Economic Regulation of Transport Bill: deliberations

Meeting report

The Chairperson welcomed Members of the Committee, representatives of the Department of Transport (DoT) and support staff to the meeting, and accepted apologies from Mr K Sithole (IFP), Mr B Yabo (ANC), Ms N Nolutshungu (ANC) and the Minister of Transport, Mr Fikile Mbalula.

Mr L McDonald (ANC) appealed to the Chairperson to make a statement on the recent bus accident in the Eastern Cape that had claimed many lives, and the accident involving a 12-seater scholar transport bus carrying 22 children that had taken place outside the Houses of Parliament.

The Chairperson said that he would make a statement at the end of the meeting.

DoT on Economic Regulation of Transport Bill

Mr Moeketsi Sikhudo, Project Manager: Single Transport Economic Regulator, Department of Transport (DoT), said that the Department’s presentation would address the concerns raised by the Portfolio Committee. These were the lack of detail on the phased-in approach to the establishment of the single regulator and the financial implications of the transition, consequential amendments, and the appointment of the board of directors.

Mr L Mangcu (ANC) said the Committee had already made a decision on 26 May that the Minister would be allowed to appoint the board of directors. Was there any reason to bring it up again?

Mr Sikhudo said that he would address this concern very briefly.

He went on to outline the phased-in approach. In the first phase, the Ports Regulator of South Africa (PRSA) would be used as the nucleus to establish the single regulator directly after the enactment of the Economic Regulation of Transport (ERT) Bill. The second phase, involving the integration of the Air Services Licensing Councils, would be completed after three years. In response to the Committee’s concerns, the Department was considering bringing forward the integration of the Cross-Border Road Transport Agency (C-BRTA) into the second phase. The third phase, involving the integration of all remaining public transport economic regulators, would be completed after five years.

He presented possible new clauses for introduction into the Bill to provide discretionary powers for the Minister to integrate individual regulatory entities into the single regulator. He presented a cost estimate indicating that the average budget of the single regulator would be R98m, compared to a sum of R272m for the existing separate regulators.

He noted some key changes that had been introduced in response to the Committee’s input, registering the Department’s concern about the proposed role of Parliament in the appointment of the board of directors of the single regulator and in the determination of regulations.

Ms Raksha Haricharan, Acting Chief State Law Adviser, added that the Bill included a complete schedule of consequential amendments. 

Discussion

Mr McDonald said that the budget of the Cross-Border Road Transport Agency (C-BRTA), which was more than R200m, had not been factored into the Department’s savings estimate. Until the C-BRTA was integrated into the single regulator in the second phase, this cost would still have to be paid. The true cost of the single regulator until the C-BRTA was integrated would therefore be greater than R300m. The numbers provided by the Department did not add up. He was also disappointed that the Department had not provided any more clarity on the consequential amendments. For example, it was important that the Act did not have to be amended every time another regulatory entity was integrated into the single regulator.

Mr Sikhudo said it would be possible to provide details on the cost of the single regulator during the transition. However, the Department’s cost estimates would not change. He explained that the PRSA would be transferred to the single regulator as a whole. The consequential amendments covering this aspect could be found in Schedules 1 and 2.

Mr C Hunsinger (DA) observed that very little of the content of the Department’s presentation was new. Nothing had been said about the implications of the transition for people’s jobs. The idea of using the PRSA as the nucleus from which to start the transition was a good idea, but would all the functions of the PRSA be incorporated into the single regulator at once? What was the shortfall in the current arrangement that justified the creation of new aviation licensing structures? If the licensing functions were being “plugged out” from the Airports Company of South Africa (ACSA), where they were currently housed, and “plugged into” the single regulator, where would the projected savings come from? The cost estimates were exactly the same slides that had been presented before, and they were inconsistent and implausible. The figure of a 60% reduction was simply a fantasy.

The consequential amendments remained a major concern. The Committee wanted to know about the impact of the Bill on all related legislation. The presentation had not brought any new clarity or assurance. The benefits of the Bill remained unclear. How would it improve services and service delivery? The idea of a single transport economic regulator was a good one, but issues were piling up and the Department was not providing clarity. The idea that had originally been published in the Gazette had changed drastically, and this had created a dilemma for the Committee.

Mr Sikhudo said that the Department was not yet able to provide concrete details about the effect of the transition on individual jobs, but it intended to put in place a human resources migration plan. He pointed out that only the economic regulation functions of the C-BRTA would be transferred to the single regulator. This excluded enforcement, policy and any other functions. The third phase would have an impact on the National Land Transport Act. In general, all legislation that would be impacted by the ERT Bill was listed in Schedules 1 and 2. He interpreted Mr Hunsinger’s criticism of the Department’s “plugging out” and “plugging in” approach as a preference for a “big bang” approach, according to which all regulatory entities would be integrated on day one, and he considered this approach a huge risk.

Mr M Chabangu (EFF) said that it should be obligatory and not optional that the Minister should hold public hearings on the regulations. How often and where would these public hearings be held?

Mr Sikhudo replied that the Department would look into whether the Minister should be obliged to hold public hearings. What this really meant was that the Department would hold the hearings on behalf of the Minister.

Ms M Ramadwa (ANC) said she did not think that there was any need to involve Parliament in the appointment of the board. Furthermore, the Minister should be allowed to make regulations as he saw fit. She proposed that the Bill be adopted.

Mr Sikhudo acknowledged Ms Ramadwa’s support.

Mr Mangcu recalled that the Committee had taken two decisions on 26 May -- firstly, to support a phased-in approach to the establishment of the single regulator, and secondly, that the Minister would be allowed to appoint the board of directors. He did not therefore support Ms Ramadwa’s proposal because it proposed something that had already been agreed on. He suggested that the Committee should confirm the decisions taken on 26 May by consulting the Committee minutes and resume the deliberations the next day.

Mr McDonald cautioned that the Committee should not delay the processing of the Bill and should continue to move forward.

The Chairperson agreed with Mr Mangcu’s suggestion.

Ms Ramadwa agreed with the suggestion, but maintained her views.

Consideration of Committee minutes and programme

The Committee adopted minutes of its meetings on 17 and 18 August.

Mr Mangcu said that the Committee was doing well on the processing of legislation, but not as well on its oversight responsibilities. He suggested that it take advantage of the extension of the term to 15 October 2021, to arrange oversight visits to Kwazulu-Natal, Gauteng and Mpumalanga. He also suggested that, if possible, the planned consideration of the Transport Appeals Tribunal Bill and the Rail Safety Bill be postponed in favour of concentrating on the bills already under consideration.

Ms Ramadwa added that there should also be an oversight visit to the Western Cape, and agreed that the processing of new bills should be postponed if possible.

Ms Valerie Carelse, Committee Secretary, said that these two bills would not be processed in 2021/22 in any event. The planned meetings would be very brief introductory briefings that would allow them to be published for stakeholders’ consideration, and allow the Committee's support staff to begin processing them and report progress to the House.

Mr McDonald said that the Committee should make sure to visit the Mooi River Toll Plaza in Kwazulu-Natal, where so many trucks had been burnt.

Mr T Mabhena (DA) asked if time could be found to have the Department brief the Committee on the licence renewal backlogs at driving licence testing centres.

Mr P Mey (FF+) suggested that the Committee also consider oversight visits to Nelson Mandela Bay and the Buffalo City Metropolitan Municipality.

Ms Ramadwa agreed that oversight visits to the Eastern Cape should be arranged. She also called for the provincial legislature of a province to be involved when the Committee did oversight visits there.

Mr Chabangu expressed scepticism about the importance of oversight visits. He recalled that the Committee had been disrespected by officials during a visit to the Free State, and had not managed to achieve anything.

The Chairperson replied that oversight was very important. He observed that it might be difficult to accommodate visits to all the provinces that Members had suggested.

The Committee provisionally adopted the programme.

Ms Carelse drew attention to an individual and three organisations that had requested to appear before the Committee: a Road Accident Fund claimant, the Law Society of South Africa, Darkipedia and the African Rail Industry Association.

Mr Mangcu did not think that the Committee should entertain these requests. They did not contain anything that warranted special attention. In addition, entertaining aggrieved individuals would set an undesirable precedent.

Mr McDonald agreed.

Mr Mangcu also drew attention to the petition, coordinated by Mr I Seitlholo (DA), that the Committee had received.

Mr Mabhena explained that Mr Seitlholo had written to the Petitions Committee, which had referred it to the Transport Committee because it related to transport issues. What was the appropriate procedure to deal with it?

Ms Carelse explained that the petition had been sent to the Committee for information only, so there was no obligation to consider it and report to the House.

The Chairperson said that he had issued a statement on the bus accident in which 30 lives were lost on 18 August. He noted that the bus in the other accident had been driving with a temporary permit, and said that this would have to be raised with the Department.

Mr McDonald added that a car belonging to this company had been involved in a fatal accident before. The bus had been issued with a temporary permit to use the roads the day before, but did not have a permit to transport passengers. The vehicle had 200 outstanding fines. The Department needed to explain.

The Chairperson suggested that the matter could be raised when driving licence testing centres were discussed.

The meeting was adjourned.