AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON TRANSPORT ON THE
PERFORMANCE OF THE DEPARTMENT OF TRANSPORT FOR THE 2011/12 FINANCIAL YEAR,
DATED 23 OCTOBER 2012.
The Portfolio Committee on Transport, having assessed the service delivery performance of the Department of Transport, reports as follows:
The mandate of the Committee is to consider legislation referred to it and to consider all matters referred to it in terms of legislation, the Rules of Parliament or resolutions of the House. The role of the Committee is to represent the people and to ensure that government fulfils its service delivery mandate.
Section 77(3) of the Constitution stipulates that an Act of Parliament must provide for a procedure to amend money bills before Parliament. This constitutional provision gave birth to the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009). The Act gives Parliament powers to amend money bills submitted by the Executive whenever the Executive deems it is necessary to do so. The Act therefore makes it obligatory for Parliament to assess the Department’s budgetary needs and shortfalls against the Department’s operational efficiency and performance.
2. THE DEPARTMENT OF TRANSPORT
This review seeks to establish whether the Department has achieved its aims and objectives, as set out in the 2011/12-2013/14 Strategic Plan, as well as whether it continues to fulfil its constitutional mandate. The focus will be on highlighting the key achievements made, as well as challenges encountered during the 2011/12 financial year, as reported in the Department’s Annual Report.
The review of the Annual Report is in accordance with
section 55(2) of the Constitution of the
3. LEGISLATIVE MANDATE OF THE DEPARTMENT
The Department is entrusted with maximising “the contribution of transport to the economic and social development of [the] country by providing fully integrated transport operations and infrastructure”. The main roles of the Department and its public entities in relation to the transport sector are:
· Policy and strategy formulation in all functional areas;
· Substantive regulation in functional areas where the Department has legislative competence;
· Implementation in functional areas where the Department has exclusive legislative competence;
· Leadership, coordination and liaison in all functional areas;
· Capacity building in all functional areas;
· Monitoring, evaluation and oversight in all functional areas; and
· Stimulating investment and development across all modes.
The Department strives to “lead the development of efficient integrated transport systems by creating a framework of sustainable policies and regulators and implementable models to support government strategies for economic, social and international development”.
5. GOVERNMENT STRATEGY AND OBJECTIVES
The transport sector is increasingly seen as a key contributor
· Infrastructure development;
· Repairing the road network;
· Job creation;
· Filling of all funded vacant posts; and
· Implementing the Comprehensive Rural Development Programme.
6. DEPARTMENT’S KEY STRATEGIC OBJECTIVES
The Department’s strategic outcomes are:
· Providing an efficient and integrated transport infrastructure network for social and economic development;
· Providing a transport sector that is safe and secure;
· Ensuring improved rural access, infrastructure and mobility;
· Providing improved public transport systems;
· Ensuring increased contribution to job creation; and
· Increasing contribution of transport to environmental sustainability.
7. MEASURABLE OBJECTIVES AND OUTCOMES OF THE DEPARTMENT OF TRANSPORT
7.1 Measurable objectives
In its commitment to discharging its mandate effectively and efficiently in 2010/11, the Department re-organised itself into the following programmes:
· Programme 1: Administration;
· Programme 2:Integrated Transport Planning;
· Programme 3: Rail Transport;
· Programme 4: Road Transport;
· Programme 5: Civil Aviation;
· Programme 6: Maritime Transport; and
· Programme 7: Public Transport.
The following outcomes have been identified to guide and enable the Department to deliver on its mandate:
· Outcome 1: An efficient and integrated transport infrastructure network for social and economic development.
· Outcome 2: A transport sector that is safe and secure.
· Outcome 3: Improved rural access, infrastructure and mobility.
· Outcome 4: Improved public transport systems.
· Outcome 5: Increased contribution to job creation.
· Outcome 6: Increased contribution of transport to environmental sustainability.
8. ANALYSIS OF THE 2011/12 ANNUAL REPORT OF THE DEPARTMENT OF TRANSPORT
During the reporting period, the Department institutionalised the management of the Durban-Free State-Gauteng Logistics and Industrial Corridor. This Corridor is part of the 17 Strategic Integrating Project approved by the Presidential Infrastructure Coordinating Commission as a flagship in the management of a coordinated approach to delivering key economic infrastructure.
The Department hosted a Maritime Black Economic Empowerment
(BEE) conference in
The Policy for the Road Accident Benefit Scheme (RABS) was finalised and approved by Cabinet on 7 September 2011. The RABS Policy was published in the Government Gazette on 21 November 2011 for general information. The Road Freight Strategy was finalised. Similarly, the National Transport Master Plan and its Action Agenda were finalised.
The National Ports Consultative Committee (NPCC) for the National Ports Act (No. 12 of 2005) was launched in September 2011 and the Department hosted all quarterly meetings of the Ports Consultative Committees. These consultative forums are aimed at enabling the ports authorities to indicate ways and means of doing business.
A total of 53 000 passengers were transported on the Rea Vaya and My Citi Bus Rapid Transit (BRT) systems, with Rea Vaya accounting for 42 000. Rustenburg, eThekwini, Tshwane
In line with section 100(1)(b) of the Constitution, the Department was part of the intervention team working in the Limpopo Department of Roads and Transport and Free State Department of Safety, Roads and Transport. The tasks included the turnaround strategies in the financial and general administration, as well as quality assurance in the delivery of services, particularly the rollout of infrastructure and public transport operations. The programme required the Department to seek additional resources and therefore virements and rollovers from less performing projects as these became necessary.
8.2 AREAS OF UNDER PERFORMANCE
8.2.1 Transport Planning Forums
At the time of the tabling of its Annual Report, the
Department reported that out of the nine transport planning forums that it had
undertaken to establish during the year under review, eight had actually been
8.2.2 Leading the Coordination of the Development of the North-South Corridor
The Memorandum of Understanding (MoU) was not signed by seven member states. The explanation provided was that there had been a “need for consultation as many other Government Departments will directly be affected”.
8.2.3 Investor Relations and Investment Promotions
During the reporting period, the Department had undertaken to hold roundtable discussions focusing on each transport mode with a view to attracting investors and marketing the projects. However, at the time of tabling its Annual Report, the Department reported that the roundtable discussions had not taken place as they had not been budgeted for.
8.2.4 Global Competitiveness Study Final Report
The report on the global competitiveness study could not be finalised owing to the fact that the supply chain management process took too long to finalise the appointment of the service provider.
8.2.5 Appointment of the Broad-Based Black Economic Empowerment (B-BBEE) Charter Council Members
At the time of tabling its Annual Report, the Department reported that the appointment of the B-BBEE Charter Council members had not happened as the appraisal of the Minister on the issue and the sourcing of funds was pending.
8.2.6 Verification of Nine Provincial Transport Departments
The provinces could not be issued with verification certificates because there were delays in the execution of the project due to the lack of funding.
8.2.7 Review of the Innovation and Technology Research Strategy
The review of the Innovation and Technology Research Strategy was put on hold as a result of the extended sick leave for the responsible official.
8.2.8 Average Turnaround Time to Eliminate Potholes Reported through the Hotline
The project to establish a pothole hotline was not implemented because the budget for this purpose had not been approved. Consequently, there was no effective monitoring of the turnaround time for the repairs of potholes during the period under review. However, as a long-term solution to pothole problems, the Department has undertaken that as of 2013/14, the Road Maintenance Grant allocations will be prioritised based on road condition assessment data.
8.2.9 Rolling out of the Non-Motorised Transport (NMT) Infrastructure
During the reporting period, the Department had set itself a target of rolling out NMT infrastructure in six municipalities. However, this did not take place and the Department reported that this was due to the fact that no budgetary provision had been made.
8.2.10 Number of Rural Schools Receiving Bicycles for Learners
The Department had undertaken to distribute 5 000 bicycles to learners in rural schools. However, at the time of tabling its Annual Report, the Department reported that only 900 bicycles had been distributed. It argued that this stemmed from the fact that the budget had not been approved for the period under review. It further stated that, in effect, these bicycles had been meant for COP 17 and were only issued after the completion of the event.
8.2.11 Implementation of enabling legislation for the roll out of Administrative Adjudication of Road Traffic Offences (AARTO)
The target could not be met owing to the lack of funds and buy-in from stakeholders.
The Department had undertaken to roll out 20 per cent of the learner’s and driver’s licences programme to schools. However, at the time of tabling its Annual Report, it reported that only 2.3 per cent of the programme roll out had been achieved. The Department contended that it “could not finalise the implementation”.
8.2.13 Consultation and Finalisation of the Draft Skills Development Strategy
While the consultation took place, the Skills Development Strategy aimed at increasing the pool of seafarers with appropriate training and qualifications could not be finalised due to capacity constraints.
8.2.14 Draft Maritime Policy
Although the terms of reference for the Draft Green Paper on Maritime Shipping Policy was drafted, the Draft Maritime Policy could not be produced owing to budgetary constraints.
9. FINANCIAL MANAGEMENT
For the sixth consecutive year, the Department received an unqualified audit opinion. Matters of emphasis were, however, identified by the Auditor-General pertaining to the following:
· The Department under-spent its budget by R320.9 million against the revised budget for the year of R41.5 billion, translating into an under-expenditure by 0.8 per cent. A transfer payment from the Public Transport Infrastructure and Systems Grant amounting to R191.7 million was withheld.
· Fewer taxis were scrapped than budgeted for, resulting in under-expenditure of R23.3 million which was shifted within the programme and across programmes to fund the expenditure needs. Savings on accommodation costs amounted to R31.1 million, of which R22.9 million was shifted within and across programmes to fund other projects.
· Projects amounting to R104 million were delayed or could not be implemented. Savings of R16.4 million were realised on goods and services and R2.3 million on capital expenditure. Compensation of employees was under-spent by R5.7 million due to posts that could not be filled and R0.8 million was saved on foreign membership fees.
· The accounting officer did not take effective and appropriate steps to prevent irregular expenditure, as per the requirements of section 38(1)(c) of the Public Finance Management Act (No. 1 of 1999).
10. HUMAN RESOURCES
By the end of March 2012, the Department had 765 (677:2011) posts on its establishment and 512 (524: 2011) were filled. The vacancy rate stood at 33.7 (22.60: 2011) per cent. The highest vacancy rate was in Programme 6 (Maritime Transport) which stood at 47.22 per cent. This was followed by Programme 3 (Rail Transport) which stood at 41.67 per cent. The Integrated Transport Planning Programme had the lowest vacancy rate at 21.54 per cent. The main reason for staff leaving the Department was said to be as a result of transfers to other public service departments. A second major reason was resignation but it was not stated why staff members were resigning. The Department employed nine persons with disabilities, translating into 1.75 per cent of the total workforce. Of these, four were African (two females and two males) and five were White (all females).
11. TECHNICAL ASPECTS OF THE REPORT
The Report is credible and presented in a clear and logical fashion. However, the performance targets for the Department are not time-bound. The absence of time-frames or deadlines for delivery makes it almost impossible to establish whether the Department achieves its aims and objectives and to hold it to account. There are also instances in the Report where the Department failed to meet the performance targets. The reason that is repeatedly advanced in this regard is that funds were not available or that there was reprioritisation. This is a cause for concern because it suggests poor planning on the part of the Department during the formulation of its Strategic Plan. In an endeavour to avoid this anomaly in future, the Department should ensure that the performance targets that it sets itself adhere to the SMART principle. An additional concern is the report on a lack of capacity in a number of programmes. The Department should evaluate its organisational structure to ensure that it has the appropriately skilled personnel to fulfil its mandate.
As at 31 March 2012, the end of the fourth quarter and the 2011/12 financial year, total expenditure for the Department amounted to R41.196 billion and this represents 99.23 per cent of the total adjusted budget of R41.517 billion. A total of R321 million or 0.77 per cent was under spent in the same period. Although, expenditure as depicted above is in line with benchmarked drawings, the Department experienced faster and slower than expected spending trends in certain budget programmes and economic classification categories due to the finalization of the programme budget structure change within the organization.
· Programme 1: Administration: Programme expenditure amounted to R276.499 million or 91.89 per cent of the total available budget of R300.909 million for the 2011/12 financial year. Savings in the programmes were due to less-than-anticipated expenditure on office accommodation as the other tenant did not vacate the building as planned. Under expenditure was also due to the PABX which was not replaced as planned.
· Programme 2: Integrated Transport Planning: Expenditure was reported at R92.386 million or 69.34 per cent of the total available budget of R133.238 million. Under expenditure in the programme was largely due to delays in the roll out of the National Travel Household Survey because critical outcomes from the Census 2011 were necessary to initiate the project. Due to capacity constraints, the Department could also not implement the freight optimization plan.
· Programme 3: Rail Transport: Programme expenditure totalled R9.532 billion or 99.91 per cent of the total available budget of R9.541 billion. Under expenditure is attributed to delays in the implementation of the following projects: development of Rail Policy and Act, establishment of Rail Economic Regulator, and the industry development and institutional reform.
· Programme 4: Road Transport: Expenditure in this programme totalled R21.729 billion or 99.98 per cent of the total available budget of R21.734 billion. Under expenditure is attributed to the savings in compensation of employees, goods and services as well as on capital expenditure.
· Programme 5: Civil Aviation: Programme expenditure was less than expected at R64.989 million or 89.64 per cent of the total available budget of R72.502 million. This significant under expenditure is attributed to the delays in the establishment of the Aviation Safety Board and the Committee to appeal such decisions, delays in drafting the White paper on Civil Aviation Policy and the review of the Civil Aviation Strategy.
· Programme 6: Maritime Transport: Programme expenditure amounted to R138.857 million or 99.03 per cent of the total available budget of R140.223 million. Under expenditure is attributed to the delays in the procurement of the Local User Terminal.
· Programme 7: Public Transport: Programme expenditure totalled R9.362 billion or 97.56 per cent of the total available budget of R9.596 billion. Under expenditure in the programme is attributed to the Taxi Recapitalisation Programme as there were fewer-than-anticipated taxis scrapped and the PTIS funds which were not transferred to the City of Cape Town; the funds were withheld due to significant under expenditure.
· Current payments: Expenditure on current payments amounted to R1.149 billion or 90.07 per cent of the available budget of R1.276 billion. Under expenditure in this economic classification is due to spending challenges experienced in the Department due to budget structure changes that have significantly delayed the implementation of projects in different programmes, as mentioned above in programme expenditure such as the National Household Travel Survey, and Development of the National Land Transport Systems. These affected spending on the goods and services budget and compensation of employees.
and Subsidies: Expenditure on transfers and subsidies
(capital and current transfers) amounted to R40.044 billion or 99.52 per cent
of the total available budget of R40.238 billion. Under expenditure is due to
less-than-anticipated expenditure in projects like the Taxi Scrapping, PTIS
fund to the City of
Due to the structure change in the Department, there has been evidence of slow spending, particularly in the Maritime and Aviation programmes and as a result, funds have been shifted out of these programmes.
Virements for the period included:
· Shifts from Programme 5: Aviation. R4.5 million from Goods and Service to Transfers to
· R5.5 million from Goods and Service to Transfers to Civil Aviation Authority;
· R1 million from Goods and Service to Transfers to Civil Aviation Authority;
· Shifts from Programme 6: Maritime. R5 million from Goods and Service to Transfers to Maritime Safety Authority;
· Shifts from Programme 7: Public Transport. R5.5 million to transfers to SANTACO;
Shift within Programme 7: Public
Transport. R55 million to transfer to
· Shift with programme 5: Civil Aviation: R2 million to increase transfer payment to SACAA.
The Committee made the following observations about the 2011/12 Annual Report of the Department:
13.1 The Annual Report of the Department was silent on skills development strategies for the transportation industry.
13.2 The Report from the Department did not to talk to the establishment of bicycle manufacturing plants or assembly plants for Shova Kalula in rural areas. The Committee is concerned that should the focus of the Department be on the establishment of plants in urban and not rural areas, the Department would not be addressing job creation, skills development and poverty reduction.
13.3 The targets set by the Department did not speak to some of the critical transport challenges faced by the majority of South Africans that were identified in the 2003 National Household Travel Survey. These included reducing the cost and duration of travel.
13.4 The Department did not have a strategy for making air travel accessible by the poor and it did not address the challenges faced by low-fare airlines.
13.5 The Department took time to finalise policies and, more often, the funds budgeted for this purpose were shifted to other programmes.
14.1 Aviation Transport
The Committee noted that the under expenditure in aviation transport was attributed to the delays in the establishment of the Aviation Safety Board and the committee to appeal such decisions, delays in drafting the White Paper on Civil Aviation Policy and the review of the Civil Aviation Strategy. The Committee is concerned that delays in these areas might negatively affect aviation safety. The Committee recommends that the Minister should ensure the finalisation of the establishment of the Aviation Safety Board and committee, as well as the White Paper on Civil Aviation Policy and the review of the Civil Aviation Strategy within six months from the adoption of this report by the Assembly.
14.2 Skills Development
The Committee noted a skills shortage in road maintenance at provincial and local government level. The Minister should ensure that the Department of Transport considers establishing programmes that would assist provinces with the development and retention of skills for the transportation industry. The Committee also recommends that the Minister should consider partnering with training institutions, for instance, the Public Administration Leadership and Management Academy (PALAMA) and Further Education and Training (FET) colleges to increase training and skills development.
14.3 Legislative Review
The Committee is concerned that the Administrative Adjudication of Road Traffic Offences (AARTO) and the Road Traffic Management Corporation (RTMC) were currently facing challenges in terms of funding and this had a negative effect on how the AARTO and RTMC operated. There was therefore a need for the Minister to prioritise the amendment of enabling legislation for the RTMC to execute its mandate. The Committee recommends that the Minister overhauls the National Land Transport Act (No. 5 of 2009) to create a conducive environment for the RTMC to function optimally within six months of the adoption of this report by the Assembly.
14.4 Public Transport
The Committee is of the view that the Minister should consider reviewing the reasons why some modes of transport are subsidised while others are not. The Committee recommends that the Minister should ensure that the focus is placed on subsidising passengers and not modes of transport to allow all modes of transport to be accessible and cost effective.
Report to be considered.