Portfolio Committee on Transport

Draft Minutes of the Proceedings


Date: 28 February 2007
Venue: S35, First Floor, NCOP Wing
Agenda: Hearings with Road Accident Fund and South African Rail Commuter Corporation on
Budget and Strategic Plan 2007

1.Present
African National Congress
Mr JP Cronin (Chairperson)
Mr MI Moss
Ms LN Moss
Mr SA Mshudulu
Ms ND Mbombo
Ms B Thompson
Mr NE Magubane
Mr PS Gabanakgosi
Ms N Khunou
Mr OM Mogale
Mr Scheemann
Democratic Alliance
Mr SB Farrow
Mr M Swathe
United Democratic Movement
Mr NS Nkabinde
NADECO
Mr BC Ngiba

2. Apologies
Mr BL Mashile

3. The following were in attendance (please see attached attendance list for senior
Managers present)
Mr V Modise: CEO: RAF
Mr L Montana: CEO: SARCC
Ms N Mandindi: CEO: Intersite
Mr A Gernandt: Chief Financial Officer

4. Proceedings

Mr Modise presented strategic plan 2008- - 2010 .The purpose of the meeting was to share
with the Portfolio Committee on Transport the milestones covered, the challenges that need to


be addressed and loopholes that needs to be tightened up. According to the CEO the vision and mission of the Fund has not changed.

Points of highlights were:

Performance review
Strategic Thrusts
Financial Plan
RAF Amendment Act
New Business model
( for a detailed copy please contact committee secretary )

Presentation from RAF

Mr Modise stated that targets set in the previous strategic plan are largely achieved. A reduction in claimant’s costs has not been achieved due to the fact that RAF has limited control over claimants legal and experts’ costs. The number of claims processed has increased substantially .In regard to general damages it is still a major component of claims payments in particular general damages for a large part of high volume low value claims. Claims by foreigners still represent the largest proportion of large claims and the example was given of one claim by a Swiss national, in excess R1, 6 billion.

The liquidity of the fund improved with last year’s R2, 76 billion cash injection, but the fund still remains insolvent. This is driven by a relatively high level of reported claims and the bulk of the current years payment relate to claims from prior years. The liability arising from undertakings alone is estimated at R2, 6 billion in real terms, from outstanding claims other than undertakings it is estimated at R24 billion in nominal terms and stabilizing costs have also been taken into consideration. The Amendment Act of 2005 will come into operation during April 2007,with publication of new of new regulations.

Presentation from SARCC

Mr Montana took the committee through the budget and SARCC strategic plan for 2008-2009.
He gave a brief overview on the process of consolidation between Metrorail and SARCC, which
had been completed on 1 May 2006. He said it was a complex and challenging process. He also mentioned that in recent years there has been an increased in investment of 30% in rail infrastructure, operations and 2010 FIFA World Cup.

He further stated that the state passenger rail is not doing well in South Africa and SARCC is
facing shortages of technical skills and there is a decline in availability of rolling stock. Now that
the passenger rail plan was approved by Cabinet in Dec 2006 SARCC is hoping that the plan will bring significant improvements in customer service. He said the budget and its business plan were only due to be presented on 22 March 2007 and the documents were subjected to changes, nevertheless SARCC was obligated to come and address the committee. The study conducted revealed that there are 2,2 million passenger trips per day, it was only 14,9% of daily public transport trips on an average day and that was not good enough. Now new corridors will be developed in all provinces.

5.Issues raised by Members

The Committee was impressed with progress shown by SARCC and particularly RAF. It was agreed that these entities are beginning to be back on their feet especially RAF. There were a number of questions around backlog of RAF claims, which Members understood would not be erased overnight. Regarding SARCC there were questions on the Shosholoza Meyl operational costs and its possible negative impact when it was consolidated with SARCC. The committee required a progress report on the Centurion alignment of Gautrain.

6.Resolutions
The committee requires as soon as possible a copy of the new Road Accident Fund
regulations.



7.CLOSURE
The Chairperson thanked all Committee Members for their participation and
the meeting adjourned at 13h45.


----------------------------- -------------------
Chairperson Date