-Department of Transport
Department of Public Enterprises
- Metrorail

Funding philosophy
Bid/Contract Amount
Income Generation
Cost Control
Shareholder' S return

Bid/Contract amount
Fixed bid for 4yrs since 1999
- Only 9% escalation in revenue
-7% escalation in baseline expenditure
-Includes subsidy & 10% management fee
Indirect & government funding
No assets ownership - no influence and control on control funding

Income generation
Fare ticket sales & other income
Incomplete fare revenue - fare evasion, poor access controls
Unreliable service - cable thefts, aged rolling stock, outdated technology, etc
loss of market share - crime, vandalism, safety risks to commuters, etc

Cost control
High fixed costs operation
Focussed control on non-core expenditure
IIP & PE - reduced dependency on subsidy of approx. R156m
Challenge - rising maintenance, safety & security costs

Shareholder' s return
Fare Revenue(R777.8m)
Other Income (R90.4m)
Subsidy(R 1,148,4m)
Transnet Returns( R161,4m)
Operational Expenditure(R1.836m)

Major funding challenges
Stretched profitability targets against
-Fixed bid
-Continuously declining subsidy
-Rising maintenance, safety, security & other direct cost
A once-off management fee deduction of R78m during 2001/02
No control on capex- investment backlogs
No access to NDOT nor Treasury