"In the short term, investment and job creation can be accelerated through targeted incentives and job creation programmes; for sustained longer-term growth, interventions required include investment in economic infrastructure, spatial development reforms, and a more effective competition policy. In the short term, immigrant skills may be critical; in the longer term, further education and training yield increasing results. In the short term the distribution and pricing of water and energy resources can be made more efficient, in the longer term new supply capacity has to be built."

The development of targeted infrastructure together with appropriate regulation will ensure that various modes of transport can be competitive and can provide an optimal modal mix for transportation in South Africa. Currently, certain commodities are transported by road, while being more suited to rail transport, because of inefficiencies in the rail system.

Safety improvements across all modes of transport will improve transport efficiencies while reducing the cost of externalities.

Backlogs in road and rail infrastructure needs to be addressed to create sustainable infrastructure as well as to improve safety on these modes of transport.

Access to and the affordability of particularly public transport is essential to facilitate access to economic opportunities and social inclusion.

The reduction in transit times in particularly the freight logistics system will both reduce costs and facilitate a migration to more appropriate modes of transport for the commodities that are transported.

Freight logistics; Public transport strategy; Public entity oversight; Inter-sphere co-ordination; Implementation and monitoring the impact of transport policy; Streamlining the transport regulatory regime; and international co-ordination

The South African economy has grown faster than the rate of investment in transport infrastructure and the development of logistical systems to support effective and efficient freight transportation systems.

For these reasons the freight transport system is currently close to its limits under existing models. The lack of reliability on the rail network, the reliance by many exporters on more costly road freight and the poor throughput at most South African ports is not wholly a consequence of inadequate infrastructure but also linked to outdated managerial and operational practices.

The freight logistics system is under review to inform not only the necessary investment in infrastructure, but also to identify operational improvements to gain maximum leverage in order to eliminate the bottlenecks in the freight logistics system.

Currently over 60% of all commuter traffic is carried by the taxi industry in an ageing fleet. The balance is carried by subsidised rail (22%) with a massive backlog in investment in infrastructure and a bus system (18%) with an often-misaligned route network, resulting in poor subsidy targeting. The commuter taxi service is not currently subsidised, despite carrying over 60% of the traffic.

The Department of Transport welcomes a provision in the Medium Term Budget Policy Statement for resources for a scrapping allowance as part of the taxi recapitalisation programme.

Improved means will be developed to target subsidies and capital investment by gaining an understanding of the transportation needs for various areas, considering an optimal modal mix where appropriate for each area.

Included in the review of public transport is the consolidation of passenger rail services (South African Rail Commuter Corporation Ltd., Metrorail and Shosholoza Meyl). This process was initiated and is underway. In the short term Government is spearheading the development of a rail plan. There is a programme in place involving the South African Rail Commuter Corporation Ltd. and Metrorail for a General Overhaul, which provides for the refurbishment of coaches and maintenance related challenges according to a pre-determined plan with clear delivery milestones.

As part of this initiative, the Department will develop capacity within the Department and support skills development in the transport sector by funding centres of development, bursaries and Learnerships in the transport arena.

The Department began a process of developing a Black Economic Empowerment (BEE) Strategy for the Transport Sector. The BEE Strategy will make a significant contribution towards economic growth, job creation, skills development, poverty alleviation and broad-based economic empowerment. The sector transformation charter is in the process of being finalised, where after Implementation, monitoring and evaluation will follow.

Public Entities resorting under the Department of Transport have also taken up the task of improving and monitoring security aspects as far as possible and are stepping up their plans for regulating security as well, where applicable. The South African Rail Commuter Corporation, in collaboration with the National Treasury, South African Police Services (SAPS) and the Department of Transport, approved the partial funding of a pilot project to provide rail security services by the SAPS. The Airports Company of South Africa Ltd. invested in security related infrastructure and already created capacity to oversee security at airports.

The Department plans to expand economic regulation across the transport sector where applicable and eventually to consider creating a transport economic regulator for all modes of transport.

The National Ports Bill, currently before Parliament, is moving towards the direction of economic regulation.

Currently the transport sector has a number of safety regulators, but economic regulation exists only in the aviation sector to regulate tariffs charged by the Airports Company of South Africa Ltd. and the Air Traffic and Navigation Services Company Ltd.

The restructuring of the Road Accident Fund has started and has two mail elements:

In terms of the Road Infrastructure Strategic Framework, about 7900 km of provincial roads will be reclassified and taken over as National roads. To date, 2230 km of Provincial roads were already taken over by the S.A. National Roads Agency Ltd. (SANRAL) and incorporated as National roads, which includes over 100 bridges. National Treasury provided limited funding for these roads while no function shift of funds took place to transfer the related budgets for these roads from Provinces to the National budget for roads.

Provinces cannot maintain these roads properly because of a lack of adequate resources. SANRAL took over these roads to prevent the further deterioration of the roads. The Medium Term Budget Policy Statement provides for additional funding in the outer year of the MTEF for these roads, but in the interim SANRAL effectively took on an additional burden without securing funding for these roads.

Provinces, through the Premier, should make a request to the Minister of Transport to take over a particular road or section of a road and should also indicate the budgeted amounts that should be shifted as a functional shift to the Department of Transport.

The Department of Transport was able to secure once off funding to revitalise some marginal branch rail lines. Spoornet discontinued services on these rail lines because the lines are not profitable to Spoornet, but they are vital to resuscitate local economies and add value to the overall development of South Africa.

The once off funding does not provide for the rendering of services or the ongoing maintenance of these rail lines, which could render these lines as continuing to be unprofitable to Spoornet and therefore unsustainable. A permanent solution must still be found to render these lines sustainable.

The provision of access roads, revitalisation of rail branch lines and provision of public transport are vital to ensuring that the Government objectives of supporting urban renewal and rural development are taken forward.