Department of Transport budget: Committee Report

Meeting report

Draft report on the Department of Transport Annual Performance Plan (APP)

Adv Alma Nel, Content Adviser, took the Committee through observations and recommendations.
Paragraph 6.1 (observations) dealt with alignment between targets and SMART principles. There were concerns about whether the Budget and targets were linked. The Committee observed non-adherence of targets to SMART principles. She was not sure if there had been feedback from the Passenger Rail Agency of South Africa (PRASA).

6.2 dealt with board vacancies in entities, especially Airports Company South Africa (ACSA), Air traffic and Navigation Services (ATNS), and Road Traffic Infringement Agency (RTIA). The board of SAMSA did not quorate.

6.3 noted that entities had implemented road safety programmes.

6.4 expressed concern about plans for legislation submitted in the outer years of the MTSF. It was recommended that plans for legislation be submitted earlier in the MTSF cycle, to prevent lapsing of legislation and having to re-submit.

6.5 dealt with the overdue Annual Report (AR) of PRASA. The 2016/17 AR was not yet received. PRASA would not be able to deal with past AGSA findings, to achieve a better audit outcome.

6.6 observed inconsistencies between figures by the Department and entities in APP documents.

Recommendations

7.1 recommended that APP figures of entities be aligned with SMART principles as per National Treasury (NT) regulations. The PRASA board had to meet with officials to look at targets, and to re-submit the APP.

7.2 recommended that boards of entities appoint to fill vacancies without delay.

7.3 recommended that the Department ascertain synergy between road safety programmes to reduce road carnage.

7.4 recommended that legislation be submitted to Parliament during the parliamentary cycle to allow for thorough processing.

7.5 recommended that the PRASA board see to the finalisation and submission of the 2016/17 AR as soon as possible.

7.6 recommended that the Department and entities ensure that figures presented in APP documents correlated with those submitted to Parliament for the Budget Vote.

Discussion

Mr L Ramatlakane (ANC) remarked that there had to be feedback from PRASA about non-adherence of targets to SMART principles. However, there were no dates or timeframes. He referred to vacancies in boards of entities. Board members had to be appointed without delay. He advised that specific entities be identified.
He referred to the overdue AR of PRASA. It had to be submitted as soon as possible, but there was no indication of a deadline. There had to be consequences. The Minister and the board had to appear before the Committee. It was serious non-compliance, and there had to be a specific date.

The Chairperson asked if he wished to propose a date for a meeting with the board and the Minister.

Mr Ramatlakane suggested 60 days. It was possible that PRASA could suggest an earlier date.

The Chairperson asked if there was agreement about that, or a counter proposition. The question was if it had to happen before or after the June recess.

Ms N Nolutshungu (EFF) suggested that it be after the recess, in August.

The Chairperson asked for agreement with that. It was decided that it would be in August.

Mr M Sibande (ANC) advised that boards with vacancies had to be brought together, when the Minister met with the Committee. Boards, including the PRASA board, had to comply. There was non-compliance because boards did not have a quorum or did not quorate. There had to be a deadline for meeting with boards. Some recently appointed board members would have to be taken on board. It was an urgent matter.

Mr Ramatlakane agreed that board vacancies was an urgent matter. It had to be discussed with the EA. (Executive Authority) It could not wait until August. There had been an interim board at PRASA, it could be questioned whether right decisions were made. There had to be a meeting with the Minister within 30 days.

The Chairperson advised that there could be a meeting with the Minister after the budget presentation. It was a challenge to the Department. The South African Maritime Safety Authority (SAMSA) board did not quorate, and did not sign the APP. She also questioned how decisions were made during the interim board at PRASA. They were challenged in court. There were board hiccups at a time when the outstanding AR was still being dealt with.

The Chairperson asked if Members were satisfied with the draft report on the APP.

Mr Ramatlakane stated that there was agreement, on condition that amendments were included.

Mr Sibande seconded.

Mr K Sithole (IFP) noted that there were no recommendations about public awareness of road safety and security matters.

Adv Nel responded that 7.3 and 8.3 on the PRMG: Road maintenance component, touched on road safety. She asked if it would be in order if that was to be beefed up.

Mr Sithole agreed with that.

Budget Vote observations and recommendations

Committee observations and recommendations covered the use of consultants; the Public Transport Network Grant; the Provincial Road Maintenance Grant; the Moloto Road upgrade; the non-toll road network; vacancies and acting positions; scholar transport; the impact of the Gauteng Freeway Improvement Project (GFIP) on SANRAL finances; the PRASA modernisation project; the taxi recapitalisation project; funding models and turnaround strategies of entities; legislative programme impact on entities; performance agreements and incentives; alignment between APP targets, SMART principles and the budget; optimal use of revenue generating streams of entities; road safety programmes; the overdue AR of PRASA, and inconsistencies between the APP figures and the figures tabled per the Budget Vote documents.

Discussion

Mr Ramatlakane referred to the last sentence under Vacancies and acting positions. He asked if progress made by the Ministry in filling board vacancies and senior management and executive posts were merely reported, or if it were fact. There was a slight difference.

Mr Sibande referred to slow progress with the Moloto Road upgrade. There was an increase in budget allocation. He asked if the project was already underway.

The Chairperson responded that SANRAL had reported that progress had started on the Limpopo side. The road was being expanded. It could be added as an observation. Mpumalanga and Limpopo had handed over to SANRAL. Progress was made with expanding the road. The Committee had to visit the project, also to see if community members were being employed.

Mr T Mpanza (ANC) apologised for being late. He was stuck in heavy traffic.

The Chairperson asked where he was stuck.

Mr Mpanza replied that it was on the way from the airport.

The Chairperson told him that he should have come the day before, as some other Members had done. He was aware of the time the meeting would start.

Mr Mpanza commented that 7.5, (Non-toll road network) was a bit slim. It only stated that the budget allocation had decreased. It had to be beefed up. The Portfolio Committee had raised concern about the Moloto Road upgrade, and Members had raised concerns about the non-toll network as well. He asked what the Committee could propose.

Mr Ramatlakane remarked that Mr Mpanza wanted it stated why there was a decrease. Previously the Minister of Finance had explained the reductions. It had to be explained.

Ms Nolutshungu referred to challenges of management and oversight of scholar transport picked up during oversight. The plight of scholars in rural areas had to be emphasised.

The Chairperson agreed that concern had to be expressed over scholars having to use dangerous transport, like overloaded vans. Discrepancies at provincial level had to be pointed out. She had seen 18 scholars loaded into a van in Cape town.

Mr Sithole commented on the lack of uniformity in different provinces. Some provinces used the Transport budget, and others used the Education budget. There had been a strike at Nkandla the day before about scholar transport.

The Chairperson responded that it was the prerogative of the Premiers in the provinces to decide which department had to be responsible. Transport regulation resided with Transport departments, and Basic Education was responsible for teaching and learning. There was work in progress between the two Portfolio Committees.
Ms Nolutshungu had raised an important point. There were children in farming communities who had to travel 10km on foot. It was said that if there were only three learners on a road, transport could not be provided. The question was if it was fair for a community to be penalised if fewer than 10 learners were using a road.

Mr Ramatlakane opined that implementation had to be added to management and oversight of scholar transport, as a concern. He referred to safety and security matters alluded to under the PRASA modernisation project. Over the preceding two years there were problems around devolution of authority to regions for effective management of rail operations. It was promised the year before that there would be work towards devolution of functions, but the situation was still the same.

Mr Sithole referred to taxi recapitalisation. Money paid out for scrapped taxis was not sufficient for the industry. R50 000 was not enough.

The Committee recommended a revision of the taxi recapitalisation policy. It was nice and soft to suggest that the policy be finalised as soon as possible. It had to be discussed with the Acting Director General. The policy review had not yet seen the light of day. Taxi owners were saying that the scrap allowance of R70 000 was not adequate. The failure to come up with a policy review was putting the industry in limbo.

Ms S Xego (ANC) remarked that there had to be regulations pertaining to scholar transport for implementation and monitoring.

The Chairperson responded that it was work in progress. There had to be a meeting with the Portfolio Committee on Basic Education, to correct anomalies. The policy on scholar transport had to be enriched. It was not static and had to be reviewed.

Mr Sibande remarked that there had never been a deadline for the taxi recapitalisation project. The cost of buying cars was increasing. But it was rather a problem of data. The Department did not have data on how many vehicles had to be scrapped. The amount paid out was not important. Detail was needed.

The Chairperson responded to that there were 400 000 taxis in SA, of which 200 000 had to be scrapped. Taxi operators did not want to scrap because the money paid out was meagre. Those who scrapped had to service debt. Statistics were available from the Department.

Mr Ramatlakane commented that provinces had to agree on one set of regulations for scholar transport. Basic Education had to draft a policy about radius, for instance that anything above 5 kilometres required transport. He referred to legislative programme impact on entities. The new Director General was suspended. It had to be asked how legislative programmes were captured in the APP. The Committee recommended that programmes be brought forward. It had to be stated that although the Portfolio Committee had recommended that programmes be brought forward, it was not being adhered to. It could result in a stampede.

Mr Sibande asked about a deadline for submission of the outstanding PRASA 2016/17 AR.

Adv Nel responded that it should be finalised with the Office of the Auditor General (AGSA) in May, to come to the Committee in September.

Mr Sibande insisted that PRASA had to be given a deadline, otherwise it could only be brought in December, or in the following year.

The Chairperson noted that the due date was normally 30 September, and then the Committee would deal with the Budget Review and Recommendation Report (BRRR), but there was the anomaly of an outstanding report. The 2017/18 AR had to be finalised and brought in by September in terms of the PFMA.

Mr Ramatlakane proposed that a sentence be added to the recommendation about consultants, namely that the Department had to brief the Committee on the scope of work and expenditure on consultants, within 30 days.

Ms Nolutshungu commented that people with special needs and the disabled were ignored. Nothing was being done, although there had been research since 2010. The public transport network was being developed without attention to accessibility. Rail transport and buses did not cater for the disabled, with the exception of MyCiti. Gautrain was not affordable. Cape town had tried to address needs, but Durban abandoned all efforts.

The Chairperson proposed that the disabled be included under safety and reliability. The Department had to be urged to have special programmes.

Mr Ramatlakane referred to vacancies and acting positions. He proposed that after the recommendation that board members be appointed without delay, “continue” had to be added. The Committee had to have an update report within 60 days.
He referred to the taxi recapitalisation project. Devolution to regions had to be included in the recommendation on the policy. It was previously stated that there was a draft policy for the Minister to comment on. It was still on the Minister’s desk. The Department had to brief on recapitalisation policy within 90 days.

The Chairperson referred to the impact of the Gauteng Freeway Improvement Project (GFIP) on SANRAL finances. It had to be added that other toll issues also had to be looked at, and how SANRAL unfolded other projects, and how it sustained its spending. Other funding models for tolling systems had to be considered. The recommendation was too thin.

Mr Ramatlakane commented that it was not clear which other funding models were supported by the PC. The PC had stated that it supported user pay as a funding model, but it had to be stated that other models had to be explored.

Mr Mpanza said that he agreed with that. It had to be considered how SANRAL could extend its scope beyond SA borders into the SADC countries. Sister countries had to be empowered. Other countries looked to SA to lead with road networks. The scope of SANRAL beyond SA had to be considered, over and above the funding model.

The Chairperson proposed that it could be said that besides the funding model, it had to be considered how the SANRAL legislation allowed it to move into other regions to amass finance and capacity. The user pay principle was challenged with the advent of GFIP issues. The Committee could not venture into a discussion of Gauteng, as that was limited to the Premier and the Minister of Transport. The question was how to ensure that SANRAL look into other funding models, and how it could expand into regions and into provinces and municipalities.

Mr Ramatlakane told Adv Nel that he was concerned that the recommendation about the impact of GFIP finances on SANRAL was only limited to the formulation of a suitable funding model. It was not only SANRAL that had to be considered. The NT also had to be drawn in and had to respond to the issue. The AGSA was concerned about GFIP as a going concern.

Adv Nel responded that it was difficult to instruct NT about the funding models of entities. It could be stated that the Minister had to liaise with NT. Recent reports by the big contractors showed that there was a decrease in the outlay of funds for roads.

Mr Ramatlakane referred to performance agreements and incentives. The recommendation stated that performance incentive policies of entities had to be reconsidered in entities that had cash flow constraints and/or deficits. The Committee had to be bolder. It was not justifiable for incentives to be awarded when an entity was experiencing difficulties. In such a case it could not be said that officials were performing well.

Adv Nel responded that one percent of a company budget was set aside for incentives and notch increases. In the public service the policy was that where funds were available, incentives had to be considered. It could be stated that non-cash incentives could be considered, in the form of additional leave days or certificates of performance. If it were recommended that incentives be cut off, there could be resistance from the labour unions.

The Chairperson commented that Road Accident Fund (RAF) executives were getting incentives. RAF was a going concern, and some targets were not even met. Executives were getting bonusses, while the people under them were not receiving it.

Mr Mpanza agreed that legislation around incentives was labour related. But it had to be borne in mind that performance incentives were a privilege, in contrast to notch increases, which were a right. Categories had to be separated, instead of a blanket approach. When benefits were confined to executives, it was a result of departmental and Ministerial discretion. The Department had to go through the exercise of determining who did not qualify for incentives. It could be stated that there could be a moratorium on incentives for executives, until the entity had improved

Mr Ramatlakane reiterated that his suggestion was specific to those entities with cash flow constraints and/or deficits. Incentives had to depend on performance. If an entity was in trouble, the question was what performance there was to talk about. The rank and file were not getting incentives. The question was whether the Committee was going to be relaxed or firm about the matter. He proposed a firm approach, as it might be that an entity had to borrow money to pay performance bonuses.

Mr Sithole referred to the alignment between APP targets, SMART principles and the budget, with reference to PRASA. The Committee had requested that PRASA officials meet with the new board as soon as possible to relook at targets and re-submit the APP to the PC. However, there was no time frame.

The Chairperson responded that the board had to meet with functionaries on 7 May and then had to send the report. The Committee had requested that the APP and targets be reworked. It was not acceptable to have an amoebic APP. Her office would write a letter to the Minister to remind the PRASA board that the APP was still awaited.

Mr Ramatlakane commented that the Committee had asked for the re-constitution of the APP. The due date of 7 May was not adhered to. It could not be a single page submitted. The whole book had to be withdrawn and another had to be submitted.

The Committee had to request re-submission of the APP and a date had to be given. He suggested the end of May.

The Chairperson opined that PRASA had to re-submit the whole APP. The RAF only had to review a page or two. There were also issues with SAMSA.

Adv Nel responded that Members could state during the Budget speech in the following week that APPs were insufficient. The Committee could accept the APP of the Department, whilst stating that RAF, SAMSA and PRASA did not achieve objectives.

Mr C Hunsinger (DA) remarked that unhappiness had to be expressed about the fact that there was an outstanding APP, with the due date for the next one approaching. The absence of the APP put the Committee in a predicament. The entity rendered reasons, but the fact remained that it had not adhered to legal requirements.

The Chairperson commented that it had to be indicated in the APP report which challenges were faced in entities. The current status of the budget had to be looked at.

Mr Ramatlakane remarked that if an APP was rejected, it had to be stated that it was rejected, and that re-submission was requested. Re-submission had to be on time, because the APP was important for budget purposes. It had to be stated clearly that the date for re-submission was 30 May.

Adv Nel agreed that it had to be stated clearly that a date for re-submission was given as 7 May, which was then extended to 30 may.

The Budget Vote report was adopted with amendments.

Committee programme

The Committee discussed the possibility and feasibility of attempting to process the Road Accident Benefit Scheme (RABS) Bill, before the end of the year. The Committee Secretary pointed out that the Committee programme was subject to changes in the Parliamentary programme, and that the Committee programme had to compete with commitments to mini-plenaries and the fact that the Committee was part of the economics cluster, which brought demands on committee time. There would be limited time to deal with legislation in the third and fourth terms. Only October and November would be available for deliberations, which in her opinion was not adequate. There was the possibility that the Bill would have to wait until after the 2019 SONA.

In discussion the DA and the ANC were split about the matter. The DA was convinced that it would not be possible to do justice to the Bill, and that it would be unwise to rush legislation, as other portfolio committees were wont to do. It was suggested that the PRASA investigation be granted priority. The ANC argued that it was the job of Parliament to make law, and that the scheme was running at a huge deficit and had to be rescued.

The Chairperson proposed that times for submissions be increased, and that other opportunities be found to attend to the Bill. The focus on legislation was important. She would talk to the House Chairperson about being freed from mini-plenaries. Even if the Bill could not to be finalised in December, the Committee was duty bound to advance the process as far as possible.

Adoption of minutes

Minutes of 28 and 30 March; 20, 21, 27 and 28 June; 2, 16 and 22 August; 5, 12, and 14 September of 2017 were adopted without amendment.

The Chairperson adjourned the meeting.