BUDGETARY REVIEW
AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON TRANSPORT ON THE
PERFORMANCE OF THE DEPARTMENT OF TRANSPORT FOR THE 2011/12 FINANCIAL YEAR,
DATED 23 OCTOBER 2012.
The
Portfolio Committee on Transport, having assessed the service delivery
performance of the Department of Transport, reports as follows:
1. INTRODUCTION
The mandate of the Committee is to consider legislation referred to it
and to consider all matters referred to it in terms of legislation, the Rules
of Parliament or resolutions of the House. The role of the Committee is to
represent the people and to ensure that government fulfils its service delivery
mandate.
Section
77(3) of the Constitution stipulates that an Act of Parliament must provide for
a procedure to amend money bills before Parliament. This constitutional
provision gave birth to the Money Bills Amendment Procedure and Related Matters
Act (No. 9 of 2009). The Act gives Parliament powers to amend money bills
submitted by the Executive whenever the Executive deems it is necessary to do
so. The Act therefore makes it obligatory for Parliament to assess the
Department’s budgetary needs and shortfalls against the Department’s
operational efficiency and performance.
2. THE
DEPARTMENT OF TRANSPORT
This review seeks to establish whether the Department has achieved its aims and objectives, as set
out in the 2011/12-2013/14 Strategic Plan, as well as whether it continues to
fulfil its constitutional mandate. The focus will be on highlighting the key
achievements made, as well as challenges encountered during the 2011/12
financial year, as reported in the Department’s Annual Report.
The review of the Annual Report is in accordance with
section 55(2) of the Constitution of the
3. LEGISLATIVE MANDATE OF THE DEPARTMENT
The Department is entrusted with maximising “the
contribution of transport to the economic and social development of [the]
country by providing fully integrated transport operations and infrastructure”.
The main roles of the Department and its public entities in relation to the
transport sector are:
·
Policy and strategy formulation in all
functional areas;
·
Substantive regulation in functional areas
where the Department has legislative competence;
·
Implementation in functional areas where
the Department has exclusive legislative competence;
·
Leadership, coordination and liaison in all
functional areas;
·
Capacity building in all functional areas;
·
Monitoring, evaluation and oversight in all
functional areas; and
·
Stimulating investment and development
across all modes.
4.
The Department strives to “lead the development of efficient
integrated transport systems by creating a framework of sustainable policies
and regulators and implementable models to support government strategies for
economic, social and international development”.
5. GOVERNMENT STRATEGY AND OBJECTIVES
The transport sector is increasingly seen as a key contributor
to
·
Infrastructure development;
·
Repairing the road network;
·
Job creation;
·
Filling of all funded vacant posts; and
·
Implementing the Comprehensive Rural
Development Programme.
6. DEPARTMENT’S KEY STRATEGIC OBJECTIVES
The Department’s strategic outcomes are:
·
Providing an efficient and integrated
transport infrastructure network for social and economic development;
·
Providing a transport sector that is safe
and secure;
·
Ensuring improved rural access,
infrastructure and mobility;
·
Providing improved public transport
systems;
·
Ensuring increased contribution to job
creation; and
·
Increasing contribution of transport to
environmental sustainability.
7. MEASURABLE OBJECTIVES
AND OUTCOMES OF THE DEPARTMENT OF TRANSPORT
7.1 Measurable objectives
In its commitment to discharging its mandate effectively and
efficiently in 2010/11, the Department re-organised itself into the following
programmes:
·
Programme 1: Administration;
·
Programme 2:Integrated Transport Planning;
·
Programme 3: Rail Transport;
·
Programme 4: Road Transport;
·
Programme 5: Civil Aviation;
·
Programme 6: Maritime Transport; and
·
Programme 7: Public Transport.
7.2 Outcomes
The following outcomes
have been identified to guide and enable the Department to deliver on its
mandate:
·
Outcome 1: An efficient and integrated
transport infrastructure network for social and economic development.
·
Outcome 2: A transport sector that is safe
and secure.
·
Outcome 3: Improved rural access,
infrastructure and mobility.
·
Outcome 4: Improved public transport
systems.
·
Outcome 5: Increased contribution to job
creation.
·
Outcome 6: Increased contribution of
transport to environmental sustainability.
8. ANALYSIS OF THE 2011/12
ANNUAL REPORT OF THE DEPARTMENT OF TRANSPORT
8.1 ACHIEVEMENTS
During the reporting period, the Department
institutionalised the management of the Durban-Free State-Gauteng Logistics and
Industrial Corridor. This Corridor is part of the 17 Strategic Integrating
Project approved by the Presidential Infrastructure Coordinating Commission as a
flagship in the management of a coordinated approach to delivering key economic
infrastructure.
The Department hosted a Maritime Black Economic Empowerment
(BEE) conference in
The Policy for the Road Accident Benefit Scheme (RABS) was
finalised and approved by Cabinet on 7 September 2011. The RABS Policy was
published in the Government Gazette on 21 November 2011 for general
information. The Road Freight Strategy was finalised. Similarly, the National
Transport Master Plan and its Action Agenda were finalised.
The National Ports Consultative Committee (NPCC) for the
National Ports Act (No. 12 of 2005) was launched in September 2011 and the
Department hosted all quarterly meetings of the Ports Consultative Committees.
These consultative forums are aimed at enabling the ports authorities to
indicate ways and means of doing business.
A total of 53 000 passengers were transported on the Rea Vaya and My Citi Bus Rapid Transit (BRT) systems, with Rea Vaya accounting for 42 000. Rustenburg, eThekwini, Tshwane
and
In line with section 100(1)(b) of the Constitution, the
Department was part of the intervention team working in the Limpopo Department
of Roads and Transport and Free State Department of Safety, Roads and
Transport. The tasks included the turnaround strategies in the financial and
general administration, as well as quality assurance in the delivery of
services, particularly the rollout of infrastructure and public transport
operations. The programme required the Department to seek additional resources
and therefore virements and rollovers
from less performing projects as these became necessary.
8.2 AREAS OF UNDER PERFORMANCE
8.2.1 Transport Planning Forums
At the time of the tabling of its Annual Report, the
Department reported that out of the nine transport planning forums that it had
undertaken to establish during the year under review, eight had actually been
established, with
8.2.2 Leading the Coordination of the Development
of the North-South Corridor
The Memorandum of Understanding (MoU) was not signed by
seven member states. The explanation provided was that there had been a “need
for consultation as many other Government Departments will directly be
affected”.
8.2.3 Investor Relations and Investment
Promotions
During the reporting period, the Department had undertaken
to hold roundtable discussions focusing on each transport mode with a view to
attracting investors and marketing the projects. However, at the time of
tabling its Annual Report, the Department reported that the roundtable
discussions had not taken place as they had not been budgeted for.
8.2.4 Global Competitiveness Study Final Report
The report on the global competitiveness study could not be
finalised owing to the fact that the supply chain management process took too
long to finalise the appointment of the service provider.
8.2.5 Appointment of the
Broad-Based Black Economic Empowerment (B-BBEE) Charter Council Members
At the time of tabling its Annual Report, the Department
reported that the appointment of the B-BBEE Charter Council members had not
happened as the appraisal of the Minister on the issue and the sourcing of
funds was pending.
8.2.6 Verification of Nine Provincial Transport
Departments
The provinces could not be issued with verification
certificates because there were delays in the execution of the project due to
the lack of funding.
8.2.7 Review of the Innovation and Technology
Research Strategy
The review of the Innovation and Technology Research
Strategy was put on hold as a result of the extended sick leave for the
responsible official.
8.2.8 Average Turnaround Time to Eliminate
Potholes Reported through the Hotline
The project to establish a pothole hotline was not
implemented because the budget for this purpose had not been approved.
Consequently, there was no effective monitoring of the turnaround time for the
repairs of potholes during the period under review. However, as a long-term
solution to pothole problems, the Department has undertaken that as of 2013/14,
the Road Maintenance Grant allocations will be prioritised based on road
condition assessment data.
8.2.9 Rolling out of the Non-Motorised Transport
(NMT) Infrastructure
During the reporting period, the Department had set itself a
target of rolling out NMT infrastructure in six municipalities. However, this
did not take place and the Department reported that this was due to the fact
that no budgetary provision had been made.
8.2.10 Number of Rural Schools Receiving Bicycles
for Learners
The Department had undertaken to distribute 5 000
bicycles to learners in rural schools. However, at the time of tabling its
Annual Report, the Department reported that only 900 bicycles had been
distributed. It argued that this stemmed from the fact that the budget had not
been approved for the period under review. It further stated that, in effect,
these bicycles had been meant for COP 17 and were only issued after the
completion of the event.
8.2.11 Implementation of enabling
legislation for the roll out of Administrative Adjudication of Road Traffic
Offences (AARTO)
The target could not be met owing to the lack of funds and
buy-in from stakeholders.
8.2.12 Schools
The Department had undertaken to roll out 20 per cent of the
learner’s and driver’s licences programme to schools. However, at the time of
tabling its Annual Report, it reported that only 2.3 per cent of the programme
roll out had been achieved. The Department contended that it “could not finalise
the implementation”.
8.2.13 Consultation and Finalisation of the Draft
Skills Development Strategy
While the consultation took place, the Skills Development
Strategy aimed at increasing the pool of seafarers with appropriate training
and qualifications could not be finalised due to capacity constraints.
8.2.14 Draft Maritime Policy
Although the terms of reference for the Draft Green Paper on
Maritime Shipping Policy was drafted, the Draft Maritime Policy could not be
produced owing to budgetary constraints.
9. FINANCIAL MANAGEMENT
For the sixth consecutive year, the Department received an
unqualified audit opinion. Matters of emphasis were, however, identified by the
Auditor-General pertaining to the following:
·
The Department under-spent its budget by
R320.9 million against the revised budget for the year of R41.5 billion,
translating into an under-expenditure by 0.8 per cent. A transfer payment from
the Public Transport Infrastructure and Systems Grant amounting to
R191.7 million was withheld.
·
Fewer taxis were scrapped than budgeted
for, resulting in under-expenditure of R23.3 million which was shifted
within the programme and across programmes to fund the expenditure needs.
Savings on accommodation costs amounted to R31.1 million, of which R22.9 million
was shifted within and across programmes to fund other projects.
·
Projects amounting to R104 million were
delayed or could not be implemented. Savings of R16.4 million were realised on
goods and services and R2.3 million on capital expenditure. Compensation of
employees was under-spent by R5.7 million due to posts that could not be filled
and R0.8 million was saved on foreign membership fees.
·
The accounting officer did not take
effective and appropriate steps to prevent irregular expenditure, as per the
requirements of section 38(1)(c) of the Public Finance Management Act (No. 1 of
1999).
10. HUMAN RESOURCES
By the end of March 2012, the Department had 765 (677:2011)
posts on its establishment and 512 (524: 2011) were filled. The vacancy rate
stood at 33.7 (22.60: 2011) per cent. The highest vacancy rate was in Programme
6 (Maritime Transport) which stood at 47.22 per cent. This was followed by
Programme 3 (Rail Transport) which stood at 41.67 per cent. The Integrated
Transport Planning Programme had the lowest vacancy rate at 21.54 per cent. The
main reason for staff leaving the Department was said to be as a result of
transfers to other public service departments. A second major reason was
resignation but it was not stated why staff members were resigning. The
Department employed nine persons with disabilities, translating into 1.75 per
cent of the total workforce. Of these, four were African (two females and two
males) and five were White (all females).
11. TECHNICAL ASPECTS OF THE REPORT
The Report is credible and presented in a clear and logical
fashion. However, the performance targets for the Department are not
time-bound. The absence of time-frames or deadlines for delivery makes it
almost impossible to establish whether the Department achieves its aims and
objectives and to hold it to account. There are also instances in the Report
where the Department failed to meet the performance targets. The reason that is
repeatedly advanced in this regard is that funds were not available or that
there was reprioritisation. This is a cause for concern because it suggests
poor planning on the part of the Department during the formulation of its
Strategic Plan. In an endeavour to avoid this anomaly in future, the Department
should ensure that the performance targets that it sets itself adhere to the
SMART principle. An additional concern is the report on a lack of capacity in a
number of programmes. The Department should evaluate its organisational
structure to ensure that it has the appropriately skilled personnel to fulfil
its mandate.
As at 31 March 2012, the end of the fourth quarter
and the 2011/12 financial year, total expenditure for the Department amounted
to R41.196 billion and this represents 99.23 per cent of the total adjusted
budget of R41.517 billion. A total of R321 million or 0.77 per cent was under
spent in the same period. Although, expenditure as depicted
above is
in line with benchmarked drawings, the Department experienced faster and slower
than expected spending trends in certain budget programmes and economic
classification categories due to the finalization of the programme budget
structure change within the organization.
·
Programme
1: Administration: Programme expenditure amounted to
R276.499 million or 91.89 per cent of the total available budget of R300.909
million for the 2011/12 financial year. Savings in the programmes were due to
less-than-anticipated expenditure on office accommodation as the other tenant
did not vacate the building as planned. Under expenditure was also due to the
PABX which was not replaced as planned.
·
Programme
2: Integrated Transport Planning: Expenditure was reported at
R92.386 million or 69.34 per cent of the total available budget of
R133.238 million. Under expenditure in the programme was largely due to delays
in the roll out of the National Travel Household Survey because critical
outcomes from the Census 2011 were necessary to initiate the project. Due to
capacity constraints, the Department could also not implement the freight
optimization plan.
·
Programme
3: Rail Transport: Programme expenditure totalled
R9.532 billion or 99.91 per cent of the total available budget of R9.541
billion. Under expenditure is attributed to delays in the implementation of the
following projects: development of Rail Policy and Act, establishment of Rail
Economic Regulator, and the industry development and institutional reform.
·
Programme
4: Road Transport: Expenditure in this programme
totalled R21.729 billion or 99.98 per cent of the total available budget of
R21.734 billion. Under expenditure is attributed to the savings in compensation
of employees, goods and services as well as on capital expenditure.
·
Programme
5: Civil Aviation: Programme expenditure was less than
expected at R64.989 million or 89.64 per cent of the total available
budget of R72.502 million. This significant under expenditure is attributed to
the delays in the establishment of the Aviation Safety Board and the Committee
to appeal such decisions, delays in drafting the White paper on Civil Aviation
Policy and the review of the Civil Aviation Strategy.
·
Programme
6: Maritime Transport: Programme expenditure amounted to
R138.857 million or 99.03 per cent of the total available budget of
R140.223 million. Under expenditure is attributed to the delays in the
procurement of the Local User Terminal.
·
Programme
7: Public Transport: Programme expenditure totalled
R9.362 billion or 97.56 per cent of the total available budget of R9.596
billion. Under expenditure in the programme is attributed to the Taxi
Recapitalisation Programme as there were fewer-than-anticipated taxis scrapped
and the PTIS funds which were not transferred to the City of Cape Town; the
funds were withheld due to significant under expenditure.
·
Current
payments: Expenditure on current payments amounted to R1.149
billion or 90.07 per cent of the available budget of R1.276 billion. Under
expenditure in this economic classification is due to spending challenges
experienced in the Department due to budget structure changes that have
significantly delayed the implementation of projects in different programmes,
as mentioned above in programme expenditure such as the National Household
Travel Survey, and Development of the National Land Transport Systems. These
affected spending on the goods and services budget and compensation of
employees.
·
Transfers
and Subsidies: Expenditure on transfers and subsidies
(capital and current transfers) amounted to R40.044 billion or 99.52 per cent
of the total available budget of R40.238 billion. Under expenditure is due to
less-than-anticipated expenditure in projects like the Taxi Scrapping, PTIS
fund to the City of
Due to the structure change
in the Department, there has been evidence of slow spending, particularly in
the Maritime and Aviation programmes and as a result, funds have been shifted
out of these programmes.
Virements for the period included:
·
Shifts from Programme 5: Aviation.
R4.5 million from Goods and Service to Transfers to
Ports Regulator;
·
R5.5
million from Goods and Service to Transfers to Civil Aviation Authority;
·
R1
million from Goods and Service to Transfers to Civil Aviation Authority;
·
Shifts from Programme 6: Maritime.
R5 million from Goods and Service to Transfers to Maritime Safety Authority;
·
Shifts from Programme 7: Public
Transport. R5.5 million to transfers to SANTACO;
·
Shift within Programme 7: Public
Transport. R55 million to transfer to
·
Shift with programme 5: Civil
Aviation: R2 million to increase transfer payment to SACAA.
13. OBSERVATIONS
The Committee made the following observations about the
2011/12 Annual Report of the Department:
13.1 The Annual Report of the Department was
silent on skills development strategies for the transportation industry.
13.2 The Report from the Department did not to
talk to the establishment of bicycle manufacturing plants or assembly plants
for Shova Kalula in rural areas. The
Committee is concerned that should the focus of the Department be on the
establishment of plants in urban and not rural areas, the Department would not
be addressing job creation, skills development and poverty reduction.
13.3 The targets set by the Department did not
speak to some of the critical transport challenges faced by the majority of
South Africans that were identified in the 2003 National Household Travel
Survey. These included reducing the cost and duration of travel.
13.4 The Department did not have a strategy for
making air travel accessible by the poor and it did not address the challenges
faced by low-fare airlines.
13.5 The Department took time to finalise
policies and, more often, the funds budgeted for this purpose were shifted to
other programmes.
14. RECOMMENDATIONS
14.1 Aviation Transport
The Committee noted that the under expenditure in aviation
transport was attributed to the delays in the establishment of the Aviation
Safety Board and the committee to appeal such decisions, delays in drafting the
White Paper on Civil Aviation Policy and the review of the Civil Aviation
Strategy. The Committee is concerned that delays in these areas might
negatively affect aviation safety. The Committee recommends that the Minister
should ensure the finalisation of the establishment of the Aviation Safety
Board and committee, as well as the White Paper on Civil Aviation Policy and
the review of the Civil Aviation Strategy within six months from the adoption
of this report by the Assembly.
14.2 Skills Development
The Committee noted a skills shortage in road maintenance at
provincial and local government level.
The Minister should ensure that the Department of Transport considers
establishing programmes that would assist provinces with the development and
retention of skills for the transportation industry. The Committee also
recommends that the Minister should consider partnering with training
institutions, for instance, the Public Administration Leadership and Management
Academy (PALAMA) and Further Education and Training (FET) colleges to increase
training and skills development.
14.3 Legislative Review
The Committee is concerned that the Administrative
Adjudication of Road Traffic Offences (AARTO) and the Road Traffic Management
Corporation (RTMC) were currently facing challenges in terms of funding and
this had a negative effect on how the AARTO and RTMC operated. There was therefore a need for the Minister
to prioritise the amendment of enabling legislation for the RTMC to execute its
mandate. The Committee recommends that the Minister overhauls the National Land
Transport Act (No. 5 of 2009) to create a conducive environment for the RTMC to
function optimally within six months of the adoption of this report by the
Assembly.
14.4 Public Transport
The Committee is of the view that the Minister should
consider reviewing the reasons why some modes of transport are subsidised while
others are not. The Committee recommends that the Minister should ensure that
the focus is placed on subsidising passengers and not modes of transport to
allow all modes of transport to be accessible and cost effective.
Report to be considered.