Civil Aviation Authority and SA Maritime Safety Authority: briefings

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
6 April 2005
CIVIL AVIATION AUTHORITY AND SA MARITIME SAFETY AUTHORITY: BRIEFINGS

Chairperson: Mr J Cronin (ANC)

Documents handed out:
SA Maritime Safety Authority (SAMSA): Financial Overview
SA Civil Aviation Authority (SACAA): Company Profile
SACAA Annual Report 2003-2004 (available under Publications link at SACAA website)
SACAA PowerPoint presentation

SUMMARY
SA Maritime Safety Authority (SAMSA) officials stressed that South Africa had huge possibilities for exploiting its potential as a maritime nation, based on favourable geographic factors. A coherent and efficient maritime legislation policy was, however, lacking. The cadet scheme for training youngsters from disadvantaged backgrounds was a failure and had been replaced by a learnership programme. The Department of Transport was criticised for lack of strategic leadership in the past. SAMSA’s financial position was sound and it was envisaged that the excessive accumulated reserve be reduced by subsidising the shipping levies that it charged.

SA Civil Aviation Authority (SACAA) officials revealed that there were nearly 9 000 aircraft in operation in South Africa. Accident rates had fallen. Areas of concern as expressed by Members were the conditions on the ground at Polokwane Airport, apparent lack of coordinated security at certain types of airports and the shortage of trained mechanics to service aircraft engines.

MINUTES

South African Maritime Safety Authority briefing
Mr S Msikinya (Chief Executive Officer SAMSA) regretted the fact that South Africans had the perception that South Africa was not a maritime nation. This in spite of the fact that there was a long and illustrious history of major shipping, and that the South African coastline stretched over 3 000 kilometres. Further, South Africa was favourably located on the major trade routes and had maritime zones under its control covering more than one million square kilometres, including that around Prince Edward Island in the South Indian ocean. Landlocked regional neighbours of South Africa also had to be serviced. It was imperative that it promote itself as a maritime nation. Major territorial contests of the future could well be over land that was important for maritime activities. A major challenge for South Africa was to create and implement a coherent maritime legislation policy that was sorely needed and still lacking. Regrettably there was no representative of the fishing industry on the Board of SAMSA. A more efficient, coherent system of maritime policy would better address problems of poaching, safety and pollution.

Mr C Nissen (Chairperson of the Board) cited the example of Liberia that encouraged the flagging of ships, which generated revenue for them. In the Philippines major benefits to job creation were derived from shipping, especially in containers. Jurisdiction over inland waterways such as the Hartebeespoort Dam had to be brought under the control of SAMSA. Fishing vessel safety had been improved through basic training of fishermen.

Mr W Dernier (Executive Manager Operations) pointed out that approximately 1 000 vessels with properly qualified crews were on the South African register, of which only five were large ships (at one time there were 65). Income tax requirements were prohibitive, and if a tonnage tax could rather be introduced, up to 16 additional ships could soon be added, with eventually as many as 100 additional ships. There would be many spin-offs in additional jobs for crew, crew training, provision of victuals, insurance, ship repairs, and money brought into the country. Many initiatives were already underway, such as tonnage tax; ranking on line to improve the position of the banks in the ranking; survey regime; oil pollution damage; amendment of the Merchant Shipping Act; and compulsory insurance for seafarers. Three bills would be submitted to Parliament during 2005. A diplomatic conference relating to terrorism was envisaged. A legal committee on wreck removal was not of major importance for South Africa. The public was ignorant even of the existence of SAMSA.

Mr Msikinya stated that there was no coast guard for South Africa. SAMSA had no jurisdiction over water but only on ships on water up to the high water mark. For inland waters they were often engaged as consultants.

Mr I Blackie (Chief Financial Officer) presented a financial overview. It was clear that the financial position of SAMSA was sound. Income derived predominantly from shipping levies which were kept as low as possible. Expenditure had remained constant over the previous three years, and substantial current assets in cash and short term investments had accumulated. It was proposed to reduce these by subsidising levies as was approved by National Treasury.

Discussion
Mr S Farrow (DA) asked five questions to which different presenters responded:
Mr Blackie explained that the qualified audit report of SAMSA by the Auditor-General came about because of an inefficient communication system. The root of the problem was the Government Pension Fund and staff medical expense benefits transferred from the Department of Transport to SAMSA. Mr Farrow requested a financial statement as soon as possible.

Mr Dernier assured the Committee that redundant anti-pollution equipment was sold through the proper tender procedures. The Smit-Dudula contract was between the Department of Transport (not SAMSA) and that company.

Mr Msikinya announced that the cadet scheme had been done away with because it did not work, that is, the failure rate was too high. Out of thirty learners only seven passed. Many did not even attend classes, so learnerships were being established as an alternative way for transferring skills. SAMSA was poaching crew from shipping companies because they did not have ships of their own on which to do practical training of cadets. It took seven to nine years after school for attaining a master’s certificate.

Mr Nissen explained that the high salary increases had been agreed on with staff on condition that there were no increases for three years. No senior employee had big salary increases.

Mr O Mogale (ANC) asked for the reasons for financial losses, high consultancy fees, how learnership programmes were marketed, and why a qualified report had been given by the Auditor-General.

Mr Farrow asked about the existence of a joint disaster management plan of SAMSA with municipalities, to which Mr Dernier replied that in cases of serious pollution, a joint organising committee was formed on an ad hoc basis, which had always worked very efficiently.

The Chair doubted that the Department of Transport was providing the strategic leadership that was required. The Committee felt that they were uninformed about new bills coming, and deplored the absence of a departmental presence at the Committee meetings.

Mr Nissen announced that the Department of Transport had appointed officials specifically to interact with their agencies such as SAMSA. Re-appointment of members of the Board of Directors of SAMSA had been overdue for some considerable time. Repeated extensions had resulted in a feeling of instability.

South African Civil Aviation Authority briefing
Ms S Reiling (Acting Chief Executive Officer) presented the SACAA regulatory framework, staff profile, strategic intent and budget for 2005/6. Aviation acts were listed, and compliance procedures set out. In spite of a doubling in the number of registered aircraft between 1988 and 2004 the accident rate had declined. Over the same period staff numbers had more than doubled solely due to a fourfold increase in Black employees. Government subsidies were phased out but increased indirect charges on airline tickets were providing an adequate income.

Mr T Naidoo (Chief Financial Officer) explained that SACAA had to undercharge the recreational aircraft industry. They budgeted for reserve capacity to replace their one remaining aircraft. Their reserves were equivalent to one year‘s salary bill. Income was highly sensitive to passenger numbers.

Discussion
Mr L Mashile (ANC) enquired about the rapid rise in staff expenses, to which Mr Naidoo replied that it was due to the growth in the industry to nearly 9 000 aircraft, as well as increased standards of oversight and security.

In response to a question on the Auditor General's qualified audit report, Ms M Mathabathe (Company Secretary) explained that the Auditor General’s qualified finding (late submission) was due to problems with a printer.

Mr R Ainslie (ANC) was concerned about the increase in passenger levies and the apparent divided responsibility for security at airports. Mr S Machobane (General Manager: Air Safety Infrastructure: SACAA) explained that there were about 800 airstrips and airports in South Africa. SACAA inspected the 140 licenced ones, at least twice per year. Nine were run by the Airport Company of South Africa (ACSA) where they, in conjunction with the airport operator, were responsible for security.

Mr Z Thwala (General Manager: Occurrence) stressed that pilots were required to follow standard procedures but that human factors sometimes led to accidents.

Mr Mashile was concerned about some strange foreign aircraft traffic at South African airports.

Ms Mathabathe revealed that there were practical problems on the ground at Polokwane Airport. Licensed airports were highly regulated.

The meeting was adjourned.