Public Entities

5.1 AIRPORTS COMPANY SOUTH AFRICA (ACSA) The Airports Company South Africa is regulated in terms of the Airports Company Act (No. 44 of 1993) and the Companies Act (No. 61 of 1973), and is listed as a schedule 2 public entity in terms of the Public Finance Management Act (No. 1 of 1999). The Airports Company South Africa was formed to own and operate the nine principal South African airports, including the three main international gateways of OR Tambo, Cape Town and King Shaka International Airports. Moreover, ACSA provides secure infrastructure for airlines to transport people and goods and extends its responsibilities to include promoting tourism, facilitating economic growth and job creation, and protecting the environment.

Over the medium term, ACSA's main strategic goals are to position itself strategically for long-term sustainability and to improve its operations. This involves analysing the market, refining its business and revenue models, developing a comprehensive stakeholder management strategy, and improving short term human resource performance

5.2 PASSENGER RAIL AGENCY OF SOUTH AFRICA (PRASA) The Passenger Rail Agency of South Africa's mandate is contained in the Transport Services Act (No. 9 of 1989), as amended in November 2008. The Act requires the agency to, at the request of the Department of Transport, provide rail commuter services within and to and from South Africa in the public interest. In consultation with the Department, PRASA is also entrusted with providing long haul passenger rail and bus services within, to and from South Africa.

The Agency's strategic goals over the medium term are to improve the quality of services, continue with its modernisation strategy, which entails acquiring new reliable trains and upgrading depots, stations, signalling and all other infrastructure and to achieve financial sustainability by improving the generation of revenue. Its performance targets for 2013/14 include: completing negotiations and contracts for its Rolling Stock Fleet Renewal programme, signaling programme (Stage 2 - KwaZulu-Natal (KZN); Stage 3-Western Cape and Stage 1 Phase 2: Gauteng) and the depot modernisation programme, completing of two rail extensions, namely the Bridge City and Greenview - Pienaarspoort railway line, and completing 14 station upgrades and 25 station improvements. It will also continue with its human capital development plans which include learnerships and building capacity for its rolling stock programme . The entity is not generating adequate cash to meet its legal obligations. It is facing an immediate cash challenge due to significant increases in the cost of energy as approved by the National Energy Regulator of South Africa (NERSA) for Eskom, higher rates and taxes for its property portfolio including the rail tunnel municipal rate increases, higher personnel costs as negotiated with unions, as well as the increased cost of material.

5.3 ROAD ACCIDENT FUND (RAF) The mandate of the Road Accident Fund, derived from section 3 of the Road Accident Fund Act (No. 56 of 1996), is the payment of compensation for loss or damage wrongfully caused by the driving of motor vehicles in South Africa.

The Fund's strategic goals over the medium term are to: develop a legislative dispensation that is aligned with the principles of social security, ensure that the organisation is solvent, liquid and sustainable by 2020 and ensure that the organisation is a customer centric, operationally effective and efficient by 2017.

Its most pressing objectives are reducing the number of unfinalised claims, actively promoting and processing direct claims, managing the liability, reducing legal costs, aligning the organisation to current and future service requirements and improving service delivery.

In recent years, the provision for claims incurred has grown substantially due to the number of open claims, a higher average cost of a claim, interest and the reopening of previously finalised claims. The Fund finds itself in a position where it has a large claims backlog.

5.4 SOUTH AFRICAN NATIONAL ROADS AGENCY LIMITED (SANRAL) The South African National Roads Agency Limited was established by the South African National Roads Agency Limited and National Roads Act (No. 7 of 1998). The Act makes the Agency responsible for the planning, design, construction, operation, management, control, maintenance and rehabilitation of the South African national road network, including the financing of these functions. This includes both toll and non-toll roads.

The Agency's main strategic goal over the medium term is to provide effective strategic road infrastructure to facilitate development, commerce, mobility and access. Over the medium term, the Agency will continue with its preventative maintenance approach as it expands its network to the extended mandate of 35 000 kilometres. It will also roll out the Gauteng e-tolling system, and is awaiting ministerial approval to proceed with the implementation of further toll road projects throughout the country.

The Agency's income consists mainly of revenue generated from toll fees and government allocations for the toll road network, as well as government allocations for the upkeep of the non-toll road network. The 78.4 per cent of revenue comes from national government transfers.

5.5 SOUTH AFRICAN CIVIL AVIATION AUTHORITY (SACAA) The South African Civil Aviation Authority was established in terms of the South African Civil Aviation Authority Act (No. 40 of 1998). The Act requires the authority to control and regulate civil aviation safety and security, oversee the implementation and compliance with the national aviation security programme, oversee the functioning and development of the civil aviation industry, and promote civil aviation safety and security.

The Authority is also mandated to promote, regulate, support, enforce and continually improve levels of safety and security throughout the civil aviation industry, which includes safety and security oversight of airspace, airports, aircrafts, operations and personnel. This is to be achieved by ensuring compliance with the International Civil Aviation Organisation Standards and recommended practices in the context of the local environment.

The Authority's main strategic goals between 2012/13 and 2017/18 are to enhance the aviation safety and security environment, and intensify regional and international cooperation. The International Civil Aviation Organisation (ICAO) compliance audit will take place in this financial year. A major challenge faced by the entity is the attraction and retention of core skills to the industry.

5.6 SOUTH AFRICAN MARITIME SAFETY AUTHORITY (SAMSA) The South African Maritime Safety Authority was established by the South African Maritime Safety Authority Act (No. 5 of 1998). It is mandated to promote South Africa's maritime interests, ensure the safety of life and property at sea, and prevent and combat the pollution of the marine environment by ships.

The Authority's main strategic goal over the medium term is to continue improving maritime safety and security and contribute to the transformation and expansion of the maritime industry which involves developing the relevant skills for the sector and raising awareness in government and society about maritime issues

Challenges experienced by the entity are increased frequency of incidents involving uninsured and substandard ships, flouting of mandatory safety requirements, the speed of processing required enabling legislation and the ratification of international and regional instruments. Funding for Emergency Casualty Response remains a big challenge at approximately R1,2 million per day with no clear arrangement of where the funding should come from and bearing in mind that the casualty response infrastructure (mainly the response vessel) has reached its end of life.

Other challenges are that the maritime communications infrastructure and governance systems have reached the end of useful life, access to port and port infrastructure to support the casualties is inadequate, regional capability in enforcing the environmental standards is inadequate to deal with oil spills emanating outside the borders, as well as substandard ships that cause problems around the South African coastline and the non ratification of International Instruments aimed at mitigating maritime pollution incidents.

6. KEY FINDINGS The Committee formulated its findings in the context of the 2003 National Household Survey on Public Transport which found that: 6.1 Communities in South Africa found transport expensive, unsafe and unreliable. They further said that it took too long to travel due to congestion and unscheduled transport. 6.2 There was a lack of integrated transport infrastructure with long periods experienced for interchange between the modes of transport.

7. OBSERVATIONS In its Strategic Planning Workshop, the Committee raised what it had observed through its study tours and oversight visits: 1. The non-alignment of some core functions of the Department under other Provincials Departments such as roads, which falls under the Public Works Department in the Eastern Cape and maritime which falls under the Department of Economic Development in KwaZulu-Natal. This situation is creating challenges with regard to the oversight functions of the Committee, as well as with the alignment of programmes and models with the Department of Transport. 2. The uneven levels of performance between the Department of Transport and its entities in instances where the entities were outperforming the Department. This created a situation where the Department was following rather than leading. The Committee also observed that the support system of the Department was not matching the needs of the entities. 3. The allocation of financial resources does not meet the needs of the Department, such as the Rural Transport Plan which was approved by Cabinet, but not funded by National Treasury, thus creating challenges of inadequate transport for rural communities. 4. The Committee observed a lack of a uniform approach in addressing pothole repairs and road maintenance, including the relationship of S'hamba Sonke to poverty reduction and job creation, as well as the improvement of access roads to schools, clinics, hospitals, police stations and places of worship. 5. The Committee further noted the lack of a transport subsidy that targets commuters, as opposed to service providers, as the current subsidy does not cover all transport modes, therefore having no impact on making all modes of transport accessible to the poor. 6. The Department focused more on policy formulation and less on coordination and the development of an integrated transport master plan, as well as the transport development model. 7. The Committee was concerned about the inability of low-fare airlines to sustain themselves in South Africa. 8. The Committee noted that some transport modes were not accessible to people with disabilities. 9. The Committee noted that a lack of proper intercom systems and electronic signage at train stations were causing frustration and anger for commuters. 10. The Committee noted the lack of pedestrian bridges to schools, as highlighted by the Department, and the lack of a uniform approach to road maintenance. The Committee reiterated that quality control and an accreditation system for road repairs should form the basis for road maintenance. 11. The Committee noted the lack of information on Shova Kalula and queried the Department's decision to have the manufacturing sites in urban areas while the project was targeted at rural areas. 12. The Department declared 2013 the Year for Maritime, but the Committee expressed its dismay that this was only communicated to it in April 2013. 13. Policy formulation in the Department took too long. The maritime and scholar transport policies have not been finalised after 5 years. 14. The Committee remained concerned that some provinces were not using S'hamba Sonke funding for its intended purpose. 15. The Committee noted that each transport entity contracted consultants to formulate its own cooperative development plans. The Committee will explore ways to align these plans while the Department identifies a niche market within industry for cooperative development, prioritising those aimed at reducing poverty and creating employment with the aim of the exiting of poor families off social development grant and indigent registers.

8. RECOMMENDATIONS The Committee recommends that the Minister ensures the following for the 2014/15 financial year: 1. Reviewing the institutional arrangements so that the core business of transport falls under the Department of Transport, even at provincial and local government level. 2. Developing a measurable strategy for reducing road accidents. 3. That National Treasury increases its financial allocation for the Rural Transport Plan. 4. The prioritizing of pothole repairs, road maintenance and access roads to public facilities in the context of community development to address unemployment and reduce poverty. 5. The establishment of a passenger-based transport subsidy. 6. Building internal capacity in engineering as part of the Department's skills development programme. 7. Reducing the duration of the Department's policy making process. 8. The Department should investigate means to make it more attractive for low-fare airlines to survive in the South African business environment. The Department should also place universal access of transport to all high on its agenda and ensure accessibility of all modes of transport to the poor. 9. The Passenger Rail Agency of South Africa has to ensure that proper intercom systems and electronic signage are installed at all its stations to improve its communication with commuters. 10. The Department should follow up on (1) the proposed plan of escalating driver training to ensure that learners obtain driving licences by the time they matriculate and (2) the conditional licensing of newly qualified drivers.

Report to be considered.