Challenges facing Cross-Border Road Traffic Agency & Road Traffic Management Corporation: briefings

Meeting report

Chairperson’s Opening Remarks
The Chairperson explained that the Cross-Border Road Traffic Agency (C-BRTA) and the Road Traffic Management Corporation (RTMC) had been invited to attend this meeting after a workshop had been held to look at an understanding of the strategic plans with regard to the mandate of the Department of Transport, and the relevance of the strategic plan to the mandate of the Department. In essence, the workshop was structured to assess whether the Department was able to deliver on its mandate; if the strategic plans were relevant to the Department; if there was congruence between the strategic plans of the two agencies and those of the Department, and if there were challenges that needed to be addressed.

This workshop also aimed to explore whether there were enough resources in place for the Department to execute its mandate with regard to the Agencies concerned.

The two entities identified in term of weak performance were the C-BRTA and RTMC. In an effort to find a solution to the problem, the Committee, had requested the two Agencies to make presentations today on how they were going to identify the challenges, what their understanding of the challenges were, and how they were going to respond to the challenges. Members of the Boards of the two respective Agencies and their Chief Executive Officers (CEOs) were invited to come up with a turnaround strategy. The Agencies were asked to not dwell too much on the problems, but to rather show how the strategy sought to address the challenges. Agencies had been asked to indicate through their presentations, what interventions they required from the Committee, to assist them with the implementation of the strategies agreed upon by members of boards and the administrative arms of the two entities.

Cross-Border Road Traffic Agency briefing
A board member of the C-BRTA indicated that there was an understanding of the expectations of the Committee, and it would attempt to confine itself to those particular expectations.

Mr Sipho Khumalo, Chief Executive Officer (CEO), C-BRTA, indicated the three key challenges facing the Agency were: the unrealised value of the C-BRTA, the C-BRTA’s recovery plan and enabling the Agency to meet its mandate. The unrealised value of the C-BRTA referred to the value that could have been provided to government, to the Department and to the transport sector in general, but was not realised. It was noted that the C-BRTA was the only regulator in South Africa that did not get any funding from the government. There was an assumption that the C-BRTA would amass funding by selling cross-border permits and through the penalisation of violators of those permit conditions. The funding mechanisms related to cross-border permits and penalties were not adequate to meet the operational costs and capital funding requirement of this Agency. The costs of providing the service far outweighed the revenues generated. This Agency had therefore never been able to provide for more than the bare minimum of the resource requirements, and had been unable to develop the capacity to play a strategic role in driving the agenda of harmonising road transport operations in the South African Development Community (SADC) region. The resulting effect was that the legitimacy of this Agency had been undermined and its capacity to lead in its area of operations had been diminished.

The C-BRTA’s recovery plan was encompassed by five strategic interventions:

•to crystallise the role of the C-BRTA in driving regional integration

•to define the role of the C-BRTA in reducing operational constraints at ‘targeted’ border posts

•championing the development of One-Stop Border Posts

•to actively engage with processes aimed at turning Southern Africa into a regional economic force; and

•to provide technical leadership on the harmonisation of transport models within the SADC region

Addressing funding imperatives were key to adequately responding to the resource requirements for fulfilling the mandate of the Agency. The most important of these funding imperatives was to strategically reposition the C-BRTA to provide strategic and technical leadership in the SADC region. The immediate funding challenges were to obtain the Minister’s approval for the 25% revision of permit tariff fees, and to obtain agreement on the need for a R200 million cash injection over a three year timeframe to enable the C-BRTA to recapitalise itself and to develop secure permit management systems.

Discussion
Mr S Farrow (DA) said that when the C-BRTA had last reported to the Committee, the computers had become obsolete. He asked if the C-BRTA had managed to obtain the maintenance or service agreements for these computers.

Mr Khumalo replied that all the obsolete computers had been replaced, including some of the furniture.

Mr Farrow asked if the Agency’s relationships with other domestic law enforcement offices had been sorted out.

Mr Khumalo confirmed that these relationships were now fully operational.

Mr Farrow asked if the C-BRTA had looked carefully at the location of the Pretoria and Bloemfontein offices in terms of the relocation and redeployment of the 299 staff members at border posts.

Mr Khumalo said that the Agency had not managed to relocate any offices as yet. The Agency was shutting down the Kempton Park office, as it was no longer needed, and integrating the personnel in that office to the Head Office. The offices in Bloemfontein would be relocated as soon as funding was secured, as it did not make sense strategically to keep those offices running.

Mr Farrow said that when one was told that R10 million was classified as wasteful expenditure, it was difficult for the Committee to motivate for additional funds. The Agency should assure the Committee especially in cases where press reports still highlighted the misappropriation of funds.

M M De Freitas (DA) said that people like the Chairman of the Board, needed to account to this Committee, especially in cases where issues like funds paid to the Chief National Officer under questionable conditions were reported in the media, as this kind of activity negated the plans that the CEO was trying to implement.

Mr Khumalo said that the Board Member present would respond to the issue of the absence of the Chairperson. He added that the press release regarding this matter had contained many inaccuracies. It was not true that there was wilful expenditure of R10 million, and that a Board Member had been paid R3 million. The Agency had investigated all those issues and found inaccuracies.

The Board Member explained that the absence of the Chairperson was due to ill health.

The Board Member said that with regard to issues of governance and the Board, it had never been easy to get the institution to the place where it should be as there had been fire fighting from day one. This entity had many problems, which were taking a long time to resolve. It should also not be forgotten that the Board Members were not full time personnel, and had to operate in a manner that showed respect to the various portfolios within the entity. Whenever the Board had been tasked with developing a turnaround strategy, and as soon as this strategy was developed, challenges arose especially with regard to who would take the strategy forward with regard to capacity and resources. And at times there were people in positions who did not have the necessary skills for these positions. Financial resources were also a challenge. One of the Human Capital challenges was the high staff turnover, and Board Members often had to assess who could act within the entity on an ad-hoc basis. The Minister of Transport had to appoint Board Members. The current concern for Board Members was the issue of continuity.

The Chairperson said that the media had a tendency to compose news that would sell newspapers, and this should not be allowed to influence the agenda of the Committee.

Ms P Ngweny-Mabila (ANC) appealed to the Committee not to allow the media to dictate its agenda.

Ms D Dlakude (ANC) emphasised the need to support the C-BRTA, as there was evidence of great improvement in its operations.

Mr De Freitas asked for a copy with the relevant time frames, of the business case for funding a new Cross-Border Road Transport Management System for the Southern African Development Community (SADC) region.

Mr J Maake (ANC) asked for clarification about the entity being a self-funding unit, as he was worried about issues of self-sustainability and the 25% tariff increase.

Mr Khumalo said that the issue of the cash injection of R62 million (not R60 million, but R62 million to be exact) was just to enable the C-BRTA to secure the requisite number of offices and equipment. These would all be once-off payments, except for salaries, which were an ongoing expense.

Mr N Qcwabaza (ANC) noted that the presentation had alerted Members to the very critical role that the Agency had to play in economic development in the country, especially with regard to regional economic integration. It was critical for the Committee to support the turnaround strategy especially in the light of the new trade policy. He asked if the Agency had a mandate to source funding from sources like the Department of Public Service and Administration (DPSA) and in particular, the World Bank where repayments with interest would be required.

Mr Khumalo said that the World Bank would not be keen to finance South Africa for grant funds on its own as a country, as it should be able to fund itself. However, the World Bank would be keener to provide funding for a permit regulation system for the region as a whole, and this was the option that would be pursued by the C-BRTA.

Mr P Poho (COPE) asked for an explanation about the supply chain management and risk management units, and if the 25% increase in tariffs were going to cause unsettlement for the public. He asked further what the 25% meant in real terms.

Mr Khumalo said that there were different rates for different permits, and the 25% increase would be an increase on the amounts already required for permits.

Ms Ngwenya-Mabila asked how the Department of Transport planned to assist the Entities to deal with the challenges presented today.

Mr Deena Pillay, Acting Chief Director: Public Entity Oversight Division, Department of Transport, addressed the subject of the role of the Department in assisting the C-BRTA. One of its strategies for moving forward was to improve the movement of people and goods across border posts. The critical need for infrastructure at border posts was also identified especially for commercial border posts. Following this, the Department had plans to do audit flows, after which specific infrastructural and facility needs would be addressed. Mr Pillay said that the 25% tariff hike had been anticipated, and a solid case existed for presentation to the National Treasury about funding.

Ms Ngwenya-Mabila asked how often the Department had meetings with entities to discuss their challenges.

Ms Thuli Letsoalo, Director: Public Entity Oversight Division, Department of Transport, said that the Department had a Public Entity Oversight Committee which was comprised of the Deputy-Director General for Public Oversight, line functions as well as technical people in the Department. This entity was established in 2006, and it was here that public entities presented their strategic plans for interrogation. Public Entities would then report to the Department of Transport through their quarterly reports. These reports were then sent to the Minister, after which letters were written to the Chairperson of the Board informing him or her of the areas that needed to be improved. The intention of the Department with the C-BRTA, was to have meetings with the CEO of the Entity to provide feedback. There was also a CEO and Director-General forum to discuss the challenges of the entities. This was the entity where the Department could come up with intervention measures to assist the CEO.

The Chairperson expressed full support for the strategy of C-BRTA. The Committee would also closely monitor the implementation of the strategy, and the involvement of the Department in providing backup support to the C-BRTA. The Committee required a follow-up meeting to check the milestones, timelines and the progress made.

The following questions were raised but not directly answered

The Chairperson asked what nurturing role would be played by the Department to assist the C-BRTA to realise its vision.

Mr De Freitas asked how the funding for the increase in personnel would be sourced.

Mr De Freitas asked if with regard to the activities proposed, there were timelines and step-by-step action plans in place on how to achieve the objectives.

Mr De Freitas asked the C-BRTA to unpack the issue of securing funding, in terms of what actions were required to fulfill this task.

Mr De Freitas asked how and from whom the C-BRTA was proposing to securing funding from for supporting their emerging strategic tasks.

With regard to the R200 million cash injection for re-capitalisation, Mr De Freitas asked if the application for such funding was going to be made to the Department of Transport, and if this application was rejected, did the C-BRTA have an alternative plan.

Road Traffic Management Corporation briefing
Mr Collins Letsoalo, Acting Chief Executive Officer (CEO): Road Traffic Management Corporation (RTMC), believed that the organisation should be looking more closely at road deaths and the accompanying statistics, to be better positioned to understand their impact on South Africa as a whole. The challenges for the RTMC were outlined as follows: the lack of controls, weak management structures, the lack of focus on core business, the lack of funding, as there was a shortfall of R70 million rand, and co-operation from other spheres of government with regard to the mandate of the RTMC. The turnaround plan of the RTMC hinged on an approach that would ensure the short-term stability of the Corporation through among other things, reinstating management and governance structures, and introducing financial and operational controls.

The lack of adherence to traffic laws, low skilled drivers and an unsafe infrastructure, were highlighted as the major causes of traffic accidents in the country. The improvement in data collection methods and better institutional arrangements were proposed as key interventions to alleviate the high incidence of road traffic accidents. 

The RTMC would, in an attempt to promote road safety education and communication, propagate the co-ordination of road safety education at schools; institute a professional drivers programme; and train community road safety councils.

Discussion
Mr Farrow said that the presentation by the RTMC was unfocused and scattered. He expressed unease as far as the Administrative Adjudication of Road Traffic Offences (AARTO) was concerned, because two related pilot projects had been introduced, and the Committee had not seen or heard about their success or failure. Unless the Metro Police were informed that the RTMC was going to play the role of the AARTO, it would never be successful. Mr Farrow expressed further unease about the electronic National Traffic Information System (eNaTIS) and whether it was operational or not. The contract for the eNaTIS had expired, and it was supposed to have been transferred to the RTMC, but this had not happened as yet.

Mr Gcwabaza suggested that educational programmes be extended to the public in particular with regard to changing road signs. The public should not add to the problem by removing road signs. Something has to be done about corruption in learner driver training agencies. This could possibly be made part of life orientation skills, to emphasise that it was wrong to buy a license.

Mr De Freitas suggested that because of time constraints the RTMC could submit written answers to the Committee. He said that the presentation was unimpressive to say the least. It had started off with exactly the same presentation that the Committee had received at the Mount Nelson Hotel. It was clear that nothing had been done to solve the problems. What was most shocking was that the Acting CEO of the RTMC did not know what his mandate was and advised him to read the Act. There was nothing wrong with the K53, except that it was not being implemented. The RMTC was in deep trouble. The RTMC should go and work out how to do the basics and report back to the Committee.

Mr Maake asked for clarity on the question of the mandate, and if the RTMC was asking for an extension of the mandate. In addition, he enquired how the RTMC envisaged dealing with occurrences of fraud and corruption.

The Chairperson acknowledged that there was insufficient time to deal with the questions raised, and proposed that the meeting follow Hon De Freitas’ suggestion to obtain written responses from the RTMC.

The Chairperson noted that she was unable to distinguish between the interventions and challenges in the presentation. With the C-BRTA, the Board Member and CEO had participated on equal terms, unlike the situation with the RTMC. The RTMC did not have a governing structure, yet the management seemed to be giving itself a mandate to act.

Mr Pillay said that in April this year the Minister was of the opinion that the Committee members should review their position and indicate whether a new Board should be appointed or not. Subsequently, because of the commitments of the Minister, the meetings hosted were unable to quorate, so a decision could not be taken on having a Board or not. The Department had requested an urgent meeting with shareholders in the next few weeks to discuss among issues the matter of a Board for the RMTC.

The Chairperson reprimanded the Department sternly for initially sitting quietly while the Committee discussed the matter of a Board, as it would have helped if this was highlighted before the presentation was made. The Acting CEO was allowed to present and this created problems in terms of developing an understanding of the processes at play between the Department and the RTMC. The Department was supposed to account to the Committee. How was the Committee supposed to be guided if contrary statements were issued between the Department and an Entity here today?

The Minister would be called to provide clarity to the Committee as the impression created here between the RTMC and the Department was confusing regarding whether a Board may or may not be appointed. The Committee was unaware of who developed this strategy, as management could not be referees and players. The RTMC required the Minister to explain the situation. The Chairperson accused Mr Letsoalo of responding to the question of the Board in an ambiguous fashion.

The meeting was adjourned.