DoT & Driving Licence Card Trading Account 2020/21 Annual Performance Plans; with Deputy Minister

Meeting report

Remarks by Deputy Minister

Ms Dikeledi Magadzi, Deputy Minister of Transport, said that after May 2019 the Department took time to evaluate whether its agenda would take it to a higher level and trajectory. This would help re-imagine the role of the Department in propelling economic activities as well as taking strides in advancing social emancipation. The Department was under no illusion that it had many challenges that needed to be confronted and resolved. Several new cultures had been imposed in the Department. Breathing life into the values of accelerating service delivery required a paradigm shift and unstinting commitment to the service of South Africans. Both the political and bureaucratic heads supported this change in the Department. The strategic plan gave the Department practical instructions despite the significant resource constraints which may result in the Department moving at a slower pace than anticipated. Through a variety of engagements with stakeholders involved in this plan the Department ensured that it was aligned to the seven apex priorities of the Sixth Administration which are anchored in the National Development Plan. The Department’s strategy to re-imagine transport and its role in growing the economy, in creating jobs, is anchored on a dynamic interplay between continuity and change. The Department will continue building momentum to the realisation of the goals of the Department as enshrined in the White Paper of 1996.

Deputy Minister Magadzi highlighted five key strategic goals: safety as an enabler of service delivery, public transport that will enable social emancipation and an economy that works, infrastructure build, building a maritime nation and then finally accelerating transformation. Despite their best wishes they were under no illusion of the severe impact of Covid-19 on the Department’s plans. The Minister of Finance indicated that the budget would be able to be adjusted due to Covid-19. The budget revision will have an impact on the 2020/21 annual performance plans. This should not breed complacency but should encourage creating creative ways in delivering services to South Africans. The slowdown in economic activity has resulted in a serious impact on a number of entities which might require some additional support for them to continue delivering critical services. This included SANRAL, the Airports Company, PRASA and the RAF.

Briefing by Department of Transport (DoT)

Mr Alec Moemi, Director-General, DoT, went through each of the 8 priority focus areas and gave a synopsis on each priority area. Each focus area contained an outcome, an outcome indicator, a baseline and then the five year target. The first programme, safety as an enabler of service delivery, looked at reduction in road crash fatalities by 25% and rail safety and security. The second programme, public transport that enables social emancipation and an economy that works, looked at expanding the funding scope for public transport, increase the number of passenger rail trips and improve rural access and mobility. The third programme, infrastructure build that stimulates economic growth and job creation, dealt primarily with the increased investment in transport infrastructure and increasing employment opportunities. The fourth programme, building a maritime nation, looked at ways of increasing efficiency of the port system and improved maritime regulatory environment. The fifth programme, accelerating transformation towards greater economic participation, included improved regulation and competitiveness. The sixth programme, innovation that advances efficiencies and supports a continuous improvement model, discussed integrated automated fare collection technology among other things. The seventh programme, environmental protection, discussed the reduction in greenhouse gas emission and the reduction in maritime pollution. The eight programme, improved efficiency and effectiveness of support services, discussed the reduction of the percentage of vacancies.

Key issues to be addressed going forward were filling of vacant positions, coordination of the entity oversight function, reconfiguration of existing programmes to address inefficiencies and duplications, and ensuring transfer of skills from external consultants to ensure reduction in the use of consultants in the medium to long term.

 

A key objective of the Department (and sector) over the medium term will be to address fruitless, wasteful, irregular and unauthorised expenditure.

 

A major focus area is the financial health of entities. DoT will monitor their current, solvency and cashflow ratios.

 

The Department, in consultation with all stakeholders, will have to address the issue of infrastructure funding, and also address how the userpay principle can be strengthened and its compliance improved. As a first step, a decision will be made on the challenges faced by the Gauteng Freeway Improvement Project (GFIP).

 

The Department and the sector have also identified pockets of job creation through all capital infrastructure programmes at PRASA, SANRAL, PRMG, ACSA and ATNS. Beneficiaries of these job opportunities will be biased towards women, youth and persons with disabilities

 

Public Transport will be strengthened over the medium term. The objective will be to improve its efficiency, accessibility, reliability, affordability and safety. A key intervention in this space will be the review of the public transport subsidy regime and development of a new integrated public transport funding model. This model will address a pertinent issue of whether the inclusion of minibus taxis in the subsidy regime is feasible.

 

Annual Performance Plan

 

The Director General went through the Department of Transport Annual Performance Plan of 2020/21. The different programmes included: Administration, Integrated Transport Planning, Rail Transport, Road Transport, Civil Aviation, Maritime Transport and Public Transport

 

Department Budget as per estimates of National Expenditure (ENE)

The Director General then went through Department’s Budget highlighting the ten year overview, the MTEF Baseline Allocation, transfers and subsidies, road transport allocations, SANRAL, Provincial Road Maintenance Grant, PRASA and the Public Transport Network Grant.

The Department’s total expenditure is expected to increase at an average annual rate of 4 per cent, from R64.2 billion in 2019/20 to R72.2 billion in 2022/23. The majority of the department’s expenditure is directed towards: the Passenger Rail Agency of South Africa for investments in rail infrastructure, maintenance, operations and inventories; the South African National Roads Agency; and provinces and municipalities for the construction, operations and maintenance of transport infrastructure and services. Over the medium term, transfers account for an estimated 97.7 per cent, R199.2 billion, of the department’s total budget.

Discussion

Mr C Hunsinger (DA) had a question around slide 14. He raised a concern of asset protection and passenger protection and said that it should be included under safety and infrastructure. There were numerous cases of vandalism of infrastructure and passengers were not safe on public transport, especially rail. He suggested that part of the strategic plan should include passenger protection and asset protection. He then raised a point on taxi reform on slide 18. The Democratic Alliance supported this goal. Would taxi reform also include employment contracts and labour law compliance? His next question related to slide 21 which dealt with percentage allocation of road maintenance. SANRAL has had an increase of R11.4 billion on 21000 kilometres of road whereas the nine provinces, which had to maintain 27300 kilometres of road, over 5 years only received a R4 billion increase. Surely this needed to be balanced out?  He then had a question on slide 30 and the single ticket system. How would SANRAL be involved in the single ticketing system? His last question related to slide 87. There was a clear indication of an increase in budget growth. He had a concern about the service delivery growth. There was not an increase in service delivery in all the projects run by the Department. For example, more than R41 billion was spent on the 13 cities for BRT systems yet very few of them were functioning.

Mr L McDonald (ANC) referred to slide 91 and noted the Department was spending about R21 million per year on the Shova Kalila bicycle programme. He had not seen any of the bicycles. In the Free State he did not see any of the bicycles or any of the value added by the services that were meant to be implemented by the bicycle project. Where was the money actually going? Then he raised a concern over SANRAL and the e-tolls. It was time that this was put to rest. The e-toll problem cannot drag on for years and years. The RAF was also going to be severely affected by the covid-19 pandemic due to the drop in the fuel sales in the last two months. This would affect payments to claimants. Will the Department be able to finance or bail out the RAF?

Mr L Mangcu (ANC) had a recommendation on the way forward. Firstly, he raised concern over programme 1 which dealt with administration. There was continued underspending since the 2018/19 and 2019/20 budgets. Yet, the Committee heard that the Department had a 10% vacancy rate. He recommended that the Committee not support that allocation until the Department convinces it otherwise.  Another major concern was that the Director General said the Department was taking over the running of IPTs in a certain number of cities. The Committee should be cautious on the roles of the different spheres of Government. Then there was an increase of 17.2% in the usage of consultants particularly in the public transport programme. That is despite the Cabinet decision regarding the usage of consultants.

Mr K Sithole (IFP) had a concern over the new formula of subsidising taxi operators. Was there any timeframe to finalising that formula for the taxi industry? Recapitalisation had also been a concern for a long time. When will the Department be finalising recapitalisation? He then raised the issue of e-tolls. The e-toll system was in crisis. It was about time that the Ministers and the Premier of Gauteng tell the Committee what was going to happen. He was worried about the decrease in some programmes’ funds. If the Department asks for a budget and fails to spend then that was worrying.

Ms N Nolutshungu (EFF) raised an issue on the taxi recapitalisation programme. The programme was running for almost 20 years and over R4.5 billion has been spent already. She was excited when the Minister met with the SANTACO. He mentioned that there would be the formalisation and regularisation of the taxi industry. She was confused because she did not see anything in the budget allocation that related to the formalisation of the taxi industry? There was an increase in taxi recapitalisation programme. How will the taxi industry be included into the integrated single ticket system that will be implemented by 2023, when it was not formalised and the subsidy was not ready? Did the Department anticipate that it would be ready by 2023? Why continue with the taxi recapitalisation? She then raised the issue of accessibility. Accessibility is usually only thought of as access for people in rural areas. People with disabilities tend to be forgotten about. People with disabilities need to have access to public transport. Currently, people with disabilities cannot access minibus taxis and railway transport. There were certain things that needed to be considered to allow for people with disabilities to access public transport easier. Infrastructure barriers on the way to transport facilities, the safety hazards on the route to transport facilities and the distance all needed to be considered. She would like this issue to be included in the Department’s five year plan.

Mr M Dangor (ANC, Gauteng) asked about the operational risks on the Western Cape line. Trains were being burned all the time and there was no talk about ways to resolve that matter. Looking at the narrative for the future he wanted to find out more about high speed railways being expanded.

Ms M Ramadwa (ANC) said that in the 2019/2020 financial year there was a budget allocation, under provincial roads maintenance grant, for disaster relief component and Mpumalanga. In the 2020/2021 there was no budget allocation for this. Can the Department explain to the Committee why this was the case?

Mr P Mey (FF+) said that because of the coronavirus the Department should focus on maintenance and stay away from any new developments in the near future. This would save money and money would be needed to buy food. He then raised a concern of the provincial roads maintenance grant. Is it not time that SANRAL take over all the roads in South Africa?

Ms S Boshoff (DA, Mpumalanga) said that the rural roads were in a terrible state of disrepair and was pleased to see that the Department was looking to pilot an alternative rural roads programme. She understood that there were discussions with unions regarding the possible severance packages to PRASA employees. Was this the case? The Director-General spoke about new train sets that will be bought but the Department was also possibly laying off employees. At what cost was the new administrator that was appointed to PRASA? Has he had brought about a change during his tenure?

Mr T Mabhena (DA) said that on slide 95 it stated over R1 billion would be spent on the Moloto road upgrade and that the upgrade would be done by SANRAL. Would that project be done by SANRAL alone or will the province make some contributions? Once the road maintenance was completed would it be administered and maintained by SANRAL or transferred back to the province? What was the maintenance plan of the road? Did the maintenance plan include the continued presence of law enforcement agencies along the road? He then moved onto the Services Bill which had been submitted to cabinet. Hopefully the Department included that they need to work with communities. They need to ensure that they do not create havoc in communities in which they operate. He then raised an issue on slide 83 which dealt with the subsidising of provincial roads. He asked that the Department provide the Committee with the quarterly and annual monitoring reports that were signed off by the accounting officers of provincials departments. He was not convinced that all the roads which were signed off were actually maintained and well administered. He then spoke about the budget reprioritisation that was ongoing. How much did the Department envisage it would reprioritise with the impact of the Covid-19 pandemic? From which programmes would the Department reprioritise funds?

Co-chairperson Mmoiemang asked about the reduction in PRASA and Metrorail. Could the Committee get a guarantee that this money would be given back to the Department? He raised this point because he recognised the importance of transport infrastructure to economic growth. Transport was not only important for the transport of people but also of goods in boosting economic development.

Briefing by Driving License Card Trading Account (DLCA)

Mr Moemi made the presentation.

He went through each of the priority focus areas and gave a synopsis on each priority area. Each focus area contained an outcome, an outcome indicator, a baseline and then the five year target.

Key challenges affecting the entity included:

Old and outdated production machine

Organisational structure that do not support the entity operations

Unconducive organizational building 

Mr Moemi reported that during the 2019/20 year, the DLCA commenced with the testing and piloting of the mobile bus in its pursuit to take service delivery to the people. However, due to legislation restrictions, the bus can only be used as an extension of an existing DLTC. The future plan is to explore the amendment of legislation to allow for the bus to be regarded as a satellite DLTC

The DLCA took over the card production facility in 2015 and discovered that the card machine had not been upgraded since 1998 and that the live capture units (LCUs) also needed an upgrade. The DLCA embarked on a journey to modernise the card production environment. The DLCA at same time, started with the project for the introduction of a new driving licence card but the security of the card design was compromised when the laptop of the DLCA official was stolen. The new card project has been resuscitated in 2020/21 and it is envisaged that a new durable driving licence card with improved security features will be introduced by the end of 2021/22. The modernisation process will enable the DLCA to reduce the production turnaround from 12 days to 7 days; introduce an electronic/mobile driving licence; create a platform for introducing e-service; and re-engineering of DLCA process to allow for automation of support services and elimination of the manual process.

The entity generates its revenue from the sale of driving licences. In the 2018/19 financial year the DLCA had a healthy financial position. The solvent assessment reflects that the DLCA is able to meet its long term commitments. In the 2018/19 financial year the total assets exceeded total liabilities by R328 034 000. The total assets were reflected at R 646 072 and the total liabilities were reflected R318 038 000. The liquidity assessment reflects that the DLCA is able to pay its short term obligations. The current ratio which measures the Entity’s ability to pay off its short term liabilities with its current assets as at 31 March 2019 was 1.6: 1. (For every R1 that the entity owes to the creditors, it has R1.60 to settle it)

The lockdown had several effects:

New driving licence card project delayed

Lost revenue estimated at R19 million a month

Card production backlog – backlog created as a results of production machine routine maintenance and possible sharp increase in the DL cards applications after the Lockdown.

Procurement of strategic assets and services delayed e.g. the process of the acquisition of the new building is on hold

Performance objectives and targets delayed e.g.  Finalisation of the piloting and deployment of a web enquiry service

The lockdown also presented a few opportunities:

It provided management with the chance to identify essential areas within the DLCA areas and officials who can be allowed to work remotely as part of business continuity plan

There is a need to develop the competency and capacity in the SHEQ to allow DLCA to be able to deal with any disaster.

It provided a chance to test the disaster recovery or business continuity plan

Management was able to identify the need to fast track the implementation of technology to support online engagements

Discussion

Mr T Brauteseth (DA, KZN) said he was excited about an electronic driver’s licence. He wanted the Department to give more detail on how the electronic driver’s licence would work. Currently if someone wanted to renew their driver’s licence they have to go through a whole process. What will the actual mechanics be of renewing their driver’s licence online? Will South Africans be asked for proof of address? Will they be able to go to an optometrist to get an eye test and submit this online? He then asked the Department for a list of all the licence enrolment units in the provinces and where they were located. The presentation also said that buses were sent to assist rural communities with driver’s license requirements but that was stopped due to legislative issues. What were those legislative difficulties? How can the National Assembly and National Council of Provinces help to resolve those roadblocks so that buses can be sent out into the field? It was concerning on slide 12 that the new driver’s licence card design was ready but the design was on a DLCA employee’s laptop the laptop was stolen and the project stopped. Can the Department give the Committee assurance that the new design was on some form of cloud system so that if a laptop gets stolen the entire project does not crash?

Mr McDonald asked how the Department will deal with the huge backlog due to the covid-19 lockdown. He said that no one in the country was receiving their driver’s licence in 12 days. It has become such a problem that now people apply for a temporary licence when they renew their licence because it take so long for the driver’s licences to be issued. How was the DLCA going to deal with the backlogs all over the country? He said that the licence enrol units were continuously offline. It can take up to five or six appointments before a licence is renewed.

Mr Mangcu recommended that a follow-up meeting be set up because the Committee was discussing an issue with lots of information. Who has the copyright for the production software at the DLCA? He then also raised the issue of buses being sent to rural areas and the legislation. He was under the assumption that the DLCA was the only card producing facility. When the DLCA sends busses was it not performing the function of the DLTC? Would the Department explain to the Committee why the DLCA was stepping into the role of DLTC? What legislation gives authority to SASSA to design a driving licence? The Director General said the design has started. Who is doing the design and how long will it take? There are international standards and countries like Lesotho and Namibia were already producing such licences. What was an electronic driving license? He wanted a simple and clear answer. What was an e-service, in simple language?

Mr Sithole asked if the Department had a system to deal with driving schools. There was a lot of corruption and fraud happening in driving schools. Does the Department have the capacity to implement the electronic driving licence system?

Mr Mabhena pointed out that it does not take 12 days to receive a driver’s licence. It was concerning that driving license design on the laptop of an official was stolen and that the entire programme was compromised. How much does the Department spend when it comes to IT systems? Which company provides those services? There needed to be a certain level of security because that was a driving licence that would be used by all South Africans. The senior posts in the DLCA were not filled.

Mr Hungsinger said that at an oversight visit the machine was the building and the building was the machine. He was curious; was there an intention to change buildings? The worst backlog of driving licences was a year ago and it was around 320000. Was there any intent in making sure that the DLCA had sufficient back up to ensure such a backlog does not occur again?

Ms Ramadwa noted that one of the priorities of the Department was to create jobs so she commended it on appointing permanent staff. The Director General said that the DLCA had surplus which indicates that they are capable of generating revenue. Her concern was that they do not have accommodation. Instead of investing the money elsewhere could the DLCA have a discussion with Treasury to buy their own accommodation?

Mr M Chabangu (EFF) said that the DLCA was introduced in 2007 to produce and deliver licencing cards in South Africa. Who produces the new licencing cards in the Republic of South Africa? If it was not produced in South Africa, why not? One of the strategic objectives was to produce and deliver highly secure and quality driving licences. Did the Deputy Minister and the Director General agree or disagree that the DLCA was not really achieving this objective? When was the Department of Transport intending to shut down all the licences that are given to South Africans which causes accidents?

Mr Mey said that it was clear that the DLCA operates very well in Pretoria but on the ground level it was a different story. Was it the responsibility of the DLCA or the municipality to open new offices?

Co-Chairperson Zwane asked in which provinces, and in which municipalities, was the bicycle programme running? How will the Department help those testing stations in rural municipalities? The Department needed to give both Committees full details on the issue of recapitalisation so that they could perform oversight. Was he correct in saying that the matter of e-tolls and SANRAL was outside of the Department’s control? That would mean that the Committees needed to follow up on the issue of e-tolls and close it. The Committees would write a letter because they have been seeking clarification for months.

Co-Chairperson Mmoiemang asked the Department to respond in writing to all the questions that were not answered. There was a consensus that the time allocated was not enough and that the Committee needed another engagement with the Department.

Mr Moemi replied that the Department would give an update on the entire budget in the wake of the Covid-19 pandemic. The answers to the rest of the questions will be provided in writing to the Committee.

The Deputy Minister said that the recommendations, comments and questions given by the Committee will be responded to in writing. The Department will get back to the Committee on how it will reorganise the budget in response to the Covid-19 pandemic. The Department would also have to readjust its APPs.

Co-Chairperson Mmoiemang said that in their next engagement they will be able to analyse the written responses and probe further.

Mr McDonald wanted an indication when the Department will respond.

Co-Chairperson Mmoiemang confirmed that the Department would respond within five days.

Committee Minutes

The minutes of the previous meeting was considered and adopted without amendments.

Co-Chairperson Zwane said that a message coming from this meeting was that the Department needed to stop talking and start doing. The Committee would be increasing its oversight role now that they knew each other better. The Committee and the Department should have recognised that certain programmes and agencies would go under because of the Covid-19 pandemic. Something should have been put aside for those entities to sustain themselves.

The meeting was adjourned.