Department of Transport Annual Report 2014/15 1

Contents Background DoT Overall Performance Performance per Programme Human Resource Management Human Resource Development DoT Equity Statistics Governance Areas for Improvement Identified Best Practices Financial Statements 2014/15

Key Focus Areas for the Report Performance of the Department of Transport (DoT); Non-financial and financial results; DoT Organisational Health and Capability to deliver on policy objectives.

Background Report focuses on the progress made with the implementation of programmes & projects in 2014/15 Focus was on optimal performance of deliverables in terms of the MTSF & MTEF Targets were guided by the outcomes-based approach (Outcome 4, 6, 7 & 10) Implementation of programmes was directed by the NDP, NGP, IPAP & NIP

Overview of the Transport Sector for the 2014/15 Financial Year NDP emphasizes necessity of sound economic infrastructure as a pre-condition for economic growth; The APP 2014/15 highlighted the DoT’s commitment to address major social and economic challenges facing the sector through interventions aimed at accelerating service delivery, increasing job opportunities, rural development and skills development; This report emphasizes the DoT’s continued restatement of the need for increased investments in public transport infrastructure, restructuring of current subsidies to promote integrated settlements and transport infrastructure projects to improve access to opportunities for the urban and rural poor.

Department Of Transport (Overall) Total Number of targets = 77 % Achievement = 56 targets (73%) % Not Achieved = 21 targets (27%)

Department Of Transport (Overall)

Department Of Transport (Summary of performance per programme) Total no of targets Achieved 2014/15 Year-to-Year Achieved Targets % % Achieved 2013/14 Improved or Dropped ADMINISTRATION (ODG, CFO, COO, TIS) 18 13 72% 84% ITP 12 8 67% 44% RAIL 5 100% 60% ROAD 10 9 90% 61% CIVIL AVIATION 75% 53% MARITIME 2 22% 52% PUBLIC TRANSPORT 11 63% DOT (OVERALL) 77 56 73% 66%

PERFORMANCE PER PROGRAMME

ITP: Key Notable Achievements To ensure an integrated and seamless movement of freight across supply chains for all transport modes, progress on the following interventions was recorded during period under review: The Final Study Report on the impact of freight accidents on SA roads was developed. The study entailed investigations into the causes and consequences of freight accidents in SA as well as recommendations towards curbing these crashes. A draft Freight Logistics Strategy Review Report was developed. The report was based on the review of the NFLS 2005 and details a re-focused strategic framework for sector institutional review and industrial restructuring for a more efficient freight system that allows greater access to service providers and cargo owners, while also creating space for private sector participation.

ITP: Key Notable Achievements To improve economic regulations in the Transport Sector: The DoT developed a draft Position Paper and 4th draft STER Bill. The Bill is being routed to Cabinet for consideration and approval. The medium term target is to establish the STER through promulgation of relevant legislation by December 2016. Once established, the STER will: enhance private sector investments in areas that were exclusively state sectors; manage relations between infrastructure owners and operators in a transparent manner in how tariffs are set; open up competition in a regulated way; and also provide opportunities for market access and competition.

ITP: Key Notable Achievements To increase sector economic transformation and performance, in the period under review, the DoT: launched the Transport BBBEE Charter Council. The Charter business plan was also developed. The Council will fast-track the uptake of transformation in the transport sector and also support the industry in reaching its targets. conducted a field survey on the Rural Accessibility / Multi Deprivation Index in 8 provinces. A survey report was subsequently generated and submitted for approval. The Index is a key transport headline indicator and is established to focus on the critical role of access and mobility in the reduction of poverty in the country.

ITP: Key Notable Achievements To increase sector contribution to environmental protection, the DoT: produced a draft report on the Energy Consumption Reduction Study and circulated it for external consultations. The study aims to recommend how the sector may reduce GHG emissions.

ITP: Notable non-achievements NATMAP 2050 was not submitted to Cabinet due to delays in consultations with the PICC. Consultations with PICC will be prioritised for 2015/16 and the Plan will be submitted to Cabinet accordingly; Tier 2 GHG Inventory Report not finalised due to lack of existence of the Maritime Database. The development of the Maritime Database will be prioritised for 2015/16 and the Inventory Report will be subsequently finalised.

Rail Transport: Key Notable Achievements To improve the efficiency, capacity and competitiveness of the rail transport operation, the DoT reported the following progress in 2014/15: Extensive stakeholder consultations were conducted on the Green Paper on Rail Transport Policy. The Green Paper was then revised. This is a key step towards formulation of a Policy that will address challenges facing the rail sector. A first draft White Paper was also drafted. Strategic Branchlines were defined and identified; and a draft Branchline Strategy was developed. The strategy provides a vehicle to shape how these strategic branchlines can contribute to increased volumes of freight, improve efficiencies and safety in the railway sector.

Road Transport: Key Notable Achievements To ensure a sustainable transport infrastructure network, the DoT: continued to implement the S’hamba Sonke Programme, which entails rehabilitation and maintenance of roads, re-sealing and patching of surfaced roads, blading and re-graveling of gravel roads. Through the programme: 298 SMMEs were supported 55 456 Full-time Equivalent jobs were created conducted a needs analysis and developed the Road Infrastructure Policy Framework. Stakeholder consultations were also conducted thereafter.

Road Transport: Key Notable Achievements To regulate and enhance road transport safety, the DoT: conducted needs analysis and consultations with RTMC, RTIA, CBRTA and Gauteng Province on the draft Road Safety Policy successfully executed and monitored the implementation of the 365-Road Safety Programme

Road Transport: Notable non-achievements Only 55 456 Full-time Equivalent jobs were created during the period under review against a target of 60 100. This baseline will be reviewed based on the type of projects being implemented at Provinces to inform targeting going forward.

Civil Aviation: Key Notable Achievements To enhance performance, efficiency and reliability of Civil Aviation, the DoT: promulgated the 2015/16 – 2019/20 Permission for the ACSA and ATNS levies in the Government Gazette gazetted the draft Amendment Bills for ACSA and ATNS Acts for public comments conducted stakeholder consultations on the Civil Aviation Amendment Bill and submitted the Bill for consideration conducted stakeholder consultations on the National Civil Aviation Policy and National Airports Development Plan held air service negotiations with Gabon, Namibia and Mozambique; and signed MoUs with South Sudan, Philippines to review air service arrangements

Civil Aviation: Key Notable Achievements To regulate civil aviation safety and security, the DoT: investigated aircraft accident and incidents and released reports with safety recommendations for each quarter To create opportunities in the civil aviation sector; awareness campaigns, career expos and exhibitions were held and 435 SA schools were exposed to aviation-related career choices

Civil Aviation: Notable non-achievements Aviation Industry Transformation Letsema not hosted for 2014 due to budgetary constraints. Regulations on the phasing out of Chapter 2 Aircraft not approved due to prolonged stakeholder consultations. The process of verification will be fast-tracked to ensure approval in the new financial year.

Maritime Transport: Key Notable Achievements To regulate and enhance Maritime Transport safety: The Cape Town Agreement (2012) on the implementation of the provisions of the Torremolinos Protocol (1993) was submitted to the ICTS Cluster for approval The MARPOL IV & VI Conventions were approved in August 2014. These conventions forms part of the sector’s contribution to environmental protection The African Maritime Charter also submitted to the ICTS Cluster as part of the sector’s contribution to job creation.

Maritime Transport: Notable non-achievements Finalisation of the Maritime Transport Policy delayed by prolonged consultation process; Amended Maritime Security Regulations not published due to prolonged stakeholder consultations; Maritime Labour Regulations not finalised due to capacity constraints; Salvage Strategy not finalised due to prolonged internal processes HNS Fund and Bunkers Convention not finalised due to prolonged stakeholder consultations

Public Transport: Key Notable Achievements In its quest to provide quality rural and learner transport, the DoT: finalised the National Learner Transport Policy and submitted it to Cabinet for approval. The Policy aims to improve the management of learner transport and ensure provision of quality public transport in rural areas distributed 3 000 bicycles to provinces finalised the review of the Rural Transport Strategy conducted stakeholder consultations on the Public Transport Stakeholder Relations Framework and developed a draft Framework.

Public Transport: Key Notable Achievements To improve Public Transport access and reliability; construction and/or operations of IPTNs are in progress in 11 municipalities. Mangaung still completing planning phase and Buffalo City progress halted by litigation processes

Public Transport: Notable non-achievements Taxi Recapitalisation Programme 4 049 old taxi vehicles were scrapped against a revised target of 5 950 (target revised from 7 500 due to trends of the first two quarters) Less applications were received from operators hence the lower number scrapped

Human Resource Management Vacancy Rate 134 positions filled during 2014/15 (target for the financial year was to fill 80 positions); Vacancy rate decreased from 26,52% to 22,16% Over-performance due to improvement of number of short-listings and interviews; and higher success rate of candidates accepting offers

Youth Skills Development Initiatives (Human Resource Development) 803 students were registered in different transport disciplines at 11 Institutions of Higher Learning (Universities and Universities of Technology); Transport Research Activity Centre (TRAC) reached out to 638 675 learners across 9 provinces and operated in 167 schools through fixed and mobile laboratories. 1 633 learners were registered for first year undergraduate qualifications at various tertiary institutions; 1 657 transport learners currently registered in TVET colleges in Operations, Logistics and Economics. 58 DoT interns were recruited and 10 youth participated in Project Management Learnership;

Employment Equity Statistics Race African – 91.35% (target – 79.5%) Coloured – 1.49% (target – 9%) Indian – 1.79% (target – 2.5%) White – 5.37% (target – 9%) Gender Male – 293 (44%) target = 54.20% Female – 378 (56%) target = 45.80%

Employment Equity Statistics SMS Male – 64 (62%) Female – 40 (38%) (Target = 50% female representation in SMS) Disability Male – 2 Female – 10 DoT Disability Status – 1.78% (Target = 2%)

GOVERNANCE

Risk Management DoT Risk Management Policy and Strategic Framework reviewed to inform the Department’s future endeavour of risk identification, assessment and monitoring; Risk Management Plan (key controls and mitigation strategies) developed and implemented; and risk assessments conducted quarterly; Progress on the implementation of risk mitigation plans monitored and reported quarterly to EXCO and Audit Committee; DoT Risk Profile updated accordingly.

Labour Relations Misconduct and Disciplinary Hearings Grievances Total of six (6) hearings (5 final written warnings and 1 case withdrawn) Grievances Total of 23 lodged (15 resolved and 8 not resolved) Disputes Total of 3 lodged (3 upheld and 0 dismissed) Strike Actions No persons working days lost Precautionary Suspensions Four (4) people suspended

Minimising Conflict of Interest Financial Disclosure Framework – All SMS members sensitised to disclose financial interest so as to identify conflict of interest; Declaration of interest for all procurement as a measure to minimise conflict of interest in SCM (SBD 4 Form and SBD 9 Form)

Code of Conduct 100% of new appointees were inducted on the Code of Conduct SMS training on disciplinary matters related to violation of Code of Conduct

Internal Control Action plans to address audit findings for 2013/14 financial year developed and monitored on a quarterly basis; Progress reports on the implementation of action plans monitored on a quarterly basis and presented to Audit Committee meetings; Compliance reviews conducted on: PFMA, Treasury Regulations, DoRA, Financial Policies, SCM.

Internal Audit and Audit Committees Internal Audit conducted 24 audits during the period under review. Ten (10) Audit Committee meetings were held during period under review. Audit Committee complied with its responsibilities - Section 38 (1) (a) (ii) of the PFMA and Treasury Regulation 3.1.13 Audit Committee has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with the Charter and has discharged all its responsibilities as contained therein. Among the responsibilities of the AC, the following were done during the period under review: Review of the effectiveness of Internal Control Assessment of in-year Management and Monthly/Quarterly Reports Evaluation of Financial Statements

Areas of Improvement Identified Improve stakeholder engagement processes in policy development Strengthen internal coordination processes Improve skills and other related capacity constraints in the DoT Enhance a structured and coordinated inter-sectoral planning and reporting mechanism Oversight of Entities and Provincial Departments Strengthen performance evaluation in line the DPME National Evaluation Framework

Best Practices Regular and vigorous EXCO deliberations on performance information Carry-over deliverables and red flags Adherence to Technical Indicator Descriptions and pre-determination of evidence for quality reporting and performance analysis Regular interactions between the CD:SP&CC and Branches to discuss planning, monitoring and reporting issues affecting performance in the DoT Reports, evidence and audit issues Quarterly meetings conducted between Planning, Monitoring and Evaluation practitioners of DoT and Provinces to discuss sector planning, monitoring and reporting as guided by transversal indicators

FINANCIAL INFORMATION

Adjusted Budget 2014/15 Details R’000 Original budget for 2014/15 48 726 518 Other Adjustments: 1. Unforeseeable and Unavoidable: 44 151 - General transport services rendered during the funeral of the former president - Airport Company of South Africa: Ground handling support equipment for Mthatha Airport 42 021 2 131 Total Adjusted Budget 48 770 669

Expenditure for 2014/15 per Programme Per Programme Budget Expenditure Variance % R'000 Spent 1. Administration 390 889 377 489 13 400 97% 2. Integrated Transport Planning 74 974 100% 3. Rail Transport 15 035 507 4. Road Transport 21 810 020 22 202 862 (392 842) 102% 5. Civil Aviation 160 966 6. Maritime Transport 101 742 99 623 2 119 98% 7. Public Transport 11 196 571 11,195,677 894 TOTAL 48 770 669 49 147 098 (376 429) 101% Note: The over expenditure of Road Transport of R392 842 million was declared as unauthorised expenditure.

per Economic Classification Expenditure for 2014/15 per Economic Classification Per Economic Classification Budget Expenditure Variance % R'000 Spent Compensation of Employees 346 697 345 900 797 100% Goods and Services 781 148 1 084 142 (302 994) 139% Provinces and Municipalities 20 140 276   Departmental Agencies and Accounts 12 203 888 12 283 363 (79 475) 101% Universities and Technikons 10 790 7 509 3 281 70% Foreign Governments and International Organisations 10 082 8 783 1 299 87% Public Corporations and Private Enterprises 14 946 301 Non-profit Institutions 20 715 19 808 907 96% Households 300 775 300 759 16 Gifts and donations Buildings and fixed structures Machinery and Equipment 9 997 Payment for financial assets 260 ( 260) TOTAL 48 770 669 49 147 098 (376 429)

Compensa-tion of employees Summary of Virements after Adjusted Budget Programme Compensa-tion of employees Goods and services House-holds Total Administration (17 000) (16 990)   (33 990) Integrated Transport Planning (2 782) (3 428) (6 210) Rail Transport 950 Road Transport 164 733 Civil Aviation 10 564 Maritime Transport (2 321) (6 526) (8 847) Public Transport ( 166) (3 589) (123 445) (127 200) (22 269) 145 714

Under / (Over) Expenditure per Programme and Classification Programme (Amounts in R’000) Classification 1 2 3 4 5 6 7 Total Compensation 797   Goods & Services 9 338 (313 187) ( 424) 1 278 (302 994) Transfers 3 454 16 (79 648) 458 841 907 (73 972) Capital Fin transactions ( 189) ( 16) ( 1) ( 7) ( 34) ( 13) ( 259) Totals 13 400 (392 842) 2 119 894 (376 428) Major under / over expenditure: P1: Underspent R9.3 million on goods and services because the use of consultants were reduced. R3.3 million was not transferred to the higher education institutions and R0.8 million was underspent on compensation of employees. P4: Over spent R313 million on eNaTIS, and R83 million on transfers to the Road Traffic Management Corporations(RTMC) on transfers that were not paid in 2013/14 financial year. Under spent R3.8 million on the transfer payment to the Road Traffic Infringements Agency (RTIA) because it was claimed late. P6: Under spent on goods and services by R1.3 million because a number of projects were not undertaken and R0.8 million was under spent on foreign membership fees that were not claimed during the year. P7: Under spent by R0.9 million because the recipient under claimed a transfer payment.

Expenditure Breakdown for 2014/15 Total 99.65%

Expenditure Breakdown for 2014/15 (Continued) Total 0.35%

Expenditure Breakdown for 2014/15 (Continued) Description Amount (R'000) PRASA 14 946 301 SANRAL 8 180 798 Provincial Road Maintenance Grant 9 361 498 Public Transport Infrastructure & Networks 5 870 846 Public Transport Operations 4 832 709 Goods and Services 1 033 871 Taxi recapitalisation 300 063 Buildings and fixed structures 50 271 Compensation of Employees 345 900 Other agencies 4 101 588 Rural Grant 75 223 Non Profit Institutions 19 808 Universities 7 509 Foreign memberships 8 783 Machinery and equipment 9 997 Financial transactions 260 Leave gratuity and sponsorships 1 674 Total expenditure 49 147 098

Rollovers to 2014/15 Details (R’000) Requested Approved Programme 1: Administration Transfer to Higher Education Institutions 3 281 - Programme 4: Road Transport Transfer to the Road Traffic Infringements Agency 3 825 Programme 5: Civil Aviation Review of the National Airports Development Plan 665 Total 7 771

Abbreviations Abbreviation Meaning eNaTIS Electronic National Traffic Information System PRASA Passenger Rail Agency of South Africa Ltd. RSR Railway Safety Regulator SANRAL South African National Roads Agency SOC Ltd. RTMC Road Traffic Management Corporation CBRTA Cross Border Road Transport Agency RTIA Road Traffic Infringements Agency RAF Road Accident Fund ACSA Airports Company of South Africa Ltd. ATNS Air Traffic and Navigation Services Company Ltd. SACAA South African Civil Aviation Authority SAMSA South African Maritime Safety Authority PR Ports Regulator of South Africa AARTO Administrative Adjudication of Road Traffic Offences ICAO International Civil Aviation Organisation

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