

•           Development of the White Paper on Roads Policy;

•           Construction and Maintenance of Provincial Roads Monitored;

•           Access Road Development Plan;

•           Review of Founding Legislations of Road Entities;

•           Monitoring Implementation of the Road Safety Strategy; and

•           Development of an Anti-Fraud and Corruption Strategy for Driving Licence Testing Centres, Vehicle Testing Centres and Registration Authorities.

 

However, Road Safety Projects were overspent. Debts written off amounted to R447 000.

 

3.3.5     Programme 5: Civil aviation transport

 

By the end of 2017/18, the Civil Aviation Transport programme had spent R166.1 million or 97.1% against R171.2 million that had been allocated to it, indicating an under-expenditure of R5 million or 2.9%. The Civil Aviation programme underspent R3.4 million on the Compensation of Employees due to posts that could not be filled. The programme “saved” R1.8 million on Goods and Services on the following projects that were completed in-house:

•           NADP;

•           Aviation Development Plan Implementation;

•           Review of the Airlift Strategy; and

•           National Air Transport Strategy.

 

An amount of R930 000 was shifted from the Maritime Transport programme to Transfers to Foreign Governments and International Organisations to cover the cost of late invoices for international membership fees.

 

3.3.6     Programme 6: Maritime transport

 

Of the R128.4 million that had been allocated to the Department in the Maritime Transport programme during the reporting period, it spent R109.3 million or 85.1%, translating into an under-expenditure of R19.1 million or 14.9%. The programme underspent R7.6 million on the Compensation of Employees due to posts that could not be filled. The programme underspent R1.4 million on Goods and Services that had been budgeted for finalising the Merchant Shipping Bill, because stakeholder consultations could not be completed.

 

A net amount of R10.1 million was “saved” on Goods and Services because a number of projects could be collectively completed below budget, such as:

  •  
  •  
  •  
  •  
  •  
  •  

 

3.3.7     Programme 7: Public transport

 

By the end of the reporting period, the Department had spent R12.3 billion or 98% of the R12.5 billion it had allocated to the Public Transport programme, indicating an under-expenditure of R248.3 million or 2%. The programme underspent R6 million on the Compensation of Employees as a result of posts that could not be filled because a moratorium had been placed on the filling of certain posts for most of the period under review.

 

Goods and Services were underspent by R52 million and R18 million was “saved”. The under-expenditure was due to a number of projects that could not be completed and delays in the bidding processes, such as:

•           R15 million Upgrade of the National Land Transport Information System (delays caused by re-advertisement);

•           Rollout of the National Land Transport Act;

•           Shova Kalula Bicycle programme;

•           Finalisation of the Transport Appeal Tribunal Amendment Bill; and

•           Funding and monitoring of the implementation of seven (7) IPTN Plans.

 

The programme “saved” on the following projects:

•           Administrative expenditure;

•           Finalisation of IPTNs in two (2) District Municipalities; and

•           Review of the TRP Design and Implementation Plan.

 

Transfers to Provinces and Municipalities were underspent by R52.5 million because a payment to Msunduzi Local Municipality from the PTNG had been stopped due to non-compliance with the Division of Revenue Act. Transfers to Households were underspent by R121.3 million after R24.3 had been shifted to augment transfer payment to the RSR, and R9.9 million was shifted to the Administration and Road Transport programmes to cover unbudgeted costs pertaining to the eNaTIS.

 

3.4        Virements 2017/18

Table 7: Summary of Virements[1]

Programme

Compensation of Employees

Goods & Services

Departmental Agencies & Accounts

Foreign Governments

Households

Total

Programme 1: Administration

(434)

8 617

-

-

-

8 183

Programme 2: Integrated Transport Planning

434

-

-

-

 

434

Programme 3: Rail Transport

-

 

24 300

-

-

24 300

Programme 4: Road Transport

-

8 536

-

-

-

8536

Programme 5: Civil Aviation Transport

-

-

-

930

-

930

Programme 6: Maritime Transport

-

-

=

(930)

-

(930)

Programme 7: Public Transport

-

(7 235)

-

-

(34 218)

(41 453)

Total

-

9 918

24 300

-

(34 218)

-

 (Source: Department of Transport, (2018)).

 

On Compensation of Employees, the Integrated Transport Planning programme overspent its budget and R43 000 was shifted from the Administration programme to cover the shortfall.

 

On Goods and Services, the Administration programme spent R1.4 million on correcting the asset register for the eNaTIS that had not been budgeted for and overspent R7.2 million on Office Accommodation due to invoices that had been received late. The Road Transport programme spent R8.5 million on investigations that had not been budgeted for. Funds were shifted from the Public Transport programme (Goods and Services and Households) to cover the cost.

 

On Departmental Agencies and Accounts, an amount of R24.3 million was shifted from the Public Transport programme (Households) to increase the Transfer Payment to RSR to fund its unfunded commitments.

 

On Foreign Governments, savings in membership fees for the International Maritime Organisation were shifted to cover the over-expenditure on membership fees of the Southern African Development Community Aviation Safety Organisation.

 

On Households, R24.3 million was shifted to the Transfer Payment of RSR and R9.9 million was shifted to the Administration and Road Transport programmes to cover unbudgeted expenditure related to the eNaTIS.

 

3.5        Rollovers requested

 

Rollovers were requested as detailed in the table below:

 

Table 8: Rollovers

Programme

‘000

Programme 3: Rail Transport: Transfer Payment to PRASA

838 825

Programme 4: Road Transport: Transfer Payment to RTMC

103 750

Total

942 576

(Source: Department of Transport, (2018)).

 

3.6        Unauthorised, fruitless and wasteful expenditure

 

3.6.1     Unauthorised expenditure

 

The cost of eNaTIS maintenance and operations resulted in unauthorised expenditure of R1.3 billion that was incurred in 2013/14, 2014/15 and 2016/17. No further unauthorised expenditure was incurred in 2017/18.

 

3.6.2     Fruitless and wasteful expenditure

 

A total of 64 cases of “no shows” pertaining to the previous and current year were declared fruitless and wasteful expenditure in the year amounting to R69 938.59. Of these, 59 cases amounting to R66 678.59 are to be recovered. Three (3) cases to the tune of R2 287.00 were transferred to debts, and one (1) case of R472.00 must be written off. One (1) case of R501.00 was reported to be under investigation at the time of reporting.

 

The total amount of R1.1 million outstanding includes the two cases regarding intangible assets that were procured in prior years and that are not used amounting to R845 196.00. The balance comprises fruitless and wasteful expenditure amounting to R50 551 that is under investigation, R78 334.25 that has to be written off and R81 554.83 that has to be recovered.

 

3.6.3     Irregular expenditure

 

Three (3) cases to the tune of R1 million were declared irregular expenditure in the financial year, of which two were reported to be under investigation at the time of reporting. No competitive quotations had been obtained in two (2) cases and there was no approval for obtaining less than three (3) quotes in one (1) case.

 

Four (4) cases amounting to R1.3 billion were written off during the year. The National Treasury had been requested to condone two cases and the Department was awaiting the response at the time of reporting.

 

Of the remaining nine (9) cases, disciplinary steps had been taken in four (4) cases. Disciplinary steps could not be initiated in one (1) case because the irregular expenditure was identified after the responsible employee had left the employ of the Department and in two (2) cases, disciplinary steps had not yet been taken at the time of reporting. Two (2) cases were still under investigation at the time of reporting.

 

3.6.4     Measures put in place

 

The Committee noted that the measures listed below are identical, as well as the same measures put in place in the Annual Report for 2014/15. The Committee further noted that the Department had still incurred irregular expenditure in the current period under review, which would indicate that the measures were either insufficient or ineffective or that the Department had not implemented these measures appropriately. The Department was once again requested to ensure that the measures are reviewed in order to ensure they are effective and that they are implemented appropriately.

 

Table 9: Measures put in place to prevent and/or detect irregular expenditure 2016/17 and 2017/18

2016/17 Annual Report

2017/18 Annual Report

Measures reported in the 2016/17 report to have been put in place by the Department to prevent and/or detect irregular expenditure are as follows: 

•Where appropriate, cases of irregular expenditure are referred to the Department’s legal services to determine whether any official can be held liable for the irregular expenditure;

•Cases of irregular expenditure are referred to the Department’s Directorate: Investigations and Forensics for investigation when an investigation is required;

•Relevant managers are requested to take disciplinary steps against officials who make or permit irregular expenditure;

•The Bid Adjudication Committee will not consider condoning irregular expenditure until a legal opinion has been obtained where applicable and disciplinary steps were considered;

•The contract management system monitors all payments against orders that are placed, and will detect payments that exceed the contract value;

•The contract management system will detect any payments that are approved for processing for which no order was placed;

•Payments for all procurements must be processed via Supply Chain Management (SCM) so that any irregular procurement can be detected before payment;

•To prevent the occurrence of not completing the internal order and requisition forms, the SCM component does not make any approval documents or letters of acceptance available until the internal order and requisition forms are completed; and

•Initiatives to train all officials who are involved in the approval of procurement matters will continue.

Measures listed in the 2017/18 report that were put in place to prevent and/or detect irregular expenditure are as follows:

 

•Where appropriate, cases of irregular expenditure are referred to the Department’s legal services to determine whether any official can be held liable for the irregular expenditure;

•Cases of irregular expenditure are referred to the Department’s Directorate: Investigations and Forensics for investigation when an investigation is required;

•Relevant managers are requested to take disciplinary steps against officials who make or permits irregular expenditure;

•The Bid Adjudication Committee will not consider condoning irregular expenditure until a legal opinion has been obtained where applicable and disciplinary steps were considered;

 

•The contract management system monitors all payments against orders that are placed, and will detect payments that exceed the contract value;

•The contract management system will detect any payments that are approved for processing for which no order was placed;

•Payments for all procurements must be processed via SCM so that any irregular procurement can be detected before payment;

 

•To prevent the occurrence of not completing the internal order and requisition forms, the SCM component does not make any approval documents or letters of acceptance available until the internal order and requisition forms are completed; and

 

•Initiatives to train all officials who are involved in the approval of procurement matters will continue.

 

 

3.7        Findings of the Auditor-General (AGSA)

 

During the period under review, the Department received an unqualified audit opinion with findings. The AGSA, however, made the following findings:[2]

 

3.7.1     Irregular expenditure

 

The Department incurred irregular expenditure as a result of officials not always following the prescribed procurement processes. Steps taken were also not effective to prevent irregular expenditure as required by section 38(1)(c)(ii) of the Public Finance Management Act (PFMA) and Treasury Regulation 9.1.1. These were repeat findings.

 

3.7.2     Procurement and contract management

 

Some of the goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury Regulation 16A6.1, and where less than three (3) quotations had been obtained, deviations were not approved, as required by Treasury Regulation 16A6.4.[3]

 

This is a repeat finding by the AG, as far as non-compliance with Treasury Regulation 16A6 is concerned. In 2016/17, the AG found that goods and services of a transaction value above R500 000 had been procured without inviting competitive bids, as required by Treasury Regulation 16A6.1.

 

3.7.3     Financial and performance management

 

Management did not adequately review and monitor compliance with the PFMA and Treasury Regulations to ensure that deviations from normal procurement processes had been approved by delegated officials.

 

Material amendments made to the annual financial statements related to impairment of the investment and prior period error adjustment and were because of incorrect calculation. The formula and inputs used for calculations were not thoroughly reviewed for accuracy.

 

3.7.4     Annual financial statements and annual report

 

As disclosed in note 35 to the financial statements, the corresponding figures for 31 March 2017 were restated as a result of an error in the financial statements of the department, and for the year ended, 31 March 2018.

 

The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records as required by section 40(1)(b) of the PFMA. Material amendments relating to impairment of investments and prior period error adjustment thereof were made to the financial statements submitted for audit due to incorrect calculation of the impairment. The amendments were assessed and confirmed to be reasonable.

 

This was a repeat finding.

 

3.7.5     Other reports

 

3.7.5.1  Investigations

 

Four (4) internal investigations are still in progress on matters related to procurement and contract management. The outcomes are expected in 2018/19 financial year.

 

During the previous financial year, there were five (5) such investigations underway and the outcomes were expected in the 2017/18 financial year. 

 

 

  1. OVERVIEW AND ASSESSMENT OF PROGRAMME PERFORMANCE

4.1        Summary of performance

 

Table 10: Overall Annual Performance Targets

Total targets set

37

Targets achieved

34/37

Targets not achieved

3/37

Success rate

91.9%

Total budget spent

R54.7 billion or 91.4%

(Source: Department of Transport (2018))

 

During the period under review, the Department had set itself 37 annual performance targets, and of these, it achieved 34, translating into an achievement rate of 91.9%.[4] Three (3) annual performance targets were not achieved, indicating an under-achievement rate of 8.1%. The budget allocation for the Department stood at R59.8 billion and of this amount, the Department had spent R54.7 billion or 91.4% by the end of the financial year, indicating an under-expenditure of R5.1 billion or 8.6%.

 

Some of the achievements by the Department during the period under review were the following:[5]

  • The HRD Framework was implemented through, inter alia, training of staff members and issuing of bursaries. The HRD Framework monitoring report and the Draft Annual HRD Implementation Plan were finalised and submitted to the DPSA;
  • Monitoring reports on the implementation of the Risk Management Strategy were developed on a quarterly basis;
  • A performance monitoring framework was developed and performance monitoring exercise was conducted on a total of 10 NATMAP priority pilot projects. A consolidated report on the monitoring of these pilot projects was also compiled;
  • The White Paper on the National Transport Policy was submitted to and approved by Cabinet for public consultations. It was then submitted to DPME for SEIA. A 30-day public consultative process was undertaken and stakeholders’ inputs were incorporated into the White Paper. The White Paper was submitted to the ESEID Cluster on 15 March 2018, and subsequently approved for submission to Cabinet;
  • The Bill was submitted to and approved by Cabinet Committee on ESEID for public consultations. A 30-day public consultative process was undertaken and stakeholders’ inputs were incorporated into the STER Bill;
  • A SEIAs certificate of approval was issued on the White Paper on National Rail Policy and the Policy was submitted to the ESEID Cluster. The Policy was subsequently approved for submission to Cabinet;
  • Stakeholder consultations on the Draft National Railway Safety were conducted with Transnet, PRASA, RSR, DPE, Rail Operators and the National Treasury. A SEIAs certificate of approval was issued on the Draft Railway Safety Bill and the Bill was submitted and presented to the ESEID Cluster. The Bill was subsequently approved for submission to Cabinet;
  • The Draft Roads Policy was presented to seven (7) provinces (Executive Committees and Members of the Executive Council), as well as the Mpumalanga Economic Cluster Technical Committee. The White Paper on the Roads Policy was subsequently submitted to and approved by Cabinet for public consultations. A 30-day public consultative process was undertaken and stakeholders’ inputs were incorporated into the White Paper. The White Paper was then submitted and presented to the ESEID Cluster in March 2018 and subsequently approved for submission to Cabinet for approval;
  • A status quo analysis of the founding legislations of Road Entities was conducted and recommendations were reviewed with the RTMC and the C-BRTA. A review of all founding legislations was conducted based on the recommendations of the status quo analysis;
  • Cabinet approved the NRSS and the Department subsequently commenced with the monitoring and implementation of the Strategy;
  • An inception report for the development of draft regulations for the Airports Company Amendment Act was developed and stakeholder consultations were conducted with ATNS, ACSA, SACAA and BARSA;
  • The Civil Aviation Amendment Bill was submitted to the DPME and ESEID Cluster, and subsequently approved by Cabinet in March 2017;
  • The Comprehensive Maritime Transport Policy was submitted to the DPME and ESEID Cluster, and subsequently approved by Cabinet in March 2017. The Draft Maritime Transport Strategy was developed and presented to the Department Executive Committee as part of consultations towards finalisation;
  • Progress assessments were conducted on Operation Phakisa infrastructure projects in seven (7) commercial ports (Cape Town, Saldanha, Durban, Richards Bay, Mossel Bay, Port Elizabeth and East London). An annual progress assessment report was developed as targeted;
  • Technical specifications for the new TRP were developed and a new proposal for the programme was submitted to and approved by Cabinet. Subsequently, drafts of the revised TRP Design and Implementation Plan were developed; and
  • The Integrated Public Transport Turnaround Plan was presented to the Southern African Bus Operations Association (SABOA), Mpumalanga, Eastern Cape and North West provinces to source inputs into the programme of action. A progress report was also developed on the analysis of implementation of the Plan. A concept framework for the implementation of the Integrated Public Transport Turnaround Plan was developed as targeted.

 

However, the Department encountered certain challenges that resulted in it being unable to meet three (3) annual performance targets that it had set itself for the period under review. The annual performance targets that could not be achieved owing to the said challenges were:[6]

 

  • The Road Freight Strategy (RFS) Implementation Plan could not be developed and this was attributed to “internal processes”.[7] Notwithstanding the fact that the annual performance target could not be achieved, the Department reported that a gap analysis and business case for the development of the RFS Integrated Implementation Plan were developed. Stakeholder consultations were conducted with the following stakeholders:

 

  • KwaZulu-Natal, North West, Eastern Cape, Limpopo, Gauteng, Northern Cape and the Transport Forum;
  • Eastern Cape Transport Technical Committee and Mpumalanga Freight Forum Meeting;
  • Johannesburg Freight Forum Meeting; and
  • National Transport Forum.

 

  • A Draft National Rail Bill was developed, but was not submitted to the ESEID Cluster as targeted; and
  • The Marchant Shipping Bill could not be submitted to Cabinet and this was attributed to “uncertainty on the scope of work for the overhaul of the Merchant Shipping Act”.[8]

 

4.2        Programme performance

4.2.1     Programme 1: Administration

 

Table 11: Programme 1: Administration: Annual Performance Targets

Total targets set

5

Targets achieved

5/5

Success rate

100%

Total budget spent

R407.5 million or 98.1%

(Source: Department of Transport (2018)).

 

The Department had set itself five (5) annual performance targets under the Administration programme and all of them or 100% were achieved. It spent R407.5 million or 98.1% of the budget it had allocated to this programme.

 

4.2.2     Programme 2: Integrated transport planning

 

Table 12: Programme 2: Integrated Transport Planning: Annual Performance Targets

Total targets set

7

Targets achieved

6/7

Target not achieved

1/7

Success rate

85.7%

Total budget spent

R76.4 million or 91.9%

(Source: Department of Transport (2018)).

 

During the period under review, the Department had set itself seven (7) annual performance targets and six (6) or 85.7% of these were achieved, and one (1) target or 14.3% was not achieved.

The target that was not achieved was the following:[9]

  • Road Freight Strategy Implementation Plan developed

 

The reason provided by the Department for its inability to achieve this target was “delays due to internal processes”.[10]

 

4.2.3     Programme 3: Rail transport

 

Table 13: Programme 3: Rail Transport: Annual Performance Targets

Total targets set

5

Targets achieved

4/5

Target not achieved

1/5

Success rate

80%

Total budget spent

R14.5 billion or 75.1%

(Source: Department of Transport (2018)).

 

Of the five (5) annual performance targets that the Department had set itself under the Rail Transport programme, it achieved four (4) or 80%, while one (1) or 20% was not achieved. The Department spent 75.1% of its budget allocation in the Rail Transport programme.

The target that was not achieved was:[11]

  • National Rail Bill submitted to the ESEID Cluster

 

While a Draft National Rail Bill was developed, it was not submitted to the ESEID Cluster and the reason provided in this regard is that “delays in submission of the White Paper on the National Rail Policy to Cabinet impacted negatively on the consultative processes of the Rail Bill”.[12]

 

4.2.4     Programme 4: Road transport

 

Table 14: Programme 4: Road Transport: Annual Performance Targets

Total targets set

6

Targets achieved

6/6

Success rate

100%

Total budget spent

R27.1 billion or 99.9%

(Source: Department of Transport (2018)).

 

The Department had set itself six (6) annual performance targets under the Road Transport programme and all or 100% of them were achieved. The Department spent R27.1 billion or 99.9% of the budget allocated to the Road Transport programme.

 

4.2.5     Programme 5: Civil aviation transport

 

Table 15: Programme 5: Civil Aviation Transport: Annual Performance Targets

Total targets set

5

Targets achieved

5/5

Success rate

100%

Total budget spent

R166.1 million or 97.1%

(Source: Department of Transport (2018)).

 

Under the Civil Aviation Transport programme, the Department had set itself five (5) annual performance targets during the period under review, and it achieved all or 100% of them, spending R166.1 million or 97.1% of the budget allocated to the programme.

 

4.2.6     Programme 6: Maritime transport

 

Table 16: Programme 6: Maritime Transport: Annual Performance Targets

Total targets set

4

Targets achieved

3/4

Target not achieved

1/4

Success rate

75%

Total budget spent

R109.3 million or 85.1%

(Source: Department of Transport (2018)).

 

During the reporting period, the Department had set itself four (4) annual performance targets and of these, it achieved three (3) or 75%, while one (1) or 25% was not achieved. The Department spent R109.3 million or 85.1% of the budget that had been allocated to it in the programme.

The unachieved target was:[13]

  • Merchant Shipping Bill submitted to Cabinet

 

The Department reported that while a Draft of the Merchant Shipping Bill had been developed and the process of stakeholder consultation had commenced, there were “delays in finalising the draft Bill due to uncertainty on the scope of work for the overhaul of the Merchant Shipping Act”.[14]

 

4.2.7     Programme 7: Public transport

 

Table 17: Programme 7: Public Transport: Annual Performance Targets

Total targets set

5

Targets achieved

5/5

Success rate

100%

Total budget spent

R12.3 billion or 98%

(Source: Department of Transport (2018)).

 

The Department had set itself five (5) annual performance targets under the Public Transport programme and all or 100% of them were achieved. The Department spent R12.3 billion or 98% of the budget allocated to the Public Transport programme.

 

 

5.         HUMAN RESOURCE MANAGEMENT

 

During the year under review, the Department had 879 posts on the approved establishment and of these, 651 had been filled. The vacancy rate stood at 25.9%.[15] The highest vacancy rate was in Programme 6: Maritime Transport that stood at 83.9%. The vacancy rates of Programme 7: Public Transport and Programme 5: Civil Aviation Transport followed, with 31.6% and 30.7% respectively.

 

The Department managed to provide 677 training interventions for a total of 399 employees during 2017/18 financial year. More emphasis was placed on accelerating leadership development to address the skills gaps identified through a skills audit project conducted during 2016/17.

 

Ten (10) employees participated in the sponsored (donor funded) international skills development programmes of which eight (8) were women and one was a person with disability.

 

In terms of the youth development initiatives, the Department exceeded the DPSA target of 5% of staff establishment by appointing fifty-eight (58) interns which is 8.6%. A total of 20 were placed within various Municipalities as Transport Planning interns. The Department secured an additional funding to the amount of R739 200.00 from the Transport Education and Training Authority (TETA) Discretionary Grant to fund sixteen (16) interns.

 

In an effort to ensure a skilled and capable workforce, the Department awarded sixty (60) new bursaries for the serving employees to further their studies. A total of 138 pipeline bursaries were managed. This was also a measure to address skills audit findings.

 

Fifteen (15) serving employees without qualifications at junior level, mostly Office Administrators were enrolled for Public Administration Learnership at National Qualifications Framework (NQF) level 5. The project will be closed during 2018/19.

 

The Department exceeded the target of ten (10) sessions by conducting seventeen (17) Career Outreach sessions across various provinces reaching a total of 16 627 learners. Furthermore, 3 057 girls participated in Take a Girl Child to Work Programme in partnership with SACAA of which thirty (30) were children of Department employees.

 

Management of MoUs with eleven (11) universities continued in which 944 learners were enrolled and 234 graduated for the 2017 academic year.

 

Provision of support to the thirteen (13) Technical Vocational Educational and Training (TVET) colleges offering transport qualifications resulted in 2 807 learners enrolled in Transport Logistics and Transport Operations.

 

The Department renewed its MoU for the Technology Research Activity Centre operating under the University of Stellenbosch for the provision of mobile laboratories to the disadvantaged schools in the rural areas of KwaZulu-Natal and Western Cape.

 

The Department managed to address all the Performance Management and Development System (PMDS) backlogs for assessment of senior managers and employees at salary level twelve (12) and below and performance incentives were paid accordingly.

 

Mechanisms to improve compliance with the submission of Performance Agreements for 2017/18 yielded a positive result where 99% of employees complied, of which employees at level twelve (12) and below obtaining 100% compliance rate. Ninety-four (94%) of the Annual Assessment for the 2016/17 performance cycle were submitted and moderated successfully. Performance incentives were paid in September 2017 way before the DPSA prescribed deadline of December 2017.

 

6.         SUMMARY OF REPORTING REQUESTS

 

The Committee requested additional matters for the Department to report on:

Recommendations

Progress

The advertising and filling of critical vacant posts should be prioritised in the Department and the affected entities. This has been a repeated recommendation over numerous years.

The Department, with its entities, must present a workable plan/strategy that will

allow for the filling of vacancies, whether this be through urgent consultation with

National Treasury or through skills assessments or both.

During the 2017/18 financial year, the Department made 3 appointments and 8 internal promotions.

Currently, advertisements to fill the positions of the Director-General and 5 Deputy Directors-General have been posted in the media.

The process of filling critical Chief Director and Director positions are at various stages (short-listing, interviewing, recommendations and appointment).

The Department should strengthen its oversight over the entities and report on progress made to remedy all matters raised by the AGSA in its audit reports of the Department and the entities. This will, in turn, allow for an improvement in the performance of the transport portfolio as highlighted under areas of concern as contained in the AGSA 2016/17 Consolidated General Report on National and Provincial Audit Outcomes.

The Minister approved SAMSA amendments on their 2017/18 APP as the AGSA had highlighted huge deficiencies in the internal controls, compliance with Treasury Regulations and poor record- keeping and further performed tests to determine whether targets and indicators were well defined.

The Department has submitted its action plan to address AGSA findings and progress on all actions.

Effective steps should be implemented to prevent irregular expenditure. Officials who caused the Department or its entities to incur irregular, fruitless and wasteful expenditure should be subjected to the appropriate measures provided for in terms of sections 81 to 86 of the PFMA. These sections define financial misconduct and lay down the procedures for disciplining public officials guilty of financial misconduct. They also include provisions for criminal prosecution in cases of gross financial misconduct.

The Department should also ensure that proper record-keeping be implemented for information supporting compliance and procurement process and implement consequence management for staff members who fail to comply with applicable legislation.

Effective steps are taken to prevent and address irregular and fruitless and wasteful expenditure. Of the 12 remaining cases of irregular expenditure, disciplinary steps were taken in 6 cases.

In 2 cases, disciplinary steps could not be taken because the responsible employees resigned.

In 3 cases, disciplinary steps are awaited and in 1 case disciplinary steps were requested.

3 Investigations were completed, 5 cases are under investigation and in 2 cases criminal

cases were opened.

1 case is being investigated to determine whether the expenditure constitutes irregular

expenditure.

Of the 48 remaining cases of fruitless and wasteful expenditure, 40 cases will be recovered, and in 4 cases, applications will be made for write-off and 4 cases must be investigated.

The Department and entities should capacitate their Finance and SCM departments with appropriately skilled and competent personnel to prepare credible financial statements. Furthermore, management should ensure that information used to prepare financial statements is accurate and reliable. Staff should be retrained and reskilled to ensure that they comply with legislation.

The Department’s Interim Financial Statements up to Quarter 3 of 2017/18 were subjected to Internal Audit. The findings were limited to household matters.

Control processes should be adhered to in the SCM processes. The Department should establish a task team to identify and address the inefficiencies in the SCM process in the Department, as well as its entities. There should be consequences for poor performance and failure to comply with applicable legislation.

A task team was not established as recommended because of capacity constraints.

However, a Departmental Circular was issued to require that Requests for Quotations be provided timeously to ensure that proper quotations can be obtained.

Irregular expenditure that was incurred was not as a result of inefficiencies in SCM processes, but rather SCM processes that were not followed by non-SCM officials.

The AGSA’s recommendations which address identified root causes should be implemented.

Action plans to address AGSA findings have been developed and are monitored on a quarterly basis to ensure that AGSA recommendations are implemented accordingly.

The Department should develop funding plans to ensure the financial sustainability of the entities and should provide the Committee with quarterly updates on strategies to improve the financial health status and reduction of instances where the liabilities exceed total assets of the C-BRTA, RAF, PRSA and SANRAL (possible inclusion of PRASA, SAMSA and ATNS will be determined once their Annual Reports have been audited) as there was uncertainty as to whether the entities would be able to fund their future obligations.

Specific sub-sectors in the Transport Sector require specialised funding for each of their

entities. Some entities are operators and some are regulators.

The Department has decided to prioritise SAMSA, whose funding model has been finalised. The next funding model on the priority list is the RSR, whose model will be finalised by end of the financial year 2018/19.

The Department, however, continues to monitor, on a quarterly basis, the financial

performance of all entities. Included in the analysis are the solvency, liquidity and gearing ratios.

The Department should report back to the Committee on a quarterly basis on its monitoring, tracking and engagement with its provincial and municipal counterparts on the implementation of the PRMG and other grants to ensure that money is used for its intended purpose, to ensure that there is value for money spent and to prevent a future need for roll-overs as an extension of the two-way Key Performance Indicator (KPI).

PRMG Review monthly financial and performance data.

Quarterly performance meeting for PRMG

Bilateral meetings with provinces for Monitoring and Evaluation (M&E).

Bilateral meetings were held with provinces and municipal counterparts on a quarterly

basis. Furthermore provinces submit their quarterly performance progress report on

implementation of PRMG and any discrepancies are followed up.

PTNG

Overall: Eleven (11) cities are undertaking network construction work and Four (4) cities (Cape Town,

Johannesburg (phase 1A & B), Tshwane and George) are mainly operating phase 1 IPTNs. Of the seven (7) cities launching or expanding in 17/18 only NMB and Tshwane (in earnest) and Ekurhuleni will likely implement their initial network operations in Quarter 4 of 17/18.

Mainly, eThekwini, Polokwane, Rustenburg and Nelson Mandela Bay seem likely to

operate in early 2019, as they are mainly completing the rollout of the network infrastructure and concluding negotiations with affected existing public transport operators.

Although Buffalo City, Msunduzi, Mbombela, and Mangaung are reportedly rolling out network infrastructure construction with varying degrees of progress, their programme monitoring reveals that they are battling with the completion of their IPTN operations and financial/business plans to inform their network operations.

Operating Cities specifics:

Johannesburg: (Rea Vaya) continues to operate Phase 1A and 1B of its PT network and the current reporting (Quarter 2) reflects: 39 690 average weekday passenger trips undertaken, 133 passengers per network vehicle per average weekday undertaken, an uptime of 98% for network operating systems as a proportion of the network’s operating hours, 26% direct operating cost recovery from the fare box and the PTNG funding covers 100% of the indirect IPTN operating costs.

Cape Town: My City network’s current reporting (Quarter 2) reflects: 64 224 average weekday passenger trips undertaken, 253 passengers per network vehicle per average weekday undertaken, an uptime of 99.7% for network operating systems as a proportion of the network’s operating hours, 53% direct operating cost recovery from the fare box and the PTNG funding covers 34% of the indirect IPTN operating costs.

George: the GO George network’s current reporting (Quarter 2) reflects: 14 476 average weekday passenger trips undertaken, 284 passengers per network vehicle per average

weekday undertaken, an uptime of 100% for network operating systems as a proportion of the network’s operating hours, 35% direct operating cost recovery from the fare box and the PTNG funding covers 85% of the indirect IPTN operating costs.

Tshwane: the A Re Yeng network’s current reporting (Quarter 2) reflects: 8 774 average weekday passenger trips undertaken, 586 passengers per network vehicle per average weekday undertaken, an uptime of 98% for network operating systems as a proportion of the network’s operating hours, 3% direct operating cost recovery from the fare box and the PTNG funding covers 64% of the indirect IPTN operating costs.

The Department and its entities should ensure that the targets set in their Strategic Plans and APPs going forward adhere to the AGSA’s Specific, Measurable, Achievable, Realistic and Timely (SMART) principles.

During the 2016-17 financial year, the AGSA raised some audit issues that SAMSA needed to urgently address. Amongst others, were objectives set by the entity that were not in line with the SMART criterion as per National Treasury’s Framework for Managing Programme Performance Indicators (FMPPI). As a result of this critical finding, the entity embarked on a process to implement corrective actions and as a result, an update on the 2017-18 APP was eminent.

The Department should ensure that the budget allocation for projects is strengthened and realistic in order to reduce the high amounts of funds being transferred under Virements.

The budget for Goods and Services was allocated to projects and operational expenditure to inform the Procurement Plan. The report of actual bids awarded against the Procurement Plan will be tabled at the Executive Committee to ensure that planned projects are embarked upon.

Virements took place over the past years to reduce unauthorised expenditure to a minimum.

The unauthorised expenditure was incurred because the eNaTIS was unfunded. The eNaTIS was transferred to the Road Traffic Management Corporation in April 2017.

The Department should develop an alternative investment attraction plan in order to make better use of Public-Private Partnerships and promotion of Private Sector Participation in the funding options for various infrastructure projects, such as the Moloto Corridor Project and other major infrastructure projects planned by the Department, as well as their provincial and municipal counterparts.

The Department has contributed a transport chapter in the National Treasury’s PSP Framework, and will continue to seek and attract investments in line with the stated Framework.

The Department should ensure that all Board vacancies of entities are filled as a matter of urgency in order to allow the entities to operate and report effectively, as well as within the parameters of the applicable legislation.

Vacancies of all Boards were advertised accordingly and the process of filling these vacancies in currently underway.

The Committee takes a dim view of the non-compliance and the lack of tabling of Annual Reports in terms of the sections 8 and 65 of the PFMA. The outstanding Annual Reports that are yet to be tabled before this committee, are of a serious concern, especially as the entities of PRASA, SAMSA and ATNS have in the past had numerous repeat findings issued by the AGSA.

The Department should ensure, and assist well in time where it is able to, that all Annual Reports are submitted within the legislated timeframes for the AGSA, as well as tabling in time before Parliament. The outstanding reports should be presented to the Committee as soon as they are tabled and referred to the Committee. It is recommended that the Committee be given an opportunity to submit a supplementary report on these late received Annual Reports.

PRASA is yet to submit its 2016/17 Annual Report due to delays in finalizing its audit process.

The Ports Regulator’s Annual Report was tabled on 22 September 2017 SANRAL, ATNS AND SAMSA’s Annual Reports were tabled after October 2017 due to delays in finalisation of the Annual Audits and it was communicated to the Minister. Parliament was duly notified.

The C-BRTA should report to the Committee regarding the draft joint agreement towards resolving the impasse regarding the cross-border movements on the Republic of South Africa (RSA)/Kingdom of Lesotho route.

The C-BRTA held a meeting with the Lesotho counterparts on 05 and 06 April 2018, where the text of draft agreements developed by both countries were reviewed. A draft consolidated agreement has been developed, however there are substantial areas of misalignment, which require intervention from the Southern African Development Community (SADC) Secretariat.

Furthermore, there is a need to convene a National Ministerial Task Team on the RSA/Lesotho impasse to discuss areas of Lesotho’s disagreement with the provisions advocated for by South Africa in preparation for the SADC meeting.

The C-BRTA should report to the Committee regarding the continued engagements on the implementation of the 1996 SADC Protocol on Transport, Communications and Meteorology.

The C-BRTA, in collaboration with the SADC Secretariat, hosted a workshop in October 2017 to review implementation of Chapters 5 and 6 of the SADC Protocol on Transport, Communications and Meteorology. The workshop was attended by 10 SADC mainland member states. Member States resolved to establish the Cross-Border Road Transport Regulators Forum (C-BRTRF), a structure that would drive the implementation of relevant Chapters of the Protocol. The Committee of SADC Ministers of Transport, in their meeting held in Malawi in November 2017, subsequently endorsed this decision. Following this ground-breaking development, the SADC Secretariat, together with the C-BRTA, hosted the inaugural meeting of the C-BRTRF in March 2018 to develop the Terms of Reference (ToR) and the Action Plan for the Forum. As part of the ToR, the Forum established the Executive Committee to lead the activities of the Forum, and the C-BRTA was nominated as the Chairperson and Secretariat of the C-BRTRF Executive Committee for the next 2 years.

In a parallel process, the Agency continues to have annual engagements with counterparts through Joint Committees as prescribed in the bilateral Road Transport Agreements that South Africa has concluded with SADC Member States with a view to implementing the SADC Protocol and address challenges faced by cross-border operators. In the last financial year, these engagements were conducted with Botswana, Democratic Republic of Congo, Mozambique, Zambia and Zimbabwe.

 

Reporting matter

Action Required

Time frame

Progress

The Department should submit an Action Plan to address the findings of the AGSA.

Written Plan from

the Department.

15 December 2017

Action Plan submitted and presented to the Committee on the 17th April 2018.

The Department should submit a comprehensive briefing on progress made on the TRP and the Review thereof.

Written briefing from the Department.

15 December 2017

Cabinet considered the review report in December 2017. Cabinet approved for implementation of the Revised TRP through the procurement process. National Treasury has approved for the contract to be extended for a period not exceeding six (6) months. The Department has already started with the procurement process to appoint a

new service provider to implement the Revised TRP.

The Department should submit quarterly reports on investigations underway in the Department and all the entities.

Written Plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA.

Cases under investigation for the period 2017/18 to date:

Cases under investigation by the Internal Audit and investigation: 16

Cases closed due to lack of evidence: 10

Cases referred to Labour Relation: 3

Categories of allegations under investigations are: Fraud, corruption,

Procurement irregularities, and others.

The Department should submit quarterly reports on the achievement of job creation targets in the Department and all the entities.

Written Plan from

the Department.

Quarterly reports within 60 days of the adoption of this report by the NA.

Progress report on the achievements of job creation targets submitted to the Committee on 17 April 2018.

The Department should submit quarterly reports on pending litigation, as well as settlements reached and judgements for and against the Department and all the entities.

Written Plan from

the Department.

Quarterly reports within 60 days of the adoption of this report by the NA.

Progress report on pending litigation, settlements reached and judgments for and against the Department submitted to the  Committee on the 17th  of April 2018.

The Department should submit quarterly reports on Human Resource Management (HRM) (retentions, secondments, transfers, retirements, training and skills transfers, resignations and dismissals), as well as report on progress in disciplinary matters (including suspensions) in the Department and all the entities.

Written Plan from

the Department.

Quarterly reports within 60 days of the adoption of this report by the NA.

HRM:

Retentions – None

Secondments – None

Transfers out – 6

Transfers in – 6

Appointments – 3

Internal Promotions – 8

Retirements – 4

Resignations – 17

Dismissals – 1

Deceased – 4

Labour Relations:

Suspensions – 1

Misconduct cases – 6

Grievances – 24

HRD:

Skills development – 335

Internship – 38

Internal bursaries – 180

External bursaries – 944

Learnerships – 15

Scholarships for serving employees – 5

Educational outreach programmes – 13 reaching 11 472 learners.

The Department should submit quarterly reports on the Shova Kalula project.

Written Plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA.

The Department has procured and distributed 6 000 bicycles in the 2017/18 financial year nationally in all provinces.

In the 2018/19 financial year, the Department will be procuring and distributing 7 000 bicycles and undertaking maintenance pilot programme of bicycles in selected provinces.

The Department should submit quarterly reports on progress regarding the Moloto Corridor Project and how this affects both the Road and Rail Programmes.

Written Plan from

the Department.

Quarterly reports within 60 days of the adoption of this report by the NA.

As part of phase one, work on Mpumalanga and Limpopo sections is

underway, that includes closing off dangerous illegal access, reducing conflict movement of service roads, installing and replacing street lights and relocating informal traders to safer areas.

Regarding infrastructure development, SANRAL has commenced with upgrading of intersections as follows: -

In Mpumalanga section:

Upgrading of 2 intersections at Vlaklaagte into traffic circles to reduce conflict movement and improve pedestrian safety.

Upgrading of intersections at Tweefontein into traffic circles to reduce conflict movement and improve pedestrian safety.

Upgrading of an intersection at Mateysloop into a butterfly.

Limpopo section:

Upgrading of surface shoulder to the existing cross section between Siyabuswa and Marble Hall on Road R573 Section 3.

Upgrading of intersections to traffic circle at the junction of R573 and

N11 at Marble Hall.

Gauteng Section:

Gauteng section of the road is not transferred to SANRAL (not proclaimed national road).

MoU signed between SANRAL and Gauteng province for maintenance of the road by SANRAL and Gauteng to transfer funds however, there is very little progress in the transfer of funds to SANRAL.

Currently, work on the Gauteng section is limited to only routine road maintenance by Gauteng.

Designs for the entire Gauteng section is at 60% complete, however funding from Gauteng still remains a challenge.

The Department should submit quarterly reports on strategies to address the financial health of C-BRTA, RAF, SANRAL and PRSA.

Written Plans from the Department and C-BRTA, RAF,

SANRAL and PRSA.

Quarterly reports within 60 days of the adoption of this report by the NA.

The Department monitors, on a quarterly basis, the financial performance of all entities, including those stated in this regard. Included in the analysis are the solvency, liquidity and gearing ratios.

The Department will continue engaging with the stated entities with the aim of improving their financial health statuses.

The Department with the C-BRTA should submit quarterly progress reports on progress regarding:

The implementation of the 1996 SADC

Protocol on Transport, Communications and

Meteorology.

The resolution of the impasse regarding the cross-border movements on the Republic of South Africa/Kingdom of Lesotho route.

Written Plan from

C-BRTA.

Quarterly reports within 60 days of the adoption of this report by the NA.

Implementation of the 1996 SADC Protocol on Transport,

Communication and Meteorology

Refer to Item 14 on the table above

Resolution of the impasse regarding cross-border movements on the

RSA/Lesotho route

Refer to item 15 on the table above.

 

 

7.         OBSERVATIONS

 

By 28 September 2018, the Annual Reports of the Department, as well as ten (10) of the entities and the two (2) accounts for DLCA and SASAR had been tabled in Parliament.

 

On 28 September 2018, Parliament was informed that ATNS were not tabling and listed the following reasons and proposed date for tabling:

“1. the fixed asset register was not ready in February2018. The report from the service provider indicated that the register crashed and could not be re-built in time. As a result of this, ATNS terminated the contract with the external service provider in February 2018. This led to ATNS losing 4 months’ worth of work and it was a huge set-back.

2. There has been different views between the Company and external auditors on methodologies applied in valuing some assets. This has resulted in protracted deliberations in pursuit of common view between the Company and the external auditors time.

This has consequently led to the delay in the External Auditors finalising the audit report on the Financial Statements. It is on this basis that I am unable to table the Annual report, financial statements and the audit report of ATNS by 31 September.”

 

On 4 October 2018, Parliament was informed that PRASA would be tabling their report late due to the AGSA only completing the 2017/2018 Audit on Tuesday 25 September 2018 and there were a few processes that had to be undertaken by the Board before the Annual Report could be tabled in Parliament. Once the AGSA completed and finalised the process of signing-off, the reports would be tabled in Parliament.

 

The Department tabled the PRASA 2017/18 Annual Report on 15 October 2018. The ATNS 2017/18 Annual Report remains outstanding at the time of completing the report.

 

The committee noted the view by the AGSA that the transport portfolio had regressed in performance and this was evident in the Department for the second year having received an unqualified opinion with findings, which also contained a number of repeat findings; the regression in audit opinion from unqualified with no material findings (clean audit) to an opinion of unqualified with findings of the entities RAF, RTMC and RTIA; and the second year of qualified audit opinions with findings of PRASA and SAMSA.

 

The Committee was pleased to note that the C-BRTA, PRSA and SACAA had been able to retain their unqualified audits with no material findings (clean audit) despite the challenges they face. SACAA is especially commended as having been the only entity of the Department which managed to achieve all of its targets for the financial year in question.

 

The Committee was concerned with the failure by PRASA and ATNS to submit their financial statements for audit within the required timeframe set by the AGSA, as well as the non-tabling to Parliament for consideration during the BRRR process by 28 September 2018. Although it was submitted late, out of these two entities only PRASA managed to table its Annual Report in time for it to be included in the Committee’s BRRR.

 

Due to the substantial late tabling of the 2016/17 Annual Report of PRASA, which was only referred to the Committee on 7 September 2018, it was not included in the Committee report for the 2016/17 financial year. This report is, however, referred to in the observations made by the Committee for the present report.

 

The Department and its entities received the following findings:

  • Unqualified Audit with no material findings (also referred to as a Clean Audit) – C-BRTA, PRSA and SACAA;
  • Unqualified with findings–the Department, SANRAL, DLCA, RSR, RAF, RTIA, RTMC and ACSA;
  • Qualified with findings – SAMSA and PRASA;
  • Failure to submit and findings still outstanding – ATNS.

 

Key areas of material non-compliance remain the failure to prevent irregular and fruitless and wasteful expenditure, asset management, non-compliance with legislation and regulations, as well as material misstatements to financial statements submitted for audit.

 

From the presentations and engagements, the Committee noted those areas where improvements were evident, however, concluded that the Department and its entities had not been able to clear repeat findings through implementing all recommendations and corrective measures by the AGSA and the Committee as made since the start of the current term.

 

The Department will need to focus more attention on ensuring that action plans are implemented to address prior year audit findings and that sustainable solutions are implemented to prevent a recurrence of findings in the area of compliance with key applicable legislation and financial reporting.  Vacancies and stability of management at the Department, as well as its entities continue to pose significant challenges regarding operations and the creation of a control environment to ensure that basic financial, performance reporting and compliance with laws and regulations are enforced.

 

The accountability for Government spending at SOEs is an area receiving attention in the public, as Government funds and guarantees are being used to sustain some of the SOEs. The audit outcomes of SOEs continued to regress – most often as a result of inadequate controls, monitoring and oversight. Instability at Board and executive level played a role in the outcomes of SOEs, and the Department and its entities were not spared this. The level of oversight by the Department over the entities reporting to it remained a concern for the Committee throughout all budget reviews over the past 4 years and the Committee welcomes the new branch within the Department to ensure it improves a greater level of oversight over its entities.

 

The Committee, in its oversight over the Department, has continued to request the Minister to ensure that proper monitoring and oversight is performed over all grant allocation projects.

 

The irregular expenditure does not necessarily represent wastage or means that fraud was committed – this needs to be confirmed through investigations to be done by the accounting officer (CEO) or accounting authority (Board) – but losses could already have arisen or may still arise if follow-up investigations are not undertaken. The track record of auditees in dealing with irregular expenditure and ensuring that there is accountability is poor. The significant increase can be attributed overall to continued weaknesses in SCM. The most common findings for the past four (4) years related to deviations from the prescribed procurement processes. Three (3) written quotations or competitive bids were not invited to enable the selection of a supplier based on a competitive and fair process. Although such deviations are allowed, the AGSA found that it had often not been approved; or, if approved, the deviation was not reasonable or justified. This points to the inappropriate use of management discretion in the procurement process. In some instances, the accounting officers used their discretion to appoint targeted suppliers without justifiable reasons – thereby failing to ensure compliance with legislation.

 

The Preferential Procurement Regulations make provision for the promotion of local production and content. These regulations are aimed at supporting socio-economic transformation. The Committee highlighted the need for the Department, as well as its entities to adhere to the Preferential Procurement Regulations throughout their engagements.

 

The AGSA is of the opinion that as long as the political leadership, senior management and officials do not make accountability for transgressions a priority, irregular, unauthorised and fruitless and wasteful expenditure, as well as fraud and misconduct will continue. An environment that is weak on consequence management is prone to corruption and fraud, and the country cannot allow money intended to serve the people to be lost.

 

The Committee continues to impress upon the Department and its entities that all investigations must be finalised within a reasonable timeframe and that all contraventions of legislation and regulations must be acted upon through disciplinary action. In instances where employees may have resigned, the Committee requested that the Department and its entities must not stop there, but should continue with steps to retrieve losses from those employees and, where appropriate, follow the procedures laid out in the PFMA for possible criminal prosecution.

 

With specific focus on the entities that appeared before the Committee, the following observations were made:

 

  • C-BRTA
    • The Agency’s financial sustainability remains a key challenge as the Agency funds its operations through one primary stream being revenue generated from issuance of permits to South African operators. The permit tariffs were last increased in 2014 and the permit tariff regulations are currently under litigation. The non-adjustment of the permit tariffs on an annual basis may create a situation where the Agency is unable to raise adequate revenue to fund its operations. There are some efforts that are ongoing to sustain the Agency, whilst it is defending the matter in court. This includes the development of a permit tariff determination model and prepared permit tariff regulations for public comments and promulgation before implementation in the First Quarter of 2018/19 financial year. The draft permit tariff regulations were gazetted for public comments in March 2018 and comments received are being considered by the Agency and the Department before finalising the permit tariff regulations for promulgation and implementation;
    • Furthermore, the Agency remains in a state of “technical insolvency” resulting from the Constitutional Court judgement in 2015 that necessitated that operators be refunded the difference between permit tariffs paid using 2011 permit tariffs and the lower 2003 permit tariffs fees. The Agency has since implemented cost cutting measures to ensure sustainable funding of the operations of the C-BRTA, whilst servicing the obligation to cross-border operators. The Agency is also pursuing the introduction of cross-border charges on foreign vehicles as an instrument for levelling the playing field and creating fair competition for South African operators, while generating the much-needed revenue to fund the Agency’s operations. The business case on the levying of cross-border charges has been finalised and currently going through approval processes in the Department;
    • Another key challenge relates to the on-going impasse relating to the issuance of passenger operations permit for the Free State/Kingdom of Lesotho corridor. The said impasse started in 1999 and has since been a challenge that affects and impedes normal passenger cross-border movements on the RSA/Kingdom of Lesotho route. The Minister of Transport established a National Ministerial Task Team (NMTT) that was tasked with the responsibility of developing a lasting solution to the impasse. The matter was also reported to the SADC Secretariat that is aiding with the facilitation of developing a lasting solution in line with the SADC Protocol on Transport, Communications and Meteorology. The engagements with SADC Secretariat resolved that the two countries should consider entering into a bilateral agreement. The C-BRTA drafted a bilateral agreement to be signed between RSA and the Kingdom of Lesotho. There are still ongoing engagements with all stakeholders on the agreement;
    • The Agency experienced a number of vacancies in the Board. The Department has been made aware of these vacancies and the process of filling the vacancies has been initiated;
    • In the year under review, permit revenue increased by 9%, being R213.6 million compared to R196.3 million in the previous year resulting in increase of R17.3 million from prior year. Penalty revenue for the year stood at R30.0 million compared to R28.7 million in the previous financial year. Interest income was R1.5 million more than budgeted, mainly due to a better than prudent cash flow management;
    • With the Constitutional Court judgement of 12 May 2015 declaring the 2011 permit tariff increase invalid, a liability of R318 million relating to operator refunds was created in the Agency’s financial books. The Agency has paid R142.8 million up to the end of March 2018 and is reporting an accumulated deficit of R124.5 million for the year ending 31 March 2018. The provisions of the Prescription Act were considered and applied as at the end of the reporting period. The Agency’s expenditure for the financial year is R18,7 million below budget, mainly arising from savings in staff costs, operating expenses and depreciation;
    • The regulation of passenger cross-border operations between South Africa and the Kingdom of Lesotho remained a challenge in the year under review. A draft consolidated agreement has been developed, however there are areas of misalignment that require intervention from the SADC Secretariat. Furthermore, there is a need to convene a MTT on the RSA/Lesotho impasse to discuss areas of Lesotho’s disagreement with the provisions advocated for by South Africa in preparation for the SADC meeting. The MTT, under the leadership of the Department, continues to engage in parallel processes of development and consultation of an economic benefit-sharing model, which is meant to address the major issues around market share;
    • New activities were noted as:
      • The Linking Africa Plan

Through the Linking Africa Plan, the C-BRTA will continue to accelerate its efforts of influencing stakeholders and leaders in other sectors. The Linking Africa Plan is a plan for integrating Africa through transport, trade, mutual respect and shared benefits for all Africans.

  • To proactively promote transformation and development of the cross-border industry

The 2018/19 financial year will see a refocused approach to the transformation and development of the cross-border industry to address historical imbalances in the regulation of the industry through C-BRTA’s approved Industry Development Strategy. This is in line with South Africa’s development agenda;

 

  • The Committee raised a concern regarding the failure by SADC countries to fully implement the 1996 SADC Protocol on Transport, Communications and Meteorology (the Protocol) and bilateral agreements in regard to road transport which negatively impacts the seamless movement of cross-border road transport and significantly contributes to the challenges faced by the cross- border industry as a whole. The full implementation of the Protocol in regard to road transport, and bilateral agreements would lead to efficient cross-border transport regulation and transportation and, in turn, culminate in reduction of challenges facing the sector. The Committee proposed that the issue be raised at the next meeting of the Committee of Ministers;
  • During the reporting period, the C-BRTA achieved 92% on pre-determined objectives, an improvement of 25% compared to the 67% in the prior year; and
  • During the reporting period, the C-BRTA received an unqualified audit opinion with no findings. While the C-BRTA should be commended for achieving an unqualified audit opinion, it should address the concerns raised by the AGSA with specific reference to the need to fill the vacancies in the Board as well as the CFO, as well as put more effort into ensuring that it achieves the annual performance targets it sets itself.

 

  • RAF
    • The financial strain on the RAF was once again tough during the reporting period. On average, the Fund was R9 billion in arrears per month with finalised claims that could not be paid due to insufficient cash to pay these claims. The Fund’s financial challenges continued under these circumstances with attachments by the sheriff of the RAF bank and call accounts that continued during the period under review in prevalence and value;
    • The RAF remained severely undercapitalised with liabilities exceeding assets by R206 billion, up from R180 billion in 2016/17;
    • During the reporting period, the number of outstanding claims where no payments had yet been made increased from 173 740 in 2016/17 to 198 285 in 2017/18;
    • 245 926 claims were still outstanding as at 31 March 2018 (personal claims: 234 572 and supplier claims: 11 354). Outstanding claims increased by almost 15%, from 213 877 in 2017/18 due to an increased number of registrations, as well as claims finalised that could not meet the high influx of new claims registered;
    • In 2017/18, the RAF achieved 90.9% of its annual performance targets, up from 90% in 2016/17. During the year under review, the RAF had set itself 33 performance targets. Of these, 30 or 90.9% were achieved, while only 3 or 9.1% were not achieved.  Conversely, in 2016/17, the Fund had set itself 30 performance targets and of these, 28 or 93.3% were achieved and 2 or 6.7% were not achieved;
    • During the period under review, the RAF regressed and received an unqualified audit opinion with findings. The Fund should ensure it works towards addressing all the concerns raised by the AGSA. The entity should also be supported in discharging its mandate of efficiently and effectively providing compulsory social insurance cover for to all users of South African roads; rehabilitate and compensate people injured owing to the negligent driving of motor vehicles; and
    • Notwithstanding the financial challenges that have beset the RAF for decades, there is hope that the RABS Bill that is currently before Parliament will usher in possible major positive amendments to the current unreasonable, inequitable, unaffordable and unstainable dispensation.

 

  • RSR
    • In the 2017/18 financial year, the organisation set eighteen (18) annual cumulative targets. Assessment of performance indicates that thirteen (13) of the eighteen (18) targets have been achieved, thus a 72% overall performance. The organisation achieved the lowest performance score in five (5) years. Several external factors contributed to this, including the financial constraints. Cash flow remained a cause for concern for the better part of the year and this was attributable to, among others, the following factors:
      • Unfunded accruals at the end of March 2017, which exceeded the outstanding receivables and available cash;
      • Under-recovery of budgeted revenues, high cost of employment and contractual commitments which impacted the 2017/18 budget; and
      • Under-recovery of technology review fees due to disputes raised by operators regarding the legality of the RSR claiming such fees and/or the over estimation of the number of projects to be submitted for review in the year;
    • To address these challenges, the management of the RSR took a frugal approach in preparing the budget for the 2018/19 financial year. The approach informed the development of a recovery plan, which serves as a roadmap, characterised by milestones, which will guide the organisation back to financial stability. The implementation of the plan is closely monitored by management and it  will assist in restoring the financial health of the RSR; and
    • In 2017/18, the RSR received an unqualified audit opinion with findings. While the RSR should be commended for having received an unqualified audit opinion, it should ensure that it attends to the findings raised by the AGSA.

 

  • RTIA
    • The programmes implemented by the Agency have yielded an achievement of 87.5% against APP targets;
    • There were challenges experienced in the revenue collection space, when the IAs stopped issuing the AARTO 03s, when they had disputes with the providers of equipment for the implementation of the service. This had a massive impact on road safety and, without a doubt, has set the entity back somewhat in its endeavour to reduce road trauma on South African roads. Following on the preceding year, the period 2017/18 saw a tremendous decrease in the total number of infringement notices issued by the IAs. The total number of notices issued during the year is 1,607,989, which amounts to a drop of 56.10% compared to the volume of notices issued in the 2016/17 period. The decrease of the volume of notices issued is mainly due to a significant reduction of electronically generated infringement notices (AARTO 03s) that account for an 82.59% reduction compared to the 2016/17 period that had 3,663,158 notices issued. AARTO 31s experienced a drop of 40.63%, being 354,238 compared to 596,613 in the previous period, followed by AARTO 02s, dropping by 23.38% from 1,279 issued in the preceding year to 980 in this reporting period. The AARTO 01s experienced a drop of 14.05% from 1,049,032 to 901,668 notices issued in the reporting period compared to the preceding year. This significant drop in the volume of infringement notices issued could have resulted in a concomitant reduction of the revenue collected and due to IAs and the Agency, were it not for the Agency's proactive and focused strategies;
    • The total Agency’s revenue collected during the reporting period increased by 17.83% as compared to the previous financial year, from R141 million in the 2016/17 period to R166 million during the 2017/18 period. Notwithstanding such increase, the Agency experienced a net loss of R30 million due to the lower than expected collections as a result of the 56.10% reduction in issued notices by IAs. Nevertheless, the Agency still continued to have a favourable cash flow position, thereby enabling it to have a strong position of dispensing its mandate and meeting its obligations as they arise;
    • The Agency has continued with analysing the road traffic environment with a view towards developing innovative interventions to increase road safety. This analysis resulted in the stratification of road users according to their vulnerability and enabled the customisation of various interventionist programmes. Whilst awaiting the final promulgation of the AARTO Amendment Bill, the Agency has undertaken the related research on the new provisions contained in the Bill, with a view towards customising solutions after the final promulgation. The Agency realises that its most important and extremely difficult challenge is effecting a change in road user behaviour. To this extent, the Agency places reliance on a dual process that identifies the quick-win situations and the long-term approaches, which include, amongst others, deployment of driving simulators. This programme will be implemented in partnership with the Agency’s strategic partner, TETA. These driving simulators are expected to provide learners and novice drivers with the requisite practice and competence to drive, prior to applying for their full driving licences;
    • Furthermore, the Agency has undertaken research to develop the framework for rehabilitation of drivers, in partnership with other stakeholders such as the National Institute for Crime Prevention and the Reintegration of Offenders (NICRO) and Department of Correctional Services, so that when the Bill is finalised, proactive measures can be implemented for changing and rehabilitating habitual infringers. Ultimately, the grand scheme that the Agency operates under will see it contributing towards the moral regeneration of society through a changed positive culture of compliance to all road traffic laws;
    • The main challenges experienced by the Agency during this period are deficiencies brought about by the current legislative framework. The Agency is, however, very pleased with the support received from its Shareholder and Parliament, which resulted in the NA approving the AARTO Amendment Bill in September 2017 and now in the final stages of approval by the NCOP. This will usher in a more robust and efficient legislative framework and enable the Agency to operate on a much firmer premise. Secondary to that have been the challenges relating to the capacitation of the Agency, to ensure appropriate timing of recruitment that aligns with national rollout after the promulgation of the AARTO Amendment Bill. In the interim, the Agency has ensured to implement strategic recruitment that is aimed at filling the positions related to the core of its mandate;
    • At the close of the reporting period, 31 March 2018, the Agency realised a cash surplus of R133 million. The Agency submitted a request for the retention of the surplus funds after the end of the financial year and is awaiting approval from the National Treasury. This request is subsequent to the previous financial year’s request for retention of the surplus experienced, which has not yet been finalised, and the related disclosures made in the Annual Financial Statements. The Agency receives less than 10% of its funding requirements from the national fiscus and has always shown the highest levels of fiscal prudence and fiduciary responsibilities. It is therefore the Agency’s strategic position to ensure that it keeps a healthy reserve to fund its programmes in preparation for national rollout from the revenue that it generates itself, without having to rely on government bailouts; and
    • During the year under review, RTIA received a regressed unqualified audit opinion with findings. While RTIA should be commended for having received an unqualified audit opinion, it should ensure that it attends to the findings raised by the AGSA and should put more effort into ensuring that it achieves all the annual performance targets it sets itself.

 

  • SAMSA
    • During the period under review, SAMSA had set itself sixteen (16) annual performance targets, and of these, it achieved eleven (11), translating into an achievement rate of 68.7%. Five (5) annual performance targets were not achieved, indicating an under-achievement rate of 31.3%.  The entity’s number of annual performance targets for 2016/17 was similar to the one for 2017/18, and the number of targets that were achieved was also the same;
    • The Committee noted with concern that SAMSA received a qualified audit for the second year in a row. While SAMSA’s achievement of 68.7% of the performance targets that it had set itself for the year under review is noted, the entity should ensure that it achieves all its set targets. In addition, the entity should ensure that it attends to the findings raised by the AGSA and put more effort into complying with applicable legislation, as well as dealing with internal control deficiencies. More importantly, the appointment of the SAMSA’s CEO should be expedited so that consequence management against officials who incur or permit irregular expenditure, as well as fruitless and wasteful expenditure are held to account.

 

  • PRASA
  • Commuter services are at its lowest performance levels of all time. On-time train performance is currently at 68.3% of trains operated and 13% of trains scheduled are cancelled with the average delay of over thirty (30) minutes being experienced by commuters. Metrorail transported 543 million paying passenger trips in 2013/14 and by 2017/18 this number has declined to 269 million paying passenger trips. This corresponds to the decline in customer satisfaction from 67% to 52% by end of 2017/18. This is as a result of the decline of the service levels. The availability of train sets (rolling stock) has decreased from 288 sets in 2013/14 to 200 by the end of 2017/18 and is currently at 174 sets (with only 50% correctly configured with twelve (12) coaches). This decline happened despite the general overhaul programme and repair interventions that amounted to billions of rand;
  • Long Distance Passenger Service (MLPS) has been declining to below acceptable levels as per the following :
    • 1. Operational and financial performance of MLPS has been declining since 2009 to levels that are beyond acceptable.
    • 2. Both trains run and passenger patronage have dropped drastically at a rate indicative of a service that has totally collapsed.
    • 3. The two MLPS service brands, Shosholoza Meyl and Premier Classe need to be well positioned to play a big role in moving passengers between cities.
    • 4. Passengers have dropped from 2.8 million in 2009/10 to 465 647 in 2017/18, whilst trains run have dropped from 6 604 in 2009/10 to 1 777 in 2017/18.
    • 5. The long distance passenger rail service has shown an average decline in fare revenue of 8% per annum over the last five (5) years;
    • Whereas Autopax has a total fleet of 517 buses, during the third quarter of 2017/18, it only operated with ninety (90) buses. Whilst this improved to 190 buses by the end of the 2017/18 financial year, this has not improved the level of performance where the service is supposed to be operated because most of its fleet is defective. The lack of availability of the fleet has contributed mainly to the drastic reduction in revenue collected. Whilst the total fleet is over eight (8) years old, 40% of the total fleet has reached over 800 thousand kilometres. The financial position of Autopax, as a going concern, is a matter that has to be addressed;
    • The PRASA Group has for a number of years experienced cash flow problems and is currently experiencing a severe cash crisis. The accumulated funding shortfall by 2017/18 financial year, stood at R5.2 billion. This is an untenable situation which demands drastic measures and immediate intervention. The entity has developed a Rescue Plan, appropriately called, Get On Track. The Get On Track Rescue Plan is presented against a background of a sustained decline in business performance, both operational and financial, which is at its lowest level in five (5) years. The Get on Track focuses on ten (10)-targetted interventions that will seek to deliver on the following:
      • Arresting the current decline in business performance.
      • Organisational stability and proper governance.
      • Fixing a misaligned and fragmented organisational structure.
      • Driving efficiencies and effectiveness to improve service delivery.
      • Fast tracking our modernisation programme to improve passenger rail travel experience;
      • The filling of critical vacancies is crucial if PRASA is to succeed in turning around the organisation. Progress has been made in this regard and the entity is working towards capacitating the organisation with skilled professionals that have a track record of superior performance. A recruitment process is reportedly underway and is aimed at being completed in the next few months;
      • The Group’s performance against pre-determined objectives was 21%. This is indicative of an organisation that is struggling to meet its performance objectives, which has a direct impact on service delivery. Comparatively, the 2016/17 financial year still remains the only period where PRASA achieved more than 55% of its predetermined objectives, but has achieved a 38.2% average performance over the last five (5) years;
      • Compounding the negative performance of the business has been the sustained leadership instability which has seen seven (7) Group CEO’s, including four (4) Boards at the helm of the organisation. This instability has negatively impacted on the organisation’s ability to take and implement the necessary and crucial decisions to fulfil its mandate. The lack of adherence to governance has resulted in a weak internal control environment with little or no consequence management. PRASA is therefore not complying with the required policies and relevant legislation. Significant findings on irregular, fruitless and wasteful expenditures, as well as repeat findings, shows an organisation that is failing to adhere to good corporate governance;
      • The below-than-acceptable performance requires special interventions and a rescue plan that will ensure that, in the next financial year PRASA, focuses on the following:
        • Arresting the current decline in business performance.
        • Focusing on reliability, availability, predictability of the service that is safe and secure and improves customer service satisfaction.
        • Fixing a misaligned and fragmented organisational structure and drive efficiencies and effectiveness in the deployment of resources.
        • Bringing organisational stability and strict governance.
        • Fast tracking our modernisation programme to improve passenger rail travel experience; and
  • The Committee noted with concern that PRASA received a qualified audit for the second year in a row. Noting the instabilities indicated above in the Board, as well as the fact that the Annual Report for 2016/17 was only tabled on 7 September 2018, nearly a year later than it was due, one could not have had expected much improvement in target achievement or audit findings for these two consecutive years. The achievement in the reporting year in question of merely 21% of the pre-determined objectives for the PRASA Group is unacceptable and the entity should work towards ensuring that it achieves all its set targets. In addition, the entity should ensure that it attends to the findings raised by the AGSA and put more effort into complying with applicable legislation, dealing with internal control deficiencies and ensuring consequence management is instituted against officials who incur or permit irregular expenditure, as well as fruitless and wasteful expenditure and these employees are held to account.

 

  • SANRAL
    • The development of Horizon 2030 offered SANRAL an opportunity to take a critical look at its business model and, especially, its funding policy. It has become clear that SANRAL cannot continue on the growth trajectory of the previous two decades during which the size of the network expanded without commensurate funding. The 2017/18 financial year was also a watershed in that SANRAL found it necessary for the first time to transfer an amount of R1 667m from the non-toll business to the toll road portfolio. This transfer, made with the concurrence of the Minister of Transport, was in order to reduce losses incurred as a result of sustained non-payment of toll fees by users of the roads constructed under the GFIP. The transferred amount was in addition to the special grant of R406m made by Treasury to off-set the reduced income on GFIP;
    • At the operational level, 2017/18 was a complex year. On the one hand, the agency had a large number of capital projects in process – a total of 223 covering 848km of roadway. Spending on capital projects was considerably lower than in 2016/17, reflecting a slowdown in construction, with a high proportion of projects running behind schedule. In addition to this, while some exciting new construction projects were initiated during the year, there was a sharp decline in the number of contracts issued – from 172 in 2016/17 to 60 in the reporting year – and there was a similar trend in relation to design phase contracts;
    • During the reporting period, SANRAL had set itself thirty-five (35) performance targets and of these, thirty-one (31) or 88% were achieved, while four (4) were not achieved; and
    • During the reporting period, SANRAL received an unqualified audit opinion with findings for the 4th year running. While SANRAL should be commended for having received an unqualified audit opinion, it should attend to the findings made by the AGSA for fear that the entity may regress to a qualified audit in the coming year. In addition, the Ministry must urgently seek to achieve finality regarding the GFIP funding model. Furthermore, the Agency should ensure that it achieves all the annual performance targets that it sets itself.

 

7.1        Comments and findings of the AGSA[16]

 

7.1.1     General comments on audit outcomes

 

C-BRTA, SACAA and PRSA maintained clean audit report status. RTMC and  RAF regressed from a clean audit status to unqualified with findings due to material non-compliance with SCM prescripts. RTIA also regressed due material non-compliance as well as a finding on usefulness of indicator and target for performance reporting.

 

SANRAL, RSR, ACSA and the Department remained unchanged with unqualified with material findings on compliance with SCM prescripts and material adjustment to financial statements submitted for audit.

 

DLCA remained unchanged due to material adjustments to the financial statements and material non-compliance, as well as findings on usefulness and reliability of indicators and targets for performance reporting.

 

SAMSA remained unchanged with a qualification on the completeness of irregular expenditure and commitments.

 

The audit opinion for PRASA remained unchanged. For the current year, the qualification was on irregular expenditure and fruitless and wasteful expenditure (completeness), assets (assets register not reliable and assets not complete and some do not exist), fare revenue (fare revenue systems not operating for the part of the year), and receivables (Impairment of irrecoverable receivables).

 

The audit of ATNS remains outstanding as the entity has requested an extension in order to resolve the assets and irregular expenditure matters that might result in a qualification.

 

7.1.2     Areas of concern

 

The audit area that the entities in the portfolio continue to struggle with most is non-compliance with key legislation, especially legislation relating to SCM prescripts. The lapse in oversight and controls in the area of compliance was evident in a number of entities that had material findings on compliance and has also led to irregular expenditure in the portfolio.

 

The entities that continue to struggle with compliance laws and regulations are the Department, ACSA, DLCA, RSR, RTMC, RTIA, RAF, SANRAL, PRASA.

 

The most common SCM findings related to:

• Deviations from the prescribed procurement processes. Although such deviations are allowed, we found that it had often not been approved, or, if approved, the deviation was not reasonable or justified; and

• Three (3) written quotations or competitive bids were not invited to enable the selection of a supplier based on a competitive and fair process.

 

7.1.2.1  Auditees that regressed (RTIA, RTMC and RAF) from clean to unqualified with findings

 

RTMC

There was a material non-compliance with SCM prescripts which led to irregular expenditure. The material finding identified related to awarding of a tender to a joint venture and one party to the joint venture did not submit declaration of conflict of interest and was not registered on the Central Supplier Database.

 

RAF

There was a material non-compliance with SCM prescripts which led to irregular expenditure. The material finding related to tender that was evaluated on functionality based on the criteria which was not documented / included on the bid documents

 

RTIA

There were material findings on compliance with SCM prescripts which led to irregular expenditure. The material findings identified related to three (3) quotations not obtained for purchases of goods and services. There was also a material finding on the reliability relating to the development of the funding model. The target was reported as achieved while it was still in progress.

 

7.1.2.2  Auditees that remain unchanged on unqualified with findings (SANRAL, ACSA, RSR, DLCA, the Department)

 

SANRAL

Material misstatements of non-current liabilities, current liabilities, revenue, trade and other receivables and disclosure items identified by the auditors in the submitted financial statements were corrected and the supporting records were provided subsequently, resulting in the financial statements receiving an unqualified audit opinion.

 

Effective and appropriate steps were not taken to prevent irregular expenditure, as disclosed in notes to the annual financial statements, as required by section 51(1)(b)(ii) of the PFMA. The majority of the irregular expenditure was as a result of additional expenditure in respect of contracts identified and reported on as irregular in previous years.

 

Some goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury Regulation 16A6.1, and the deviation was not approved by a delegated official. Some contracts were extended or modified without the approval of a properly delegated official, as required by section 56 of the PFMA.

 

ACSA

Material misstatements of non-current assets, current and non-current liabilities and disclosure items were identified by the auditors, in the submitted annual financial statements these were subsequently corrected which resulted in the financial statements receiving an unqualified audit opinion.

 

Goods, works or service were not procured through a procurement process which is fair, equitable, transparent and competitive, as required by section 51(1) (a) (iii) of the PFMA.

 

Sufficient appropriate audit evidence could not be obtained that all contracts were awarded in accordance with the legislative requirements because information relating to three (3) contracts awarded could not be provided for audit purpose.

 

Bid documentation for procurement of commodities designated for local content and production, did not meet the stipulated the minimum threshold for local production and content, as required by the 2017 preferential procurement regulation 8(2).

 

There was no sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred irregular expenditure and fruitless and wasteful expenditure, as required by section 51(1) (e) (iii) of the PFMA. This was due to proper and complete records that were not maintained as evidence to support the investigations into irregular and fruitless and wasteful expenditure.

 

DLCA

Material misstatements of disclosure items identified by the auditors in the submitted financial statement were corrected resulting in the financial statements receiving an unqualified opinion.

 

Specific information systems that were established by the trading entity were inadequate to enable the monitoring of progress made towards achieving targets, core objectives and service delivery, as required by public service regulation 25(1)(e)(i) and (iii).

 

A contract was awarded to a bidder based on pre-qualification criteria that differed from those stipulated in the original invitation for bidding, in contravention of the 2017 preferential procurement regulation 4(1) and 4(2).

 

The Department

Some of the goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury Regulation 16A6.1 and where less than three (3) quotations were obtained, deviations were not approved as required by Treasury Regulation 16A6.4.

Material amendments relating to impairment of investments and prior period error adjustment thereof were made to the financial statements submitted for audit due to incorrect calculation of the impairment. The amendments were assessed and confirmed to be reasonable.

 

RSR

There was over expenditure on contract without the necessary approval and deviation from procurement processes were not followed which resulted in irregular expenditure.

 

7.1.2.3  Auditees that remained unchanged with qualified audit opinion

 

SAMSA

Remained unchanged with a qualification on the completeness of irregular expenditure and commitments.

 

Goods and services of a transaction value above R500 000 were procured without inviting competitive bids, as required by Treasury Regulations 16A6.1. Similar non-compliance was also reported in the prior year. Goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury Regulation 16A6.1. Similar non-compliance was also reported in the prior year.

 

Sufficient appropriate audit evidence could not be obtained that all contracts and quotations were awarded in accordance with the legislative requirements as information was not submitted for audit. Some of the contracts were extended or modified without the approval of a properly delegated official as required by section 44 of the PFMA and Treasury Regulations 8.1 and 8.2.

 

Some of the contracts and quotations were awarded to bidders who did not submit a declaration on whether they are employed by the state or connected to any person employed by the state, which is prescribed in order to comply with Treasury Regulation 16A8.3. This non-compliance was identified in the procurement processes for the Maritime Special Projects.

 

PRASA

PRASA was qualified on assets (assets register not reliable and assets not complete and some do not exist), fare revenue (fare revenue systems not operating for the part of the year), receivables (impairment of irrecoverable receivables) and irregular expenditure and fruitless and wasteful expenditure (no complete and accurate register of irregular expenditure as well as fruitless and wasteful expenditure).

 

Financial statements were not submitted for auditing within two (2) months after the end of the financial year, as required by section 55(1)(c)(i) of the PFMA. Although a submission was made, it was incomplete.

 

Some material misstatements of disclosure items identified by the auditors in the submitted financial statements were corrected and the supporting records were provided subsequently, but the uncorrected material misstatements and supporting records that could not be provided resulted in the financial statements receiving a qualified audit opinion.

 

An annual shareholders’ compact was not concluded in consultation with the executive authority (Minister), as required by Treasury Regulation 29.2.1. The key performance measures and indicators included in the shareholders’ compact compiled by the accounting authority (Board) were not agreed to between the accounting authority and the executive authority, as required by Treasury Regulation 29.2.2. As a result of there being no approved shareholders’ compact, the corporate plan did not include approved objectives and outcomes, as required by Treasury Regulation 29.1.1(a).

 

Effective and appropriate steps were not taken to prevent irregular and fruitless and wasteful expenditure, as required by section 51(1)(b)(ii) of the PFMA. As reported in the basis for the qualified opinion, the value disclosed in notes 41 and 40 to the financial statements does not reflect the full extent of irregular and fruitless and wasteful expenditure incurred. The majority of the irregular and fruitless and wasteful expenditure disclosed in the financial statements was caused by noncompliance with SCM related legislation, policies as well as payments made where the value derived could not be justified.

 

Effective and appropriate steps were not taken to collect all revenue due, as required by section 51(1)(b)(i) of the PFMA.

 

Sufficient appropriate audit evidence could not be obtained that some contracts and quotations were awarded in accordance with the legislative requirements, as information was not provided due to inadequate record-keeping processes. For bids awarded, there was insufficient evidence that the bids of the winning suppliers were received before the stipulated closing date and time. These matters had an impact on a fair, equitable, transparent and competitive procurement process, as required by section 51(1)(a)(iii) of the PFMA.

 

Some goods, works or services were not procured through a procurement process that is fair, equitable, transparent and competitive, as required by section 51(1)(a)(iii) of the PFMA and section 217 of the Constitution.

Similar non-compliance was also reported in the prior year.

This included instances where:

  • supply chain management processes were not followed when procuring services from suppliers;
  • contracts were awarded to suppliers based on deviations that were not recorded and approved by the delegated authority;
  • contracts were issued in excess of the contract period stipulated in PRASA’s supply chain management policy;
  • some deviations from the supply chain management policy were approved by the delegated officials even though it was not impractical to follow the process stipulated by the policy; and
  • goods and services were procured through a quotation process instead of a tender process.

 

The preference point system was not applied in some of the procurement of goods and services above R30 000, as required by section 2(a) of the Preferential Procurement Policy Framework Act of South Africa (No. 5 of 2000) (PPPFA). Similar non-compliance was reported in the prior year.

Some contracts and quotations were awarded to bidders based on preference points that were not allocated and calculated in accordance with the requirements of the PPPFA and its regulations. Similar non-compliance was also reported in the prior year. Some contracts and quotations were awarded to bidders that did not score the highest points in the evaluation process, as required by section 2(1)(f) of the PPPFA and its regulations. Similar noncompliance was also reported in the prior year.

 

Some construction contracts were awarded to contractors that did not qualify for the contract in accordance with Construction Industry Development Board regulations 17 and 25(7A). Similar noncompliance was also reported in the prior year.

 

Bid documentation for some procurement of commodities designated for local content and production did not meet the stipulated minimum threshold for local production and content, as required by preferential procurement regulation 8(2) of 2017.

 

Some of the commodities designated for local content and production were procured from suppliers who did not submit a declaration on local production and content, as required by the 2017 preferential procurement regulations. Some of the commodities designated for local content and production were procured from suppliers who did not meet the prescribed minimum threshold for local production and content, as required by preferential procurement regulation 8(5) of 2017.

 

Disciplinary steps were not taken against officials who had incurred irregular and fruitless and wasteful expenditure, as required by section 51(1)(e)(iii) of the PFMA. This was due to not all instances of such expenditure previously reported being investigated. Where financial misconduct was confirmed in those instances that were investigated, disciplinary steps were not taken against the officials who had incurred and/or permitted irregular expenditure, as required by section 51(1)(e)(iii) of the PFMA and Treasury Regulation 33.1.1.

 

Allegations of fraud, forgery or uttering a forged document that exceeded R100 000 were not reported to the SAPS, as required by section 34(1) of the Prevention and Combating of Corrupt Activities Act (No.12 of 2004).

 

7.1.3     The AGSA highlighted the following key matters

 

7.1.3.1  Going concern/Financial sustainability

 

The entities noted below, have liquidity challenges that might result in a possible material uncertainty on the ability of these three (3) entities to continue as a going concern.

 

RAF

Similar to the Committee’s reporting in the prior year, the going concern assumption remains a concern for RAF and should be monitored closely by the entity i.e. ability to manage cash flow in order to fund claims which are due and payable.

 

SANRAL

The ability of SANRAL to continue as a going concern is dependent on the ability of it to issue bonds on the JSE and the Ministry seeking to achieve finality regarding the GFIP funding model, alternatively obtaining cabinet approval to discontinue the collection of e-toll revenue for GFIP. There has been limited progress made with finding a lasting solution to the financial sustainability of the entity.

 

PRASA

The agency continues to incur losses that increases the risk that the capital budget might be utilised to cover operational costs. The risk must be monitored and appropriate action plans should be put in place to manage the risk

 

7.1.3.2  Governance and oversight

 

The Minister together with the Department should ensure that Boards and audit committees for entities within the transport portfolio are capacitated with members who have appropriate skills and experience to ensure effective governance. This also includes the appointments of Director-General (DG), Deputy Director-General (DDG), Chief Executive Officer (CEO), Chief Financial Officer (CFO) and other key management personnel in the Department, as well as these entities. Appointments are imperative as these officials will be tasked to implement and monitor controls over financial and performance management.

 

7.1.3.3  Vacancies on Boards and audit and risk committees

 

ATNS

Due to the governance challenges at ATNS during the current year, the audit and risk committee was not fully functional and therefore there was no effective oversight.

 

SAMSA

The Board has vacancies and the current board term expired on 30 June 2018 and has been extended to November 2018.

 

C-BRTA

The current Board has vacancies on specialist Board members required in terms of the C-BRTA enabling Act.

 

SACAA

The Board term expired on the 30th of September 2018 and there was no extension granted.

 

RTIA

The Board term expired on the 31st of July 2018 and no extension was granted. At the time of reporting, the AGSA indicated that RTIA did not have a Board in place.

 

The Boards for SANRAL and ACSA have been appointed subsequent to financial year-end. PRASA currently has an interim Board appointed along with an interim Group CEO.

 

7.1.3.4  Key management personnel vacant posts

 

The Department

The position of Accounting Officer (DG) has been vacant for over a year and in the audit by the AGSA, they indicate that at the time of auditing there were six (6) acting DDG[17] posts that have been vacant for a significant period of time

 

PRASA

Key positions of Group CFO and Chief Procurement Office (CPO) are filled by acting incumbents and have been vacant for a significant period of time. At the time of auditing, the interim Group CEO’s appointment was aligned to the interim Board and is therefore limited to 12 months.

 

ACSA

The CFO post is vacant and is currently filled with an Acting CFO for over a year.

The CEO contract expired on 14 May 2018 and has been extended till 30 November 2018.

 

DLCA

The position of Head of Entity has been vacant for an extended period of time.

The CFO resigned in May 2018 and an acting CFO has been appointed.

 

RAF

The position of the CEO has now been vacant for 15 months.

 

SAMSA

The positions for CEO has been vacant 24 months. The period of acting CEO expired on 31 May 2017 and currently there is no acting CEO.

The CFO resigned at the end of February 2018 and a new CFO has been appointed, with effect from 01 November 2018.

 

ATNS

The position of CFO is currently vacant.

The position of CEO also became vacant subsequent to year-end, with effect from the beginning of October 2018.

 

RSR

The CEO is on precautionary suspension pending the outcome of an investigation. The outcomes of the investigation will need to be evaluated by the audit team to assess the impact on the audit.

 

C-BRTA

The CFO post is vacant and is currently filled with an Acting CFO for over a year.

 

 

7.2        Significant emphasis of matters

 

With regard to the Department, the financial statements, the corresponding figures for 31 March 2017 were restated as a result of an error in the financial statements of the Department, and for the year ended, 31 March 2018, and irregular expenditure was incurred as a result of officials not always following the prescribed procurement processes.

 

7.3        Material misstatements

 

With regard to the Department, the financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records as required by section 40(1)(b) of the PFMA. Material amendments relating to impairment of investments and prior period error adjustment thereof were made to the financial statements submitted for audit due to incorrect calculation of the impairment. The amendments were assessed and confirmed to be reasonable.

 

The Committee noted the material misstatements to financial statements at the Department, as well as at the entities indicated above. Root causes were again identified as key officials lacking appropriate competencies and slow responses by management. The Committee further noted that the root causes for material misstatement at the Department were identified by the AGSA as a lack of consequence for poor performance and transgressions and vacancies in key positions.

 

7.4        Procurement and contract management

 

With regard to the Department, some of the goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury Regulation 16A6.1 and where less than three (3) quotations were obtained, deviations were not approved as required by Treasury Regulation 16A6.4.

 

7.5        Predetermined objectives

 

In general, the AGSA commented on the majority of the Annual Reports that there were some concerns regarding the over- or underachievement of set targets. Management in the Department, as well as the entities should ensure that it is possible to validate the processes and systems that produce the indicator to enable them to produce the required evidence supporting their reported performance. Conversely, they should adhere to the requirements of the Framework for Managing Programme Performance Information (FMPPI) to ensure that all indicators are well defined and verifiable and that all targets are specific and measurable i.e. the nature and required level of performance is clearly specified and measurable.

 

The Committee noted that lack of specific set targets by entities, a lack of verifiable evidence on performance, as well as a lack of consequences for poor performance and transgressions were the root causes for the findings at the Department and certain identified entities.

 

7.6    Compliance with legislation

 

As a general observation, the Committee repeats its proposal from last year in that the Department and its entities should ensure that management formulates compliance checklists that detail the compliance requirements for each requirement, and these checklists should be reviewed throughout the procurement process. Members of the relevant committee and the chairperson should satisfy themselves that all service providers that are recommended for award have all the required documentation in terms of laws and regulations. The list of recommended bidders should be accompanied by a signed checklist confirming the completeness of required documents. Management should properly plan the acquisition of goods and services and exercise sufficient oversight and monitoring of controls to ensure that compliance with SCM policy is achieved. Recurring non-compliance should be investigated and appropriate action taken against transgressors. Furthermore, management should establish their own policies and procedures, aligned to the Framework for Managing Performance Information and the PFMA, to ensure that performance reporting requirements are properly processed by the Department.

 

7.7        Internal control deficiencies

 

With regard to the Department and its entities, there remains concerns regarding the vacancies in Boards, as well as in critical posts. As a general comment, it was also noted that the majority of the entities showed a slow response in implementing the commitments made in the prior year to address the internal control deficiencies in the areas of financial and performance reporting and compliance. Effective action plans were not developed and implemented to ensure that the repeat findings and related internal control deficiencies are addressed.

 

The entities and Department were also advised to implement proper record-keeping in a timely manner, to ensure that complete, relevant and accurate information is accessible and available to support performance reporting and to review and monitor compliance with applicable laws and regulations.

 

For the Department and the majority of its entities, although  action plans to address audit findings had been complied by management, the plans were ineffective in timeously addressing the reported control deficiencies, as an appropriate level of management did not monitor the status of addressing the findings and did not ensure that the lack of progress was escalated for further intervention. The plan for the Department, for example, is a carbon copy of the plan stated in the previous year.

 

The Committee requested that the Department ensure, within the Department, as well as its entities (especially with reference to Board appointments as well as Senior Management Posts) all funded and critical vacancies are filled as soon as is possible and also requested that the Department and its entities report back to the Committee regarding their plans to reduce the vacancy rate and ensure retention policies are in place.

 

The Committee further noted the lack of effective controls to ensure compliance with internal policies with regard to SCM and the AGSA’s findings in this regard for the Department and the affected entities. The Committee noted that the main root causes of these findings were key officials lacking the appropriate competencies, as well as a need to implement and apply an appropriate checklist for the compliance to all SCM policies and legislation.

 

7.8        Financial health of entities

 

Specific concerns were expressed for the financial health of SANRAL and RAF; although, C-BRTA, PRSA and PRASA were also of concern to the AGSA.

 

The financial health of various entities, as well as their abilities to execute their mandates, is in part affected by delays in the processing of legislation and regulations by the Department. The Committee continues to reiterate as a repeat observation, that the Department should work with an increased sense of urgency in finalising the required legislation and regulations in order to improve the performance of its entities.

 

7.9     Investigations

 

The Committee stated its concern regarding the long delays in the finalisation of investigations within the transport portfolio which are still before the Public Protector and various other institutions.

 

With regard to the Department, four (4) internal investigations were still in progress on matters related to procurement and contract management. The outcomes are expected in 2018/19 financial year.

 

Of specific concern to the Committee was the PRASA investigations and the massive budget spent on the investigation process with little results being report to date; with specific emphasis on the Werksmans Attorneys (“Werksmans”) forensic investigation, which had been reported as having commenced with a mandate effective from 5 August 2015.

 

In the BRRR of the Committee of 2016, the Committee was particularly concerned with the investigation underway by Werksmans on behalf of PRASA due to the fact that this particular investigation was unfunded and had incurred approximate expenses of R100 million at the time of compilation of the 2016 BRRR. During a report to SCOPA in August of 2017, PRASA indicated that this forensic investigation had cost approximately R148 million and that it had been finalised.

 

In the 2016/17 Annual Report, PRASA indicated that the report on investigations done by Werksmans would be made available after July 2017 and management would take action where necessary in executing consequence management. At the time, forty-one (41) cases with criminal intent were under investigation by the Hawks. At the time of reporting, there was no report or indication of when these matters would be finalised and/or could be obtained by management.

 

In 2017, PRASA indicated that the continuation of the investigations highlighted by the Public Protector report as done by Werksmans (only finalised in July 2017), as well as the National Treasury, still to be completed, resulted in a number of contracts being put on hold, suspended or in litigation. During the engagements with PRASA on 17 October 2018, it was indicated to the Committee that the bill to Werksmans for a forensic probe into mismanagement continues to grow during the second phase of implementation of findings and that  it is now standing at R169 million.

 

The Committee had on numerous occasions during the past 3 years inquired from PRASA to supply it with information regarding the contract that was concluded with Werksmans for investigations flowing from the findings of the report of the Public Protector, as well as the actions instituted as a result of the implementation of the findings from the Werksmans report. The Committee is of the opinion that the state has sufficient resources and entities (such as the SAPS, Directorate for Priority Crime Investigation (HAWKS) and National Treasury) that are more than capable of performing the work that has been contracted to Werksmans. The Committee is also of the view that the validity of the contract with Werksmans is questionable and is yet to receive a copy of the concluded contract or a formal report on how the appointment process was concluded, how this was budgeted for and how the ongoing work for implementation of the report findings is being budgeted for.

 

The Committee requests that PRASA reports on the validity of the contract, as well as when the scope and term of the contract will come to an end; whether the findings of the reports will be handed over to the relevant state institutions and entities; what consequence management will be implemented if it is found that the contract was concluded unlawfully or without the relevant authorisation and budget and whether there will be consequences for the persons who caused any irregular, fruitless and wasteful expenditure related to the conclusion of the Werksmans contract.

 

The Committee requested that the Department brief the Committee on the state of affairs of the investigations relating to the Department, as well as its entities that were underway at the time of reporting.

 

7.10      Policy and implementation concerns

 

Through its engagements with the Department and its entities, the Committee has noted with concern that although policy regarding the transport portfolio resides with the Department, the implementation thereof by some SOEs resides within the DPE. This causes difficulty in the effective operations of the entities reporting to the Department, e.g. concerns raised regarding the implementation of the PRSA functions within the sphere of operations managed by the Ports Authority of South Africa; as well as concerns regarding the rental of railway infrastructure from Transnet by PRASA.

 

The Committee further noted concerns remain regarding scholar transport, especially in the rural areas, and requested that the Department work with the Department for Basic Education in order to ensure the provision of safe and reliable scholar transport to learners.

 

8.         RECOMMENDATIONS

 

8.1        Observations and recommendations from the Budget Vote Report 2018

 

8.1.1     The Committee made the following observations:

8.1.1.1           Use of consultants

The Committee noted the increase in the budget of the Department for the use of consultants from R286 million in 2017/18 to R348.4 million in 2018/19, notably in the Public Transport programme.

 

8.1.1.2  Public transport network grant (PTNG)

The budget allocation for the PTNG increased from R6.2 billion in 2017/18 to R6.3 billion in 2018/19.   The Committee further noted that the implementation and rollout of these projects differ in each municipality to which funds are allocated despite this being a municipal implementation of national policy.

 

 8.1.1.3 Road maintenance (PRMG)

 The Committee observed that the budget allocation for the PRMG: roads maintenance component increased from R10 billion in 2017/18 to R10.3 billion in 2018/19. 

 

8.1.1.4  Moloto Road upgrade and Moloto development corridor

The Committee noted the increase in the budget allocation from R1.3 billion in 2017/18 to R1.8 billion in 2018/19 for the Moloto Road upgrade. The Committee noted that there has been progress regarding the R573 Moloto Road that connects the provinces of Gauteng, Mpumalanga and Limpopo. Mpumalanga and Limpopo provinces have transferred their sections of the road to SANRAL, while Gauteng province has not yet done so. The Committee was, however, concerned about the slow progress of this originally planned five (5) year upgrade project and also noted that the Rail portion of the Development Corridor project has slowed and PRASA Corporate Plan indicated that for 2018/19 the entity will target to finalise funding with the Department and National Treasury by the Second Quarter. The Department has concluded a review and assessment of the Putco Moloto contract, which included a detailed census to determine current demand. The review proposed that a new contract be introduced to replace the current one based on the outcome of the passenger census and the current demand.

 

8.1.1.5    Non-toll road network

The budget allocation for the non-toll network decreased from R9.1 billion in 2017/18 to R7.9 billion in 2018/19. This is for a number of reasons that include budget cuts which logically result in a reduction of targets for SANRAL and R128 billion of earmarked toll projects having been shelved. There was also a reprioritisation and focus on capacity improvements/new facilities.  

 

8.1.1.6  Vacancies and acting positions

The Committee observed the end of term for boards at ACSA, ATNS and RTIA. The Committee further noted that the board of SAMSA did not quorate. Numerous vacancies also still exist in the Department and its entities that led to an increase in the use of acting posts and could have contributed to further instability in these bodies. The Minister reported on progress in filling Board vacancies, as well as senior management and executive posts to the Committee.

 

8.1.1.7  Scholar transport

The Committee noted the Department’s target proposal in the 3rd Quarter to develop requirements for the inclusion of the Scholar Transport and Cross-Border Transport in the TRP.

 

The Committee raised concerns regarding the challenges faced by rural learners in obtaining access to scholar transport. Furthermore, concerns were raised regarding the modes or types of transport provided to learners which are not suitable or safe for the transportation of learners and often leads to overloading and contraventions of road traffic laws.

 

Concerns were also raised regarding the lack of uniformity in scholar transport provision in the various provinces and challenges faced in the management, financing, implementation and oversight over scholar transport as the policy framework resides with the Department. However, each provincial administration deals with the allocation of the function differently, with some provinces having it residing with Education and others with Transport.

 

8.1.1.8  SANRAL funding concerns as well as impact of GFIP thereon

 

The Committee raised concerns regarding the going-concern status of SANRAL due to poor collection on GFIP e-toll project. The Committee noted delays in implementation of critical projects which were also due to toll resistance and there was a loss of opportunity, as R128 billion investment in road infrastructure projects have been slowed down to the point of shelving them which includes:

  • N1-N2 Winelands Project, Western Cape
  • N2 Wild Coast Project, Eastern Cape
  • N3 Van Reenen Development Project
  • N3 Cedara to Durban Project.

 

The Committee noted that one of the key focus areas indicated by SANRAL for 2018/19 is the cooperation with the Department on developing a fresh Toll Roads Policy.

 

8.1.1.9  PRASA modernisation project

The Committee was of the view that until and unless the current service and safety concerns are adequately addressed, including the devolution of authority to regions for elective management and rail operations by the entity and the Department, the modernisation project will not be able to progress as more budget has to be spent on refurbishment of vandalised and outdated coaches and infrastructure to ensure services are able to run.

 

8.1.1.10            TRP

The revision of the policy appears to be delayed and the targets set for implementation of the project have failed to be accurate in recent years due to a reduced uptake thereof by the industry. The current project has no termination date which creates no urgency for compliance or uptake of the project. Furthermore, the Committee is concerned that the Department may not be utilising the data it has from the operating licence and permit databases to identify and contact owners of vehicles that may be qualifying for scrapping. The Committee indicated that the value allocated for pay-out to the industry in terms of the project is perceived as insufficient by the industry to warrant an uptake in the project. There also appears to be a trend towards utilising the underspent budget of this project to cover over expenditure in other projects. The Committee also noted with concern that the new proposed review of the policy has to date not been presented to the Committee despite promises to make such a presentation over a year ago.

 

8.1.1.11            Funding models and turn-around strategies of entities

The Committee is concerned that the funding models and/or turn-around strategies of the entities are not being processed or implemented as a matter of urgency, which if left to continue as is will lead to financial ruin of these entities and a lack of service delivery to citizens.

 

8.1.1.12            Legislative programme impact on entities

The Committee noted that despite past recommendations to bring legislation forward in the planning of the Department and entities, this was not adhered to and many challenges of entities could have been resolved if the Department planning was such as to ensure that legislation is processed earlier in the MTSF cycle. STER, RABS and AARTO Amendments are examples of pieces of legislation that could substantially affect the finances of entities. It was noted with concern that a substantial amount of proposed bills are yet to be submitted to Parliament for processing in the latter years of the MTSF cycle which may lead to the lapsing of the legislation and the need to resubmit after the elections in the new Parliament cycle.

 

8.1.1.13            Performance agreements and incentives

The Committee was concerned that some Department staff had still not signed performance agreements or undergone performance assessments during the reporting year. This is in contravention of the Public Service Act, as well as the employment contracts of public servants. Without proper assessments of performance, one cannot expect staff to improve on their services or allow the Department to identify training needs or identify talented staff members that would benefit from career advancement. The Committee further noted with concern that in some entities, such as the RAF, incentives such as cash bonuses are still being paid out to the executive despite the entity having an increasing deficit and cash flow constraints. Entities with deficits (current and/or budgeted as such in outer years) are PRASA, RAF, SANRAL, C-BRTA, RTIA, and SACAA. The Committee was of the view that entities with deficits should revise their performance management policies in a manner that regulates the issuing of non-cash incentives instead of cash based incentives in years where they carry deficits.

 

8.1.1.14            Alignment between APP/ Corporate plan targets and SMART principles, as well as Budget

The Committee observed the non-adherence of the APP targets to SMART principles as per the National Treasury Regulations, of certain entities, in particular PRASA, RAF and SAMSA. The Committee indicated that PRASA targets were especially of concern and that the Corporate Plan of the entity is rejected until such time as the targets have been revised and resubmitted to the Committee by 7 May 2018. The Committee also takes note that the Standing Committee on Appropriations received a briefing from the Office of the Chief Procurement Officer in National Treasury where it was reported that PRASA had failed to submit its 2018/19 procurement plan by 31 March 2018. These plans must be aligned with the Corporate Plan and PRASA was requested to provide reasons for the non-submission to the Standing Committee on Appropriations, as well as how this would impact on the attainment of the 2018/19 Corporate Plan targets. PRASA must also indicate to the Standing Committee on Appropriations why it should approve the 2018/19 budget allocation given the fact that it has failed to submit its procurement plan.

 

8.1.1.15            Optimal use of revenue generating streams of entities

The Committee noted that some entities, such as ACSA and PRASA, that have access to property do not make optimal use of possible advertising revenue or retail revenue generating streams.

 

8.1.1.16            Road safety programmes

The Committee noted the implementation of road safety programmes by various road transport entities.

 

8.1.1.17            Overdue Annual Report of PRASA

At the time of receiving the 2018/19 Corporate Plan presentation for PRASA, the Committee had still not received the entity’s Annual Report for the 2016/17 financial year. The absence of the report continues to limit the Committee in its oversight over PRASA, as well as doing a thorough assessment how the entity has dealt with past AGSA’s findings or how it intends to deal with such findings in its proposed APP in order to allow it to receive improved audit outcomes. In order to facilitate Parliament’s oversight over the national executive organs of state, section 92(3)(b) of the Constitution requires that “Members of Cabinet must provide Parliament with full and regular reports concerning matters under their control.” The oversight powers of the NA are particularly important for the process of considering annual reports, as they are the ‘regular reports’ referred to above. The challenge facing portfolio committees is that they need to ensure that departments provide good quality service delivery information in their strategic plans with tight performance targets and then to ensure that departments report against those targets in their Annual Reports.

 

The deadline of 30 September 2018 for submissions of 2017/18 Annual Reports is fast approaching and yet the Committee must now consider the plans in the APP and budget for an entity that failed to report on its operations for the financial term that ended two years ago.

 

8.1.1.18            Inconsistencies between the APP figures and the figures tabled per the Budget Vote documents

The Committee noted that in some instances there were inconsistencies in the figures presented by the entities and the Department in their APP documents when compared to the 2018 Estimates of National Expenditure for Vote 35: Transport, as tabled by Treasury.

 

8.1.1.19            Increased promotion required of universal access

It was noted that the Department indicated under the IPTN roll-out that some of the cities participating in the project have facilitated the procurement of nearly 1 000 vehicles worth over R3 billion and these are universally accessible to all users, in particular; the elderly and people with special needs. Furthermore, the Committee noted the Department’s commitment in the medium-term, to continue with the planning and construction of universally accessible BRT systems in identified local and metropolitan municipalities.

 

However, Universal Access is so much more than just access to the BRT system. Universal access is the goal of enabling all citizens to reach every destination served by their public street and pathway system. Universal access is not limited to access by persons using automobiles. Travel by bicycle, walking, or wheelchair to every destination is accommodated in order to achieve transportation equity, maximize independence, and improve community liveability. Wherever possible, the Committee would urge that the Department ensures the promotion of the need to have road and transport facilities designed to allow safe travel by young, old, and disabled persons who may have diminished perceptual or ambulatory abilities. By using design to maximize the percentage of the population who can travel independently, it becomes much more affordable for society to provide paratransit services to the remainder with special needs.

 

The Committee, therefore, was of the view that the Public Transport, Road and Rail Programmes do not make sufficient provision for the promotion of Universal Access as the APP currently appears to only focus on the BRT rollout with such service considerations.

 

8.1.2     The Committee recommended that the Minister ensure:

 

8.1.2.1        Use of consultants

The use of consultants is monitored by the Department, and that the Department ascertains whether the services rendered provided good value for money. In addition, the Department should indicate whether the consultants transfer relevant skills to the employees of the Department. The Department must furthermore brief the Committee on all consultants used with reference to their scope of work and the expenditure linked to these appointments within 30 days of the publication of this report.

 

8.1.2.2  Public transport network grant (PTNG)

The Department monitors the spending of the funds by the 13 IPTN/BRT implementing cities and ensures that the funds are spent as per the Division of Revue Act to warrant that value for money is achieved and services are delivered to the citizens. Quarterly reports on progress should be delivered to the Committee, as well as indications on whether or not any of the cities stand a real chance of having their funding allocation stopped due to a lack of progress.

 

8.1.2.3              Provincial roads maintenance grant (PRMG):  Road maintenance component

The Department monitors the expenditure of the Roads maintenance component of the PRMG and briefs Parliament quarterly on progress, as well as the breakdown of the 2018/19 budget allocation per province.

 

8.1.2.4  Moloto Road upgrade and development corridor

The Department delivers quarterly updates to the Committee on the progress made regarding the Moloto Road upgrade and Moloto Development Corridor (Rail) programme.

 

8.1.2.5    Non-toll road network

The Department ensures that the budget allocation for the SANRAL road maintenance programme respond to the challenges of unemployment, poverty alleviation and inequality.

 

8.1.2.6  Vacancies and acting positions

That Board members of entities such as ACSA, ATNS, SAMSA and RTIA are appointed without delay so that the entities are able to discharge their legislative mandates optimally. The Minister is also requested to report to the Committee on this matter, as well as the Department’s plan for ensuring future Board member vacancies are filled timeously within 30 days of the publication of this report. Furthermore, that the Minister ensures that all other vacancies in senior management in the Department and the executive in the entities are filled and reported on to the Committee within 60 days of the publication of this report.

 

8.1.2.7  Scholar transport

That the Scholar Transport Policy and regulation thereof is rolled out uniformly and monitored by the Department. The Department must ensure that one set of regulations is set out and implemented nationally on scholar transport norms and standards, which must be done through regular meetings with and co-operation with the Department of Basic Education. The Department should also hold regular engagements with Provincial Departments with which the function resides to assist in improving scholar transport, as well as report back to the Committee on progress on a quarterly basis.

 

8.1.1.8  SANRAL funding concerns, as well as impact of GFIP thereon

That SANRAL is assisted with formulating a suitable funding model that could aid in resolving the impact on its finances from the rollout of the GFIP project, as well as manage current project stoppages related to the general objections on all toll projects by finalising the development of a fresh Toll Roads Policy. The Minister also needs to address the going concern issues raised for SANRAL by arranging meetings between the entity, the Department, as well as the National Treasury.

 

SANRAL should also be assisted with support towards the achievement of its Strategic Objective to foster co-operative working relationships with all spheres of Government and the SADC member countries through the possible expanding of its scope towards becoming a road agency for the SADC as this could help support the development of infrastructure in the region, as well as economic integration.

The Department is to report to the Committee on a quarterly basis regarding the above recommendations.

 

8.1.2.9              PRASA modernisation project

That PRASA improves their current services and safety through the rollout of the turnaround strategy in a manner that would allow for the entity to focus further on the modernisation project. The entity should also indicate progress towards the devolution of authority to regions for effective management and rail operations through quarterly reports on the above to the Committee.

 

8.1.2.10            TRP

That the revision of the policy is finalised as soon as possible and ensure that value chain aspects are covered in the revised project model. That targets for the project should be set more accurately in order to reduce the over-reliance on underspent funds from this project to cover over expenditure in others. The Department must present the reviewed policy to the Committee within 90 days of the publication of this report.

 

8.1.2.11            Funding models and turn-around strategies of entities

That all entities with turn-around strategies and new funding models are given the required assistance, guidance and oversight required in order to implement these strategies and models that would allow them to be self-funding and reduce the increasing reliance on the national fiscus in the pursuit of service delivery. The Minister also needs to address the going concern issues raised for entities by arranging meetings between the entities, the Department, as well as the National Treasury.

 

The Department is to report to the Committee on a quarterly basis regarding the above recommendations.

 

8.1.2.12            Legislative programme impact on entities

That the Department and its entities ensure that their planning for legislation to be submitted to Parliament for processing is done in such a manner that would allow for the thorough processing thereof during the Parliament Cycle and not to rush submissions in the outer years of the MTSF.

 

8.1.2.13            Performance agreements and incentives

That the Department staff are enabled and assisted in finalising and signing performance agreements and being subjected to performance assessments as required. Performance incentive policies of entities must be revised in a manner that regulates the issuing of non-cash incentives instead of cash based incentives, especially for board members and the executive structures of the entities, for entities that have cash flow constrains and/or deficits (PRASA, RAF, SANRAL, C-BRTA, RTIA, and SACAA).

 

8.1.2.14            Alignment between APP/ Corporate Plan targets and SMART principles as well as Budget

That APP/Corporate Plan targets of entities, such as PRASA, RAF and SAMSA, when formulated, should be aligned to the SMART principles as per the National Treasury Regulations. The Minister should take note that the Committee requested that PRASA officials meet with the new Board as soon as possible to relook at the targets and resubmit their Corporate Plan to the Committee by 7 May 2018 prior to the finalisation of the Committee’s Budget Report. This target was not met and the Committee is forced to report to the House on the matter despite being given the revised documents as requested from PRASA and the RAF. The Committee therefore recommends further that the Minister ensure that PRASA and the RAF submit the requested amendments to their respective Corporate Plans/APPs to the Committee and present same to the Committee within 30 days of the  publication of this report in order to allow the Committee to table and supplementary report hereto.

 

8.1.2.15            Optimal use of revenue generating streams of entities

That entities with ownership of property which could serve as a source of additional revenue through advertising or retail rentals, ensure that all spaces are used optimally in order to increase revenue generated by the entities towards self-reliance.

 

8.1.2.16            Road safety programmes

That the Department ensures that there is synergy pertaining to the implementation of the road safety programmes by the various entities so that the programmes can complement each other in achieving a reduction in the carnage on the roads, as well as ensuring that budgets for these programs are optimally allocated and not duplicated.

 

8.1.2.17            Overdue Annual Report of PRASA

That the Board of PRASA ensures the finalisation and submission of the 2016/17 Annual Report is done within 60 days of the publication of this report and to ensure that this failure to submit on time is not repeated again in future.

 

8.1.2.18            Inconsistencies between the APP figures and the figures tabled per the Budget Vote documents

That the Department and its entities ensure that the figures presented in their APP documents correlate with those tabled by Treasury to Parliament for purposes of the Budget Vote or at the very least to indicate any possible discrepancies due to a change in figures post Estimates of National Expenditure having been published.

 

8.1.2.19            Increased promotion required of universal access

That the Department and its entities increase the implementation of projects and/or programmes aimed at increasing Universal Access to all modes of public transport and for all transport and road infrastructure.

 

8.2        Observations and recommendations from the Strategic Plan and APP Report 2018

 

8.2.1                 The Committee made the following observations:

The Committee commended the Department on the improvement in targets and indicators set by it through consultations with the AGSA. It further noted the following observations regarding the revised Strategic Plans and the 2018/19 APPs of the Department and its public entities:

 

8.2.1.1  Alignment between APP/Corporate Plan targets and SMART principles

The Committee observed the non-adherence of the APP targets to SMART principles as per the National Treasury Regulations, of certain entities, in particular PRASA, RAF and SAMSA. The Committee indicated that PRASA targets were especially of concern and that the Corporate Plan of the entity is rejected until such time as the targets have been revised and resubmitted to the Committee by 7 May 2018. The Committee also takes note that the Standing Committee on Appropriations received a briefing from the Office of the Chief Procurement Officer in National Treasury where it was reported that PRASA had failed to submit its 2018/19 procurement plan by 31 March 2018. These plans must be aligned with the Corporate Plan and PRASA was requested to provide reasons for the non-submission to the Standing Committee on Appropriations, as well as how this would impact on the attainment of the 2018/19 Corporate Plan targets. PRASA must also indicate to the Standing Committee on Appropriations why it should approve the 2018/19 budget allocation given the fact that it has failed to submit its procurement plan.

 

8.2.1.2  Board vacancies in entities

The Committee observed the end of term for Boards at ACSA, ATNS and RTIA. The Committee further noted that the Board of SAMSA did not quorate.

 

8.2.1.3  Road safety programmes

The Committee noted that various transport entities were implementing road safety programmes.

 

8.2.1.4              Setting the submission of legislation to Parliament in the outer years of the MTSF

The Committee noted that many challenges of entities could have been resolved if the Department planning was such as to ensure that legislation is processed earlier in the MTSF cycle. It was noted with concern that a substantial amount of proposed bills are yet to be submitted to Parliament for processing in the latter years of the MTSF cycle which may lead to the lapsing of the legislation and the need to resubmit after the elections in the new Parliament cycle.

 

8.2.1.5  Overdue Annual Report of PRASA

At the time of receiving the 2018/19 Corporate Plan presentation for PRASA, the Committee had still not received the entity’s Annual Report for the 2016/17 Financial Year. The absence of the report continues to limit the Committee in its oversight over PRASA, as well as doing a thorough assessment how the entity has dealt with past Auditor-General findings or how it intends to deal with such findings in its proposed APP in order to allow it to receive improved audit outcomes. In order to facilitate Parliament’s oversight over the national executive organs of state, section 92(3)(b) of the Constitution requires that “Members of Cabinet must provide Parliament with full and regular reports concerning matters under their control.” The oversight powers of the NA are particularly important for the process of considering annual reports, as they are the ‘regular reports’ referred to above. The challenge facing portfolio committees is that they need to ensure that departments provide good quality service delivery information in their strategic plans with tight performance targets and then to ensure that departments report against those targets in their annual reports.

 

The deadline of 30 September 2018 for submissions of 2017/18 Annual Reports is fast approaching and yet the Committee must now consider the plans in the APP and budget for an entity that failed to report on its operations for the financial term that ended two years ago.

 

8.2.1.6              Inconsistencies between the APP figures and the figures tabled per the Budget Vote documents

The Committee noted that in some instances there were inconsistencies in the figures presented by the entities and the Department in their APP documents when compared to the 2018 Estimates of National Expenditure for Vote 35: Transport, as tabled by Treasury.

 

8.2.2     The Committee recommended that the Minister ensure:

 

8.2.2.1  Alignment between APP/ Corporate Plan targets and SMART principles

That APP/ Corporate Plan targets of entities, such as PRASA, RAF and SAMSA, when formulated, should be aligned to the SMART principles as per the National Treasury Regulations. The Minister should take note that the Committee requested that PRASA officials meet with the new Board as soon as possible to relook at the targets and resubmit their Corporate Plan to the Committee by 7 May 2018 prior to the finalisation of the Committee Budget Report. This target was not met and the Committee is forced to report to the House on the matter despite being given the revised documents as requested from PRASA and the RAF. The Committee therefore recommends further that the Minister ensure that PRASA and the RAF submit the requested amendments to their respective Corporate Plans/APPs to the Committee and present same to the Committee within 30 days of the publication of this report in order to allow the Committee to table and supplementary report hereto.

 

8.2.2.2  Board vacancies in entities

That Board members of entities such as ACSA, ATNS, SAMSA and RTIA are appointed without delay so that the entities are able to discharge their legislative mandates optimally. The Minister is also requested to report to the Committee on this matter, as well as the Department’s plan for ensuring future Board member vacancies are filled timeously within 30 days of the publication of this report.

 

8.2.2.3  Road safety programmes

That the Department ensures that there is synergy pertaining to the implementation of the road safety programmes by the various entities so that the programmes can complement each other in achieving a reduction in the carnage on the roads, as well as ensuring that budgets for these programs are optimally allocated and not duplicated.

 

8.2.2.4              Setting the submission of legislation to Parliament in the outer years of the MTSF

That the Department and its entities ensure that their planning for proposed legislation to be submitted to Parliament for processing is done in such a manner that would allow for the thorough processing thereof during the Parliament cycle and not to plan for submissions to be made in the outer years of the MTSF.

 

8.2.2.5  Overdue Annual Report of PRASA

That the Board of PRASA ensures the finalisation and submission of the 2016/17 Annual Report is done within 60 days of the publication of this report and to ensure that this failure to submit on time is not repeated again in future.

 

8.2.2.6              Inconsistencies between the APP figures and the figures tabled per the Budget Vote documents

That the Department and its entities ensure that the figures presented in their APP documents correlate with those tabled by Treasury to Parliament for purposes of the Budget Vote or at the very least to indicate any possible discrepancies due to a change in figures post Estimates of National Expenditure having been published.

 

 

8.3 Recommendations made by the AGSA for the Budgetary Review and Recommendation Report for the 2017/18 financial year[18]

 

8.3.1     Best practices, root caused and recommendations

 

8.3.1.1  Auditees that maintained clean audits (SACAA, PRSA, C-BRTA) were able to:

 

  • Produce financial statements that are free from material misstatements;
  • Measure and report on their performance in accordance with the predetermined objectives in their performance plan in a manner which is useful and reliable;
  • Implement measures to ensure compliance with key applicable legislation;
  • Implement stringent financial management principles and controls;
  • Display strong leadership that ensured corrective action was implemented to address prior year internal and external audit findings; and
  • Implement effective governance structures that performed effective oversight.

 

8.3.1.2  Auditees with qualified and unqualified with findings (RSR, ACSA, DLCA, the Department, SAMSA, RTMC, RTIA, RAF) outcomes are struggling to:

 

  • Produce financial statements that are free of material misstatements. They rely on the auditors to detect these errors and omissions, so that they can correct them;
  • Implement controls to prevent and detect errors, including slow response to address the identified internal control deficiencies;
  • Set clear performance indicators and targets to measure their performance against their predetermined objectives i.e. Indicators and targets are not SMART;
  • Provide the sufficient and appropriate evidence to support the reported performance;
  • Implement policies, procedures and controls to ensure they comply with the relevant legislation;
  • Implement review and monitoring of compliance with applicable legislation to ensure instances of non-compliance are being identified. This led to an increase in irregular expenditure when compared to prior year; and
  • Implement consequence management to ensure that employees are held accountable for repeat findings and misstatements.

 

8.3.1.3  Root causes for entities with negative outcomes

 

  • Key management posts are vacant or filled with staff in acting positions, which contributes to lack of accountability;
  • The governance structures in some of the entities are not fully constituted which results in ineffective oversight;
  • Where an action plan had been put in place, it was not monitored at the appropriate level and the lack of progress was not escalated for further intervention by senior management;
  • There is a slow response in addressing ongoing deficiencies with compliance to laws and regulations and lack of consequence management in respect of staff that do not perform their allocated responsibilities; and
  • Some entities lack the discipline of ensuring that internal controls to ensure that accurate and complete financial reporting and compliance to laws and regulation are adhered to.

 

8.3.1.4  AGSA Recommendations

 

The role of the AGSA is to reflect on the audit work performed to assist the Committee in its oversight role of assessing the performance of the entities taking into consideration the objective of the committee to produce a  BRRR. The AGSA has assessed the level of assurance provided (as third level) by the Committee and found that the Committee provides assurance.

 

The AGSA has recommended that monitoring and regular follow up with the Minister and the accounting officer (CEO)/authority (Board) is required on:

  • Appointment of boards and other governance structures to ensure that they are fully constituted with members with the appropriate skills and experience for effective governance and oversight over the entities;
  • Management of vacancies to ensure stability of leadership;
  • Progress on action plans put in place by the entities to address undesirable audit outcomes; and
  • Performance and consequence management especially around supply chain management.

 

Overall the Portfolio Committee should obtain the commitments from the Minister, accounting officers (CEOs) and the accounting authority (Boards) that an adequate action plan to address AGSA audit findings and internal control deficiencies has been developed, implemented and monitored.

 

The Committee should obtain commitments from the Minister in stabilising the boards and other governance structures of the following auditees: PRASA, ACSA and SAMSA.

 

The Committee should obtain the commitments from the auditees to implement the following recommendations:

 

PRASA

  • The public entity should fast track the filling of key vacancies such Group CEO, Group CFO etc.;
  • Obtain commitments from the public entity to deal with the consequence management for transgressions supply chain management processes and other legislations and poor performance;
  • The public entity is to ensure that it maintain proper record keeping with regards to procurement and contract management as well as evidence of investigations into irregular expenditure and fruitless and wasteful expenditure;
  • An appropriate level of management and governance structures should ensure that there is adequate review of the financial statements before submission for audit;
  • An appropriate level of management should implement the basic daily and monthly  controls for the processing and reconciliation of transactions, the preparation of regular and credible financial and performance reports and the review and monitoring of compliance with legislation. If these controls and disciplines are implemented and institutionalised it will prevent and detect material misstatements in the financial statements and annual performance reports and non-compliance with legislation; and
  • Put measures in place and ensure that the IT systems are operating effectively and efficiently i.e. Fare revenue system has not been operating for the part of the 2017/18 financial year and has resulted in an entity not being able to generate the relevant reports and perform the necessary reconciliations.

 

ACSA

  • The public entity should fast track the filling of key vacancies such CFO;
  • Improve on proper record keeping with regard to procurement and contract management, as well as evidence of investigations into irregular expenditure and fruitless and wasteful expenditure;
  • Implement consequence management for transgressions of laws and regulations and for poor performance;
  • An appropriate level of management and governance structures should ensure that there is adequate review of the financial statements submitted for audit. This will result in the auditees avoiding material adjustments on assets, liabilities and other disclosure arising from audit; and
  • An appropriate level of management and governance structures should ensure that there is adequate review of the financial statements before submission for audit.

 

SAMSA

  • The public entity should fast track the filling of key vacancies to improve stability at management level (The CEO position has been vacant for more than two years);
  • An appropriate level of management and governance structure should ensure that the action plans to address prior year audit findings are developed in a timely manner, status of addressing of addressing the findings is monitored on a regular basis and lack of progress in addressing the findings is escalated to the appropriate governance structures for further action in a timely manner;
  • Improve on proper record keeping with regard to procurement and contract management as well as evidence of investigations into irregular expenditure and fruitless and wasteful expenditure;
  • Implement consequence management for transgressions and poor performance;
  • An appropriate level of management and governance structures should ensure that there is adequate review of the financial statements submitted for audit; and
  • Put adequate measures to ensure that revenue due to the entity is timeously collected.

 

DLCA

  • The accounting officer should fast track the appointment of head of entity and filling of vacancies to improve stability at management level;
  • The entity should improve on the financial and performance management controls. This relates to the basic daily and monthly controls for the processing and reconciliation of transactions, the preparation of regular and credible financial and performance reports and the review and monitoring of compliance with legislation; and
  • If these controls and disciplines are implemented and institutionalised it will prevent and detect material misstatements in the financial statements and annual performance reports and noncompliance with legislation.

 

RSR

The entity should put adequate measures in places to prevent irregular, fruitless and wasteful expenditure. Consequence management should be applied for officials who permit or cause noncompliance with laws and regulations.

 

RTIA

The entity should put adequate measures in places to prevent irregular, fruitless and wasteful expenditure. Consequence management should be applied for officials who permit or cause noncompliance with laws and regulations.

 

SANRAL

  • An appropriate level of management and governance structure should ensure that the action plans to address prior year audit findings are developed in a timely manner, status of addressing of addressing the findings is monitored on a regular basis and lack of progress in addressing the findings is escalated to the appropriate governance structures for further action in a timely manner; and
  • The entity should put adequate measures in place to prevent irregular expenditure. Consequence management should be applied for officials who permit or cause non-compliance with laws and regulations.

 

RAF

The entity should put adequate measures in place to prevent irregular expenditure. Consequence management should be applied for officials who permit or cause non-compliance with laws and regulations.

 

The Department

  • The Committee should obtain commitments from the Minister in filling the DG and the various DDG vacancies at the Department; and
  • The Department should improve on the financial and performance management controls. This relates to the basic daily and monthly controls for the processing and reconciliation of transactions, the preparation of regular and credible financial and performance reports and the review and monitoring of compliance with legislation.

 

8.4        The Committee recommendations for the 2017/18 financial year Budgetary Review and Recommendation Report

 

The Committee recommends that the Minister, through the Department, should ensure the following:

 

8.4.1     Since the Department depicts itself as “the heartbeat of South Africa’s economic growth and social development”, it should live up to this vision by ensuring that it achieves all the annual performance targets that it sets itself so that South Africa can indeed become prosperous. Granted, it has managed to do so, as exemplified by its 100% achievement of performance targets in the Administration, Road, Civil Aviation Transport, as well as the Public Transport programmes. This level of performance should, therefore, be replicated in all programmes;

8.4.2     The advertising and filling of board as well as senior management vacancies, as indicated in the paragraphs above, should be prioritised in the Department and the affected entities. This will allow the entities to operate and report effectively, as well as within the parameters of the applicable legislation This has been a repeated recommendation over numerous years and the Department, with its entities, must present a workable plan/strategy that will allow for the filling of vacancies, whether this be through urgent consultation with National Treasury or through skills assessments or both;

8.4.3     The Committee took a special resolution in the meeting of 16 October 2018 to request specific and immediate action within 48 hours from the Ministry, regarding the filling of the C-BRTA Board vacancies that are within the ambit of the Ministry to fill, bearing in mind that the status of these had been reported as being in the process of short-listing as at 5 June 2018, thus nearing completion;

8.4.4     The AGSA’s recommendations which address identified root causes should be implemented. The Department should strengthen its oversight over the entities and report on progress made to remedy all matters raised by the AGSA, as indicated in the paragraphs above as well as in its audit reports of the Department and the entities;

8.4.5     Effective steps should be implemented to prevent irregular expenditure. Some of these highlighted by the Committee are:

8.4.5.1  Officials who caused the Department or its entities to incur irregular, fruitless and wasteful expenditure should be subjected to the appropriate measures provided for in terms of sections 81 to 86 of the PFMA. These sections define financial misconduct and lay down the procedures for disciplining public officials guilty of financial misconduct. They also include provisions for criminal prosecution in cases of gross financial misconduct; and

8.4.5.2 The Department should also ensure that proper record-keeping is implemented for information supporting compliance and procurement process and implement consequence management for staff members who fail to comply with applicable legislation;

8.4.6     The Committee requests the following with regard to compliance with the provisions of the PFMA:

8.4.6.1  The Department and entities should capacitate their Finance and SCM directorates/departments/branches with appropriately skilled and competent personnel to prepare credible financial statements;

8.4.6.2  The executive authorities, accounting authorities, accounting officers and senior management should ensure that information used to prepare financial statements are accurate and reliable; and

8.4.6.3  Due to the repeat findings on non-compliance with the relevant provisions of the PFMA and Treasury Regulations, and in order to highlight the seriousness of this matter and in a further effort to ensure that this is not a repeat finding again next year, the Department and its entities must ensure that all officials responsible for reporting in terms of the PFMA are reskilled by ensuring they receive training on compliance with the PFMA, ensure that these staff members undergo refresher courses on the applicable National Treasury Regulations that are implemented from time to time, and receive training on compliance with the King Report on Corporate Governance IV;

8.4.7     Control processes should be adhered to in the SCM processes. Some of these highlighted by the Committee are:

8.4.7.1 The Department should establish a task team to identify and address the inefficiencies in the SCM process in the Department, as well as its entities. There should be consequences for poor performance and failure to comply with applicable legislation;

8.4.7.2 Members of the relevant board/bid evaluation committee and the chairperson should satisfy themselves that all service providers that are recommended for award have all the required documentation in terms of laws and regulations. The list of recommended bidders should be accompanied by a signed checklist confirming the completeness of required documents;

8.4.7.3 Management should properly plan the acquisition of goods and services and exercise sufficient oversight and monitoring of controls to ensure that compliance with SCM policy is achieved;

8.4.7.4 Recurring non-compliance should be investigated and appropriate action taken against transgressors;

8.4.7.5 Furthermore, management should establish their own policies and procedures, aligned to the Framework for Managing Performance Information and the PFMA, to ensure that performance reporting requirements are properly processed by the Department;

8.4.8     The Department should develop funding plans to ensure the financial sustainability of the entities and should provide the Committee with quarterly updates on strategies to improve the financial health status and reduction of instances where the liabilities exceed total assets of most urgently SANRAL and RAF as there was uncertainty as to whether the entities would be able to fund their future obligations. Updates should also be provided on the notable concerns regarding liquidity remaining for C-BRTA, PRSA, and PRASA (possible inclusion of ATNS will be determined once their annual report has been audited and tabled);

8.4.9 The Department should report back to the Committee on a quarterly basis on its monitoring, tracking and engagement with its provincial and municipal counterparts on the implementation of the PRMG and other grants to ensure that money is used for its intended purpose, to ensure that there is value for money spent and to prevent a future need for roll-overs as an extension of the two-way KPI;

8.4.10 The Department and its entities should ensure that the targets set in their Strategic Plans and APPs going forward adhere to the AGSA’s SMART principles and ensure that sufficient records are available to prove that those targets had been met. Management in the Department, as well as the entities should ensure that it is possible to validate the processes and systems that produce the indicator to enable them to produce the required evidence supporting their reported performance. Conversely, they should adhere to the requirements of the Framework for Managing Programme Performance Information (FMPPI) to ensure that all indicators are well defined and verifiable and that all targets are specific and measurable i.e. the nature and required level of performance is clearly specified and measurable;

8.4.11 The Department should ensure that the budget allocation for projects is strengthened and realistic in order to reduce the high amounts of funds being transferred under Virement;

8.4.12 The Department should develop an alternative investment attraction plan in order to make better use of Public-Private Partnerships and promotion of Private Sector Participation in the funding options for various infrastructure projects, such as the Moloto Corridor Project and other major infrastructure projects planned by the Department, as well as their provincial and municipal counterparts;

8.4.13 The Committee takes a dim view of the non-compliance and the lack of tabling of Annual Reports in terms of the sections 8 and 65 of the PFMA. The outstanding Annual Report that is yet to be tabled before this committee are of a serious concern, especially as ATNS has in the past had numerous repeat findings issued by the Auditors. The Department should ensure, and assist well in time where it is able to, that all Annual Reports are submitted within the legislated timeframes for the AGSA, as well as tabling in time before Parliament. The outstanding report should be presented to the Committee as soon as it is tabled and referred to the Committee. The Committee would work towards submitting a supplementary report on the late received annual report, should it be tabled in time to do so;

8.4.14 The C-BRTA should report to the Committee regarding the draft joint agreement towards resolving the impasse regarding the cross-border movements on the RSA/Kingdom of Lesotho route;

8.4.15 The C-BRTA should report to the Committee regarding the continued engagements on the implementation of the 1996 SADC Protocol on Transport, Communications and Meteorology;

8.4.16 The appointment of SAMSA’s CEO should be expedited so that consequence management against officials who incur or permit irregular expenditure, as well as fruitless and wasteful expenditure are held to account;

8.4.17   The RAF should be supported by the Department and stakeholders in discharging its mandate of efficiently and effectively providing compulsory social insurance cover for to all users of South African roads; rehabilitate and compensate people injured owing to the negligent driving of motor vehicles;

8.4.18   The below-than-acceptable performance requires special interventions and a rescue plan that will ensure that, in the next financial year, PRASA, focuses on the following:

8.4.18.1 Arresting the current decline in business performance;

8.4.18.2 Focusing on reliability, availability, predictability of the service that is safe and secure and improves customer service satisfaction;

8.4.18.3 Fixing a misaligned and fragmented organisational structure and drive efficiencies and effectiveness in the deployment of resources;

8.4.18.4 Bringing organisational stability and strict governance; and

8.4.18.5 Fast tracking our modernisation programme to improve passenger rail travel experience;

8.4.19  That PRASA improves their current services and safety through the rollout of the turnaround strategy and the entity should also indicate progress towards the devolution of authority to regions for effective management and rail operations through quarterly reports on the above to the Committee;

8.4.20   With regard to SANRAL, the Ministry must urgently seek to achieve finality regarding the GFIP funding model.

 

 

9.        SUMMARY OF REPORTING REQUESTS

 

The Committee requested additional matters for the Department to report on:

 

Reporting matter

Action required

Timeframe

The Department should submit an improved Action Plan to address the findings of the AGSA, as well as the implementation of the recommendations made by the Committee in this report.

Written plan from the Department.

15 December 2018

The Department should submit a comprehensive briefing on steps it will be taking to assist in stabilising its entities (including filling of vacancies, conclusion and evaluation of shareholder agreements, improving the efficiency of the shareholder representatives on the boards, closely monitoring the implementation of projects and budget expenditure, etc.).

Written briefing from the Department.

15 December 2018

The Department should submit a comprehensive briefing on progress made on the filling of Board vacancies in entities as well as the filling of all critical posts within the Department and its entities.

Written briefing from the Department.

15 December 2018

The Department should submit a comprehensive briefing on progress made on the TRP and the Review thereof.

Written briefing from the Department.

15 December 2018

The Department should submit quarterly reports on investigations underway in the Department and all the entities.

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

The Department should submit quarterly reports on pending litigation, as well as settlements reached and judgments for and against the Department and all the entities.

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

The Department should submit quarterly reports on human resource management (retentions, secondments, transfers, retirements, training and skills transfers, resignations and dismissals), as well as report on progress in disciplinary matters (including suspensions) in the Department and all the entities.

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

The Department should submit quarterly reports on the achievement of job creation targets in the Department and all the entities.

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

The Department should submit quarterly reports on the Shova Kalula project.

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

The Department should submit quarterly reports on the progress of projects linked with the following grants:

  • PTOG
  • PRMG
  • PTNG
  • Rural Road Asset Management Systems Grant (RRAMS)
  • Coal Haulage Grant
  • Disaster Management Grant

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

The Department should submit quarterly reports on progress regarding the Moloto Corridor Project and how this affects both the Road and Rail Programmes.

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

The Department should submit a comprehensive briefing on the progress made to address and/or implement recommendations emanating from Committee Oversight Reports during the year.

Written briefing from the Department.

15 December 2018

The Department should submit quarterly reports on strategies to address the financial health status of:

  • C-BRTA
  • RAF
  • PRSA
  • SANRAL
  • PRASA

Written plans from the Department of Transport and:

 

  • C-BRTA
  • RAF
  • PRSA
  • SANRAL
  • PRASA

Quarterly reports within 60 days of the adoption of this report by the NA.

The Department with the C-BRTA should submit quarterly progress reports on progress regarding:

  • The implementation of the 1996 SADC Protocol on Transport, Communications and Meteorology;
  • The resolution of the impasse regarding the cross-border movements on the RSA/Kingdom of Lesotho route.

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

The Department with PRASA should submit a comprehensive briefing on the Werksmans contract from conclusion of the contract in 2015 to the current status of work performed by the firm and include the total expenditure to date relating to the contract in question as well as the progress on resolving the matters raised in the report.

Written briefing from the Department.

15 December 2018

The Department with PRASA should submit a comprehensive briefing on:

- the Get on Track Rescue Plan it intends to implement as well as how this will address the shortages of trainsets currently online and how they intend to increase ridership;

- The plan in place to ensure that PRASA complies with the RSR directives;

- The plan in place to phase out manual authorisation or how they will ensure that the use of manual authorisation will not lead to another train collision or derailment.

Written briefing from the Department.

15 December 2018

The Department with PRASA should submit quarterly reports on the plan to ensure that regional offices are equipped and properly authorised/delegated functions that would allow them to obtain the required services/spares in order to bring their respective rail services up to acceptable standards.

Written plan from the Department.

Quarterly reports within 60 days of the adoption of this report by the NA

 

 

10.          CONCLUSION

 

The Committee would, through its oversight and engagements with the Department and its entities ensure that the AGSA’s recommendations are implemented by the Department and its entities. The Committee would further request regular feedback from the Department on key issues impacting entities as identified through the oversight process.

 

11.        APPRECIATION

 

The Committee would like to acknowledge the Minister, the Deputy Minister, the Department officials and Board Members and officials of the entities for presentations made on their Annual Reports and Financial Statements. 

 

The Committee applauds the achievements by the C-BRTA, PRSA and SACAA in receiving Unqualified Audit opinions with no material findings.

 

The Committee would also like to extend a note of appreciation to its support staff during the year under review and in the compilation and capturing of the Committee reports.

 

Report to be considered.

 

Attached – Annexure A: List of abbreviations/acronyms

 

 

ANNEXURE A: LIST OF ABBREVIATIONS/ACRONYMS

Abbreviation/Acronym

Meaning

AARTO

Administrative Adjudication of Road Traffic Offences

ACSA

Airports Company South Africa

AFCAC

African Civil Aviation Commission

AGSA

Auditor-General of South Africa

APP

Annual Performance Plan

ARDP

(Draft) Access Road Development Plan

ATNS

Air Traffic Navigation Services

AU

African Union

BARSA

Board of Airlines Representatives of South Africa

B-BBEE

Broad-Based Black Economic Empowerment

BRRR

Budget Review and Recommendations Report

BRT

Bus Rapid Transport

C-BRTA

Cross-Border Road Transport Agency

C-BRTRF

Cross-Border Road Transport Regulators Forum

CEO

Chief Executive Officer

CFO

Chief Financial Officer

CIDB

Construction Industry Development Board

CNG

Compressed Natural Gas

CPO

Chief Procurement Office

DG

Director-General

DDG

Deputy Director General

DGOs

Dangerous Goods Operators

DLCA

Driving Licence Card Account

DLTC

Driving Licence Testing Centres

DPE

Department of Public Enterprises

DPME

Department of Planning, Monitoring and Evaluation

DPSA

Department of Public Service and Administration

eNaTIS

Electronic National Traffic Information System

ESEID

Economic Sectors, Employment and Infrastructure Development

EXCO

Executive Committee

FMPPI

Framework for Managing Programme Performance Information

GFIP

Gauteng Freeway Improvement Project

GHG

Greenhouse Gas

GDP

Gross Domestic Product

GDYC

Gender, Disability, Youth and Children

GTS

Green Transport Strategy

HRD

Human-Resource Development

IA

Issuing Authority

ICAD

International Civil Aviation Day

ICAO

International Civil Aviation Organisation

ICT

Information and Communications Technology

IMO

International Maritime Organisation

IPTNs

Integrated Public Transport Networks

IPTTP

Integrated Public Transport Turnaround Plan

IRERC

Interim Rail Economic Regulatory Capacity

IT

Information Technology

KPI

Key Performance Indicator

LDV

Light Delivery Vehicle

LPG

Liquefied Petroleum Gas

MECs

Members of the Executive Council

MEOSAR

Medium Earth Orbit Search and Rescue 

MLPS

Long Distance (Main Line) Passenger Service

MoU/MOU

Memorandum of Understanding

MTEF

Medium-Term Expenditure Framework

MTP

Comprehensive Maritime Transport Policy

MTSF

Medium-Term Strategic Framework (2014-19)

MTT

Ministerial Task Team

M&E

Monitoring and Evaluation

NA

National Assembly

NADP

National Airports Development Plan

NATMAP 2050

National Transport Master Plan 2050

NCAP

National Civil Aviation Policy

NCCRS

National Climate Change Response Strategy

NCOP

National Council of Provinces

NDP

National Development Plan

NEDLAC

National Economic Development and Labour Council

NICRO

South African National Institute for Crime Prevention and the Reintegration of Offenders

NIP

National Infrastructure Plan

NQF

National Qualifications Framework

NRSS

National Road Safety Strategy

NRTA

National Road Traffic Act

PEPFRA

Ports Economic Participation Framework

PFMA

Public Finance Management Act

PICC

Presidential Infrastructure Coordinating Commission

PMDS

Performance Management and Development System

PPP

Public-Private Partnership

PPPFA

Preferential Procurement Policy Framework Act

PRASA

Passenger Rail Agency of South Africa

PRSA

Ports Regulator of South Africa

PRMG

Provincial Roads Maintenance Grant

PSP

Private Sector Participation

PTNG

Public Transport Network Grant

PTOG

Public Transport Operations Grant

RABS

Road Accident Benefit Scheme

RAF

Road Accident Fund

RFS

Road Freight Strategy

RSA

Republic of South Africa

RSR

Railway Safety Regulator

RTIA

Road Traffic Infringements Agency

RTMC

Road Traffic Management Corporation

SAAF

South African Air Force

SAATM

Single African Air Transport Market

SABC

South African Broadcasting Corporation

SABOA

Southern African Bus Operations Association

SACAA

South Africa Civil Aviation Authority

SADC

Southern African Development Community

SAMSA

South African Maritime Safety Authority

SANRAL

South African National Roads Agency Limited

SAPS

South African Police Services

SARS

South African Revenue Service

SASAR

South African Search and Rescue Organisation

SCM

Supply Chain Management

SEIAs

Socio Economic Impact Assessment System

SIP

Strategic Infrastructure Programme

SMART

Specific, Measurable, Achievable, Realistic and Timely

SOEs

State-owned Enterprises

SONA

State of the Nation Address

SSP

S’hamba Sonke Programme

STER

Single Transport Economic Regulator

TFR

Transnet Freight Rail

ToR

Terms of Reference

TRP

Taxi Recapitalisation Programme

TVET

Technical Vocational Educational and Training

UN

United Nations

VTC

Vehicle Testing Centres

WHO

World Health Organisation

 

 

 


[1]Department of Transport (2018), p. 25.

[2]Department of Transport (2018), p. 210.

[3]Department of Transport (2018), p. 212.

[4] Department of Transport (2018), pp. 59-101.

[5]Ibid.

[6]Ibid.

[7] Department of Transport (2018), p. 69.

[8] Department of Transport (2018), p. 94.

[9]Department of Transport (2018), p. 69.

[10]Ibid.

[11]Department of Transport (2018), p. 70.

[12]Department of Transport (2018), p. 75.

[13]Department of Transport (2018), p. 94.

[14]Ibid.

[15]Department of Transport (2018), p. 173.

[16] AGSA The 2017-18 audit outcomes and key messages: Transport Portfolio (15 October 2018).  

[17] The Department has indicated on page 152 of their Annual Report the that there are five (5) acting DDG posts currently and advertisements to fill these positions as well as that of the DG have been posted in the media.

[18] AGSA The 2017-18 audit outcomes and key messages: Transport Portfolio (15 October 2018).  

Documents

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