ATC220929; Report of the Portfolio Committee on Transport on the 2021/22 Fourth Quarter Expenditure of the Department of Transport Dated 27 September 2022

Transport

Report of the Portfolio Committee on Transport on the 2021/22 Fourth Quarter Expenditure of the Department of Transport Dated 27 September 2022

 

The Portfolio Committee on Transport, having considered the expenditure of the Department of Transport for the Fourth Quarter of the 2021/22 financial year on 7 June 2022, reports as follows:

 

1. INTRODUCTION

 

The prime mandate of the Committee is governed by the Constitution of the Republic of South Africa, 1996 (“the Constitution”), in respect of its legislative and oversight responsibilities. 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 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 of the Department and entities that fall within the transport portfolio. This report provides an overview of the expenditure of the Department of Transport for the Fourth Quarter of the 2021/22 financial year, as presented to the Committee on 7 June 2022.

 

1. ANALYSIS OF THE 2021/22 FOURTH QUARTER EXPENDITURE OF THE DEPARTMENT

 

By the end of the 4th Quarter of the 2021/22 financial year, the Department of Transport (“the Department”) had spent R64.9 billion against a 4th Quarter adjusted budget of R65.4 billion. The Department under spent R522.3 million (or 0.8 per cent) lower than budgeted.[1] On Compensation of Employees (CoE), it spent R479.5 million against an available budget of R542.6 million, with 737 filled posts against a funded establishment of 921 posts. This represented a vacancy rate of 20 per cent (or 184 vacant posts).[2]

 

1. budget expenditure per programme

 

Table 1: Expenditure per Programme

R Million Programme	Main Appropriation	Adjusted Budget	Available Budget	Year End Actual Expenditure	Expenditure As % of Available Budget	Underspending\ Overspending	% Underspending\ Overspending	COVID-19 Spending
Administration	497	522.2	522.2	439.5	84.2%	82.6	15.8%	0.4
Integrated Transport Planning	92.2	90.2	90.2	64.7	71.8%	25.5	28.2%	0.0
Rail Transport	16 785.8	16 806.4	16 806.4	16 768.2	99.8%	38.2	0.2%	0.0
Road Transport	34 166.7	34 222	34 222	34 123.7	99.7%	98.3	0.3%	0.0
Civil Aviation Transport	503.9	496.3	496.3	546	110%	-49.8	-10%	0.0
Maritime Transport	157.5	155.2	155.2	115.6	74.5%	39.6	25.5%	0.0
Public Transport	14 488.6	13 133.3	13 133.3	12 845.5	97.8%	287.8	2.2%	0.0
Total	66 691.8	65 425.5	65 425.5	64 903.3	99.2%	522.3	0.8%	0.4

(Source: National Treasury (2022))

2.1.1 Programme 1: Administration

 

The Administration programme spent R439.5 million (or 84.2 per cent) against the total available budget of R522.2 million for the 2021/22 financial year, indicating an underspending of 15.8 per cent– equivalent to R82.6 million. The preliminary underspending was mainly on Goods and Services and on the CoE due to the lack of spending on planned projects such as the document management solution, automation tools for internal audit and the bulk procurement of laptops.[3]

 

2.1.2 Programme 2: Integrated Transport Planning

 

In the Integrated Transport Planning programme, the Department spent R64.7 million (or 71.8 per cent) of the total available budget of R90.2 million for the financial year under review. This translated into an underspending of (28.2 per cent)– equivalent to R25.5 million. The preliminary underspending was largely on Goods and Services owing to the slow spending on consultants for projects such as:[4]

• Regional Integration Strategy; and
• Regional Transport Integration Market Strategy and District Development.

 

2.1.3 Programme 3: Rail Transport

 

The Department spent R16.8 billion (or 99.8 per cent) of the total available budget of R16.81 billion for the financial year under review, indicating an underspending of 0.2 per cent– equivalent to R38.2 million in the Rail Transport programme. The underspending was largely because of a failure to appoint the Housing Development Agency (HDA), on behalf of the Passenger Rail Agency of South Africa (PRASA), to deal with “the relocation of informal settlements off the rail reserve around major service lines in Cape Town”.[5]

 

2.1.4 Programme 4: Road Transport

 

In the Road Transport programme, the Department spent R34.1 billion (or 99.7 per cent) of the total available budget of R34.2 billion for 2021/22, indicating an underspending of 0.3 per cent– equivalent to R98.3 million. The underspending was mainly due to less than anticipated expenditure on the rollout of the Administrative Adjudication of Road Traffic Offences (AARTO) by the Road Traffic Infringements Agency (RTIA). In addition, the underspending on Goods and Services was due to procurement delays in:[6]

• The development of the Road Disaster Management Plan;
• The road asset management tool, and
• The development of S’hamba Sonke project.

 

2.1.5 Programme 5: Civil Aviation Transport

 

The Department spent R546 million (or 110 per cent) of the total available budget of R496.3 million in the Civil Aviation Transport programme for the financial year under review, indicating an overspending of 10 per cent– equivalent to R49.8 million. The preliminary overspending was mainly because of the court settlement costs pertaining to the refurbishment of the Mthatha Airport, as ordered by the Mthatha High Court.[7] Funds were shifted from other programmes to cover the shortfall.

 

2.1.6 Programme 6: Maritime Transport

 

In the Maritime Transport programme, the Department spent R115.6 million (or 74.5 per cent) of the total available budget of R155.2 million for the 2021/22 financial year, translating into an underspending of 25.5 per cent– equivalent to R39.6 million. The underspending was mainly on Goods and Services due to delays in projects such as:[8]

• The automated vessel clearance; and
• The marine court of enquiry.

 

The Department utilised internal capacity for projects such as the Review of Merchant Shipping, Review of Maritime Policy and Legislation.[9]

 

2.1.7 Programme 7: Public Transport

 

The Department spent R12.8 billion (or 97.8 per cent) of the total available budget of R13.1 billion for the financial year under review, indicating underspending of 2.2 per cent– equivalent to R287.8 million. The underspending was mainly on Transfers and Subsidies due to lower than projected demand on the Taxi Recapitalisation Programme (TRP) and on Goods and Services owing to delays in projects such as:[10]

• The public transport grant monitoring;
• The implementation of the integrated public transport networks (IPTNs) in district municipalities; and
• The national land transport information system.

 

2.1.8 COVID-19 Spending

 

As at the end of the 4th Quarter of the 2021/22 financial year, the Department had spent R372 000 on COVID-19 related projects and business activities. The COVID-19 spending mostly pertained to the procurement of protective equipment and other interventions within the Department. In addition, it related to the support to public transport operators in response to the pandemic, as well as assistance to the Department of Basic Education with the procurement of disinfectants and sanitisers for scholar transport.[11]

1. conclusion

 

By the end of the 4th Quarter of the 2021/22 financial year, the Department spent R64.9 billion against a 4th Quarter adjusted budget of R65.4 billion. The expenditure of 99.2 per cent is the equivalent of the Department spending during the 2019/20 financial year. In 2020/21, overall expenditure improved slightly to 99.5 per cent.  

 

Programme 2: Integrated Transport Planning remains the slowest spending programme; a trend it has maintained for the past three consecutive financial years. By the end of 2019/20, its 4th Quarter preliminary expenditure was 41.8 per cent of the available budget. By 2020/21, it stood at 64 per cent and by 2021/22, it reached 71.8 per cent. This programme requires closer oversight scrutiny to ensure not only better spending, but that performance targets are not compromised by poor spending.  

 

Spending under Programme 1: Administration has declined over the past three financial years, commencing from a high of 98.5 per cent of its available budget spent by the end of the 4th Quarter of the 2019/20 financial year. By 2020/21, spending slowed down to 81.8 per cent, and by 2021/22 it reached 84.2 per cent of its available budget.

 

1. COMMITTEE OBSERVATIONS

 

Members made the following observations during discussions:

 

1. There were still gaps between the department’s actual expenditure and service delivery.  Concerns were again raised about the continued payment of the PTNG to all under-performing cities such as Mangaung and Rustenburg in the absence of service delivery and lack of the bus service to date.
2. More checks and balances were required in the implementation of the scholar transport programme since the spate in recent accidents indicated that the vehicles used to transport scholars were not roadworthy and not suitable for transporting children.
3. The department had to look into the reasons for the rise in aviation accidents due to insufficient maintenance of aircraft.
4. The high number of potholes on the roads remains a concern, patching of potholes seemed to not last for longer than a week.
5. It was noted that the PRMG allocation to provinces was insufficient and there was a need to improve on weighbridge use to prevent overloaded freight vehicles damaging the road infrastructure.
6. Concerns were raised about the vacancy rate in the department and the continued underspending on Compensation for Employees and Goods and Services.

           

 

1. COMMITTEE RECOMMENDATIONS

 

The Committee recommends that the Minister ensure that:

 

1. The Department provide, within 30 days of adoption of this report, the reasons as well as remedies to prevent future underspending on the Compensation of Employees in the Administration programme.
2. The Department ensure that more weighbridges and law enforcement operations are operating to ensure effective monitoring of the loading of trucks.
3. The Department submit a report to the Committee, within 30 days of adoption of this report, on the reasons for the rise in aviation accidents.
4. The Department improve on the oversight implemented over the PTNG budget and progress on projects linked thereto in all applicable municipalities.
5. The Department implement more checks and balances on scholar transport regulation and operations to ensure correct licenced vehicles are used, driven by properly licenced drivers and with road worthy vehicles that are not overloaded.
6. The Department improve on monitoring and oversight over the PRMG projects to ensure that these funds are spent to improve the quality of roads in all provinces.
7. The Department provide a report within 30 days of adoption of this report, on the projects in place to deal with eliminating potholes.

 

The Report, further states that the Economic Freedom Fighters (EFF) abstained from the adoption of the report.

 

Report to be considered.

 

 

 

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[1] National Treasury (2022).

[2] National Treasury (2022), p. 136.

[3] National Treasury (2022), pp. 135-136.

[4] National Treasury (2022), p. 136.

[5] National Treasury (2022), p. 136.

[6] Ibid.

[7] Ibid.

[8] National Treasury (2022), p. 136.

[9] Ibid.

[10] Ibid.

[11] National Treasury (2022), p. 136.