ATC231024: Report of the Portfolio Committee on Transport on the 2023/24 First Quarter Expenditure of the Department of Transport Dated 24 October 2023

Transport

Report of the Portfolio Committee on Transport on the 2023/24 First Quarter Expenditure of the Department of Transport Dated 24 October 2023

The Portfolio Committee on Transport, having considered the expenditure of the Department of Transport for the First Quarter of the 2023/24 financial year on 12 September 2023, reports as follows:

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 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 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 First Quarter of the 2023/24 financial year, as presented to the Committee on 12 September 2023.

2. ANALYSIS OF THE 2023/24 FIRST QUARTER EXPENDITURE OF THE DEPARTMENT OF TRANSPORT

For the 2023/24 financial year, the budget of the Department of Transport (“the Department”) sits at R79.6 billion and of this amount, the Department spent R17.2 billion (or 21.7%) against the First Quarter projection of R18.1 billion.[1] The lower than projected spending of R876.1 million (or 4.8%) was largely due to expenditure delays in the Road Transport and Public Transport programmes on Goods and Services across programmes.[2]

The Department spent R129.1 million against the First Quarter’s projection of R131.5 million for the Compensation of Employees (CoE). It spent R2.4 million (or 1.8%) lower than projected mainly because of the slow filling of vacant posts. By the end of the First Quarter of 2023/24, the Department had 753 filled posts against a funded establishment of 834 posts. This represented a vacancy rate of 10% (or 81 vacant posts).[3] The vacancy rate was an improvement from where the Department was by the end of the Fourth Quarter of 2022/23. At that time, it had 108 vacant posts on a funded establishment of 813 posts. This translated into a vacancy rate of 13.3%.[4]

2.1 budget expenditure per programme

Table 1: 2023/24 First Quarter Expenditure of the Department of Transport

Programme	Main Appropriation	Available Budget	Q1 Actual Expenditure	Expenditure As % of Available Budget	Q1 Projected Expenditure	Variance from Projected Expenditure	% Variance from Projected Expenditure	Disaster Spending
Administration	516.4	516.4	105	20.3%	120.4	15.4	12.8%	0.0
Integrated Transport Planning	89.4	89.4	21.4	24%	16.7	-4.8	-28.6%	0.0
Rail Transport	20 592.9	20 592.9	5 139.2	25%	5 148.1	8.9	0.2%	0.0
Road Transport	42 611.1	42 611.1	10 419.7	24.5%	11 168.4	748.8	6.7%	150.1
Civil Aviation Transport	314.5	314.5	68	21.6%	79.4	11.4	14.3%	0.0
Maritime Programme	379.2	379.2	44.1	11.6%	59.2	15.1	25.5%	0.0
Public Transport	15 048.9	15 048.9	1 446.5	9.6%	1 527.8	81.3	5.3%	0.0
Total	79 552.4	79 552.4	17 243.9	21.7%	18 120	876.1	4.8%	150.1

(Source: National Treasury (2023a)

2.1.1 Programme 1: Administration

The Administration programme spent R105 million (or 20.3%) against a projection of R120.4 million, translating into a lower than planned spending of R15.4 million (or 12.8%). Expenditure delays were mainly in Goods and Services owing to invoices not received from the Department of Public Works and Infrastructure for office accommodation.[5]

2.1.2 Programme 2: Integrated Transport Planning

In the Integrated Transport Planning programme, the Department spent R21.4 million (or 24%) against a projection of R16.7 million. Spending was R4.8 million (28.6%) higher because of higher than planned spending on projects pertaining to the Black Economic Empowerment (BEE) Charter Council and the South African Women in Transport (SANWIT) empowerment projects.[6]

2.1.3 Programme 3: Rail Transport

The Department spent R5.1 billion (or 25%) against a First Quarter projection of R5.2 billion. Spending was R8.9 million (or 0.2%) lower than projected due to slower than expected expenditure on the Interim Rail Economic Regulator, National Rail Master Plan and the drafting of the Railway Safety Bill.[7]

2.1.4 Programme 4: Road Transport

By the end of the First Quarter of 2023/24, the Road Transport programme had spent R10.4 billion (or 24.5%) against the projection of R11.2 billion. Spending was R748.8 million (or 6.7%) lower than projected owing to transfers to the Road Traffic Infringement Agency (RTIA) that had not been made for the Administrative Adjudication of Road Traffic Offences (AARTO) rollout and outstanding payments to the Provincial Roads Maintenance Grant (PRMG) for the refurbishment component.[8] In addition, there were spending delays in Goods and Services for projects such as the S’hamba Sonke and the development of road asset management tool.[9]

2.1.5 Programme 5: Civil Aviation Transport

In the Civil Aviation Transport programme, the Department’s expenditure was R68 million (or 21.6%) lower than the projection of R79.4 million. This indicated an under-expenditure of R11.4 million (or 14.3%). The delay in spending was largely due to lower expenditure on Goods and Services for the payment to Telkom for Watch-Keeping Services.[10]

2.1.6 Programme 6: Maritime Transport

By the end of the period under review, the Department had expended R44.1 million (or 11.6%) against a projection of R59.2 million in the Maritime Transport programme. The spending was R15.1 million (or 25.5%) lower than projected and this was attributed mainly to slow progress on projects such as the Maritime Policy and Legislation and the Review of the Merchant Shipping Bill.[11]

2.1.7 Programme 7: Public Transport

The Department had spent R1.45 billion (or 9.6%) against a projection of R1.53 billion in the Public Transport programme by the end of the First Quarter of 2023/24. Spending was R81.3 million (or 5.3%) lower mainly due to lower than projected demand on the Taxi Recapitalisation Programme (TRP). Moreover, the lower than projected spending was on Goods and Services because of delays in projects such as the implementation of the integrated public transport networks (IPTNs) in district municipalities, Shova Kalula Bicycle Programme and grant monitoring.[12]

2.1.8 Disaster Response

As of 30 June 2023, the Department had spent R150.1 million on disasters that had been caused by floods in the provinces.[13]

COMMITTEE OBSERVATIONS

Members made the following observations during discussions:

3.1 The Department did not achieve 8 of its 64 targets for the first quarter. It was a matter of concern that 5 of the 7 programme areas could not meet all of the targets in the first quarter.

3.2 Having noted the continued trend of slow filling of vacancies, the Department was asked how it would ensure the filling of vacancies going forward would be done as fast as possible, seeing as some were due to contracts expiring and those are not unforeseen events but instances where the correct planning would result in filled posts as soon as the contracts expire.

3.3 The Committee noted the under-expenditure on transfers and subsidies mainly due to the outstanding payments to the Provincial Roads Maintenance Grant (PRMG) and once again asked for a detailed report on the matter.

3.4 The Committee noted the under-expenditure of R11.4 million in the Civil Aviation Transport programme that was largely due to lower expenditure on Goods and Services for the payment to Telkom for Watch-Keeping Services. Members noted that this matter was a recurring issue.

3.5 The Revised Taxi Recapitalisation Programme (RTRP) proposed target of March 2025 to remove minibus taxis older than 2006 was regarded as an ambitious target that the Department would not be able to reach.

3.6 Concerns were expressed about the slow pace of road rehabilitation in provinces with flood-damaged infrastructure as well as the slow progress in filling potholes under the Vala Zonke Programme

3.7 By the end of the Fourth Quarter of 2022/23, the Department had reported underspending on the Public Transport Grant monitoring project. This was still one of the areas of under-expenditure in the Public Transport programme by the end of the First Quarter of 2023/24.

COMMITTEE RECOMMENDATIONS

The Committee recommends that the Minister, through the Department, ensure the following is done on a quarterly basis:

4.1 The Department must indicate whether it has put in place an action plan and corrective measures to address non-achievement of targets in the programme areas as well as an updated report on the status of Department and entity vacancies.

4.2 The Department must provide the reasons for the PRMG payments that were outstanding by the end of the First Quarter.

4.3 The Department must provide the reasons for delays in the implementation of IPTNs in district municipalities. Moreover, the Department should give the names of the district municipalities where IPTNs could not be implemented due to reported delays. Finally, the Department should indicate whether it has developed an action plan to ensure that this situation does not recur and also provide an updated status report on the IPTN roll-out in the 13 original identified cities.

4.4 The Department must indicate whether it has developed any oversight mechanism to ensure that the funds set aside to respond to the disasters caused by floods in the provinces are used for their intended purpose.

4.5 The Department must indicate whether, given the Constitutional Court ruling on 12 July 2023 paving the way for the rollout of AARTO by the RTIA, transfers to the RTIA have since been made.

4.6 The Department must apprise the Committee whether it has put in place any measures with a view to addressing underspending on the grant monitoring project.

4.7 The Department must submit a report to the Committee on how it intends to resolve this matter to ensure timeous payment for these Telkom for Watch-Keeping Services (given that the under-expenditure linked to payments to Telkom for Watch-Keeping Services is a recurring issue).

4.8 The Department must provide an updated status report on work done by SANRAL on the Moloto Road Upgrade Project.

4.9 The Department must provide an updated status report on the uptake and ability to meet targets of the Vala Zonke Application and the project seeking to fill reported potholes within 14 days of having been reported.

4.10 The Department must provide an updated status report on the progress made under the Welisizwe Rural Bridges Programme (clearly indicating the Department’s responsibilities under the programme, as well as which portion of the Department Budget is transferred and report on how the expenditure relates to the work done).

4.11 The Department must provide a report to the Committee on SMMEs that benefitted from transport projects based on the presentation, breaking down the provinces, areas and demographics.

4.12 The Department must provide a report to the Committee indicating a breakdown per province on the full-time equivalent jobs created through the SANRAL Road Maintenance Programme.

4.13 The Department must provide a report indicating reasons for delays and progress in the following projects: the regional integration strategy, the integration of road traffic law enforcement entities, the Road infrastructure policy with emphasis on the capacity constraints leading to delays, the National Airports Development Plan and the rural and scholar transport programme.

Report to be considered.

[1] National Treasury (2023a), p. 147.

[2] Ibid.

[3] National Treasury (2023a), p. 148.

[4] National Treasury (2023b), p. 156.

[5] National Treasury (2023a), p. 147.

[6] Ibid.

[7] National Treasury (2023a), p. 147.

[8] National Treasury (2023a), p. 147.

[9] Ibid.

[10] National Treasury (2023a), p. 147.

[11] Ibid.

[12] Ibid.

[13] National Treasury (2023a), p. 147.

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