ATC221021: Budgetary Review and Recommendation Report (BRRR) of the Portfolio Committee on Transport, Dated 18 October 2022

Transport

Budgetary Review and Recommendation Report (BRRR) of the Portfolio Committee on Transport, Dated 18 October 2022

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

INTRODUCTION

The period under review took place against the backdrop of the second phase of the implementation of the National Development Plan (NDP) (2019-2024). 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.

Due to the continued impact of the 2020/21 COVID-19 lockdown measures on the performance of the Department and its entities throughout the year under review, as well as its impact on the reporting and audit finalisation timeframes for the year under review, this report will be based on those Annual Reports that were tabled before 13 October 2022. There were early indications from the Auditor-General of South Africa (AGSA) that there are delays in finalising the audits of the Road Accident Fund (RAF) and Passenger Rail Agency of South Africa (PRASA), however, at the time of the drafting of this report the only outstanding audit findings are those of the RAF. On 13 October 2022, the Minister submitted a letter requesting the further extension for the late tabling of the RAF Annual Report until the judicial review of the dispute with the AGSA is finalised. The AGSA indicated that the audits of all the transport entities were finalised at the time of reporting to the Committee, but that the outcome of the RAF audit will only be released once the Annual Report is tabled by the entity. At the time of the drafting of this report, the AGSA did indicate that they had finalised the audit of the Road Traffic Infringement Agency (RTIA) and the Driving License Card Account (DLCA), however, the Annual Reports of the entities were not tabled before Parliament at the time of finalising this report. Should they submit their Annual Reports following this report, the Committee will consider a supplementary report.

COVID-19 interventions during the 2020/21 financial year aimed at curbing/mitigating the spread of the pandemic through the world and the country restricted movement of all transport operations (including road, rail, maritime and aviation), restricted administration programmes responsible for the filling of vacancies, restricted access to vehicle and driver licencing services and road accident claim services, restricted maintenance and/or repair of road and/or rail infrastructure and restricted the roll-out of labour intensive infrastructure projects – to mention but a few areas of impact. This continued to have a significant impact on the revenue generation and operations of a number of the entities under the Department, as is evident from the audit outcomes and the financial statements per the Annual Reports received to date.

Despite dealing with the residual impact of COVID-19 on the transport portfolio, the portfolio was also impacted in various levels by the July 2021 Civil Unrests, the flood damage in various provinces in January 2022 and April 2022 resulting in massive infrastructure damage, as well as the ongoing conflict between Russia and Ukraine, the most recent conflict applicable to the financial year under review having started in February 2022.

1.1 Mandate of the Committee

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 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, Annual Performance Plans (APPs) and the Annual Reports of 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. As this is the third BRRR done by the 6th Parliament Committee, reference will be made to the key achievements made, as well as challenges encountered during the 2018/19, 2019/20, 2020/21 and 2021/22 financial years, as reported in the Department’s and entities’ 2018/19, 2019/20, 2020/21 and 2021/22 Annual Reports and APPs.

1.3 Methodology

The Committee engaged with the AGSA on its audit findings of the Department and its entities, as well as engaged with the Department and, due to time constraints, selected entities on 11, 12 and 13 October 2022 on their performance and audit outcomes for the period under review.

The Committee selected to meet with the Air Traffic and Navigation Services (ATNS), Airports Company of South Africa (ACSA), South African Civil Aviation Authority (SACAA), South African National Roads Agency Limited (SANRAL), Road Traffic Management Agency (RTMC), South African Maritime Safety Authority (SAMSA) and PRASA due to time constraints and since these entities tabled their reports in time for consideration during the BRRR process.

At the time of considering this report, the RTIA, RAF, and DLCA had not tabled their Annual Reports yet. The Committee voiced its dissatisfaction with the lack of reasons provided for the failure to table the RTIA and DLCA Annual Reports – it was the third consecutive year that RTIA and second consecutive year that RAF did not table their reports in time for the BRRR process.

The following entities were not programmed or called to meet with the Committee specifically, however, their Annual Reports and/or financial statements were tabled on time and their audit was part of the Department’s audit:

South African Search and Rescue Organisation (SASAR), including the National Sea Rescue Institute (NSRI);
Railway Safety Regulator (RSR);
Ports Regulator of South Africa (PRSA); and
Cross-Border Road Transport Agency (C-BRTA).

The BRRR details the analysis of the 2018/19, 2019/20, 2020/21 and 2021/22 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 2021 State of the Nation Address (SONA);
The Department’s Strategic Plan and APPs for 2021/22;
The Department’s Annual Report and Financial Statement for 2018/19, 2019/20, 2020/21 and 2021/22;
The Strategic Plans and the APPs/Corporate Plans of the entities that fall under the Department, as well as their nnual reports and financial statements for 2018/19, 2019/20, 2020/21 and 2021/22;
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.

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.

The Department strives to be “the heartbeat of South Africa’s economic growth and social development”.[1] Its core values are:[2]

Maintaining fairness and equity in all its operations;
Striving for quality and affordable transport for all;
Stimulating innovation in the transport sector;
Ensuring transparency, accountability and monitoring of all operations; and
Ensuring sustainability, financial affordability, accessibility, as well as the upholding of the Batho Pele principles.

In an endeavour to discharge its mandate effectively and efficiently, the Department is structured as follows:[3]

Programme 1: Administration;
Programme 2: Integrated Transport Planning;
Programme 3: Rail Transport;
Programme 4: Road Transport;
Programme 5: Civil Aviation Transport;
Programme 6: Maritime Transport; and
Programme 7: Public Transport.

The Department’s organisational structure was approved in September 2011, and it was implemented from November 2011.[4] The structure comprises four transport modes (rail, road, civil aviation and maritime transport), as well as integrated transport planning and public transport. Support functions, particularly in the Office of the Director-General (DG), Office of the Chief Operations Officer (COO) and the Office of the Chief Financial Officer (CFO) fall under the Administration programme.

2.1 Strategic overview 2021/22

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 Medium-Term Strategic Framework (MTSF) 2019-2024, as well as the SONA policy directives.

The Department contributes to the realisation of the vision of improved social and economic development articulated in the NDP. Transport infrastructure and services support economic growth and development by connecting people and goods to markets. The development and maintenance of an efficient and competitive transport system is a key objective of the NDP. To this effect, the Department, in partnership with the sector public entities, provincial and local government, focuses on improving mobility and access to social and economic activities.[5]

In addition, the Department gives impetus to priority 1 (economic transformation and job creation) and priority 4 (spatial integration, human settlements and local government) of Government’s 2019-2024 MTSF. The table below shows a schematic illustration of the alignment between MTSF pillars, apex priorities of the 6th Administration and the strategic focus areas of the Department.

Table 1: Alignment between MTSF Pillars, Apex Priorities and Strategic Focus of the Department

MTSF Pillars	Apex Priorities	Department’s Strategic Focus Areas
Achieving a more capable State	Priority 1: A capable, ethical and developmental State	Improved efficiency and effectiveness of support services
Achieving a more capable State	Priority 7: A better Africa and world	Building a maritime nation, elevating the oceans economy Environmental protection – Recovering and maintaining healthy natural environment
Driving a strong and inclusive economy	Priority 2: Economic transformation and job creation	Infrastructure build that stimulates economic growth and job creation
		Building a maritime nation, elevating the oceans economy
		Accelerating transformation towards greater economic participation
Building and strengthening capabilities of South Africans	Priority 3: Education, skills and health	Improved efficiency and effectiveness of support services
	Priority 5: Spatial integration, human settlements and local government	Public transport that enables social emancipation and an economy that works
	Priority 6: Social cohesion and community safety	Safety (and security) as an enabler of service delivery

(Source: Department of Transport (2021)

As far as the 2021 SONA is concerned, it accentuated the following strategic objectives that had a bearing on the transport sector:[6]

Constructing and rehabilitating N1, N2 and N3 highways;
Supporting a massive increase in local production; and
Using Operation Vulindlela to bring about reforms in the transport sector.

Over the medium-term, the Department plans to give effect to these guiding policies by focusing on:[7]

Building and maintaining national and provincial road networks;
Providing passenger rail infrastructure and services; and
Facilitating the provision of integrated public transport networks.

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 infrastructure 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 2: Ministers’ Delivery Agreement with the President of the Republic of South Africa – information obtained from the Annual Performance Plan 2019/20 p. 2 – 3. The Annual Reports of the Department for 2019/20, 2020/21 and 2021/22 did not contain this agreement as was done in the past. On page 21 of the 2021/22 Annual Report, the Deputy Minister does merely refer to the Minister’s Performance Agreement he signed with the President being the basis for the strategic focus areas guiding the Department’s performance.)

2.1.2 Strategic Outcomes and Oriented Goals of the Department

During the period under review, the Department discharged its responsibilities with a view to attaining the following strategic objectives:[8]

Safety as an enabler of service delivery;
Public transport that enables social emancipation and an economy that works;
Infrastructure build that stimulates economic growth and job creation;
Building a maritime nation, elevating the oceans economy;
Accelerating transformation towards greater economic participation;
Innovation that advances efficiencies and supports a continuous improvement model;
Environmental Protection – Recovering and maintaining a healthy natural environment; and
Governance – Greater efficiency, effectiveness and accountability.

In the 2021/22 financial year, the Department aimed to perform its work in line with the following Priority Focus Areas and Performance Outcomes:

Department Priority Focus Area 1: SAFETY as an Enabler of Service Delivery
- Sub-Programme: Safer Transport Systems
  - Road Transport Safety
    - Improved transport safety and security
  - Rail Transport Safety
    - Improved transport safety and security
  - Civil Aviation Safety
    - Improved transport safety and security
  - Maritime Transport Safety
    - Improved transport safety and security
  - Public Transport Safety
    - Improved transport safety and security
    - Improved public transport safety[9]

Department Priority Focus Area 2: PUBLIC TRANSPORT that Enables Social Emancipation and an Economy that Works
- Sub-Programme: Public Transport
  - National Taxi Lekgotla Resolutions Implementation
    - Improved accessibility, quality and reliability of public transport
  - Integrated Public Transport Networks (IPTNs)
    - Improved accessibility, quality and reliability of public transport
  - Rural and Scholar Transport
    - Improved accessibility, quality and reliability of public transport
  - Rail Transport
    - Improved accessibility, quality and reliability of public transport

Department Priority Focus Area 3: INFRASTRUCTURE Build that Stimulates Economic Growth and Job Creation
- Sub-Programme: Competitive and Accessible Markets
  - Road Transport
    - Increased access to affordable and reliable transport systems
    - Decent Jobs sustained and created
  - Rail Transport
    - Increased access to affordable and reliable transport systems
    - Decent Jobs sustained and created
  - Civil Aviation
    - Decent jobs sustained and created

Department Priority Focus Area 4: Building a MARITIME Nation, Elevating the Oceans Economy
- Sub-Programme: Competitive and Accessible Markets
  - Increased access to affordable and reliable transport systems

Department Priority Focus Area 5: Accelerating TRANSFORMATION towards Greater Economic Participation
- Sub-Programme: Competitive and Accessible Markets
  - Increased access to affordable and reliable transport systems

Department Priority Focus Area 6: INNOVATION that Advances Efficiencies and Supports a Continuous Improvement Model
- Sub-Programme: Innovation
  - Improved competitiveness through adoption of new technology

Department Priority Focus Area 7: ENVIRONMENTAL PROTECTION – Recovering and Maintaining a Healthy Natural Environment
- Sub-Programme: Reduction in Greenhouse Gas Emission and Pollution
  - Emission of Greenhouse Gases reduced
  - Pollution incidents reduced

Department Priority Focus Area 8: Governance – Greater Efficiency, Effectiveness and Accountability
- Sub-Programme: Skills Development
  - Improved sector skills and capacity
- Sub-Programme: Functional, efficient and integrated government
  - Improved governance and strengthened control environment

2.1.3 Challenges experienced in 2021/22 as reported by the Department

The outbreak of the COVID-19 pandemic resulted in restrictions that led to the closure of Driving Licence Testing Centres (DLTCs), Registering Authorities (RAs) and Vehicle Testing Centres (VTCs), particularly during Alert Levels 5 and 4, between 26 March 2020 and 31 May 2020.[10] These institutions gradually opened from 1 June 2020 depending on their readiness in terms of COVID-19 regulations. Due to the impact of COVID-19 on service delivery, in terms of limited staff and demand for services, major backlogs were incurred, especially with regard to the renewal of driving licences.[11] In addition to this, there was a breakdown of the card production machine during the 2021/22 financial year which further added to the already COVID-19 impact on the backlog. This then necessitated extensions of validity period of driving licences, in a way to allow the backlog to be cleared.

The vacancy rate in the Department remained a challenge. During the period under review, a total of sixty-one (61) vacant positions were filled, against a target of fifty (50).[12] However, the anticipated decline in the vacancy rate did not materialise due to a high turnover rate and unfunded positions. The turnover rate was impacted by, amongst other things, the number of deaths of employees, resignations, external transfers and retirements[13]. The Department has undertaken to “continue prioritising filling of vacant position to ensure attainment of a 10% or lower rate as prescribed by the State”.[14]

The following were reported in the annual report as challenges experienced by the Department during the year under review, per the Report of the Accounting Officer:[15]

2.1.3.1 Programme 1: Administration

All Information and Communications Technology (ICT) governance structures were reconstituted and met regularly during the period under review. Audit findings raised by the Office of the Auditor-General of South Africa (AGSA) on ICT governance were fully addressed. In terms of ICT service delivery matters, improvements are being effected and still work in progress.

Internal controls were monitored in financial and supply chain management (SCM), and in stakeholder coordination and compliance. Irregular and unauthorised expenditure have been put in check with the Department not incurring any for the financial year. However, there are a few cases of potential irregular expenditure that are being assessed for verity. Nine cases of fruitless and wasteful expenditure, mainly as a result of no-shows related to travel, were recorded during the period under review. One (1) case was written off and eight (8) were transferred to debt.

Vacancy rate in the Department remains a challenge. A total of sixty-one (61) vacant positions were filled, against a target of fifty (50) for the financial year. However, the anticipated decline in the vacancy rate did not materialise due to a high turnover rate and unfunded positions. The turnover rate was impacted by, amongst others, number of deaths of employees, resignations, external transfers and retirements. The Department will continue prioritising filling of vacant position to ensure attainment of a 10% or lower rate as prescribed by the state.

Revenue losses and regulatory restrictions experienced by the sector, as a result of the COVID-19 pandemic, impacted heavily on achievement of critical milestones in sector capital infrastructure programmes. State-Owned Entities (SOEs) impacted include the Passenger Rail Agency of South Africa (PRASA), ACSA, SANRAL and ATNS.

2.1.3.2 Programme 2: Integrated Transport Planning

The freight to rail agenda is being addressed through the development of the approved Road Freight Strategy and its implementation plan. A migration plan, which assesses infrastructure readiness, condition and determination of commodities and quantities that could be carried by the rail sector, was also developed.

The establishment of the Transport Economic Regulator (TER) remains a critical target of the Department within the medium-term. The Economic Regulation of Transport (ERT) Bill is currently being processed in Parliament, and it is anticipated that the Bill will be approved in the new financial year (2022/23).

To ensure an adequate regulatory environment for the implementation of autonomous vehicle technology (AVT) in the country, a legislative gap analysis on the regulation of autonomous vehicles was conducted and a recommendation report has been developed. This report will guide the required amendment of legislation that will be prioritised within the medium-term.

In the 2021/22 financial year, green procurement guidelines were developed to advance the sector target of reducing Greenhouse Gas emission within the medium-term.

2.1.3.3 Programme 3: Rail Transport

As part of ensuring a rail transport sector that is safe and secure, the Rail Safety Bill is currently being processed in Parliament. Once approved, the Act will guide the implementation of interventions to ensure rail commuters, including rail infrastructure are safeguarded accordingly.

On 23 March 2022, Cabinet approved the White Paper on National Rail Policy that takes a holistic view on the development of the rail system. This Policy introduces radical structural reforms in the sector and also intends to place rail on a sound footing to play a meaningful role as a backbone of a seamlessly integrated transport value chain.

One of the highlights of the Policy relates to enabling investments in the rail network with specific attention to the exploitation of rail's genetic technologies to achieve renaissance in the following market spaces: heavy haul, heavy intermodal, which includes double-stacked containers, contemporary urban and regional rapid transit, as well as higher-speeds of 160 to 200km/h and high speeds up to 300 km/h.

The draft of the High-Speed Rail Corridor Framework was developed during the period under review. The Framework is due for submission to Cabinet in the 2022/23 financial year.

The Rolling Stock Fleet Renewal Programme has produced thirty-nine (39) new train sets during the 2021/22 financial year. Thirty-three (33) of the sets have been provisionally accepted while six (6) await fitment of parts before testing. The total number of train sets produced since the inception of the programme is eighty-five (85).

To date, five (5) priority corridors have been recovered and services have resumed. Four corridors are currently closed for repairs and will be returned to service within the new financial year. In KwaZulu-Natal, two corridors (Umlazi-Durban and KwaMashu-Durban), which were impacted by the recent floods, are undergoing infrastructure clean up with a view to resuming services within the financial year.

2.1.3.4 Programme 4: Road Transport

Implementation of the National Road Safety Strategy was monitored nationally and in nine provinces. Regulatory law enforcement interventions were commissioned to improve road safety and reduce road crashes and fatalities. Reduction of road crash fatalities amounted to 20.02 in the 2021/22 financial year.

In November 2021, the DLCA experienced a machine breakdown due to flooding of the adjacent building, which caused an electrical surge. As at 20 January 2022, when the DLCA resumed production, the backlog in the production of driving licence cards that resulted from the machine breakdown was 639 000. As at 11 April 2022, a total of 628 000 cards had been produced, leaving a balance of 11 000 cards from baseline backlog recorded in January 2021. The accumulated backlog to the date of reporting was 593 000. The DLCA is operating day and night shifts to address this backlog and to ensure that all road users have valid driving licenses.

National and provincial road networks were rehabilitated and maintained during the period under review. On the national front, the entire 22 266 km of the SANRAL network was exposed to routine maintenance.

In line with the Provincial Road Maintenance Programme, the provincial road network was exposed to rehabilitation, maintenance, re-surfacing, resealing, blacktop patching, blading and re-gravelling during the period under review. Over 310 239 job opportunities were reported, with some opportunities being for women, youth and persons with disabilities.

Compliance with the user-pay principle remained optimal, except on the SANRAL network impacted by e-tolling, i.e. Gauteng Freeway Improvement Project (GFIP). This section constitutes a small fraction of the SANRAL network. A decision on the GFIP tariff and funding structure is eminent within the current financial year, primarily to bring certainty to SANRAL’s ability to continue operating as a going concern and also to the user-pay principle as a policy of government.

2.1.3.5 Programme 5: Civil Aviation

In the 2020/21 financial year, the South African Civil Aviation Authority (SACAA) initiated the process to review RPAS regulations. The target is to ensure that the review process is concluded within the medium-term and that the regulatory framework for RPAS is optimised.

Over the medium-term, the Department, in collaboration with SACAA, will optimise the implementation of the Aviation Safety Strategy to ensure that the fatal accidents in general aviation are reduced.

2.1.3.6 Programme 6: Maritime Transport

In June 2021, President Ramaphosa announced the decision to corporatise the Transnet National Ports Authority (TNPA) as an independent subsidiary of Transnet. Following this pronouncement, an interim Board was appointed, and relevant processes given effect to enable the establishment of the TNPA as an independent subsidiary. The finalisation of this process with the appointment of a permanent Board will give full effect to the provisions of the National Ports Act of 2005.

Implementation of Operation Phakisa 3-Foot Plan was also monitored during the period under review. A draft business case for the establishment of a National Shipping Company was developed as targeted. During the period under review, the draft National Maritime Security Strategy was developed.

2.1.3.7 Programme 7: Public Transport

The implementation of Integrated Public Transport Networks (IPTNs) in various cities has not been without problems. Capacity challenges in some of the cities have given rise to complications that have either delayed or stalled progress.

During the 2021/22 financial year, a total of (7) cities are operational and are working towards expanding current services. Operating cities carry a combined average weekday passenger trips of 117 305. These cities include the City of Cape Town, George, Ekurhuleni, Johannesburg, Tshwane, Nelson Mandela Bay and Polokwane.

Rustenburg, Mangaung and eThekwini are working towards the launch of new services. eThekwini is currently experiencing challenges due to unsuccessful negotiations with taxi operators on the affected routes.

As part of the implementation of the National Taxi Lekgotla resolutions, the Department has also initiated the establishment of a Panel of Eminent Persons to lead discussions regarding unity and leadership within the taxi industry with a view to finding a lasting solution to the ongoing leadership dispute and bring stability. The key deliverable of this Panel of Eminent Persons would be to find a lasting solution to the ongoing divide that plagues the industry and bring about unity and stability. Members of the Panel were appointed within the period under review.

Regarding implementation of the Revised Taxi Recapitalisation Programme, the number of vehicles scrapped was negatively affected due to slow uptake by the industry. A marketing drive to sensitise the public about taxi scrapping was delayed in different provinces due to the COVID-19 pandemic. A total of 2 234 old taxi vehicles (OTVs) were scrapped during the period under review. To ensure that uptake by the industry is improved, and that more OTVs are scrapped, the Department and TRSA will communicate directly with Taxi Associations and qualifying individual operators to get them to bring their old taxis for scrapping.

The Shova Kalula (Ride Easy) bicycle project is a national bicycle programme initiated by the Department as a pilot project in 2001, with the purpose of promoting and maximizing the use of bicycle as a low-cost mobility solution to poor communities, particularly in the rural areas. The project provides for distribution of bicycles to learners from poor households who walk more than 3 kilometres to their educational resource centres. During the period under review, a total of 11 349 bicycles were distributed across all nine (9) provinces.

To ensure sector compliance with the implementation of the National Strategic Plan (NSP) on Gender Based Violence and Femicide (GBVF), the Department, in collaboration with the South African National Taxi Council (SANTACO), provides an annual operational funding of R26 million, increased annually, to support some taxi industry programmes. Amongst the programmes supported by SANTACO, are campaigns to educate drivers on GBVF and to empower them in the job market. The taxi industry has also partnered with the Department of Women, Youth and Persons with Disabilities and Sonke Gender Justice to educate their members on GBVF matters. A Memorandum of Understanding (MoU) was signed in December 2021 to formalise this initiative and to set out the programme of action.

2.1.3.8 Key policy developments and legislative changes

During the year under review, the Department indicated the following key policy developments and legislative challenges:[16]

The decision to corporatise the TNPA as an independent subsidiary of Transnet was announced by President Ramaphosa in June 2021. Following this pronouncement, an interim Board was appointed, and relevant processes given effect to enable the establishment of the TNPA as an independent subsidiary. The finalisation of this process with the appointment of a permanent Board will give full effect to the provisions of the National Ports Act of 2005.
To address regulatory and capacity gaps that relate to South Africa’s need for an efficient and cost-effective transport system, in order to raise economic growth and meet its social goals, the Department is in the process of finalising the Economic Regulation of Transport (ERT) Act, which will affect the establishment of a Transport Economic Regulator (TER).
National Road Traffic Amendment Bill is currently serving before the Portfolio Committee of Parliament and finalising the A-list of the Bill for adoption and approval. The Bill seek to reduce the blood alcohol limit to zero with the result that no one on the road should be operating a motor vehicle whilst under the influence of alcohol and drugs.
The Railway Safety Bill seeks to improve the regulatory framework regulating safety in the Republic of South Africa in order to improve safety for passenger and freight. The Bill was processed through Cabinet and introduced to Parliament in March 2021.
The White Paper on National Rail Policy was approved by Cabinet in March 2022. The implementation of the Nation Policy will drive reduction in the cost of freight services at national level through the encouragement of modal shift from road to rail. It will also drive passenger mobility through higher levels of service and quality of service with increased intermodal connectivity.

2.1.3.8.1 Institutional Policies and Strategies over the five-year planning period

a) National White Paper on Transport Policy, 1996

The vision of the White Paper on National Transport policy is to provide safe, reliable, effective, efficient, and fully integrated transport operations and infrastructure which will best meet the needs of freight and passenger customers at improving levels of service and cost in a fashion which supports Government strategies for economic and social development whilst being economically and environmentally sustainable.

b) White Paper on National Policy on Airports and Airspace Management, 1997

This is a national policy response on airports and airspace management as a result of far- reaching changes which have occurred in South Africa, in general, and in civil aviation, in particular. This policy is currently under review to address recent developments and resultant policy gaps.

c) National Commercial Ports Policy, 2002

The aim of this policy is to ensure an internationally competitive port system informed by the knowledge that efficient ports are known to be catalysts for increased trade, and thus provide a comparative advantage for international trade. Thus, this policy aims to ensure affordable, internationally competitive, efficient and safe port services based on the application of commercial rules in a transparent and competitive environment applied consistently across the transport system.

The importance of this policy is further highlighted by the fact that globalisation pressures make it essential that nations integrate their transport systems into the global logistics network. Ports are naturally being incorporated into this changing system and have to adjust to the new challenges and environment.

d) Taxi Recapitalisation Policy, 2009

The Taxi Recapitalisation Policy (TRP) is an intervention by Government to bring about safe, effective, reliable, affordable and accessible taxi operations by introducing New Taxi Vehicles designed to undertake public transport functions in the taxi industry.

A revised fiscal framework also accounts for substantial revenue losses emanating from the economic shock of COVID-19 pandemic and the subsequent lockdown. The lockdown significantly delayed planned programmes, projects and expenditure in the sector. As a result, the Department, Provinces and Municipalities, in their revised budget applications, would have to show delayed milestones and targets, the impact on their operational revenue and how they intend to mitigate the risk towards desired recovery and achievement of medium- to long-term outcomes.

The revision exercise thus focused, amongst others, on downscaling and/or reducing performance targets, particularly where programmes were impacted by budget cuts; and also, on prioritising interventions critical in mitigating the impact of the COVID-19 pandemic, thus saving lives of the South Africans, where necessary. In revising performance targets, the NDP, the seven (7) apex priorities of the 6th Administration and the MTSF 2019 – 2024 remained the authoritative documents from which the exercise took guidance. For the remainder of the current Medium Term Expenditure Framework (MTEF), baseline allocations would be used to provide for the rapidly changing economic conditions and enable spending on the COVID-19 response.

This proposed modification would then be in categories.

• Category 1 will see suspension of funds and reallocation, where applicable. In this regard and as stated, the baselines of allocations to sector Departments will be reduced.

• Category 2 will see reprioritisation of funds within the budget votes. To this effect, funds will be shifted across programmes and/or budget items and reprioritised to where there are needs.

As stated, COVID-19 had a negative impact on the plans and operations of the Department and sector entities, particularly for the 2020/21 financial year. The effects of the impact of the pandemic would then have to be mitigated for the medium-term through revision of the Strategic Plan and medium-term targets.

2.1.3.8.2 Legislative challenges

The Department had 8 Bills that were processed during the year under review or still currently before Parliament and they are listed as follows:

1) Civil Aviation Amendment Bill, 2018 [B44-2018] (introduced 14 November 2018, Bill processed and passed by the National Assembly on 11 May 2021 – National Council of Provinces passed the Bill on 14 December 2021 – on 31 March 2022 the Bill was signed by the President and enacted as Act (No. 22 of 2021);

2) Economic Regulation of Transport Bill, 2020 [B1-2020] (introduced 31 January 2020 and currently in the NCOP process);

3) Transport Appeal Tribunal Amendment Bill, 2020 [B8-2020] (introduced 29 May 2020 and still before the Committee);

4) National Road Traffic Amendment Bill, 2020 [B7-2020] (introduced 29 May 2020 and currently in the NCOP process);

5) Railway Safety Bill, 2021 [B7-2021] (introduced 19 March 2021 and still before the Committee);

6) National Land Transport Amendment Bill, 2016 [B7-2016] (introduced 15 April 2016 and referred back to Parliament by the Presidency on 9 September 2021 to address the reservations about the Bill’s constitutionality – under consideration by the NA);

7) Marine Pollution (Prevention of Pollution from Ships) Amendment Bill [B5-2022] (introduced 31 January 2022 and still before the Committee);

8) Marine Oil Pollution (Preparedness, Response and Cooperation) Bill [B10-2022] (introduced 10 March 2022 and still before the Committee).

2.1.4 Achievements highlighted and significant events and/or projects for the year 2021/22 as reported by the Department

The following is a summary of the reported notable progress, milestones and achievements by the Department during the year under review:[17]

In pursuit of the transport sector’s desired outcome of an affordable, safe, universally accessible and reliable public transport, seven (7) cities (Johannesburg, Tshwane, Ekurhuleni, Cape Town, George, Polokwane and Nelson Mandela Bay) operated IPTNs and carried a combined 117 305 average passenger trips.[18]
The Annual Report on the PRASA Rail Modernisation Programme was developed.[19]
The Analysis Report on jobs created through PRASA Infrastructure programmes was developed.[20]
The Annual Report on PRASA rail operations was developed.[21]
The Annual Report on the implementation of programmes addressing the violence against women, youth and persons with disabilities in the rail transport sector was developed.[22]
The National Household Travel Survey (NHTS) reports were produced for all the provinces.[23]
The Draft Regional Integration Strategy was developed.[24]
The Freight Migration Plan (Road to Rail) was developed.[25]
The High Speed Rail (HSR) Corridor Framework was approved for submission to Cabinet.[26]
The Annual Monitoring Report on the implementation of the National Road Safety Strategy was developed.[27]
The Draft Road Infrastructure Funding Policy was developed.[28]
The existing Public Transport Funding Model was reviewed.[29]
The framework for the taxi industry ownership of the Taxi Scrapping Entity was developed.[30]
The Annual Monitoring Report on Public Transport Operations was monitored in provinces.[31]

OVERVIEW AND ASSESSMENT OF FINANCIAL PERFORMANCE

3.1 2018/19

Table 3: Appropriation Statement for 2018/19

Programme R’000	2018/19			2017/18
Programme R’000	Final Approp. R’000	Actual Expenditure R’000	Over/Under Expenditure R’000	Final Approp. R’000	Actual Expenditure R’000	Over/Under Expenditure R’000
Programme 1: Administration	434 094	379 809	54 285	415 254	407 466	7 788
Programme 2: Integrated Transport Planning	89 982	71 375	18 607	83 075	76 360	6 715
Programme 3: Rail Transport	15 887 279	15 873 693	13 586	19 333 199	14 515 158	4 818 041
Programme 4: Road Transport	30 098 760	30 067 108	31 652	27 138 175	27 118 369	19 806
Programme 5: Civil Aviation Transport	182 253	167 718	14 535	171 165	166 149	5 016
Programme 6: Maritime Transport	129 126	123 993	5 133	128 417	109 327	19 090
Programme 7: Public Transport	13 009 800	12 509 758	500 042	12 525 895	12 277 572	248 823
Direct charge against Revenue Fund	10 200	2 976	7 224	10 000	5 559	4 441
Total	59 841 494	59 196 430	645 064	59 805 180	54 675 960	5 129 220

(Source: Department of Transport Annual Report for 2018/19 (2019b).

For the 2018/19 financial year, the Department had received a budget of R59.8 billion and of this amount, it spent R59.2 billion by the end of the financial year, that is 98.9% of the available budget, up from R54.7 billion (or 91.4%) of the R59.8 billion it had spent by the same time in 2017/18. The Department underspent a total amount of R645.1 million, translating into an under-expenditure of 1.1%. The biggest under-expenditure was in the Public Transport programme. Of the R13 billion that had been allocated to this programme, the Department had spent R12.5 billion (or 96.2%) by the end of the reporting period, indicating an under-expenditure of R500 million (or 3.8%). The Compensation of Employees (CoE) was underspent in all programmes due to posts that could not be filled.[32]

3.2 2019/20

Table 4: Appropriation Statement for 2019/20

Programme	2019/20			2018/19
	Final Appropriation	Actual Expenditure	Over/Under Expenditure	Final Appropriation	Actual Expenditure	Over/Under Expenditure
	R’000	R’000	R’000	R’000	R’000	R’000
Programme 1: Administration	419 337	412 741	6 596	434 094	379 809	54 285
Programme 2: Integrated Transport Planning	152 936	139 950	12 986	89 982	71 375	18 607
Programme 3: Rail Transport	16 560 839	16 560 238	601	15 887 279	15 873 693	13 586
Programme 4: Road Transport	33 295 501	33 285 865	9 636	30 098 760	30 067 108	31 652
Programme 5: Civil Aviation Transport	224 345	178 820	45 525	182 253	167 718	14 535
Programme 6: Maritime Transport	135 250	132 879	2 371	129 126	123 993	5 133
Programme 7: Public Transport	13 416 923	13 178 118	238 805	13 009 800	12 509 758	500 042
Direct charge against Revenue Fund	10 424	2 614	7 810	10 200	2 976	7 224
Total	64 215 555	63 891 225	324 330	59 841 494	59 196 430	645 064

(Source: Department of Transport, (2020).

For 2019/20, the Department had received a budget of R64.2 billion and of this amount, it spent R63.9 billion by the end of the financial year, that is 99.5% of the available budget, up from R59.2 billion (or 98.9%) of the R59.8 billion it had spent by the same time in 2018/19.

The Department underspent a total amount of R324.3 million, translating into an under-expenditure of 0.5%. The biggest under-expenditure was in the Public Transport programme. Of the R13.4 billion that had been allocated to this programme, the Department had spent R13.2 billion (or 98.2%) by the end of the reporting period, indicating an under-expenditure of R238.8 million (or 1.8%). The Compensation of Employees was underspent in all programmes due to posts that could not be filled.[33]

3.3 2020/21

Table 5: Appropriation Statement for 2020/21

Programme	2020/21
	Final Approp.	Actual Expenditure	Over/Under Expenditure	Final Approp.	Actual Expenditure	Over/Under Expenditure
	R’000	R’000	R’000	R’000	R’000	R’000
Programme 1: Administration	469 780	384 336	85 444	419 337	412 741	6 596
Programme 2: Integrated Transport Planning	90 071	57 614	32 457	152 936	139 950	12 986
Programme 3: Rail Transport	9 599 405	9 584 302	15 103	16 560 839	16 560 238	601
Programme 4: Road Transport	31 472 160	31 459 985	12 175	33 295 501	33 285 865	9 636
Programme 5: Civil Aviation Transport	2 670 849	2 642 208	28 641	224 345	178 820	45 525
Programme 6: Maritime Transport	144 618	135 776	8 842	135 250	132 879	2 371
Programme 7: Public Transport	12 907 852	12 809 594	98 258	13 416 923	13 178 118	238 805
Direct charge	10 997	-	10 997	10 424	2 614	7 810
Total	57 365 732	57 073 815	291 917	64 215 555	63 891 225	324 330

(Source: Department of Transport, (2021b)

For 2020/21, the Department had received a budget of R57.4 billion and of this amount, it spent R57.1 billion by the end of the financial year, that is 99.5% of the available budget. The expenditure pattern of the Department remains the same as in the previous financial year, when it had spent the same percentage (i.e. 99.5%) of the R64.2 billion allocated to it.

The Department underspent a total amount of R291.9 million, translating into an under-expenditure of 0.5%. In terms of Rand value, the biggest under-expenditure was in the Public Transport programme. Of the R12.9 billion that had been allocated to this programme, the Department had underspent R98.2 million (or 0.8%) of its allocation. Given the size of this programme’s overall budget, the smallest proportion would suggest significant amounts in monetary value. However, the Integrated Rail Transport Planning programme was the worst performing in terms of proportional expenditure, as it underspent 36% of its budget. This is a significant decline from the previous year when its managed to spent 91.5% of its budget.

In contrast, the Civil Aviation Transport programme’s expenditure improved in 2020/21. In 2019/20, its expenditure was 79.7%. However, expenditure reached 98.9%.

Compensation of Employees was underspent across all programmes, bar the Maritime Transport programme, “due to posts that could not be filled”.[34] Goods and Services underspent in most programmes owing to the effects of the COVID-19 pandemic.[35]

3.4 2021/22

Table 6: Appropriation Statement for 2021/22

Programme	2021/22			2020/21
	Final Appropriation	Actual Expenditure	Over/Under Expenditure	Final Appropriation	Actual Expenditure	Over/Under Expenditure
	R’000	R’000	R’000	R’000	R’000	R’000
Programme 1: Administration	521 938	439 550	82 388	469 780	384 336	85 444
Programme 2: Integrated Transport Planning	83 427	64 740	18 687	90 071	57 614	32 457
Programme 3: Rail Transport	16 796 420	16 768 179	28 241	9 599 405	9 584 302	15 103
Programme 4: Road Transport	34 221 977	34 123 692	98 285	31 472 160	31 459 985	12 175
Programme 5: Civil Aviation Transport	564 322	546 031	18 291	2 670 849	2 642 208	28 641
Programme 6: Maritime Transport	148 177	115 600	32 577	144 618	135 776	8 842
Programme 7: Public Transport	13 089 277	12 845 485	243 792	12 907 852	12 809 594	98 258
Direct charge against the National Revenue Fund	11 602	3 372	8 230	10 997	-	10 997
Total	65 437 140	64 906 649	530 491	57 365 732	57 073 815	291 917

(Source: Department of Transport (2022a)

For 2021/22, the Department had received a budget of R65.4 billion and of this amount, it spent R64.9 billion by the end of the financial year, that is 99.2% of the available budget. The expenditure pattern of the Department slightly decreases from the previous financial year, when it had spent R57.1 billion (i.e. 99.5%) of the R57.4 billion allocated to it.

The Department underspent a total amount of R530.5 million, translating into an under-expenditure of 0.8%. In terms of Rand value, the biggest under-expenditure was in the Public Transport programme. Of the R13.1 billion that had been allocated to this programme, the Department had underspent R243.8 million (or 1.9%) of its allocation. Given the size of this programme’s overall budget, the smallest proportion would suggest significant amounts in monetary value. However, the Integrated Transport Planning programme was the worst performing in terms of proportional expenditure, as it underspent 22.4% of its budget. Notwithstanding this, the programme’s expenditure slightly went up compared to the previous financial year when it had managed to spend 64% of its budget.

The Department underspent on the CoE due to vacant posts that could not be filled in the 2021/22 financial year.[36] The Annual Performance Plan target of the Department was to fill 50 posts for the period under review. However, the Department averred that a total of 61 posts had been filled as at the end of the 2021/22 financial year.[37] In addition, it stated that most of the posts that had been filled during the financial year were through internal promotions and this included the recorded resignations, retirements and transfers outside the Department which contributed to the underspending on COE.

Goods and Services were underspent across programmes due to non-spending on a number of projects. The Department reported that the procurement plan had been reviewed and revised to improve the spending on projects. However, due to delayed procurement, other projects could not be finalised by the end of the financial year “and those projects will be deferred to the coming financial year” (2022/23).[38] Other projects were reportedly “done in house and were performed as targeted”.[39]

3.4.1 Programme 1: Administration

By the end of 2021/22, the Administration programme had spent R439.6 million (or 84.2%) of the R521.9 million that had been allocated to it, translating into an under-expenditure of R82.4 million (or 15.8%). This was mainly on CoE, and on Goods and Services projects such as:[40]

Automation tools for internal audit;
Slow spending on the document management solution; and
Termination of the TRAC project at the University of Stellenbosch, as well as other projects.

The Department reported that what further contributed to the underspending on Goods and Services was the training and development due to less training, travel and subsistence owing to less travelling and venues and facilities as most gatherings were conducted virtually. The underspending on Transfers and Subsidies was attributed to less intake of students in the universities on bursaries to non-employee and on machinery and equipment as the bid for the procurement of bulk laptops had been approved and a service provider appointed. However, there was a delay in the delivery “due to global laptop shortages”.[41]

The project on hardware refresh and switches had been delayed and “will be deferred to the coming financial year”[42]. A total amount of R403 million had been shifted from Goods and Services to fund the excess expenditure for the payment of vehicle licence, payment for leave gratuities, as well as for debt written off.[43]

3.4.2 Programme 2: Integrated transport planning

The budget allocation for the Integrated Transport Planning programme stood at R83.4 million and of this amount, the programme had spent R64.7 million (or 77.6%) by the end of the reporting period, translating into an under-expenditure of R18.7 million (or 22.4%).

The under-expenditure was on CoE and on Goods and Services as internal capacity had been utilised for other projects. However, the following projects, namely, Autonomous Vehicles Regulations, Regional Corridor Strategy and Freight Transport Model “will be deferred to the coming financial year”.[44] A total amount of R6.8 million was shifted from Goods and Services in this programme to cover the excess expenditure on Programme 5: Civil Aviation.[45]

3.4.3 Programme 3: Rail transport

For the 2021/22 financial year, the budget for the Rail Transport programme sat at R16 796 420 billion and of this amount, the programme had spent R16 768 179 billion (or 99.8%) by the end of the period under review. The programme underspent R28.2 million (or 0.2%) mainly on Goods and Services projects such as the appointment of a Housing Development Agency (HDA) on behalf of the Passenger Rail Agency of South Africa (PRASA) in the City of Cape Town.[46]

In terms of the implementation plan, the Department committed itself to entering into a Service Level Agreement (SLA) with the HDA as an implementing agent. This was intended to attend to the establishment of temporary residential areas and the resettlement of households residing in the PRASA railway reserves. However, there was a delay in the signing of the SLA.[47] Other contributing factors to the underspending included projects such as the establishment of the Rail Economic Regulator and the National Rail Bill which was still at consultation stages, as well as other operational costs.[48]

The Department reported that it had shifted a total amount of R37 000. 00 from Goods and Services to fund leave gratuities under Households, and R13 000. 00 was shifted within the programme to fund debt written off.[49] A total amount of R9.9 million was shifted from Goods and Services in this programme to cover the excess expenditure on Programme 5: Civil Aviation.[50]

3.4.4 Programme 4: Road transport

Of the R34.2 billion that had been allocated to the Road Transport programme for 2021/22, it spent R34.1 billion (or 99.7%). The programme underspent by R98.3 million (or 0.3%) mainly due to the non-payment of the Road Traffic Infringement Agency (RTIA) for the Administration of Adjudication of Road Traffic Offences (AARTO) roll-out as a result of the court judgement to allow for other processes to unfold. The Department maintained that these funds would be declared as “savings”.[51]

Other contributing factors were Goods and Services projects such as the Programme Development for S’hamba Sonke, Development of the Road Disaster Management Plan, Road Asset Management “which shall be deferred to the coming financial”, year as well as other projects.[52]

Funds amounting to R605 000. 00 were shifted within the programme to cover the excess expenditure under Households for the payment of leave gratuities, as well as for debt written off.[53]

3.4.5 Programme 5: Civil aviation transport

By the end of 2021/22, the Civil Aviation Transport programme had spent R546 million (or 96.8%) against R564.3 million that had been allocated to it during the reporting period, indicating an under-expenditure of R18.3 million (or 3.2%). The programme recorded regression on spending during the period under review, down from 98.9% in 2020/21 when it had spent R2.6 billion against R2.7 billion that had been allocated to it during that reporting period.

The underspending in the Civil Aviation Transport programme was mainly on CoE and Goods and Services due to less than anticipated spending on the Watch Keeping Services project, delays in projects such as the National Aviation Transformation Strategy, Correction Factor: Airports Company South Africa (ACSA) and the Air Traffic Navigation Services (ATNS), as well as other projects.[54]

Other contributing factors included less spending on the Travel and Subsistence due to less travelling and other operational items. The programme realised a saving on foreign membership fees, as well as non-profit institutions.

A total amount of R31.9 million was shifted from Goods and Services within the programme to fund excess expenditure incurred under building and other fixed structure owing to the payment of the court judgement for the refurbishment of Mthatha Airport, R120 000.00 to households and R2 000.00 for debt written off.[55] A total amount of R68 million was shifted from various programmes to fund the excess expenditure due to court judgement against the Department in favour of Ndorum Joint venture for the refurbishment of Mthatha Airport in this programme.[56]

3.4.6 Programme 6: Maritime transport

For the 2021/22 financial year, the Maritime Transport programme had received R148.2 million and of this amount, it spent R115.6 million (or 78%), indicating an under-expenditure of R32.6 million (or approximately 22%). It is worth noting that there has been consistent regression on the expenditure in this programme in the previous financial years. For example, in 2020/21, it spent R135.8 million (or 93.9%) of the R144.6 million that had been allocated to it, indicating an under-expenditure of R8.8 million (or 6.1%). In 2019/20, the Maritime Transport programme had been allocated R135.3 million, and by the end of the financial year, it had spent R132.9 million (or 98.2%), translating into an under-expenditure of R2.4 million (or 1.8%).

The programme underspent by R32.6 million mainly on Goods and Services as a result of less than anticipated expenditure to the Oil Pollution Prevention project.[57] The Department asserted that internal capacity was utilised for projects such as the Review of the Merchant Shipping, as well as the development of Maritime Transport policy and legislation. The programme also underspent on the following projects:[58]

Feasibility Study on Tug Boat Services; and
Automated vessel clearance.

The Department reported that the Marine Court of Enquiry “will be deferred to the coming financial year”, including the International Maritime Organization (IMO) World Maritime parallel event which had been suspended as a result of the COVID-19 pandemic.

A total amount of R7 million was shifted from Goods and Services in this programme to cover the excess expenditure on Programme 5: Civil Aviation.

3.4.7 Programme 7: Public transport

By the end of the period under review, the Public Transport programme had spent R12.8 billion (or 98.1%) of the R13.1 billion that had been allocated to it, translating into an under-expenditure of R243.8 million (or 1.9%). The programme’s expenditure slightly regressed from the previous financial year when it had spent 99.2% of its budget allocation.

The Public Transport programme’s under-expenditure was mainly on Transfers and Subsidies owing to less intake on the taxi recapitalisation which is demand driven. The taxi scrapping project is a demand-driven process, wherein qualifying taxi operators decide when and how they will deliver their old taxi vehicles for scrapping. Some of the identified vehicles were precluded due to the lack of valid operating licences.[59] The branch is proposing that a “cut-off” date be proclaimed in order to force the taxi operators to deliver their qualifying old taxis for scrapping.[60]

Other contributing factors included the underspending on Goods and Services projects such as:

The Public Transport Grant Monitoring;
Public Transport Safety Plan;
Implementation of the integrated public transport networks (IPTNs) in district municipalities; and
National Land Transport Information Systems (NLTIS) upgrade, as well as other projects.

At the time of the reporting, the Department maintained that the branch had since recommenced with the procurement process for the Public Transport Grant Monitoring project. However, it had been suspended due to the National Treasury directive to suspend advertisements of tenders following the Constitutional Court ruling on the Preferential Procurement Regulations.[61]

A total amount of R583 000.00 was shifted from Goods and Services within the programme to fund leave gratuities under Households and debt written off.[62] An amount of R44 million was also shifted from Goods and Services in this programme to fund excess expenditure on Programme 5: Civil Aviation.[63]

3.5 Virements/ Roll Overs 2021/22

Table 7: Virements[64]

Programme R’000	Compensation of Employees	Goods and Services	Interest and Rent on Land	Transfers and Subsidies	Machinery and Equipment	Buildings and other Fixed Structures	Payments for Financial Assets	Total
Administration	-	(404)	-	348	(226)	-	56	(226)
Integrated Transport Planning	-	(7 017)	-	-	208	-	17	(6 793)
Rail Transport	-	(10 037)	-	24	18	-	13	(9 982)
Road Transport	-	(605)	-	579	-	-	26
Civil Aviation Transport	-	(31 927)	61 414	120	-	38 410	23	68 040
Maritime Transport	-	(7 004)	-	-	-	-	4	(7 000)
Public Transport	-	(44 623)	-	580	-	-	3	(44 040)
Total	-	(101 617)	61 414	1 651		38 410	142

(Source: Department of Transport (2022a)

As previously stated, savings and under-expenditure on Goods and Services were shifted across programmes to cover over expenditure in Programme 5: Civil Aviation to fund the excess expenditure due to court judgement against the Department, in favour of Ndorum Joint venture for the refurbishment of Mthatha Airport in this programme.

A total amount of R101.6 million was shifted from Goods and Services across programmes as follows:[65]

R61.4 million to fund interest and rent on land as a result of the long process of the court proceedings in the matter of Ndorum Joint venture for the refurbishment of Mthatha Airport;
R1.7 million to fund Transfers for payment of vehicle licences under provinces and municipalities, as well as transfers to Households for resignations and retirements that could not be anticipated;
R38.4 million to fund building and other fixed structures for funds paid as a result of the court judgment against the Department in favour of Ndorum Joint venture for the refurbishment of Mthatha Airport; and
R142 000.00 to fund debts written off on travel and subsistence due to no-shows, as well as for excess on vehicle damages.

Rollovers were requested as detailed in the table below:[66]

Table 8: Rollovers

Programme	R’000
Programme 1: Administration Payment for capital assets: Procurement of bulk laptops to refresh its information technology (IT) hardware assets that have reached their five-year life span or more.	7 080
Programme 3: Rail Transport Appointment of a HDA on behalf of the PRASA in the City of Cape Town, to attend to the establishment of temporary residential areas and the resettlement of households residing in the PRASA railway reserves.	20 695
Total	27 775

(Source: Department of Transport (2022a)

3.6 Unauthorised, fruitless and wasteful and irregular expenditure 2021/22

3.6.1 Unauthorised expenditure

The cost of the electronic National Traffic Information system (eNaTIS) maintenance and operations resulted in unauthorised expenditure of R1.3 billion, which was incurred in 2013/14, 2014/15 and 2016/17.[67] Unauthorised expenditure of R980.375 was incurred in 2018/19 as expenditure that had been incurred, but not in accordance with the vote of the programme: Road Transport. The RTMC took over the eNaTIS with effect from 5 April 2017. Disciplinary processes commenced pertaining to the unauthorised expenditure that had not been in accordance with the vote of the programme: Road Transport. The National Treasury wrote a letter to the Standing Committee on Appropriations on the 15 November 2019, to review the unauthorised expenditure for all departments.[68] At the time of reporting, the Department contended that no decision had been taken in this regard.[69] In addition, it averred that the National Treasury would follow up on the matter. The Department reported that it had not incurred unauthorised expenditure during the period under review.[70]

3.6.2 Fruitless and wasteful expenditure

The Department had forty-seven (47) cases of fruitless and wasteful expenditure, to the tune of R68 561.34 for the 2020/21 financial year. These consisted, amongst others, of:[71]

Two (2) cases amounting to R1 986 to correct the prior error;
Nine (9) cases amounting to R18 896.22 that were added in the 2021/22 financial year;
One (1) case that was written off amounting to R3 132; and
Twenty-four (24) cases that were transferred to debt amounting to R39 347.55.

By the end of the 2021/22 financial year, the department had twenty-nine (29) cases amounting to R42 992.01.

3.6.3 Irregular expenditure

The Department had twenty-three (23) cases of irregular expenditure, amounting to R119.3 million, remaining at the beginning of the 2020/21 financial year. Of these cases:[72]

Disciplinary process had started on two (2) cases;
The National Treasury had been requested to condone three (3) cases;
Five (5) cases were awaiting investigation report;
The Accounting Officer had approved recommendations for two (2) cases that involved non-employees;
Four (4) cases were still waiting submissions to the Bid Adjudication Committee (BAC);
Confirmation of disciplinary steps, disciplinary and recovery processes must be started on five (5) cases; and
Two (2) cases had been condoned.

This left a total of twenty-one (21) cases of irregular expenditure, to the tune of R118.3 million, by the end of 2021/22.[73]

3.6.4 Measures put in place to prevent and/or detect irregular expenditure

The table below indicates the measures that were indicated in the Annual Report as having been put in place to prevent and/or detect irregular expenditure.[74]

It was noted that, for the Transport portfolio, irregular expenditure increased from R1.6 million to R1.8 million, and fruitless and wasteful expenditure increased from R 117 million to R 291 million over the past year. PRASA, ACSA and SANRAL remained the largest contributors to irregular expenditure. Most of the entities need to implement preventative controls to monitor compliance with legislation especially relating to SCM. Non-compliance with SCM prescripts is the biggest contributor when it comes to irregular expenditure. An assessment was done of irregular expenditure where non-compliance with section 217 of the Constitution was identified. The results indicated that in 84% of the instances, the process had not been transparent and competitive. Eleven percent (11%) was not equitable and 11% was not fair. The risk exists that the non-compliance can result in Material Irregularities and the accounting officer/authorities therefore needs to deal with these matters properly with a zero tolerance approach.

The Committee notes the changes in the measures from those which were taken from the previous Annual Reports of the Department that were identical to the measures put in place in the Annual Reports for 2014/15, 2016/17, 2017/18 and 2018/19. The Committee urges the Department to carefully and closely measure whether the implementation of these measures will result in a reduction in irregular expenditure. For the entire portfolio, the concern remains valid given that the transport portfolio still incurred irregular expenditure in the current period under review, which would indicate that the previous measures were either insufficient or ineffective or that the Department had not implemented these measures appropriately throughout the transport portfolio. This concern was shared by the AGSA for the transport portfolio in their presentation to the Committee and the proposal that the Committee should continue to do oversight on the implementation of these measures.

Table 9: Measures put in place to prevent and/or detect irregular expenditure 2017/18, 2018/19, 2019/20, 2020/21 and 2021/22

2017/18 Annual Report

2018/19 Annual Report

2019/20 Annual Report

2020/21 Annual Report

2021/22 Annual Report

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 BAC 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.

Measures listed in the 2018/19 report that were put in place to prevent and/or detect irregular expenditure are as follows: