Department of Transport, DLCA, RSR & PRASA 2021/22 Annual Performance Plans, with Minister and Deputy Minister

Meeting report

The Chairperson welcomed the representatives from the Department of Transport, RSR and PRASA to the meeting, and acknowledged the presence of the Minister of Transport, Mr Fikile Mbalula and Deputy Minister Ms Dikeledi Magadzi in the meeting. He then handed over to the Department to present their Strategic Plans and APP to the Committee.

Briefing by the Department of Transport

Mr Fikile Mbalula, Minister of Transport, said that the Department is pleased to present their Strategic Plans and APP to the Committee to ensure that transport as a sector plays a meaningful role in enabling access to economic opportunities for the citizens of the country. The Strategic Plan outlines measures that will be implemented by the Department in making its contribution to the country's economic reconstruction and recovery. He said that he has no doubt that the Committee appreciates the disruptive effects of the COVID-19 pandemic on the Department’s plans when they came into office in 2019. Not only did the Department have to play catch-up, but they had to revise their plans and targets, and re-examine their ambitious goals in light of the budget constraints that were brought by the pandemic. He added that an integral part of adapting to the new normal is to do more with less, while tackling corruption and wastage aggressively.

Minister Mbalula said that their resolve to raise the bar on clean governance and ethical leadership has never been greater. “As we appoint boards for various entities, we demand the same commitment to them and clarify this commitment in the form of shareholder compacts and performance agreements”, he said. He added that this is imperative if they were to optimize performance and deliver to the people services that will improve their lives. This starts with achieving unqualified audit opinions with no significant findings over the medium term in all entities, guided by the findings of the Auditor-General of South Africa. He said that they will be paying particular attention to specific areas in order to improve governance across all entities. This includes among others, elimination of wasteful and fruitless expenditure, reduction of irregular expenditure, resolution of the reported incidents of corruption, establishment of operationalization of ethics structures and compliance to the 30-days payment requirements. The Department and its entities will report on this on a biannual basis.

He said that the revised Strategic Plan and APP for 2021-2022 of the Department needed tighter alignment to the National Development Plan (NDP), the Medium-Term Strategic Framework and the Performance Agreement that he signed with the President. He added that this alignment ensures that there is a direct line between the output of the Department, its entities and other spheres of government and to that effect consolidated indicators were developed. This will enable the Department to track selected performance of entities and provinces. “Given the constraints to the fiscus and the reality of the new normal, our approach to service delivery needed a rhythm”, he said. The sector needs to be versatile and adapt quickly to new ways of doing things, while also ensuring that the transport mandate is sustained towards desired outcomes. “We must therefore be agile in managing the interface between the change agenda underpinned by the Khawuleza Ethos and the sustained agenda that requires of us to keep the eye on the ball”, he added. As part of the public sector pursuit for transformation, the Department embarked on a process of ensuring that all sector-functional areas are mainstreamed. The sector has been identified as key for job creation, mainly due to its capability to use labor-intensive methods in the implementation of infrastructure programs. As a result, jobs targeted infrastructure programmes such as railroads and civil aviation will be disaggregated into three categories of vulnerable groups, women, youth and persons with disabilities. Other areas identified include but are not limited to employment equity in the filling of vacant posts, training and development, disbursement of bursaries, selection and appointment of interns and distribution of bicycles to use in rural areas.

Minister Mbalula said that in the public transport space, all planned infrastructure should comply with universal access design codes and standards mainly to ensure that persons with disabilities are able to access public transport. Addressing and ending Gender-based Violence in the Taxi Industry and in rail transport have also become critical performance areas for the sector. To that effect, the Department has designed dedicated programs to ensure that women, youth, the elderly and children are safe when using public transport. The Department will monitor these programmes on an ongoing basis. In line with the properties of government, the Department lifted among others, five critical interventions that occupy center stage in 2021 into the APP. These include:

• Tabling the traffic management value chain and road safety interventions to achieve a 25% reduction of fatalities on the roads by 2024;
• Stabilisation of the Road Accident Fund (RAF) and addressing its debt exposure;
• Stabilisation of PRASA ensuring the delivery of efficient rail services;
• Accelerating the implementation of the revised Taxi Recapitalisation Programme underpinned by the Public Transport Funding Model that recognises the role of the taxi industry in the economic value chain and addresses SANRAL liquidity issues and
• Facilitating the finalisation of the decision of the Gautrain through the improvement project.

He then handed over to the Director-General to provide a detailed presentation of the Department’s revised Strategic Plans and APP.

Mr Alec Moemi, Director-General: Department of Transport, presented on the Department’s revised Strategic Plan (2020-2025) and APP (2021-2022). His presentation was focused on the National Development Plan’s pillars aligned to the seven Apex priorities of the Department, the Minister’s Priorities, a strategic overview of the Department, the Department’s revised Strategic Plan (2020-2025) and the APP (2021-22) of the Department.

Discussion

Mr C Hunsinger (DA) said that he was encouraged by the presentation from the Department and noted that there is an improved alignment particularly on safety and security which is a real concern across all programmes and across all aspects of all the entities in transport. “I particularly like the approach by the Department of including actual reductions and percentage improvements with actual numbers which of course is a lot more measurable and can be evaluated across all the transport sectors”, he added. In terms of the strategic goals in general, he said that all the priorities are appropriate and relevant to the current needs and there are several good ideas. He said that his critique would be that the Department has never failed with good ideas, but the failure was with implementation, and added that he would have expected more strategic impetus on how to better implement plans. On Program 8, in particular around accountability, he said that he would have loved to see more content on how to improve accountability and added that he is not convinced that the filling of vacancies is a priority area of how to address accountability. “Certainly, skills and capacity can be enhanced through vacancies, but all aspects of consequence management and aspects related to incidents of corruption and the large number of wasteful expenditures could have been addressed in a better way”, he said.

Mr Hunsinger said that the impetus under Programme 8 in accountability of improved internal control measures is encouraging and it is the right direction. In the subprograms in general, he said that there is good alignment with the strategies and also with the content in terms of APPs, there is an improvement to address the service delivery needs and to a great extent which is encouraging and very positive. He said that the big concern is on the road infrastructure budget and the balance between the increases of the budget allocated to SANRAL versus the increases overtime allocated to provinces. He said that this needs special attention, recognising that the SANRAL increases are a lot more than the increases which provinces are given and asked that the Department and the Minister step in and fix it.

Mr P Mey (FF+) said that the Eastern Cape has a shortage of Driving License Testing Centers and wanted to know why the Department has not made use of the private sector participation in this issue. He added that he had received complaints from a Mr Goodman who is in charge of a Driving License Testing Center in Humansdorp that was closed down because of instructions received from an Inspector. He said that he met with a Mr Tyrone Martin at the office of the Inspector who read the email to Mr Goodman which clearly stated that the License Testing Center must not be closed until only a day before the renovations begin. He asked the Department has to do something about the situation because the people closest to the area suffering the most, as they have to travel far for their driving license tests.

Mr L McDonald (ANC) said that this is one of the better APPs by the Department and noted the alignment with where the Department should be going. He said he would definitely like to see more spending on the rural roads. He said that there is two ways of looking at things when the economy is down. One is to stop spending, and the other way, which helped Japan and many other countries is to continue spending. He encouraged the Department to look at ways to spend more because by spending more, they can actually make a serious contribution to the economy of this country because this is one of the biggest Departments with the biggest budgets. He expressed concern about aviation accidents at the moment, as in January alone, there were 14 general aviation accidents and they continued to mount in the past couple of months. He encouraged the Department to consider more inspections to some of their smaller airfields.

Mr McDonald said that what is missing on the Cape Town International Airport is the proposed new runway to allow more planes to land in bigger bands to lengthen the Airport. He said that if it does not happen it is going to encourage the private sector to open the other airport in Stellenbosch which should not be encouraged. The money should rather be spent on increasing the size of the already existing airport because if there is talk of opening another airport which would be less than 50km away, then this means that there is money available that could be used for the expansion of the airport.

Mr M Chabangu (EFF) wanted to know how the Department aims to ensure a decrease in the fatalities on the public roads, especially during holidays. He wanted to know the responsibility of the municipalities with regard to taxi transportation because at the moment, there is a strike where he lives, where the taxi owners are taking children from school from the buses who are supposed to be taking them. He wanted to know who is to be held responsible for this and who must intervene. Mr Chabangu also wanted an elaboration from the department on what has been submitted to Parliament in terms of railway safety. He also wanted to know how far the department is in terms of removing the e-Tolls in Gauteng. In terms of the distribution of bicycles, he advised that the bicycles should not be provided to rural areas where there are mountains because they tend to be more a burden than a solution to the learners.

Response by Department of Transport

Mr Moemi said that the Department is dealing with the issue of consequence management and was doing a lot of work across all the entities as well as within the Department. The Department has also made it clear to the boards of all the entities that good governance is not negotiable. In terms of the SANRAL increases being higher than the provinces, he said that it is a result of the Department’s funding policy and constitutional arrangement as a state, as well as the fiscal arrangements that they agreed to. The roads function is a concurrent function across all three spheres, which means that from the equitable share of each and every province and from raised taxes and everything the municipalities are collecting, they ought to take care of the municipal portfolio of roads and also have provincial roads taken care of and are primarily budgeted for by their provincial Treasury. When the country removed the National and Provincial Roads Boards and agreed on the current arrangements for all the practical considerations and strategic considerations, SANRAL was created with the idea of a national road network of roads that are so important to the country that national government has to take care of them fully. There are roads that are still strategic to provincial economies and regional economies and those had to be part of the Provincial Roads Network. The cost of replacement of the roads is much more expensive than the cost of its maintenance, so it was best to give to provinces a provincial grant which would be utilized for purposes of only maintaining existing roads. There was also a realisation and acceptance that many of the provinces, including provinces like Northern Cape, where the provincial equitable share budget for roads constituted for about 4% of the grants for maintenance of roads. It was recognized that perhaps some money within the grant is ringfenced so that while the grant is primarily a maintenance grant, it should allow some money for provinces to maintain some of the roads which are considered strategic roads in the provinces. The provinces have about 50% of the grant intended for maintenance.

He said that the issue of Driving License Testing Centers in the Eastern Cape will be looked at and added that the Minister has met with the testing centers and provincial and local government in Gauteng and has directed the department to meet with other provinces to discuss the issue. The Department has also agreed that in other instances, in terms of the expansion of services like the post office, they will give municipalities more responsibilities. It was also agreed that the driving testing centers cannot be privatized because they contain a lot of people’s personal information. In terms of money being spent more on rural roads, he agreed with Mr McDonald and added that for the first time, the department has invested money for SANRAL to do labor intensive methods. The Department will revise the grant framework for PRMG to also ringfence money for rural roads and has previously gazetted the 12 roads that they said they will have done, but the money that was originally promised from the Treasury did not materialise. The entire R500 billion that was promised by the President did not fully materialise and discussions are still ongoing on what should be done.

On the issue of aviation accidents, he said that they have heard Mr McDonald's advice and will send their team and to increase their inspection capacity. On the issue of fatalities on the roads, he said that they have presented on the strategy for road safety to the Portfolio Committee before and have also set themselves a 25% yearly reduction rate target. He added that they have given the mechanics the information on what they intend to achieve with this, and there was a huge debate where the Department was criticized by the Committee and they went back and looked at the criticisms carefully and revised their strategy. In terms of the responsibilities of municipalities on Taxis, he said that the municipalities have to provide them taxi ranks and spaces for operating as well as routes. Provinces have to give them licensing and address other challenges. The issue of Taxis taking school learners from busses can also be addressed by the province itself because they are the ones who administer the PRMG. In terms of the removal of e-Tolls in Gauteng, he said that the Department is awaiting final processes, as the Cabinet mandated the Ministers of Transport and Finance to meet, and they met and delegated to their Director-Generals are due to look at the possibilities. The DG’s have met, and now the Treasury has to create a memorandum which they will submit to the Cabinet, and the process is hopefully going to be finalised by the end of the week. He said that the Committee will be kept in the loop in terms of the issue. He then noted Mr Chabangu’s advice on the issue of the distribution of bicycles to learners from the rural areas that are surrounded by mountains.

Briefing by Department of Transport on the Driving License Card Account (2021-2022)

Mr Moemi presented on the APP of the Driving License Card Account (2021/22). The outline of the presentation constituted the Relevant legislative and policy mandates, Relevant court ruling, situational analysis, DLCA vision and mission, DLCA values and principles, Expenditure analysis, Purpose per programme, DLCA programme performance information, and the key challenges for attention on the MTSF.

Discussion

Mr L Mangcu (ANC) said that the presentation does not answer the critical questions that should have been answered which had been outstanding for quite a long time. He said that on the weaknesses, the department talked about obsolete technology, which is an issue that was spoken about since 2019. He then asked the DG to clarify the new design approval that the department needs approval for from the Cabinet because this is an international standard which is already aligned to the SADC protocols in which South Africa’s regional neighbors are already on the new. He asked for clarity in terms of the government strategy beyond rationalization resulting in merging of the DLCA with other related transport entities. This is because when the presentation started, the DG mentioned the mandate of the DLCA as it stands. He wanted to know the progress in terms of the procurement of a new card machine that was spoken about in the 2019/20 financial year. In terms of the vacancy rate of not more than 10% of the approved organisational structure, he wanted clarity on whether the plan is to intentionally under-populate the structure. Mr Mangcu said that there is very little progress in terms of the DLCA and that is raises major concerns to him and because the same issues have been dealt with for a very long time.

Mr McDonald said that when the Committee did its oversight visit many months ago, they were told that the last container of ink for the machine that they are currently using was secured. The Committee has been told about the new machine and the new technology for the past five or six consecutive meetings. He said that it is unacceptable for the Committee to be told about the new machine that is coming and an old machine that is not functioning anymore and added that the Department is treating the machine issue with kid gloves while people in South Africa cannot renew their licenses on time. He said that there needs to be a decision and it needs to be made soon because it is going to be a catastrophic problem when the machines completely stop working.

Response by Department of Transport on the DLCA

Mr Moemi said that the Department has moved and made progress on the machine matter. He said that the first time the Department mentioned the machine issue they highlighted it as a problem and brought it to the Committee’s attention with the plans that they were going to take to resolve the issue. In their second interaction with the Committee about the machine, the Department spoke of the need for them to commence with the procurement process of which they needed to convince the Treasury and devise a financial plan on how they were going to sustain and ensure that they would get the approvals necessary for the recapitalisation of the DLCA. After a long time of planning and talking with the Treasury, they finally approved and once the Department received the approval, there was an issue of a new driver’s license card which needed approval from the Cabinet, which the Committee was informed about. The Department is briefing the Committee once more about the machine and about the new driver’s license card.

He said that the Department now has approval from the Treasury to retain the money to recapitalise and there is an approval from Cabinet to finalise with State Security on the design in terms of security features and other elements that are important. The Department has revised its specifications of the design because the machine they need to buy must be in a position to print the type of inks, elements and every other thing that may be required in the future license card. The technology remains obsolete up until the new machine is conditioned. The Department still relies on the old machine and has been talking to the people who developed the machine that while they are busy with their processes as a matter of business continuity, they must be granted a cover so that they do not run out of ink for printing cards and so on. The ideal scenario is where the process of the new machine is completed as quickly as possible, and the Department is on track to achieve all of that.

In terms of the issue of the vacancy rate, he said that the department is not planning for that, but they know that organisations are a living organism, they go on people by normal attrition, as some people pass on, and some resign, some get fired and so forth. What the Department is saying is that at any given point in time, the vacancy rate must not be more than 10%. It is also a matter that the Auditor-General is monitoring whether the vacancy rate has exceeded 10% or not. He said that the DLCAS has been established as a training entity and should it be merged into the merger of the entities, namely RTMC, RTR as well as DLC, the functions will be performed together in a section that would historically have been the DLCA. Those functions would continue as the law requires them to perform.

Briefing by Railway Safety Regulator (RSR)

Ms Dikeledi Magadzi, Deputy Minister of Transport, said that the Railway Safety Regulator, led by Mr Nobunga and the other board members present at the meeting is one of the pressing issues included in the NDP in order to be able to look into how best the Department can be able to make sure that the regulator is able to look into the focus of regulating rail functions in the Republic of South Africa. She then handed over to the Chairperson of the Regulator to introduce the presentation.

Mr Boy Nobunga, Chairperson: Railway Safety Regulator, said that it is an honor to present before the Committee the plans for the 2021/22 financial year, especially because it is just over a year since South Africa recorded its first case of the COVID-19 pandemic, which was announced on 5 March 2020. The reporting of the first COVID-19 cases in the country would become a life-changer, as the norm in which business is conducted in this country was changed. He said that the RSR, like any other organisation had to reimagine its approach in order to stem the tide and make use of the safety protocols that they would ensure that they continue to do business. The organisation has taken great care to align the organisational plans with the apex priorities of the sixth administration and the strategic outcomes of that Department of Transport. The pandemic exposed the poverty and unemployment prevalent in our country and has created greater urgency for job creation. The regulator has embarked on various activities to ensure the organisation remains equipped to meet the demands of the industry itself and as they present today, the strategies and plans which were designed to ensure that RSR continues to contribute to the rail sector will be outlined. In dealing with the escalating unemployment, the regulator will play its part in transforming the economy by utilising its procurement spend to target designated groups such as women and youth who own SMMEs.

He said that the regulator has set aside a budget for external bursaries for critical skills required in the rail sector and have recently welcomed ten interns who will be provided with work experience to increase their future employability in the job market. This is in response to the transformation of the economy and increasing skills in the South African economy in general as well as the rail sector in particular. In contributing to efforts to advance nation building and social cohesion, the RSR continues to bolster the Rail Regulator Framework through the development of determinations, protocols and guidelines. With the deployment of these tools, the RSR will ensure that they build industry capacity to develop effective safety management approaches as well as development of industry safety risk profile to support critical risk mitigation that would result in rail safety operations. The 2019-2020 state of safety report painted a great picture of safety within the rail industry, however RSR will continue to ensure that they prioritise safety to their passengers and goods. Over the last year there has been an acceleration of acts of criminality targeted towards major operators and a surge in the frequency of theft and vandalism of rail infrastructure. RSR is working together with the industry players to find a lasting solution to these challenges. Mr Nobunga assured the Committee that the RSR’s efforts for the 2021/22 financial year have been designed to precisely address the challenges and reduce acts of vandalism against rail infrastructure and added that they will continue to seek solutions to improve the safety of the rail sector. He then handed over to the Acting CEO to provide a detailed presentation of the RSR’s APP.

Mr Mmuso Selaledi, Acting CEO: Railway Safety Regulator, provided a presentation of the RSR’s Annual Performance Plan for the 2021/22 Financial year. The contents of the presentation included the legislative mandate of the RSR, its Duties and Responsibilities, the Strategic Mandate, Strategic Drivers, Strategic Risks, among other issues.

Discussion

Mr Mangcu wanted to know the role played by RSR in dealing with the theft of rail infrastructure owned by PRASA and also the role that they play in the rebuilding of the infrastructure to ensure the enhancement of safety as it relates to the environment. He wanted to know how STER is an external threat to RSR. He wanted to know the names of the firm metals that RSR is working on with PRASA. He said that safety in the rail space goes beyond what the RSR have always been looking at and wanted to know what the organisation is doing to improve safety in the rail space, looking at that they have set awareness initiatives in the current financial year. He wanted to know how much of railway safety will be covered by the RSR’s safety initiatives. He also wanted to know where the 30 safety awareness initiatives will be done so that they can be monitored very closely. He wanted to know the cost of the board meetings and whether the RSR is planning for them and also asked about their budget targets in terms of the number of the board meetings.

Mr Hunsinger wanted to know the number of kilometers of rail that is currently operational and in use in terms of public transport, specifically under PRASA, Shosholoza Meyl and Metrorail. With regards to the Strategic Plan, he said that the current Strategic Plan and APP on the basis of the track record over his exposure of seven years with the Portfolio Committee on Transport is largely ignored. The directives have been largely ignored, particularly by PRASA, and the manual authorisations have escalated tremendously up until February-March 2020. He said that his general impression is that whatever the Railway Safety Regulator is requesting, requiring and instructing is ignored. He wanted to know if the organisation finds this current strategy as an adequate one in light of how the organization has been treated by the stakeholders such as PRASA up to this point.

Ms M Ramadwa (ANC) wanted to know whether the organisation has not appointed a CEO, considering that only an Acting CEO was in the meeting. She wanted to know how they plan to achieve good governance and clean audits when they do not have a CEO. She also wanted to know how the organisation plans to recover the skilled personnel that they have lost.

Mr Chabangu was also concerned that the regulator has an Acting CEO instead of a full-time CEO, as it had been said that all positions must be filled. He wanted to know the strategies that have been prepared by the regulator to prevent criminal activities such as robbery and theft in the trains, as well as commuters getting onto trains without tickets. He wanted to know whether it is their intention to bring back railway police in order to monitor the situation.

Response by Railway Safety Regulator

Mr Nobunga said that the regulator has had an Acting CEO for the past three financial years because the CEO was suspended and went through the disciplinary processes before dismissal. The organisation then ran the process of recruitment and submitted to the Minister for appointment by the former board, and the process was then returned, and the new board has finalized the process and made recommendations to the Minister for the appointment. He said that they are waiting for the Minister to appoint the CEO of RSR. He handed over to the acting CEO to answer the other questions from the Committee.

Mr Selaledi said that RSR is also extremely concerned about the level of vandalism on rail infrastructure. “From RSR’s point of view and within our mandate, the vandalism particularly affects PRASA and TFR in the lines that it operates, but the common view is that it particularly affects PRASA”, he said. In their last permit assessment in August 2020, they were given one special condition to review their security management practices and ensure that their security strategy is sufficient to, and in line with the requirements of RSR regulations the SMS determination and RSR prescripts to stop this level of vandalism. PRASA at the time told the regulator that they do not have the necessary resources to conduct a review of their security strategy and asked RSR to do it on their behalf. The RSR commissioned an independent study, and that study is now ready, and a draft has been submitted to the Acting CEO and the team. RSR is processing the draft alongside PRASA and will take it through both their boards in order to understand the outcomes of that strategy. That is in an important assessment that will guide the decision on the upcoming permit assessment which comes up in August.

He said that the RSR board also articulated concern about the destruction of railway infrastructure to the extent that they have asked for an inspection trip where they can see it first-hand, and they continue to push management on the initiatives that should be put in place. The Department also promulgated the Railway Reserve Regulations which also go a long way in indicating the initiatives that the operator needs to put in place to protect the railway reserves, including appointing a Chief Security Officer and the practices they would have in place in implementing a security strategy. The RSR is acutely aware and is trying to articulate its regulator intervention that it has put in place in anticipation of its permit assessment. In terms of STER, he said that the reason that STER is viewed as an external threat is in the detail of how it would charge its permit fee. RSR acknowledged that from a risk perspective, the majority of RSR’s permit fees come from three major operators, PRASA, TFR and BOC, so RSR expects that STER would also charge fees to these operations. A natural discussion would have to take place at policy level with the guidance of the department as to how the RSR and STER could work together to not overburden operators and increase the cost of regulation. He said that the RSR are in constant communication with the Department and receiving guidance from them as to what action they will have to take, but from a risk perspective and the SWOT analysis, they have put it as an external threat. RSR has not put down the names of the four metros that they have selected as part of the threat, but they are going to have an engagement with SALGA to seek their guidance on which four municipalities they should place their efforts on.

He said that the 30 Initiatives are primarily focused on the major operators with many of them being at PRASA. The RSR teams did a risk assessment of the higher risk level crossing, the places where there have been the most occurrences as articulated in the state of safety report and then targeted their initiatives around those areas, either in high risk level crossings or at station precincts or at central line and so on. The reason for this is based on the baseline of the previous year where RSR did 23 initiatives and also the tight financial resources and availability of their budget. These are RSR initiatives, but they do partner with operators in their initiatives which are far larger than 50. In terms of the cost of board meetings, he said that the CFO informed him that the actual fees paid last year, as narrated in the annual report were around R2.5 million. The budget for the 2021/22 financial year is at R3.3 million, R3.4 million for the next financial year and R3.6 million in the following year. He said that they ordinarily budget for one ordinary board sitting per quarter and then they allow the board two special sittings in March and one in September to look at policies that are brought in on a regular basis by management for the board to review. There are also other special meetings here and there to deal with urgent issues and the AGM and prep sessions.

Mr Selaledi said that RSR has a report that they call the Annual State of Safety Reports where they narrate safety issues on their interventions and the report for last year painted a picture that even though occurrences had increased, the number of train kilometers had dropped over time. He said that in 2010 when there was a FIFA World Cup, services were almost at optimum level and in these circumstances, the train kilometers were 27 million. Last year, as per the state of safety report, there were 17 million train kilometers, so this was the year 2019 up to March 2020. He said that they are currently preparing the State of Safety report for 2020/21 and are expecting the train kilometers to be even less because of the level 5 restrictions of the subsequent national lockdown. He conceded the criticism from the Committee that their directives, penalties and proposed improvements have been often ignored, particularly by PRASA. He said that from their technical assessment, PRASA is almost the biggest culprit, but they have done substantial efforts in the last 18 months to try to improve their compliance. One key characteristic is that a lot of these actions are tied to infrastructure, so PRASA needed to have a full board in place with the necessary procurement quality to approve the infrastructure related projects to deal with the RSR’s compliance directives. PRASA did not have a board for a long time, but they do have a board now and the board has made specific commitments to the Committee, to the Ministry and to the public on accelerating this procurement and RSR hopes that through that, the infrastructure related plans will address many of the RSR’s compliance directives and instruments.

He said that the issue of the CEO had been dealt with by Mr Nobunga and added that RSR does have a retention strategy as over the last six months the board approved an HR strategy which is supported by a talent management strategy, and management has crafted a plan that will implement the talent management strategy. Top of mind is the retention of the key and critical skills, and hopefully by implementing this HR strategy and talent management strategy, RSR will have its people stay longer with the regulator because of their critical skills. In terms of ensuring the safety of commuters on trains from criminal activities, he said that the principal responsibility lies with the operator to ensure that their safety and security mechanisms are in place to prevent that. From a regulatory point of view, he said that there are those Rail Reserved Regulations that indicate some requirements around the station precinct and the rail reserve itself, but the operation was put in place. Last year the RSR did a study on a research paper called “Personal Safety on Trains” which seeks to understand the root causes around the question asked by Mr Chabangu and the interventions proposed to counteract all of these instances that happen in the stations. In terms of the railway police service, he said that it is a function of the Ministry, but from a regulatory point of view, RSR would welcome that deployment.

Mr Nobunga said that the appointment of a new board by PRASA has paved a way for interaction between the two boards of RSR and PRASA, as they have begun their interaction with the first meeting having taken place and are looking forward to other meetings to ensure that the issues that they are facing in the rail space are attended to.

Mr Mangcu wanted to know why RSR is waiting for the Minister to appoint their CEO and wanted clarity on why that is the Minister’s responsibility.

Mr Nobunga said that the responsibility of the board is to run the recruitment process and recommend to the Minister for the appointment of the CEO of the organization. He said that the process has run its course and they are awaiting the final appointment by the Minister as required by their founding legislation. 

The Chairperson allowed a 10-minute break, and the meeting would reconvene at 12:50 for a presentation by PRASA.

Minister Mbalula said that he heard Mr Mangcu’s question regarding the appointment of a CEO for the RSR and stated that Mr Nobunga was correct, as according to section 91, the Minister appoints the CEO after consulting the board, and in consultation with the Minister of Finance, determines the conditions of the CEO. 

Briefing by PRASA

Minister Mbalula said that PRASA is an entity of the Department of Transport with an important mandate to provide mobility to the poorest of the poor. “Since we came into office, we have been hard at work tackling the challenges in our railway environment and have made many strides, but our challenges still loom large”, he added. He said that with the board in place and a group Chief Executive Officer at the helm, the Department is confident that they will move at a faster pace in restoring what was previously characterised as a broken organisation. The recently published National Household Travel Survey of 2020 confirmed that passenger rail remains the least expensive mode of transport compared to all other modes. This is an important element of the Department’s mandate to provide a public transport system that is affordable among other attributes. Funding for PRASA accounts for an estimated 27.2%, R57 billion of the Departments budget over the medium term. This is a large part of the Department budget which increases from R66.7 billion in 2021/22 to R70.2 billion and R72.5 billion in the outer years.

He said that the investment made by the Department in passenger rail is crucial towards positioning rail as the backbone of the public transport system. While PRASA has struggled for many years to work out its modernisation program due to chronic challenges, the Department has no doubt that their interventions to place PRASA on a stable footing are bearing fruits. PRASA is plagued by a number of challenges which have led to the entity only achieving 17.5% of its performance targets in the 2019/20 financial year. In addition to the vandalism and theft of infrastructure, inadequate and outdated rail stock and infrastructure, rail reserve encroachment that interrupts train services continued to undermine the Department’s ability to deliver a passenger rail service that is responsive to the needs of the people.

The Department has adopted a risk-based approach in tackling these challenges and its ability to mitigate the risks is critical in ensuring that interventions realise their intended objectives to address all these challenges and turn around the business of PRASA. Key strategic interventions have been prioritised and their implementation accelerated, this includes returning to service the upgraded Central and Mabopane lines, among others. This will be unpacked in detail in the PRASA presentation alongside the multi-pronged approach that has been adopted which targets the restoring of the service while simultaneously building internal capacity which will ensure that the impact of the Department’s interventions are seen and felt within a short time frame. He then handed over to the chairperson of PRASA to introduce the group CEO who was presenting in front of the Portfolio Committee for the first time.

Mr Leonard Ramatlakane, Chairperson: PRASA, introduced the CEO of PRASA who started in the position on 8 March 2021 and other representatives who were present in the meeting. He then handed over to the CEO and his team to present before the Committee.

Mr Zolani Mathews, CEO: PRASA, presented on the PRASA Corporate Plan for 2021-2024.

Mr Fana Marutla, Chief Engineer- Rail Infrastructure: PRASA, presented issues pertaining to Rail Infrastructure.

Ms Lesibana Fosu, CFO: PRASA, presented on the Capital Programme of PRASA.

Ms Nyameka Madikizela, CEO: PRASA Corporate Real Estate, presented on issues relating to PRASA property.

Discussion

Mr Hunsinger congratulated and welcomed Mr Mathews to his new position as CEO of PRASA and acknowledged that this was his first engagement with the Portfolio Committee. He said that this was his 12th exposure to a Strategic Plan, and the Committee had fought with previous Strategic Plans and previous people presenting these great Plans. This is because all the previous the 12 plans, including the one presented by Mr Mathews had wonderful turn-around strategies, but the problem was with implementation. He wanted to know Mr Mathews’ position around PRASA over the years ignoring trains that moved with open doors while commuters are inside. He wanted to know whether PRASA has considered any measures around natural surveillance, in other words to repurpose in particular the railway corridors, which in many cases are huge dormant government spaces which most certainly can be repurposed to the benefit of natural surveillance. The huge loss of infrastructure was largely due to the reluctance and failure to protect infrastructure. He said that COVID-19 did not steal and destroy the infrastructure but, it was the fact that security contracts were not renewed in time and the infrastructure was exposed to be vandalised and stolen. He said that he appreciated the Strategic plan from PRASA, but he wanted to know the immediate next step that will be taken on the vandalization and theft of infrastructure. He said that he is not excited about the Auto Pax division being included in the PRASA main structure. He said that he is disappointed by this and proposed that within the business of rail, buses should be a separate aspect in the same way as property management. He wanted to know the current age analysis on average creditors payment and whether it is 30 days, 60 days or 90 days. He also wanted to know the current bottom-line loss of assets at PRASA with regards to rail infrastructure.

Mr McDonald welcomed Mr Mathews and appreciated the presentation. He said that the presentation was forward thinking, however on the Committee’s last oversight visit, they were given a plan to employ security guards and then consequently in that same meeting, it was clear that the 3000 security that they were going to employ was only 700. He wanted to know from the CEO the number of securities that are going to be employed and how they are going to ensure that the missing critical assets which are 1180 are going to be protected further because as the meetings continue, people are literally carrying PRASA away metal piece by metal piece. He wanted to know if there is a real need for PRASA to continue to pay SAP for the updating of software capabilities as a lot of money is being spent on this. He wanted to know if the software development and updating cannot be insourced within South Africa instead of spending on other countries. He was concerned about the introduction of the e-ticketing system and reduced personnel, and said that in the current situation he strongly condemns the reduction of personnel in a country where the ordinary black person is battling to keep his/her job. He said that SOEs are meant to be the largest employer in the country and reducing personnel goes against that.

He said that on PRASA CRES, people are currently not paying their rent and the buildings are in disarray. He added that the Committee went on an oversite visit to Cape Town Station recently and the building windows are cracked, and some people are stealing electricity and not paying rent and there is no end to that. He said that at some point PRASA needs to draw a line in the sand and stop the depletion of their systems. They need to make sure that there are people in the stations to guard infrastructure and that there are people to ensure that buildings are maintained, as well as security to ensure that are no people sleeping in the stations. These conditions are prevalent in many of the stations in the country and something needs to be done about them. He challenged the CEO to take a train from Johannesburg to Cape Town and assured him that he would not be able to get food, sleep, safety nor even a chance to go to the bathroom because of the conditions of the trains and the stations. He stated that people would never return to trains unless the trains uphold the dignity of the users and urged the CEO to act immediately to fix the situation.

Mr Mangcu welcomed the CEO and told him that unfortunately there is no time to put on kid gloves or velvet gloves because he came into a house that is on fire. “You cannot come into a house on fire and expect us to be excited about grand plans of how this house is going to be furnished, if the house is on fire, we are expecting you to tell us how you are extinguishing the fire”, he said. He agreed with Mr McDonald that in the Cape Town Station, there is no working ablution facility and if you find it, it is stinking. He said that PRASA needs to start fixing the basic issues that have been reported all across the country about the train stations and their infrastructure. He asked the CEO if he had heard anything of the the corporate plan which was presented to the Committee last year because if he had seen that plan and heard of the concerns that were raised, he would understand the Committee’s disappointment and lack of excitement. He said that the Committee were told last year that the Central line in the Western Cape would be running by September 2020 and that by April 2021, that there would be a full service in the entire central line. He said that there is nothing new that has happened since then. He wanted to know how the Committee is expected to believe that the same central line will be up and running. He said that the same thing was promised about Mabopane, and still nothing happened.  He said that the CEO presented that there is work being done in Mabopane, and said that this is not true, as Mabopane is his constituency, and no work is currently being done in the station.

He said that the big cities have been plagued by vandalism and theft of infrastructure, except for cities in the Eastern Cape and KZN. He wanted to know why there is no sign of good operation of train services in those cities that are not plagued by the vandalism and theft. He wanted to know how the MLPS line is progressing. He wanted to know the exact number of stations that are receiving an infrastructure update, as the Department presented 23 and PRASA presented a different number which is 43. He said that he does not think that Auto Pax exists and that he will ask questions about them when he sees them. Mr Mangcu wanted to know whether the impediment to PRASA exploring ACSA security has been resolved.  He said that he did not see the continuity from the security plans that were presented to the Committee in the previous year in the presentation by the CEO. He said that as much as he appreciates the forward thinking in the presentation, he needs to see train services getting back on track. He said that he had visited the supposed State of the Art facility in Tembisa, and it did not look up to standard as there was a poorly staged show there where people said they were just brought there to sit on the computers because the Portfolio Committee was coming.

Mr Mey said that his biggest concern is safety and security and added that during the Committee’s oversight in 2019 and 2020 he came to the conclusion that security companies are not the solution, especially looking at the poor state of the infrastructure and buildings. PRASA lost so much money over the last 10 to 15 years as a result of vandalism. “What we need is South African Railway Police Service in the stations and on the trains”, he said. He also wanted to know the reason that the Department of Transport does not support the establishment of a South African Railways Police Service.

Response by PRASA

Mr Mathews said that he had no problem with the baptism of fire, as it is certainly what he expected coming to the meeting. He welcomed the honest and robust engagement and objective criticism from the Committee and said that he regards it as the proper and correct functioning of the Portfolio Committee to hold them accountable and ensure that they address the issues as they see them. He said that he recognises that it is the unfortunate function of SOEs that Strategic Plans are seen as the “be all” and “end all” of organisations and they somehow are a magic wand and possess all the answers. He said that he does not agree, and added that in his presentation he mentioned that there is a need to get back to basics. He said that he as read the current Corporate Plan and while the content is good, it is really just about the work that PRASA has to do, as the Committee had pointed out on the very basic issues around the restoration of the core services and the resumption of those services for commuters who are unable to pay the high costs of traveling on taxis to able to support themselves.

He agreed with Mr Hunsinger on the issue of trains operating with open doors that it is a totally unsafe and unacceptable practice for any commuter. He said that there are trains in a number of the PRASA yards across the country that he insisted must not be brought back into service because they pose risks to the passengers who are using the services. In terms of the railway corridor and repurposing, he said that they have enormous challenges in security and are currently not at capacity to adequately address the network across the country, but they are taking steps to do that. He said that he does not want to mention some of the steps in an open platform because they will talk to some of the plans and some strategies that they have to implement in terms of the technology that they utilized and the operational tactics that will be employed. He reassured the Committee that the issue is being given the urgency that it has to be given and added that they are addressing those issues in a very pragmatic, practical, objective, sustained and a very calculated manner, but the level of detail is something that he would only share with the Committee in closed session. He said that they are also getting advice and guidance from the Minister in that regard. Mr Mathews said that there has been an attempt to engage with the security companies, particularly in the Western Cape, where he met with the security companies that are currently employed by PRASA to discuss with them how they can be more operationally effective so that they could utilise and also hold them accountable, because it is pointless to be paying the high costs that they pay for security while they are not getting the service for which is paid for. They are also on notice to accept the integrated approach overseen by the security teams to ensure that they agree to get the best out of them. A part of that is to bring on board additional security capability to augment the numbers PRASA currently has.

He said that they currently have 3 100 protective guards that are employed and have deployed 738, and the other 438 have been deployed to work on CCTV monitors and another 1 782 in additional physical security. They do need to be equipped properly to ensure that they are receiving sufficient training to allow them to be able to provide the services that are required. He said that they also recognize that in many instances the training has been insufficient and the level of equipment that has been provided is totally inadequate, as they lost one of their offices recently due to lack of equipment to defend themselves against organised criminal activities and acts of vandalism. He added that Auto Pax is an ongoing discussion and debate, and it is something that there is concern about from the shareholder in terms of money that has been poured into Auto Packs and whether its long-term viability is something that should continue. “It is something that we are constantly examining and assessing, but we feel that the visualisation and the opening of new routes could possibly look at sustaining the business over the long term, and as we do that there will be a continuous ongoing assessment on whether or not it is practical and economically viable for us to keep Auto Pax going”, he said. He said that at this point, they are going to keep it going because the loss of those jobs will be a too significant turn for them to take, and they certainly do not want to see people at this particular juncture out of work

Mr Mathews said that e-ticketing versus cash is a dilemma that they have at PRASA and added that he would like to see them at some point move away from cash because it opens up too many challenges. He said that they wanted to try to find a gradual way of moving away from cash, as more and more people are getting used to the different technologies that are gradually growing in the country. He also agreed that at the PRASA CRES site, the collection of rents is a problem and agreed on the amount of time and money needed to invest in developing Cape Town Station and other stations where the escalators are not working as well as the ablution facilities that are certainly substandard. He said that he has told most of the stations with teams from PRASA CRES, as well as the CEO that they are now accountable to ensure that this is no longer an acceptable standard. He added that as a result of the substandard conditions in the stations in conjunction with the lack of security particularly in the stations, PRASA has lost a lot of revenue from tenants having moved out, so they are trying to ensure that the restoration of security particularly in the stations is sufficient to try to encourage paying tenants to come back into the stations. He agreed with Mr Mangcu that there is no time for velvet gloves, as PRASA has been in crisis mode for a very long time and added that he knows that he will have to start from the basic ground floor level to fix those deficiencies that have been correctly identified on the Mabopane and Central Line corridor that have been there for some time. He said that there is no justification for that to continue and there are no excuses that he could give other than to say that it is getting his attention and that of his colleagues because he made it clear to them that they cannot allow things to continue as they are on this basis.

He said that he would get a confirmation on the number of stations that need an update on the infrastructure and modernisation. In terms of ACSA and ESKOM, he said that ESKOM had indicated that their security contracts are terminated, but PRASA has engaged with ACSA and are waiting for a response as to whether they can utilise those. He said that he has indicated to his colleagues that they need to have a Plan B, and the Plan B was instituted, which was to approach National Treasury to see if they can utilize the section 32 with other entities or municipalities currently operating, and they are waiting for that response. He said that he would be happy to visit the State-of-the-Art center with Mr Mangcu when his schedule allows, but unfortunately next week he will be in the Western Cape and Worcester. He said that he will contact Mr Mangcu directly to arrange a visit to the center. He also welcomed any other Member who would want to do the same at any other time and restated his willingness to work with Members of the Committee.

Mr Mathews said that the railway police are a difficult issue because the railway police are not as visible as they would like them to be and added that they have requested a meeting with the Commissioner of Police so that they can actually find out if there is any functioning unit of railway police and if it is available, they wanted to find out how they could work with PRASA on the stations. The police face their own challenges, but at the same time if there is a detachment of police that is available and can be utilised to augment the current security component that PRASA has, then PRASA is more than willing to work with them. In many cases at the stations, they have an office space available so that they can be a fully functioning part of a security structure. He said that in his own observation, there is not much of police visibility, but given the opportunity, PRASA would want to have security police to work with, especially if it is on an ongoing basis and not a piecemeal approach.

Ms Fosu said that in terms of the age analysis for creditor repayment dates, PRASA is currently paying their creditors at over 180 days and the significant portion of their creditors are from Transnet. In terms of the loss base of their assets, she said that most of their losses occurred in the current financial year and they are busy with asset verification at the moment. She said that they will provide the fully quantified amount of the losses when they present their financial statements to the Committee. She said that Mr McDonald’s concern about SAP is valid, but the problem is that an organisation as big and as complex as PRASA needs enterprise resources, planning systems and there is a handful of them that are available out there, and by all means they are looking for one that can be invented in South Africa. She said that their situation is similar to what happens in Pharmaceuticals, where all Pharmaceuticals outside South Africa are the inventors of the molecules that we are consuming. She said that PRASA does want to use software products that are created from South Africa but at the moment they are unavailable.

Mr Mathews said that there was a question that was asked by Mr Mangcu about the MLPS that he did not clearly understand. He said that he will get clarity from him privately and address that question.

The Chairperson said that he appreciates the effort from the PRASA team to answer all questions as they come. He said that their determination to make things right is encouraging and gives the Committee hope that maybe this time around the problems faced by PRASA will be addressed. He said that the Committee is thanking PRASA on their willingness to be shown where they did not see, as it is a positive step towards the right direction. He said that the Committee remains committed to assisting the team that will be leading PRASA and ensuring that things are back to normal and people can be able to use trains. He then handed over to the Minister to share his concluding remarks.

Minister Mbalula welcomed the inputs that were made by the Committee and added that some of the plans that PRASA had in the previous year were affected partly by the pandemic. Most of the things that were supposed to happen could not be implemented in a faster pace because the pandemic forced the progress to slow down, but that is not a form of defense. He said that the department has done what needed to be done with regards to PRASA, as they now have a board of control and a CEO. The CEO is only two months into the position and for all these things to happen, they had to move with speed in terms of the restructuring process. He said that now that PRASA has a group CEO and a board to support them, they should be in a position to move with speed. He added that when he went to Transnet before the current CEO was appointed, everybody was active and the same goes for PRASA, before the CEO was appointed everybody had been in acting positions. He said that the detours that they had were mostly because the SOEs did not have a solid structure. He said that now that the right people have been appointed in the previously vacant position, it is time for the implementation processes to begin. He said that he is optimistic and added that this weekend he will be overlooking the implementation of some projects at PRASA. The President spoke about Mabopane and Central Line a year ago, and when it was time to implement, COVID-19 came into place. Security is very key in these places because as the construction of new stations and the rollout of the new infrastructure is underway, they must be protected. He said that he believes the issue of security companies was raised by the Committee because the previous board took a decision to remove them based on the outcomes of the AG report, but there was no contingency plan. Minister Mbalula said that the department had met with the police before the board and current CEO and had received cooperation from them to work with PRASA in relation to this. He said that the Portfolio Committee must continue to do its work and hold them accountable, and the department will also do its work to monitor the extent to which the boards and management of the entities are doing their own jobs.

The Chairperson thanked the Minister and Deputy Minister of Transport for their availability in the meeting, as well as the Department of Transport, RSR and PRASA for their presentations. He allowed the delegations to leave the meeting while the Committee continued with the rest of the proceedings.

Consideration and adoption of Minutes

The Committee considered and adopted its minutes of 5 March, 16 March, 17 March and 18 March 2021.

The meeting was adjourned.