ATC240910: Report of the Portfolio Committee on Transport on the 2023/24 Fourth Quarter and the 2024/25 First Quarter Expenditures of the Department of Transport, Dated 10 September 2024

Transport

Report of the Portfolio Committee on Transport on the 2023/24 Fourth Quarter and the 2024/25 First Quarter Expenditures of the Department of Transport, Dated 10 September 2024

 

The Portfolio Committee on Transport, having considered the expenditures of the Department of Transport (“the Department”) for the Fourth Quarter of the 2023/24 financial year and the First Quarter of the 2024/25 financial year on 27 August 2024, 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 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 expenditures of the Department for the Fourth Quarter of the 2023/24 financial year and the First Quarter of the 2024/25 financial year, as presented to the Committee on 27 August 2024.

 

 

  1. ANALYSIS OF THE 2023/24 FOURTH QUARTER EXPENDITURE OF THE DEPARTMENT OF TRANSPORT

 

By the end of the 2023/24 financial year, the Department had spent approximately R78 billion (or 99.6%) against R78.3 billion of the available budget, indicating underspending of R323 million (or 0.4%). Lower spending to the tune of R153.7 million was recorded under Goods and Services, particularly on consultants across the various programmes due to delays in procurement, including the hold on the procurement of the new tugboat. Expenditure on Transfers and Subsidies was lower by R157.8 million (or 0.2%). This was on account of delays in journaling for the Taxi Recapitalisation Programme (TRP), and delays in transfers to the Road Traffic Infringement Agency (RTIA) for the Administrative Adjudication of Road Traffic Offences (AARTO) rollout.[1]

 

The Department spent R533.3 million against the allocation of R557.5 million for the Compensation of Employees (CoE). It spent R24.2 million (or 4.3%) lower than budgeted mainly due to the delayed filling of vacant posts. For the 2023/24 financial year, a total of 41 employees left the Department, while it managed to fill 94 posts. Of these, sixteen (16) were at senior management level. The remainder was spread across other salary levels.[2]

 

2.1 BUDGET EXPENDITURE PER PROGRAMME

 

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

Programme

Main Appropriation

Adjusted Budget

Available Budget

Year End Actual Expenditure

Expenditure As % of Available Budget

Underspending \ Overspending

% Underspending\ Overspending

Disaster Spending

Administration

516.4

527.3

550.1

538.2

97.8%

11.9

2.2%

0.0

Integrated Transport Planning

89.4

91

98.3

98.3

100%

0

0%

0.0

Rail Transport

20 592.9

20 592.9

20 591.4

20 582.7

100%

8.7

0%

0.0

Road Transport

42 611.1

42 047.3

42 047.3

41 964.1

99.8%

83.2

0.2%

601.7

Civil Aviation Transport

314.5

317.5

317.5

305.4

96.2%

12.1

3.8%

0.0

Maritime Programme

379.2

263.6

263.6

184.6

70%

79

30%

0.0

Public Transport

15 048.9

14 442.7

14 414.2

14 286.1

99.1%

128.1

0.9%

0.0

Total

79 552.4

78 282.4

78 282.4

77 959.5

99.6%

323

0.4%

601.7

(Source: National Treasury (2024)).

2.1.1 Programme 1: Administration

 

The Administration programme spent R538.2 million against an allocation of R550.1 million, resulting in the underspending of R11.9 million (or 2.2%). The Department shifted funds to this programme to accommodate the initial budget shortfall.[3] This was primarily due to expenditure on Goods and Services for office accommodation, software licences and communication campaigns’ payments. It also included payments for capital assets to pay for the bulk procurement of desktops and laptops, and the procurement of an x-ray machine for security services and departmental servers.[4]

 

2.1.2 Programme 2: Integrated Transport Planning

 

In the Integrated Transport Planning programme, the Department spent R98.3 million against an allocation of R98.3 million. Following the shifting of funds to the programme, spending was aligned with its allocation after higher spending on the Black Economic Empowerment (BEE) Charter Council and to the South African Network Women in Transport (SANWIT) projects respectively.[5] The projects present opportunities to women in transport and Charter Council forum’s members.

 

2.1.3 Programme 3: Rail Transport

 

The Department spent R20.58 billion against an allocation of R20.59 billion in the Rail Transport programme. Spending was R10.3 million (or 0.1%) below budget, mainly in the CoE resulting from vacant posts and in Goods and Services allocations for the National Rail Master Plan, the Rail Economic Regulator and the National Devolution Strategy.[6]

 

2.1.4 Programme 4: Road Transport

 

By the end of the Fourth Quarter of the 2023/24 financial year, the Road Transport programme had spent approximately R42 billion against an allocation of R42 billion. Spending was R83.2 million (0.2%) below the programme’s allocation mainly due to outstanding transfer payment to RTIA for the AARTO roll-out, amounting to R71.8 million, owing to delays in the proclamation of the Bill resulting in the postponement of the rollout.[7]

 

2.1.5 Programme 5: Civil Aviation Transport

 

In the Civil Aviation Transport programme, the Department spent R305.4 million against an allocation of R317.5 million. Spending was R12.1 million (or 3.8%) below the budget mainly on Goods and Services, CoE, and Transfers and Subsidies. The programme’s underspending on Goods and Services was attributed to deferred projects such as the Single African Air Transport Market Pilot Implementation Project (SAATM-PIP), the Development of Regulations Permission for Airports Company of South Africa (ACSA), and the information technology (IT) aviation system.[8] The underspending on Transfers and Subsidies resulted from non-payment of membership fees to international organisations.[9]

 

2.1.6 Programme 6: Maritime Transport

 

By the end of the period under review, the Department had spent R184.6 million against an allocation of R263.6 million. Spending was R79 million (or 30%) below allocation due to underspending on the CoE, Goods and Services, and Transfers and Subsidies.[10] These were because of delays in the filling of vacant posts, and procurement delays in projects such as the public-private partnership (PPP) Tugboat Unitary Payment, Feasibility Study, and Small Vessel Surveyor Training.[11]

 

2.1.7 Programme 7: Public Transport

 

The Department spent R14.3 billion (or 98.9%) against an allocation of R14.4 billion in the Public Transport programme. Spending was R128.1 million (or 0.9%) below allocation. The programme’s underspending was primarily in Goods and Services in Taxi Scrapping Administration, Empowerment of Small Bus Operators, Financial Framework for National Learners, and Technical Advisory Services. The Department reported that some of the factors attributable to underspending in these projects were “service providers delays and weak capacity for public transport grant monitoring”.[12]

 

2.1.8 Disaster Spending

 

By 31 March 2024, the Department had spent R601.4 million on flood damages in provinces, mainly infrastructure repairs such as roads, bridges, and related infrastructure.[13]

 

 

  1. ANALYSIS OF THE 2024/25 FIRST QUARTER EXPENDITURE OF

THE DEPARTMENT OF TRANSPORT

 

For the 2024/25 financial year, the budget of the Department sits at R80.6 billion and of this amount, the Department had spent R17.8 billion (or 22.1%) by the end of the First Quarter. This indicates a slightly delayed spending of R126.5 million (or 0.7%) against projections. This outcome was prominently because of Transfers and Subsidies which spent R17.5 billion.[14] This represents a R137.3 million lower than projected spending due to outstanding transfer payments to the RTIA for the AARTO rollout, and the TRP.

 

Although the overall outcome reflected a delay in expenditure, operational spending (expenditure excluding Transfers) was ahead of the Department’s projections. This was fuelled primarily by the adoption of the cost-of-living adjustment, coupled with 2023/24 commitments which were serviced in the current financial year, and an unprecedented increase in consultants spend.[15]

 

CoE expenditure was R139.5 million (or 24.4%) of the Department’s 2024/25 budget allocation of R571.6 million. The resulting spending was above estimate by R1.1 million (or 0.8%). This was largely on account of the implementation of the cost-of-living adjustment.[16] The expenditure trajectory of CoE tended to progress steadily. The Department had a vacancy of 124 funded posts and of these, sixty-four (64) had been advertised and were reportedly in the process of being filled.[17]

 

3.1 budget expenditure per programme

 

Table 2: 2024/25 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

545

545

121.9

22.4%

118

-3.9

-3.3%

0.0

Integrated Transport Planning

91.7

91.7

25.6

27.9%

19.3

-6.3

-32.8%

0.0

Rail Transport

19 490

19 490

4 865.7

25%

4 870.5

4.8

0.1%

0.0

Road Transport

43 728.3

43 728.3

10 466.2

23.9%

10 499.2

33

0.3%

0.0

Civil Aviation Transport

538.5

538.5

81.1

15.1%

79.7

-1.4

-1.8%

0.0

Maritime Programme

189.4

189.4

38.5

20.3%

46.2

7.8

16.8%

0.0

Public Transport

16 038.3

16 038.3

2 225.2

13.9%

2 317.7

92.6

4%

0.0

Total

80 621.1

80 621.1

17 824.2

22.1%

17 950.6

126.5

0.7%

0.0

(Source: National Treasury (2024a)).

 

3.1.1 Programme 1: Administration

 

The Administration programme spent R121.9 million (or 22.4%) of its allocation against a projected budget of R118 million, resulting in an accelerated spending of R3.9 million (or 3.3%). This was mainly in Goods and Services owing to 2023/24 commitments for travel and subsistence and communications being serviced in this financial year.[18] In addition, overspending was attributed to accelerated expenditure on Transfers and Subsidies because of leave gratuities paid to employees resigning from the Department.[19]

 

3.1.2 Programme 2: Integrated Transport Planning

 

In the Integrated Transport Planning programme, the Department spent R25.6 million (or 28%) of its R92 million allocation against a projected R19.3 million. This was R6.3 million (or 32.8%) above projection. The higher spending was mainly on CoE which was driven largely by the implementation of the cost-of-living adjustments, and Goods and Services.[20] The higher than projected expenditure on Goods and Services was due to expenditure for communication campaigns, travel and subsistence and other operational costs such as advertising.[21]

 

3.1.3 Programme 3: Rail Transport

 

The Department spent R4.9 billion (or 25%) of its allocation against a projected R4.9 billion in the Rail Transport programme. The programme spending represents a lower than projected spend of R4.8 million (or 0.1%) which was on Goods and Services for consultants, particularly on the Establishment of Rail Economic Regulator programme, the National Rail Master Plan, among other slow spending projects.[22]

 

3.1.4 Programme 4: Road Transport

 

By the end of the First Quarter of 2024/25, the Road Transport programme had spent R10.5 billion (or 23.9%) of its allocation against a projected R10.5 billion spending. The programme spent relatively in line with the Department’s projections, representing a lower than projected spend of R33 million (or 0.3%). This outcome was primarily from Transfers and Subsidies due to the RTIA for the AARTO rollout which had not been transferred due to implementation delays.[23]

 

Goods and Services expenditure was an additional contributor to the slow spending, particularly through slow consultants’ spending on the Central Data Repository for Road project, Development of Road Disaster Management Plan, Evaluation of the National Road Strategy, and the Road Transport Legislative Review.[24]

 

3.1.5 Programme 5: Civil Aviation Transport

 

In the Civil Aviation Transport programme, the Department spent R81.1 million (or 15.1%) of its allocation against a projected R79.7 million, representing a higher spending of R1.4 million (or 1.8%). Instrumental drivers of spending within this programme included CoE’s expenditure which was influenced by the cost-of-living adjustment.[25]

 

Spending on Goods and Services, driven primarily by payment for the Marine Rescue Coordination Centre for the 2023/24 Fourth Quarter which was paid in this financial year, was another contributing factor. Similarly, payments for capital assets whose 2023/24 commitments were settled in the current financial year, further exacerbated the accelerated spending in this programme.[26]

 

3.1.6 Programme 6: Maritime Transport

 

By the end of the period under review, the Department had spent R38.5 million (or 20.3%) of its budget against a projected R46.2 million which meant that spending was lower than planned by R7.8 million (or 16.8%). The slow spending was on account of the delayed invoice for the Oil Pollution Prevention Services project under Goods and Services, as well as “other operational costs”.[27]

 

3.1.7 Programme 7: Public Transport

 

The Department spent R2.2 billion (or 13.9%) of its allocation against a projected R2.3 billion, translating into a R92.6 million lower than estimated spending as at end of First Quarter of 2024/25. The programme’s slow expenditure was predominantly due to Transfers and Subsidies resulting from the TRP, which is demand driven.[28]

 

It is worth noting that the programme spent above projections in Goods and Services (R65.3 million) resulting from communication drives that were facilitated in 2023/24, but the campaigns were paid for in this financial year.[29]

 

 

 

  1. COMMITTEE OBSERVATIONS

 

Members made the following observations during discussions on the expenditures for the quarters under consideration:  

 

4.1       Concerns were raised about the choice of Key Performance Indicators (KPIs) reflecting as achieved or non-achieved while experience on the ground did not show the 100% performance. The Department was asked whether the KPI’s would be reviewed and aligned with service delivery.

4.2       The underspending in Programme 1: Administration due the delayed filling of vacant posts and frozen posts was noted. The Department was asked whether it would consider amending the organogram to deal with the persistent underperforming target to fill vacancies.

4.3       By excluding the three cities from the BRT/Integrated Public Transport Network due to non-performance, potential passengers were punished for administrative failures by the participating cities. The Department was asked whether withholding of funds was the correct remedy and whether there should not be a review of the interventions.

4.4       Concerns were raised about the Civil Aviation Transport programme spending 3,8% below the budget mainly on Goods and Services, CoE and Transfers and Subsidies during the fourth quarter. The Department was asked whether it had corrective measures in place to improve on this performance.

4.5       The report on the implementation of the National Road Safety Strategy (NRSS) was noted as well as the reduction in road fatalities.

4.6       Clarity was sought on whether unions were challenging the implementation of traffic policing as 7-day, 24-hour job; whether this matter was canvased at the National Economic Development and Labour Council (NEDLAC); the outcome of such discussions and what the impact would be if this was implemented without the union buy-in.

4.7       Given that there has always been underspending and underperformance in the TRP, the Department was asked whether its implementation and targets should be reviewed.

4.8       Clarity was requested on the implications of the expenditure linked to cost-of-living adjustment and leave gratuity payments on the audit report.

4.9       Further information was requested on the non-payment to the RTIA for the AARTO roll-out.

4.10      Members queried the eight working days turnaround time for issuance of driving licence cards since that was not experienced by users having to wait for weeks for their renewed driving licence cards. The Department was asked what measures it had in place to fix the backlogs in driver licence card production since it could not produce its targets.

4.11      It was noted that a budget was allocated to the Women in Transport empowerment programme. The Department was asked how it identified the beneficiaries and to share the names of the beneficiaries.

4.12      The number of staff on suspension was noted. Further information was asked on number of staff on suspension, the duration of the suspensions and the amounts paid for staff on suspensions.

4.13      The Department was asked to explain what monitoring mechanisms were in place to ensure that the Flood Disaster Fund was used for their intended purpose.

4.14      It was noted that Park Train Station was functional again and that it should remain clean and safe so that the surrounding buildings could become attractive for investment.

4.15      Members noted the delay in the finalisation of policies and bills and wanted to know what measures would be taken to ensure targets are achieved in the second quarter.

4.16      Supply Chain Management in the entities were a concern as this leads to audit findings. Procurement issues must be resolved.

4.17      The relocation of Transnet and SAA to the Department was noted. The Department was asked whether it had the capacity to oversee the new 2 entities and their subsidiaries.

4.18      Clarity was further sought on Public Transport subsidy targets in terms of the deadline for the consultation process and the policy.

4.19      The Department was also requested to provide clarity on the appointment of Interns and whether work skilling was performed there.

 

 

5. COMMITTEE RECOMMENDATIONS

 

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

5.1       That the Department, within a month of the adoption of this Report by the National Assembly, provide the Committee with the following reports:

5.1.1   A report on the Public Transport subsidy targets in terms of the deadline for the consultation process and the policy;

5.1.2     A report on the appointment of Interns per the programme targets and whether work skilling is performed along with these appointments; and

5.1.3 A report on the planned policy and legislation targeted for delivery over the next 5-year period.

5.2       That corrective measures to catch up with non-achieved targets should be time bound, and that the Department provide a report, within a month of the adoption of this Report by the National Assembly, that would indicate when non-achieved targets would be met.

5.3       The Department should provide a report, within a month of the adoption of this Report by the National Assembly, that indicates whether and how the Department considers expanding universal access in public transport and, seeing as the cost of the service seemed to impact the implementation of public transport services to people with disabilities, the report should also indicate the costs associated with the provision of public transport services for persons with disabilities.

5.4       The Department must ensure that the targets and KPIs that it, as well as the entities linked to the Department, will be setting for the new 5-year Strategic Plan as well as the Annual Performance Plan for 2025/26 are formulated in such a manner that will show the link thereof to actual service delivery.

5.5       The Department provide quarterly progress reports to the Committee on the following matters:

            5.5.1 List all staff in the Department as well as the entities reporting to the Department who have been placed under suspension, term of suspension, whether the staff member is on suspension with or without pay, date by when disciplinary measures linked to each suspended staff member will be finalised;

            5.5.2 Progress made in ensuring the re-admission of the three (3) cities suspended from receiving grant funding for the Integrated Public Transport Network Grant as well as progress reports for all other cities receiving this grant funding;

            5.5.3 Reports per quarter on road fatalities data as well as expenditure on road safety programmes for all entities reporting to the Department which have road safety programmes (for example SANRAL, RAF, RTMC, C-BRTA);

            5.5.4 Reports per quarter on the number of taxi vehicles scrapped per the TRP as well as reports on stakeholder engagements with the industry to promote the uptake of the TRP;

            5.5.5 Reports per quarter on the number of driving licence cards processed and the actual number of days taken to process a new or renewal card application from date of application to date of delivery of the card to the licence centre that processed the application; and

            5.5.6 Reports per quarter on progress made in restoring road and transport infrastructure damaged in floods.

 

Report to be considered.

 

[1] National Treasury (2024), p. 146.

[2] National Treasury (2024), p. 148.

[3] National Treasury (2024), p. 147.

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] National Treasury (2024), p. 147.

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] Ibid.

[12] National Treasury (2024), p. 147.

[13] National Treasury (2024), p. 148.

[14] National Treasury (2024a), p. 142.

[15] National Treasury (2024a), p. 142.

[16] National Treasury (2024a), p. 144.

[17] Ibid.

[18] National Treasury (2024a), p. 143.

[19] Ibid.

[20] Ibid.

[21] Ibid.

[22] National Treasury (2024a), p. 143.

[23] Ibid.

[24] Ibid.

[25] Ibid.

[26] National Treasury (2024a), p. 143.

[27] Ibid.

[29] National Treasury (2024a), p. 144.