SOUTH
AFRICAN MARITIME SAFETY AU'IHORITY
F2008 BUDGET: EXPLANATORY NOTE FOR THE FINANCIAL YEAR ENDING 31 MARCH 2008
1 Introduction
1.1 This document is submitted in support of SAMSA's F2008 budget Its main
purpose is to explain how the budget addresses SAMSA's statutory mandate and
strategic objectives for the period 1 April 2007 to 31 March 2008 (F2008).
1.2 In particular, the document highlights the current deficit situation facing
the organisation and the challenges that this presents for the organisation's
sustainability going forward. A solution is proposed that requires reasonable
tariff increases and the preservation and writing back of cash reserves over
the short to medium term to move the organisation rapidly to a more sustainable
balance between revenue and expenditure.
2 Statutory mandate
2.1 SAMSA's core mandate, and mission, is given in section 3 of the South
African Maritime Safety Authority Act 1998. This mandate requires that SAMSA
(1) ensure the safety of life and property at sea, (2) prevent and combat
pollution from ships, and (3) promote South Africa's maritime interests.
2.2 The first two elements of the mandate are relatively straight forward,
essentially requiring that SAMSA carry out its administrative responsibilities
under the several safety and pollution laws entrusted to its administration,
and example being its responsibilities under the Merchant Shipping Act 1951.
Much of the budget is concemed with ensuring that SAMSA is able to carry out
these core administrative responsibilities.
2.3 The third element of the mandate is more problematic, mainly because of the
broad way in which it is framed. The strategic and operational challenge here
is to give specific content to this element and, for F2008; this will be
achieved through several programmes that are explained more fully under
"Strategic initiatives" below.
3 Strategic initiatives
3.1 SAMSA's strategic plan gives SAMSA its vision - namely "to be a
leading maritime authority globally" - and sets out how, in executing its
mission, this vision will be achieved:
1 by ensuring maritime safety and security;
2 by preventing and combating pollution from ships;
3 by raising awareness of maritime opportunities and obligations;
4 by ensuring a coherent and productive maritime policy in order to facilitate
and promote South Africa's maritime interests; and
5 by building a committed, transparent, professional and sustainable
organisation.
3.2 The strategic plan also sets the achievement of this vision in a global
dimension, requiring that SAMSA execute its mission by acting locally,
regionally (i.e. in Africa), and internationally. How, then, does Budget F2008
support this strategic intent?
South Africa
3.3 First, looking at the local dimension, SAMSA's activities for F2008 will
have both an internal and external focus and will be informed by the following
key initiatives that are covered by Budget F2008:
Building the capacity of the organisation
3.3.1 One of SAMSA's key challenges going forward is to sustain and strengthen its
internal capacity to deliver its core mandate and responsibilities. While
significant progress has been made in addressing technical capacity, there is
also a clear need to expand training and development initiatives into
supporting areas and disciplines, for example into the fields of general
maritime administration and general management. The emphasis here will be to
strengthen significantly the organisation's capacity to think and act more
strategically in relation to those maritime matters that have significance for
South Africa.
This capacity is key to being able to influence more effectively, and to have
an impact on, developments particularly at the international and regional
levels and, closer to home, in our own maritime industries. The initiative is
consistent with the commitment given by the Board at the last annual general
meeting, where government's expectations of an expanded role for SAMSA, in
supporting maritime initiatives internationally, regional and locally, were
tabled and discussed.
The initiative, then, sets as its main aim building sustainable expert and
leadership capacity, and depth, within the organisation through training and
development, taking into account succession planning and employment equity
considerations. Supporting aims cover the establishment of a scholarship
programme, to encourage and support studies in maritime-related fields; a
research programme, to complement and strengthen the organisation's research
capacity; and redeployments in the Operations Division to create a dedicated,
and more strategically oriented, technical support team. The key aspects of
this initiative are covered by the following budgetary provisions:
1 Training budget (R1, 428,910= 2.5% of salary cost): This item also covers 1
placement at the IMO International Maritime Law Institute (IMLI) in Malta.
Additional placements at the IMO World Maritime University in Malmo, Sweden,
will also be explored but, because of timing around admissions, it is unlikely
that full placements will happen during the budget period This item also covers
special training for the 2 MRCC chief trainees (in the Maritime Rescue
Co-ordination Centre) to be recruited during the budget period.
2 MRCC trainees: Provision is made for 2 additional trainee posts in the MRCC.
Accordingly, 2 MRCC chief trainees will be recruited to address succession
planning and employment equity considerations in the top management structure.
Because of the highly specialised nature of MRCC work and the general absence
of an appropriate skills pool, SAMSA has decided to develop suitable candidates
itself, using the expertise it currently has. The aim is to ensure that
critical skills and knowledge are transferred before these are lost to the
organisation.
3 Partnership programme (R150k): SAMSA has established partnership arrangements
with 2 of the world's leading maritime authorities, the Danish Maritime
Authority and the Singapore Maritime and Port Authority. This item covers
training and exchange placements with these organisations.
4 Internship programme (R150k): This item is intended to provide experiential
exposure for students and graduates through short term placements with SAMSA.
The programme will also be used as a vehicle to identify talent for future
recruitment into the organisation.
5 Scholarship programme (R350k): This is a new item that is principally
externally focussed and intended to provide educational assistance for
undergraduate and postgraduate studies in maritime and related fields. The
intention here is to build the broader pool of maritime-related expertise and,
again, the programme will be used as a vehicle to identify talent for future
recruitment into the organisation. A further anticipated benefit of this
programme is the value that can be extracted from research output, particularly
at the postgraduate level. While SAMSA is committed to the ongoing funding this
programme, the intention going forward is to seek supplementary funding from
the Maritime Fund and possibly the maritime industries.
6 Research programme (R350k): This is also anew item The programme addresses
the concerns of the Minister's-representative expressed at the last annual
general meeting that SAMSA should strengthen its research capacity, and develop
a research agenda, to inform and support government's maritime initiatives both
locally and abroad. While SAMSA is committed to the ongoing funding of this
programme, the intention going forward is to seek supplementary funding from
the Maritime Fund.
7 Technical support team: There are no significant additional costs associated
with this initiative. The team will be made up through the redeployment and
filling of certain vacancies and the redeployment of other existing staff
within the Operations Division. The team is being set up to provide critically needed
high-level strategic (policy and standards) support to the organisation and
particularly its operations functions. The Team will also be positioned to
playa leading role in strengthening SAMSA's technical research capacity and the
quality of SAMSA's participation at the regional and international levels,
particularly at bodies such as IMO.
Maritime operations (safety, health and environment)
3.3.2 Key initiatives in the operational environment will be delivered through
the work of the Occupational Health and Safety Unit (OHS). The initiatives
cover the following areas: fishing vessel safety, stevedore safety, seafarer
labour standards and welfare, and casualty investigation.
3.3.3 A stevedore safety specialist has recently joined the unit and the unit's
budget has been adjusted to cover its expanded role in this sector. The unit's
work in this sector will be informed largely by the legislative changes around
stevedore safety that have been completed by SAMSA and are currently awaiting
Ministerial approval.
3.3.4 The other work of the unit, in the fields of fishing vessel safety,
seafarer labour standards and welfare (where SAMSA is playing a particularly
active role internationally, at IMO and ILO, but also locally), and casualty
investigation are adequately resourced in the budget. In particular, casualty
investigation receives special attention this year with R200k being set aside
for training in this discipline. Work in the welfare field, particularly around
drug and alcohol abuse and HIV / Aids, will continue and has been appropriately
resourced with ''HIV / Aids awareness", for example, receiving R40k.
3.3.5 A survey presence is to be established at Port Nolloth with the opening
of a new SAMSA office. The office will be a sub-office of the Saldanha office,
will be staffed by 1 surveyor and will be service mainly the Northern Cape
offshore diamond mining and fishing industries. The total budget for the office
is R462, 691.
Improving business and management systems
3.3.6 Provision has been made (R700k) for critically needed maintenance and
upgrading of the operations databases, e.g. the ships register and seafarers
databases. Maintenance has not been performed on these databases for some time,
and additional database modules are now also needed. This project is intended
to expand, and improve integration and functionality across, these key
operations databases.
3.3.7 Quality assurance also received special attention with R200k budgeted
under the "quality assurance" programme. R150k is provided for ISO
certification of the STCW seafarer examination and certification system, which
is necessary for compliance with STCW Convention requirements. RSOk is also
provided for limited external assistance to support the in-house quality
assurance team in setting up an organisation-wide quality assurance system.
3.3.8 The new Compiere financial system will be rolled out in April, which
should bring significantly improved functionality and control to the financial
management (including procurement) environment. The enhanced procurement, which
will include a supplier database) will enable improved control and more
accurate monitoring of compliance with BBBEE procurement spends targets
(currently 60%). R50k has been budgeted for ongoing support of the system.
Promoting South Africa's maritime industries
3.3.9 SAMSA is expected to play an increasing role in this terrain, which poses
a number of challenges for an organisation that, fundamentally, is not
currently configured to play that role. However, there are things that SAMSA
can do and the budget provides resources for this purpose. A key event will be
hosting a day of dialogue between the coal and shipping industries around
opportunities in the coal export trade for South African shipping.
3.3.10 In anticipation of the tonnage tax initiative moving ahead, R30k is
budgeted under "ship registration promotion" for promotional
activities around this initiative.
The provision is substantially down on F2007 because of lingering uncertainty
around the initiative's timeline.
External relations and communication
3.3.11 SAMSA's current website has to be completely redeveloped along with the
intranet. As a key communication tool, a professional and informative website
is critical to any successful corporate communication strategy, and corporate
image. R250k is therefore budgeted for website and intranet redesign.
Additionally, IT has been resourced to cover website hosting costs.
3.3.12 Much of the work in this field falls to Corporate Communications, and
the "conference-external" budget of makes provision for year-end
stakeholder functions (at all offices), and for SAMSA participation in, inter
alia, the local World Maritime Day event and Transport Month. The unit has also
been resourced to develop appropriate marketing and promotional material.
3.3.13 A standing SAMSA / industry forum will be set up in F2008 to bring about
a more structured engagement with industry stakeholders. This follows a
commitment given at the Fishing Safety Indaba last year. The budget makes
provision for this under the "conferences/meetings-external" item.
Regional / Africa
3.4 On the regional, and particularly the Africa, front SAMSA's activities will
centre on supporting DOT's Africa and IBSA initiatives. While SAMSA's
involvement is not settled in any detail at this stage, provision is made on
the budget, mainly under ''travel'', in support of these initiatives. This will
ensure that SAMSA is able to participate in regional initiatives when
appropriate.
3.4.1 Provision is also made under "conferences/meetings-external"
item for hosting a conference of Southern African maritime administrations, the
aim of such a conference being to examine the regional maritime agenda and how
issues of regional significance might better be articulated in international
bodies like IMO. Additionally, funds have been budgeted for unscheduled
bilateral hosting.
3.4.2 SAMSA is the implementing agency for the GEF-World Bank funded Western
Indian Ocean Marine Highway (WIOMH) Project. This project is likely to become
effective in the first quarter of F2008 and R150k has been budgeted for
preparatory costs connected with the project. These costs will be recoverable
from the USD600k available under the project for SAMSA's implementing costs.
3.4.3 SAMSA will be hosting the Indian Ocean Memorandum of Understanding on
Port State Control (IOMOU) committee meeting this year and R200k has been under
"conferences/meetings-external" for this purpose.
International / IMO/ILO
3.5 SAMSA's activities on the broader international front centre mainly on IMO
and ILO. The strategic intent here is to strengthen SAMSA's participation, and
capacity to influence outcomes around issues of importance, in the key
committees and subcommittees of IMO and ILO. While the "foreign travel"
budget covers participation, it is the new Technical Support Unit, together
with the research programme, that is expected to make a difference at a
qualitative level.
4 Key aspects of the budgeted income statement for F 2008
Revenue
Forecast revenue for F2007 R55,448,191
Budgeted revenue for F2008 R60.014.152
Increase in revenue R
4.565.961
4.1 The following tariff and activity adjustments have been applied to revenue
estimates:
·
5% increase in levy, charge and other income;
·
4.5% activity (business volume) increase applied to levy income collected
on SAMSA's behalf by the National Ports Authority (NPA). This is a conservative
adjustment based on forecast information obtained from the NP A Levies
collected by NP A make up + 60% of SAMSA's total operational revenue.
·
The amount receivable from government is forecast to increase by 5%. The
amount is stated as given by DOT in the preliminary national economic
estimates.
4.2
Despite these adjustments, the budgeted operational loss for F2008 is estimated
at R10,460,717 against a forecast operational loss for F2007 of R3,475,905
(against a F2007 budgeted deficit of R18,954,135. These figures exclude
interest income, for F2007 forecast at R6,042,404 and for F2008 estimated at
R6,639,261.
4.3 The operational deficit is historical and reflects the fact that increases
in revenue have been insufficient to absorb corresponding increases in
operational expenditure. However, the budgeted position has to be balanced
against the actual financial performance of the organisation, which has
consistently produced surpluses mainly because of under spending against
budget. This has resulted in the considerable cash reserves that have been
built up over the past 10 years and forecast for F2007 at R83,573,051. The effect
has not been entirely benign, because key business systems have not been
upgraded as planned and organisational capacity issues have not been
effectively addressed.
4.4 While this budget begins to address these issues, it is clear that, in the
short to medium term, the financial position of the organisation will have to
be managed prudently to avoid reserves simply being consumed by recurrent
operational deficits. What this budget proposes is an approach that will begin
to narrow the gap between revenue and expenditure through a combination of
reasonable tariff and activity increases and cost cutting measures (mainly
through efficiency gains) over the next 3 to 5 years. During this period,
interest income will be maximised and will continue to be used to reduce the
overall deficit position. Limited, and reducing, write backs from the reserve
will be necessary over this period to balance the budget. This approach can
accommodate a reasonable capital and capacity expenditure programme and is
unlikely, therefore, to have a significant adverse affect on the organisation's
infrastructure and other capacity requirements. The attached Financial
Sustainability Sheet illustrates the key elements of the approach in more
detail.
Expenditure
Forecast expenditure for F2007 R58,924,095
Budgeted expenditure for F2008 R70.474.869
Increase in expenditure R11.550.
77 4
4.5 Budgeted expenditure for F2008 represents a 20% increase against the F2007
forecast figure. However, against F2007 budgeted expenditure, it represents a
decrease of 1,3%. The explanation for under spending against Budget F2007lies
mainly in the fact that the organisation has continued to carry a number of
high-level vacancies during this period (notably CEO, ICT manager,
Communications manager, board secretary, and internal audit), which, apart from
the impact on "employee costs", has also affected related "other
expenditure" items. From the current budgeting round, it also appears that
certain expenditure items may have been overstated in Budget F2007.
4.6 Budgeted expenditure for F2008 takes account of the organisation's current
revenue constraints and has been put together after thorough and critical
assessment of the organisation's cost structure, taking into account savings
that are possible 1hrou~ improved efficiencies and budgetary control.
4.7 Significant expenditure items are tabulated below.
Employee costs
Forecast employee costs for F2007 R37,974,100
Budgeted employee costs for F2008 R44.155.529
Increase in employee costs R
6.181.429
The F2008 budget assumes a total staff establishment of 127, which includes 14
vacancies plus an additional 2 posts to cater for the MRCC chief trainees at a
total estimated cost ofRS,7 million. Additionally, the following is assumed:
·
CPIX adjustment at 5,3%;
·
Performance bonus provision at 10% of salary costs;
·
Benefits (cell-phone (R500) and computer allowances (R200» for eligible
staff.
The
main related expenditure items cover the following:
·
Staff recruitment at R981,500, based on current vacancies;
·
Staff training at R1,428,910, calculated at 2.5% of budgeted salary
costs, excepting exceptional training provisions (e.g. IMLI, MRCC trainees, and
casualty investigation training);
·
New provision for staff recognition and reward at R50k;
·
New provision for an employee assistance and wellness programme (EAP
Projects) at R40k);
·
Casual labour at R200k, mainly as a vacancy contingency;
·
Staff refreshment at R151,960, covering the cost of tea and coffee,
occasional staff lunches and a year-end fimction, and calculated at R80 per
employee per month plus R200 for the year end function. Other refreshment costs
attach to the relevant cost categories such as training and conferences;
·
Protective clothing at R45k.
The
skills development levy has been forecast at 1 % of the direct staff costs as
is currently required by the relevant legislation. Likewise the UIF
contribution has been based on the current rate of 1 % of the total cost to
company cost as directed by the relevant legislation. These provisions are
included in "manpower costs".
Advertising, promotions, donations etc
Forecast advertising costs for F2007 R324,312
Budgeted advertising costs for F2008 R360.000
Increase in advertising costs R
35.688
This provision is for promoting SAMSA's services and corporate image and
covers mainly corporate advertising, sponsorships, and promotional and
marketing material.
Additionally, the following budgetary provisions fall under this category:
·
Contribution to NSRI at R50k, to support the good work done by that
organisation;
·
Corporate gifts at R55k, to build up an appropriate range of quality
items that will promote the image of the organisation;
·
Corporate clothing at R30k, again to enhance the image of the
organisation;
·
Donations/social responsibility at R50k, to support socially worthy
causes.
Cleaning
services-daily
Forecast for F2007 R
39,963
Budget for F2008 R104.700
Increase R
64.737
The
increase covers contracted daily cleaning services for SAMSA offices.
Computer expenses
Forecast for F2007 R1,307,419
Budget for F2008 R1.322.954
Increase R
15.535
This is a major expenditure item covering a range of computer-related costs,
including maintenance and repairs, WAN lines, internet connectivity, website
hosting, software licences and updates, off-site data storage, and computer
consumables (excluding printer cartridges). Much of the planned basic ICT
infrastructure work has been completed, and the recent appointment of an ICT
manager is expected to improve 1he overall management and performance of 1his
infrastructure, which has allowed costs to be contained.
Conference costs
Conference costs are now allocated over three related cost items.
"Conference fees" (R53k) are now just that and no longer include
other attendance costs (e.g., accommodation and travel which is captured under
1he travel budget item) and hosting costs, which are captured under the 2 other
conference items. The "Conferences-external" item (R830k) covers
externally focussed events that are hosted by SAMSA The increased provision for
F2008 caters, in particular, for hosting the following planned events: a SADC
maritime conference, an IOMOU port state control committee meeting, 2 maritime
industry promotion events, maritime technical bilateral meetings, stakeholder
functions, safety and seafarer seminars, and a standing stakeholder
consultation forum. The "Conferences-internal" item (R193k) covers
hosting costs associated with internal meetings, such as board and management
meetings, and planning and teambuilding events.
Consulting fees
Forecast for F2007 R1,945,967
Budget for F2008 R1.591.200
Increase R
nil
In line
with previous Board decisions, an effort has again been made to keep consulting
costs to a minimum without adversely affecting SAMSA's operation. A breakdown
of1his item is given below:
MRCC |
210.000 |
A
contribution to a SASAR media liaison capability |
Human
Resources |
160,000 |
For
labour relations, job evaluations/ remuneration benchmarking, and performance
management system support |
Public
Relations |
- |
|
Legal
(Compliance) |
- |
|
Finance
(CEO) |
50,000 |
A
provision for independent advice |
Finance |
- |
|
PTA
General |
7,200 |
For
contracted library updating service |
HQ
(BOARD) |
120,000 |
A
provision for independent advice |
HQ
(CEO) |
600,000 |
For
contracted internal audit services and independent facilitation at planning
events |
IT |
309.000 |
For
the remaining portion of the IT support contract, which expires in June 2007 |
Gen
Ops |
100.000 |
For
external expertise related to marine interventions and casualty investigation |
Ops
OHS |
35,000 |
For
external expertise at the planned casualty investigation courses |
|
|
|
|
|
|
Depreciation
Forecast for F2007 R1247,589
Budget for F2008 R1.245.349
Increase R
nil
Depreciation has been forecast in line with planned capital expenditure, taking
into account the current book value of assets in operation.
Entertainment
Forecast for F2007 R129,936
Budget for F2008 R124.400
Increase R
nil
Entertainment costs are provided for in accordance with fixed rates. The rates,
which were last adjusted 6 years ago, are proposed to be increased by 2.5% for
each of those years.
Finance projects
The new Compiere financial system will be rolled out finally on 1 April 2007.
R50k is provided under this item for ongoing system support.
Implementation costs
The Occupational Health and Safety Unit has been tasked to ensure that SAMSA
complies fully with the Occupational Health and Safety Act 1993. R20k is
budgeted for this purpose.
Insurance
Forecast for F2007 R498,728
Budget for F2008 R667.000
Increase R168.272
This
item covers short-term, liability and travel insurance. The increase covers
expected premium adjustments and the extension of liability cover to Board
members.
Internship development
R150k is provided for the internship programme. This programme forms part of
our broader capacity building initiative explained above.
Lease costs
Forecast for F2007 R
62,673
Budget for F2008 R176.880
Increase R114.207
This
item covers operational leases for equipment such as PABXs and photocopying
machines The major part of this cost item (:I: R60k) covers communication
equipment used by the MRCC.
Legal fees
Forecast for F2007 R339,344
Budget for F2008 R550.000
Increase R210.656
The
following cases are pending and are covered by this provision:
·
Cadets v SAMSA (unfair dismissal and reinstatement)
·
The "TMP Sagitarius" (recovery of pollution response costs)
·
Msikinya V SAMSA (constructive dismissal)
·
Haluodi v SAMSA (defamation and contractual damages)
Library
books
Forecast for F2007 R103,359
Budget for F2008 R131,500
Increase R
28.141
Provision
for sustained spending is made under this item to ensure that essential
reference works are available throughout the organisation. The provision takes
account of the fact that many specialist and technical publications have to be
sourced abroad.
Marine interventions
A provision of R100k is made under this item for costs related to interventions
in the case of marine emergencies (e.g. pollution response, casualty
management). The provision enables an immediate response, bearing in mind that,
in most cases, costs of this kind are recoverable ultimately under shipowner
insurance arrangements.
Motor vehicle expenses
Forecast for F2007 R44,108
Budget for F2008 R68.000
Increase R23.892
SAMSA
operates 4 vehicles (2 at HO, 1 in Richards Bay, and 1 in Saldanha) and this
item covers their operational costs such as fuel, repairs and maintenance. The
increase arises from an expected increase in use and also covers planned
repairs to the 4x4 vehicle in Richards Bay.
Office plants and decorations
Forecast for F2007 R32,624
Budget for F2008 R59.600
Increase R26.976
Specific
provision is made for these costs and covers general improvements to the office
environment The major part of the provision (+R30k) covers contracted
services to the Pretoria head office.
Parking expenses
Forecast for F2007 R
8,349
Budget for F2008 R11.400
Increase R
3.051
This
item covers parking costs not connected with local or foreign travel. The
provision is based on a fixed amount per unit and office, taking into account
anticipated loca1ised travel.
Partnership programme
This is a new expense item that supports capacity-building and benchmarking
initiatives with the Danish Maritime Authority and Singapore Maritime and Port
Authority. The provision of R150k is made to cover training placements and
exchanges with these organisations.
Printing and stationary
Forecast for F2007 R299,730
Budget for F2008 R870.500
Increase R570.770
The
increase in this item arises from the reclassification of certain expenses,
notably the printing of statutory forms (Which used to be covered under
"Publications SAMSA") and replacement printer cartridges (which used
to be covered under "Computer expenses").
Publications-SAMSA
Forecast for F2007 R379,045
Budget for F2008 R390.000
Increase R
10.955
This
item covers production of publications such as the annual report, information
and safety brochures and pamphlets, marine notices and circulars, and codes of
safe practice. Provision is also made for the consolidation and publication of
the Code for South African Maritime Qualifications, to coincide with the planned
implementation of revised seafarer training and certification standards to give
effect to the International Convention on Standards of Training, Certification
and Watchkeeping for Fishing Vessel Personnel 1995.
Quality assurance programme
Provision is made under this item (R200k) to cover the cost of quality
assurance certification of the seafarer training and certification system, as
required under the International Convention on Standards of Training,
Certification and Watchkeeping for Seafarers 1978. This certification must be
in place before the end of 2007 to maintain South Africa's IMO ''White
List" status. The provision also covers external assistance to the
in-house team working on organisation-wide policies and procedures for quality
assurance purposes.
Rent, water and electricity
Forecast for F2007 R4,408,645
Budget for F2008 R4.767.324
Increase R
358.679
Provision
is made in line with current lease agreements and anticipated consumption
levels.
There are no immediate plans to purchase offices and all major office leases
are committed over the budget period. However, a longer term plan will be
developed for more cost efficient office accommodation, particularly for the
Cape Town office, which could include consolidating the current MRCC and Cape
Town offices.
Repairs and maintenance
Forecast for F2007 RI69,724
Budget for F2008 R276.000
Increase RI06.276
Provision
is made in line with expected repair and maintenance costs, the increase
covering, in particular, maintenance work to be carried out at the Durban and
Port Elizabeth offices, and at the Pretoria office on the air conditioning
system.
Research programme
This is a new expense item that is intended to strengthen the organisation's
research capacity. The provision of R350k covers external research support to
complement SAMSA's in-house capacity. A key outcome of this programme is to
build and consolidate the knowledge base around maritime-related affairs and to
support, primarily at a qualitative level, SAMSA's participation at the
regional and international levels.
Scholarship programme
This is also a new expense item that forms part of the organisation's broader
capacity building initiatives. The provision ofR350k is intended to provide
educational assistance for under- and post-graduate studies in maritime and
related fields.
Ship registration promotion
The provision (R30k) has been reduced substantially because of delays in
finalising the proposed new shipping tonnage tax regime. Since there is no clear
indication of a future time-line for this initiative, only nominal provision
has been made to support SAMSA's ongoing involvement in the Ship Registration
Advisory Group.
Subscriptions
Forecast for F2007 R199,573
Budget for F2008 R110.000
Increase R
nil
This
provision covers subscriber electronic and hard copy publications, such as
statutes, law reports and other reference works, and trade journals and
periodicals. Significant savings are anticipated by rationalising the
periodicals subscriber list and through improved controls.
Surveyor costs
Forecast for F2007 R
55,021
Budget for F2008 R379.900
Increase R324.879
This
item covers costs associated with survey-related equipment, e.g. calibration of
radio equipment, hydrometers, torches and other incidentals. It also covers the
reimbursement of travel costs exceeding 500km per month, which makes up the
major portion of the provision. These reimbursement claims are covered at
applicable government rates. It appears that costs related to this item were
not properly provided for in Budget F2007. The proposed provision is based on
proper estimates around equipment and travel.
Telephone and fax
Forecast for F2007 R938,900
Budget for F2008 R759.100
Increase R
nil
This
item covers telephone and fax costs, and line and equipment rental costs, but
does not include leased and financed assets which are included under
"lease costs". The provision is based on the budget inputs from the
various offices and takes account of anticipated savings through improved
telephone control systems, which are being rolled out across the organisation.
Further savings will be possible with the introduction of a VOIP system, which
will be investigated during the 1st quarter.
Travel
Forecast for F2007 R3,507,506
Budget for F2008 R4.392.200
Increase R
884.694
This
item covers accommodation, travel and transport, meals and parking related to
local and foreign travel. The increase arises mainly from under spending
against Budget F2007 and is consistent with anticipated travel commitments for
the F2008 period.
The local travel component is estimated at R2,205,200 assuming an average cost
of R4,700 per trip. A breakdown is given below:
MRCC |
112,800 |
HUMAN
RESOURCES |
84,600 |
COMMUNICATIONS |
120,000 |
LEGAL |
76,500 |
FINANCE |
70,600 |
PTA
GENERAL |
29,500 |
HEADQUARTERS
- CEO & IA |
162,100 |
HEADQUARTERS-BOARD |
360,900 |
INFORMATION
TECHNOLOGY |
47,000 |
OPERATIONS |
1,141,200 |
The
foreign travel component is estimated at R2,187,000 and is in line with the
number of meetings the organisation is expected to attend, taking into account
its more active role at the international level. In particular, the provision
is intended to support participation in the work of international bodies such
as the International Maritime Organisation and the International Labour
Organisation, where SAMSA is playing a key role in the areas of fishing vessel
safety and labour standards. Regional travel is budgeted at an average of
R12,500 per trip and other international travel at R37,500. The meetings to be
attended include the following:
IMO
Assembly (3)
Council (3)
MSC (3)
SLF (1)
DE (1)
BLG (1)
COMSAR (2)
MEPC (1)
TC (1)
LEG (2)
Wreck Removal Dipcon (2)
ILO
Labour Conference (2)
Technical working group meeting (1)
Bilaterals / Regional
Namibia (2)
Mozambique (2)
SAR related (5)
Port state control MOUs
Abuja (1) IOMOU (1)
Other
COSPAS-SARSAT (2)
SAR Task Group Meetings (2)
MAIIF (1)
Provision has also been made for each Board member to attend at least 1 IMO
meeting' as part of board induction.
Efforts are being made to manage the travel budget more efficiently, a key
aspect of this initiative being an in-house booking system Initial indications
are that significant savings can be achieved through an in-house system
WIOMH project
This is a new expense item that i$ related to the GEF - World Bank funded
Western Indian Ocean Marine Highway Project. SAM SA will be the implementing
authority for this multi-year project when it is rolled out later this year.
The provision of R150k is intended as bridging funding, mainly for preparatory
purposes, until such time as project management costs can be recovered under
the project. USD600k is available under the project for costs of this kind.
5 Capital expenditure plan for F2008
The Authority currently has cash resources amounting to R83,5 million. A
reserve of R35,3 million, which is equal to 6 months operating expenditure,
will be set aside to cover operational contingencies (e.g. for emergency
response and for future infrastructure requirements). Because of the current
operational deficit, there is no plan for large scale investment in office
space in the budget period. Instead, the plan is to retain, and maximise the
yield from, cash resources in the short to medium term to allow time for the
achievement of a sustainable balance between operational revenue and
expenditure. This will require limited write-backs over the next 3 to 5 years
totalling R18 million. This assumes that the balance struck in revenue and
expenditure assumptions will be achieved over the period, and any adverse
change in that balance will mean obviously that a larger part of cash resources
will have to be written back over a longer period, before a sustainable balance
(breakeven point) is reached.
For the F2008 budget period, capital expenditure can be broken down as follows:
Furniture and fittings (R343,500)
The provision is for the replacement of old furniture in existing offices and
to equip the new office in Port Nolloth.
Motor vehicles (R140,000)
The provision is for the replacement of one of the Pretoria vehicles which is
fully depreciated.
Computer equipment (R289,900)
The provision is for the replacement of redundant computer equipment and also
covers new additional equipment for current vacancies.
Computer software (R1,764,800)
Provision is made for software for replacement and additional computer
equipment and for ICT policies enforcement and mail server upgrades.
Additionally, R250,000 has been provided for website and intranet upgrades and
R700,000 has been provided to begin upgrading, expanding and integrating the
key operations databases, such as the ship and seafarers databases.
Office equipment (R316,500)
The provision is mainly for the replacement of old computer printing equipment
and for the provision of additional server room air conditioning units at
several offices.
Office alterations (R560,000)
The provision is for office upgrades and reconfiguration mainly at the
Pretoria, Richards Bay and Cape Town offices. The provision takes account of
current vacancies and R150k has been provided for the new Port Nolloth office.