ATC121023: Budgetary Review and Recommendation Report of the Portfolio Committee on Transport on the Performance of the Department of Transport for the 2011/12 Financial Year, dated 23 October 2012.
AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON TRANSPORT ON THE
PERFORMANCE OF THE DEPARTMENT OF TRANSPORT FOR THE 2011/12 FINANCIAL YEAR,
DATED 23 OCTOBER 2012.
The Portfolio Committee on Transport, having assessed the
service delivery performance of the Department of Transport, reports as
The mandate of the Committee is to consider legislation
referred to it and to consider all matters referred to it in terms of
legislation, the Rules of Parliament or resolutions of the House. The role of
the Committee is to represent the people and to ensure that government fulfils
its service delivery mandate.
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 birth to the Money Bills Amendment Procedure
and Related Matters Act (No. 9 of 2009). The Act gives Parliament powers to
amend money bills submitted by the Executive whenever the Executive deems it is
necessary to do so. The Act therefore makes it obligatory for Parliament to
assess the Departments budgetary needs and shortfalls against the Departments
operational efficiency and performance.
THE DEPARTMENT OF TRANSPORT
This review seeks to establish
whether the Department
has achieved its
aims and objectives, as set out in the 2011/12-2013/14 Strategic Plan, as well
as whether it continues to fulfil its constitutional mandate. The focus will be
on highlighting the key achievements made, as well as challenges encountered
during the 2011/12 financial year, as reported in the Departments Annual
The review of the Annual Report is
in accordance with section 55(2) of the Constitution of the
LEGISLATIVE MANDATE OF
The Department is entrusted with
maximising the contribution of transport to the economic and social
development of [the] country by providing fully integrated transport operations
and infrastructure. The main roles of the Department and its public entities
in relation to the transport sector are:
Policy and strategy formulation in all
Substantive regulation in functional areas
where the Department has legislative competence;
Implementation in functional areas where
the Department has exclusive legislative competence;
Leadership, coordination and liaison in all
Capacity building in all functional areas;
Monitoring, evaluation and oversight in all
functional areas; and
Stimulating investment and development
across all modes.
The Department strives to lead the
development of efficient integrated transport systems by creating a framework
of sustainable policies and regulators and implementable models to support
government strategies for economic, social and international development.
GOVERNMENT STRATEGY AND
The transport sector is increasingly
seen as a key contributor to
Repairing the road network;
Filling of all funded vacant posts; and
Implementing the Comprehensive Rural
The Departments strategic outcomes
Providing an efficient and integrated
transport infrastructure network for social and economic development;
Providing a transport sector that is safe
Ensuring improved rural access,
infrastructure and mobility;
Providing improved public transport
Ensuring increased contribution to job
Increasing contribution of transport to
OBJECTIVES AND OUTCOMES OF THE DEPARTMENT OF TRANSPORT
In its commitment to discharging its
mandate effectively and efficiently in 2010/11, the Department re-organised
itself into the following programmes:
Programme 1: Administration;
Programme 2:Integrated Transport Planning;
Programme 3: Rail Transport;
Programme 4: Road Transport;
Programme 5: Civil Aviation;
Programme 6: Maritime Transport; and
Programme 7: Public Transport.
following outcomes have been identified to guide and enable the Department to
deliver on its mandate:
Outcome 1: An efficient and integrated
transport infrastructure network for social and economic development.
Outcome 2: A transport sector that is safe
Outcome 3: Improved rural access,
infrastructure and mobility.
Outcome 4: Improved public transport
Outcome 5: Increased contribution to job
Outcome 6: Increased contribution of
transport to environmental sustainability.
OF THE 2011/12 ANNUAL REPORT OF THE DEPARTMENT OF TRANSPORT
During the reporting period, the
Department institutionalised the management of the Durban-Free State-Gauteng
Logistics and Industrial Corridor. This Corridor is part of the 17 Strategic
Integrating Project approved by the Presidential Infrastructure Coordinating
Commission as a flagship in the management of a coordinated approach to
delivering key economic infrastructure.
The Department hosted a Maritime
Black Economic Empowerment (BEE) conference in
The Policy for the Road Accident
Benefit Scheme (RABS) was finalised and approved by Cabinet on 7 September
2011. The RABS Policy was published in the Government Gazette on 21 November
2011 for general information. The Road Freight Strategy was finalised.
Similarly, the National Transport Master Plan and its Action Agenda were
The National Ports Consultative
Committee (NPCC) for the National Ports Act (No. 12 of 2005) was launched in
September 2011 and the Department hosted all quarterly meetings of the Ports
Consultative Committees. These consultative forums are aimed at enabling the
ports authorities to indicate ways and means of doing business.
A total of 53 000 passengers
were transported on the
Bus Rapid Transit (BRT) systems,
42 000. Rustenburg, eThekwini, Tshwane and
In line with section 100(1)(b) of the Constitution, the
Department was part of the intervention team working in the Limpopo Department
of Roads and Transport and Free State Department of Safety, Roads and
Transport. The tasks included the turnaround strategies in the financial and
general administration, as well as quality assurance in the delivery of services,
particularly the rollout of infrastructure and public transport operations. The
programme required the Department to seek additional resources and therefore
and rollovers from less
performing projects as these became necessary.
AREAS OF UNDER
Transport Planning Forums
At the time of the tabling of its
Annual Report, the Department reported that out of the nine transport planning
forums that it had undertaken to establish during the year under review, eight
had actually been established, with
Leading the Coordination
of the Development of the North-South Corridor
The Memorandum of Understanding
(MoU) was not signed by seven member states. The explanation provided was that
there had been a need for consultation as many other Government Departments
will directly be affected.
Investor Relations and
During the reporting period, the
Department had undertaken to hold roundtable discussions focusing on each
transport mode with a view to attracting investors and marketing the projects.
However, at the time of tabling its Annual Report, the Department reported that
the roundtable discussions had not taken place as they had not been budgeted
Study Final Report
The report on the global competitiveness
study could not be finalised owing to the fact that the supply chain management
process took too long to finalise the appointment of the service provider.
Appointment of the Broad-Based Black Economic Empowerment
(B-BBEE) Charter Council Members
At the time of tabling its Annual
Report, the Department reported that the appointment of the B-BBEE Charter
Council members had not happened as the appraisal of the Minister on the issue
and the sourcing of funds was pending.
Verification of Nine
Provincial Transport Departments
The provinces could not be issued
with verification certificates because there were delays in the execution of
the project due to the lack of funding.
Review of the Innovation
and Technology Research Strategy
The review of the Innovation and
Technology Research Strategy was put on hold as a result of the extended sick
leave for the responsible official.
Average Turnaround Time
to Eliminate Potholes Reported through the Hotline
The project to establish a pothole
hotline was not implemented because the budget for this purpose had not been
approved. Consequently, there was no effective monitoring of the turnaround
time for the repairs of potholes during the period under review. However, as a
long-term solution to pothole problems, the Department has undertaken that as
of 2013/14, the Road Maintenance Grant allocations will be prioritised based on
road condition assessment data.
Rolling out of the
Non-Motorised Transport (NMT) Infrastructure
During the reporting period, the
Department had set itself a target of rolling out NMT infrastructure in six
municipalities. However, this did not take place and the Department reported
that this was due to the fact that no budgetary provision had been made.
Number of Rural Schools
Receiving Bicycles for Learners
The Department had undertaken to
distribute 5 000 bicycles to learners in rural schools. However, at the
time of tabling its Annual Report, the Department reported that only 900
bicycles had been distributed. It argued that this stemmed from the fact that
the budget had not been approved for the period under review. It further stated
that, in effect, these bicycles had been meant for COP 17 and were only issued
after the completion of the event.
Implementation of enabling legislation for the roll out of
Administrative Adjudication of Road Traffic Offences (AARTO)
The target could not be met owing to
the lack of funds and buy-in from stakeholders.
The Department had undertaken to roll
out 20 per cent of the learners and drivers licences programme to schools.
However, at the time of tabling its Annual Report, it reported that only 2.3
per cent of the programme roll out had been achieved. The Department contended
that it could not finalise the implementation.
Finalisation of the Draft Skills Development Strategy
While the consultation took place,
the Skills Development Strategy aimed at increasing the pool of seafarers with
appropriate training and qualifications could not be finalised due to capacity
Draft Maritime Policy
Although the terms of reference for
the Draft Green Paper on Maritime Shipping Policy was drafted, the Draft
Maritime Policy could not be produced owing to budgetary constraints.
For the sixth consecutive year, the
Department received an unqualified audit opinion. Matters of emphasis were,
however, identified by the Auditor-General pertaining to the following:
The Department under-spent its budget by
R320.9 million against the revised budget for the year of R41.5 billion,
translating into an under-expenditure by 0.8 per cent. A transfer payment from
the Public Transport Infrastructure and Systems Grant amounting to R191.7 million
Fewer taxis were scrapped than budgeted
for, resulting in under-expenditure of R23.3 million which was shifted
within the programme and across programmes to fund the expenditure needs.
Savings on accommodation costs amounted to R31.1 million, of which R22.9 million
was shifted within and across programmes to fund other projects.
Projects amounting to R104 million were
delayed or could not be implemented. Savings of R16.4 million were realised on
goods and services and R2.3 million on capital expenditure. Compensation of
employees was under-spent by R5.7 million due to posts that could not be filled
and R0.8 million was saved on foreign membership fees.
The accounting officer did not take
effective and appropriate steps to prevent irregular expenditure, as per the
requirements of section 38(1)(c) of the Public Finance Management Act (No. 1 of
By the end of March 2012, the
Department had 765 (677:2011) posts on its establishment and 512 (524: 2011)
were filled. The vacancy rate stood at 33.7 (22.60: 2011) per cent. The highest
vacancy rate was in Programme 6 (Maritime Transport) which stood at 47.22 per
cent. This was followed by Programme 3 (Rail Transport) which stood at 41.67
per cent. The Integrated Transport Planning Programme had the lowest vacancy
rate at 21.54 per cent. The main reason for staff leaving the Department was
said to be as a result of transfers to other public service departments. A
second major reason was resignation but it was not stated why staff members
were resigning. The Department employed nine persons with disabilities,
translating into 1.75 per cent of the total workforce. Of these, four were
African (two females and two males) and five were White (all females).
TECHNICAL ASPECTS OF THE
The Report is credible and presented
in a clear and logical fashion. However, the performance targets for the
Department are not time-bound. The absence of time-frames or deadlines for
delivery makes it almost impossible to establish whether the Department
achieves its aims and objectives and to hold it to account. There are also
instances in the Report where the Department failed to meet the performance
targets. The reason that is repeatedly advanced in this regard is that funds
were not available or that there was reprioritisation. This is a cause for
concern because it suggests poor planning on the part of the Department during
the formulation of its Strategic Plan. In an endeavour to avoid this anomaly in
future, the Department should ensure that the performance targets that it sets
itself adhere to the SMART principle. An additional concern is the report on a
lack of capacity in a number of programmes. The Department should evaluate its
organisational structure to ensure that it has the appropriately skilled personnel
to fulfil its mandate.
As at 31 March 2012, the end of
the fourth quarter and the 2011/12 financial year, total expenditure for the Department
amounted to R41.196 billion and this represents 99.23 per cent of the total
adjusted budget of R41.517 billion. A total of R321 million or 0.77 per cent
was under spent in the same period.
Although, expenditure as depicted
in line with benchmarked drawings, the Department experienced faster and slower
than expected spending trends in certain budget programmes and economic
classification categories due to the finalization of the programme budget
structure change within the organization.
Programme expenditure amounted to
R276.499 million or 91.89 per cent of the total available budget of R300.909
million for the 2011/12 financial year. Savings in the programmes were due to
less-than-anticipated expenditure on office accommodation as the other tenant
did not vacate the building as planned. Under expenditure was also due to the
PABX which was not replaced as planned.
2: Integrated Transport Planning:
Expenditure was reported at
R92.386 million or 69.34 per cent of the total available budget of
R133.238 million. Under expenditure in the programme was largely due to delays
in the roll out of the National Travel Household Survey because critical
outcomes from the Census 2011 were necessary to initiate the project. Due to
capacity constraints, the Department could also not implement the freight
3: Rail Transport:
Programme expenditure totalled
R9.532 billion or 99.91 per cent of the total available budget of R9.541
billion. Under expenditure is attributed to delays in the implementation of the
following projects: development of Rail Policy and Act, establishment of Rail
Economic Regulator, and the industry development and institutional reform.
4: Road Transport:
Expenditure in this programme
totalled R21.729 billion or 99.98 per cent of the total available budget of
R21.734 billion. Under expenditure is attributed to the savings in compensation
of employees, goods and services as well as on capital expenditure.
5: Civil Aviation:
Programme expenditure was less
than expected at R64.989 million or 89.64 per cent of the total available
budget of R72.502 million. This significant under expenditure is attributed to
the delays in the establishment of the Aviation Safety Board and the Committee
to appeal such decisions, delays in drafting the White paper on Civil Aviation
Policy and the review of the Civil Aviation Strategy.
6: Maritime Transport:
Programme expenditure amounted to
R138.857 million or 99.03 per cent of the total available budget of
R140.223 million. Under expenditure is attributed to the delays in the
procurement of the Local User Terminal.
7: Public Transport:
Programme expenditure totalled
R9.362 billion or 97.56 per cent of the total available budget of R9.596
billion. Under expenditure in the programme is attributed to the Taxi
Recapitalisation Programme as there were fewer-than-anticipated taxis scrapped
and the PTIS funds which were not transferred to the City of Cape Town; the
funds were withheld due to significant under expenditure.
Expenditure on current payments amounted to R1.149
billion or 90.07 per cent of the available budget of R1.276 billion. Under
expenditure in this economic classification is due to spending challenges
experienced in the Department due to budget structure changes that have
significantly delayed the implementation of projects in different programmes,
as mentioned above in programme expenditure such as the National Household
Travel Survey, and Development of the National Land Transport Systems. These
affected spending on the goods and services budget and compensation of
Expenditure on transfers and subsidies (capital
and current transfers) amounted to R40.044 billion or 99.52 per cent of the
total available budget of R40.238 billion. Under expenditure is due to less-than-anticipated
expenditure in projects like the Taxi Scrapping, PTIS fund to the City of
to the structure change in the Department, there has been evidence of slow
spending, particularly in the Maritime and Aviation programmes and as a result,
funds have been shifted out of these programmes.
Virements for the period included:
Shifts from Programme 5: Aviation.
R4.5 million from Goods and Service to Transfers to
million from Goods and Service to Transfers to Civil Aviation Authority;
million from Goods and Service to Transfers to Civil Aviation Authority;
Shifts from Programme 6: Maritime.
R5 million from Goods and Service to Transfers to Maritime Safety Authority;
Shifts from Programme 7: Public
Transport. R5.5 million to transfers to SANTACO;
Shift within Programme 7: Public
Transport. R55 million to transfer to
Shift with programme 5: Civil
Aviation: R2 million to increase transfer payment to SACAA.
The Committee made the following
observations about the 2011/12 Annual Report of the Department:
The Annual Report of the
Department was silent on skills development strategies for the transportation
The Report from the
Department did not to talk to the establishment of bicycle manufacturing plants
or assembly plants for
in rural areas. The Committee is concerned that should the focus of the
Department be on the establishment of plants in urban and not rural areas, the
Department would not be addressing job creation, skills development and poverty
The targets set by the
Department did not speak to some of the critical transport challenges faced by
the majority of South Africans that were identified in the 2003 National
Household Travel Survey. These included reducing the cost and duration of
The Department did not
have a strategy for making air travel accessible by the poor and it did not
address the challenges faced by low-fare airlines.
The Department took time
to finalise policies and, more often, the funds budgeted for this purpose were
shifted to other programmes.
The Committee noted that the under
expenditure in aviation transport was attributed to the delays in the
establishment of the Aviation Safety Board and the committee to appeal such
decisions, delays in drafting the White Paper on Civil Aviation Policy and the review
of the Civil Aviation Strategy. The Committee is concerned that delays in these
areas might negatively affect aviation safety. The Committee recommends that
the Minister should ensure the finalisation of the establishment of the
Aviation Safety Board and committee, as well as the White Paper on Civil
Aviation Policy and the review of the Civil Aviation Strategy within six months
from the adoption of this report by the Assembly.
The Committee noted a skills
shortage in road maintenance at provincial and local government level.
The Minister should ensure that the Department
of Transport considers establishing programmes that would assist provinces with
the development and retention of skills for the transportation industry. The
Committee also recommends that the Minister should consider partnering with training
institutions, for instance, the Public Administration Leadership and Management
Academy (PALAMA) and Further Education and Training (FET) colleges to increase
training and skills development.
The Committee is concerned that the
Administrative Adjudication of Road Traffic Offences (AARTO) and the Road
Traffic Management Corporation (RTMC) were currently facing challenges in terms
of funding and this had a negative effect on how the AARTO and RTMC operated.
There was therefore a need for the Minister to
prioritise the amendment of enabling legislation for the RTMC to execute its
mandate. The Committee recommends that the Minister overhauls the National Land
Transport Act (No. 5 of 2009) to create a conducive environment for the RTMC to
function optimally within six months of the adoption of this report by the
The Committee is of the view that the
Minister should consider reviewing the reasons why some modes of transport are
subsidised while others are not. The Committee recommends that the Minister should
ensure that the focus is placed on subsidising passengers and not modes of
transport to allow all modes of transport to be accessible and cost effective.
Report to be considered.
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