DEPARTMENT OF TRANSPORT PORTFOLIO COMMITTEE PRESENTATION THIRD QUARTER 2015/16 1

Contents Overview Performance Analysis Improvement Plan to Address targets not achieved during the period under review Financial Performance Information

Overview Report focuses on the progress made with the implementation of programmes & projects in the period covering 01 October – 31 December 2015; Focus was on optimal performance of deliverables in terms of the MTEF 2015/16 – 2017/18; Report in compliance with relevant statutory requirements Report interrogated against the approved DoT PMR Guidelines and Technical Indicator Descriptions

Department Of Transport (Overall) Total Number of targets = 50 % Achievement = 35 targets (70%) % Not Achieved = 15 targets (30%)

Department Of Transport (Quarter to Quarter) PROGRAMME TOTAL NUMBER OF TARGETS ACHIEVED Q1 ACHIEVED Q2 ACHIEVED Q3 Non / Improvement from previous quarter Number of targets % Administration 8 (7 targets in Q1) 6 85.7% 7 87.5% 5 62.5% Integrated Transport Planning 9 77.8% 89.0% Rail Transport 2 40.0% 100.0% 4 80% Road Transport 100% - Civil Aviation 75.0% Maritime Transport 50.0% 3 37.5% 25% Public Transport 75% DoT (Overall ) 50 37 75.5% 42 84.0% 35 70%

PERFORMANCE PER PROGRAMME

Administration: Notable Q3 Achievements Financial Governance Compliance and Control: Progress report on implementation of action plans to address audit findings compiled and presented to EXCO and Audit Committee in November 2015. DoT Risk Management Strategy: Progress report on implementation of agreed action plans for strategic risks compiled and presented to EXCO and RMC Enterprise Architecture: ICT Security and Solutions Infrastructure Architecture developed

Administration: Notable Q3 Achievements Human Resource Development Strategy: 53 internship posts advertised through popular media (Closing Date - 06 November 2015); 18 interviews held across various branches since November 2015 and 18 candidates identified for appointment pending verification of qualifications. Integrated Communication and Marketing Strategy Media activities coordinated for October Transport Month and festive season road safety campaings; Event logistics support provided for Minister and the Deputy Minister events; 98% of Presidential Hotline cases resolved.

Administration: Notable Q3 Non-Achievements DoT Internet System: Internet Portal not implemented due to delays in content availability Remedial Action: Roll out of the portal will be done in Quarter 4.

Administration: Carry-Over deliverables from Q2 (Red Flags) International Relation Strategy: The development of the IR Strategy and the IR Policy are parallel processes. Vacancy Rate: No vacancies were filled during the period under review. Engagement with the National Treasury continues for consideration of application for additional funds. (Annual Target may not be achieved)

ITP: Notable Q3 Achievements Review of the White Paper on the National Transport Policy: Recommendations developed and incorporated into the White Paper (Draft II Report). Single Transport Economic Regulator: STER Draft Bill completed and Cabinet Memo submitted for Ministerial approval. Draft Subsidiary Regulations for Complaints, Review and Appeals developed 11

ITP: Notable Q3 Achievements Private Sector Participation Framework Stakeholder consultations conducted in the previous quarter and the Consolidated PSP Final Report developed. Green Transport Strategy: Draft status quo analysis report compiled. Road Freight Strategy Consultations conducted and draft Strategy updated with stakeholder inputs.

ITP: Notable Q3 non-achievements NATMAP 2015: Unforeseen delays in convening the Inter-Ministerial Committee hampered scheduled consultations on the NATMAP report Remedial Action: IMC process to be expedited in Q4 given the clarity provided

ITP: Carry-Over deliverable from Q2 Harrismith Hub Framework: Bilateral consultations with Free State Provincial Government conducted. However, SIP 2 stakeholders not engaged with as targeted. Remedial Action: Programme to highlight when consultations with SIP 2 stakeholders will be conducted.

Rail Transport: Notable Q3 Achievements National Rail Policy: Stakeholder consultations on the Green Paper on the National Rail Policy conducted in nine (9) provinces and with SALGA, NEDLAC and PRASA. Branchline Strategy: Draft Strategy finalised and submitted for approval. National Railway Safety Regulator Bill: Stakeholder consultations on the draft Bill conducted with PRASA, RSR, TRANSNET and Bombela Operating Company.

Rail Transport: Notable Q3 Non-Achievements National Railway Safety Strategy: Draft Strategy not developed as targeted in Q3. Remedial Action: Development of the Strategy to be fast-tracked in Q4 pending appointment of a service provider

Road Transport: Notable Q3 Achievements Green Paper on the Road Transport Policy Stakeholder inputs consolidated and the Draft Green Paper in the Roads Policy finalised Access Road Development Plan: Status quo report completed and local authorities engaged through monthly progress meetings as well as National RRAMS workshop AARTO Amendment Bill: The AARTO Bill and Cabinet memorandum was submitted to the Minister for approval.

Road Transport: Notable Q3 Achievements Provincial Road Maintenance Programme (S’hamba Sonke): PRMG projects monitored Progress status on expenditure and physical indicators provided Nine (9) PRMG tranche payments effected

Civil Aviation: Notable Q3 Achievements ACSA and ATNS Amendment Bills: Stakeholder consultations on the two Bills conducted in November 2015 NCAP and NADP: Consultations on the NCAP and NADP conducted with DIRCO, National Treasury, JCPS Cluster and NICOC Principals Air Services Agreements (Yamoussoukro Decision) Bilateral Air Services Agreements and MoUs reviewed with Egypt, Guinea, Guinea- Bissau, Mauritius and Sierra Leone

Civil Aviation: Notable Q3 Achievements Civil Aviation Amendment Bill: Further inputs were received from the SACAA on Accident Investigation pursuant to a meeting between the DoT and the Civil Aviation Authority and inputs were incorporated. Regulations for the phasing out of the Chapter 2 Aircraft Regulations for the phasing out of the Chapter 2 Aircraft were approved by the Minister in October 2015 and will come into force in January 2016. Implementation is being monitored.

Civil Aviation: Notable Q3 non-achievements Upgrading of Mthatha Airport: Decision taken at DGs’ meeting in December 2015 that the initial decision to obtain condonement from Treasury for the payment of the Variation Orders (VOs) be recalled. As the VOs will not be paid, the Contractor will not address the deficiencies of the aerodrome lighting. Remedial Action: Documentation for the transfer of the assets will be re-submitted to the EC DoT during Quarter 4.

Maritime Transport: Notable Q3 Achievements Merchant Shipping Bill: Discussion Paper on the Merchant Shipping Bill (2016) presented to Clusters PCOT, NCOP. Discussion Paper has been tabled and signed. African Maritime Charter: Charter presented to Parliamentary Committees.

Maritime Transport: Notable Q3 non-achievements National Maritime Transport Policy: The Green Paper could not be finalised for submission to the ICTS Cluster due to capacity constraints Remedial Action: Finalisation of the Green Paper and the submission to ICTS to be fast-tracked in Quarter 4 Cabotage Policy: Policy incorporated as a chapter of the National Maritime Transport Policy Remedial Action: Development of Cabotage Policy in line with finalisation of the National Maritime Transport Policy`

Maritime Transport: Notable Q3 non-achievements Recommendations of Mock Audit Findings: Approved report was not submitted to audited stakeholders as was targeted in Q2. In Q3, it is reported that implementation of audit recommendations has been monitored on a continuous basis, however no evidence was provided to support reported information. Remedial Actions: Programme to confirm if the approved report was submitted to audited stakeholders as was targeted in Q2. Programme to provide evidence for information reported in Q3.

Maritime Transport: Carry-Over deliverable from Q2 (Red Flags) Cabotage Strategy: Draft Framework was not developed as targeted in Q2 and draft Strategy not developed as per the Q3 target. (Annual target may not be achieved as the Strategy is dependent on the finalisation of the Policy) Cabotage Bill: Consultations on the draft Bill not conducted as targeted in Q3 (Annual target may not be achieved as the Bill is dependent on the finalisation of the Policy)

Maritime Transport: Carry-Over deliverable from Q2 (Red Flags) Inland Waterway Strategy: In Q3, the draft Strategy could not be submitted to EXCO as targeted due to poor attendance of the Advisory Committee on Small Vessels to finalise the draft. Remedial Actions: Programme to ensure submission to EXCO

Public Transport: Notable Q3 Achievements Integrated Public Transport Networks Plans in District Municipalities IPTN Operational Plan developed for OR Tambo DM and consultations conducted Taxi Recapitalisation Programme Scrapping 804 old taxi vehicles scrapped during period under review Taxi Recapitalisation Programme Review First Draft TRP Review has been developed

Public Transport: Notable Q3 Achievements Integrated Public Transport Turnaround Plan: Comments from bus sub-committee task team considered and incorporated into Version 1 of the Final draft IPTTP. This version was circulated to Provinces in November 2015.

Public Transport: Notable Q3 non-achievements Review of the Rural Transport Strategy: Reviewed Strategy not submitted to FOSAD as targeted Remedial Action: Strategy to be tabled at the next sitting of FOSAD

Public Transport: Carry-Over deliverable from Q2 (Red Flag) Land Transport Amendment Bill: Bill not submitted to the State Law Adviser as targeted in Q2. In Q3, it is reported that the Bill was not submitted to the PCOT as targeted. 2nd and 3rd quarter targets not achieved (Programme to confirm if submission to the State Law Advisor has been achieved and whether the annual target will be achieved)

IMPROVEMENT PLAN TO ADDRESS NON-ACHIEVEMENTS AND TIMELINES FOR EACH MILESTONE - PER PROGRAMME

Integrated Transport Planning

Rail Transport

Civil Aviation

Maritime Transport

Maritime Transport

Public Transport

FINANCIAL PERFORMANCE INFORMATION

Expenditure per programme to 31 December 2015 Adjusted Budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent   R'000 1. Administration 383 457 277 668 285 626 97 831 (7 958) 74% 2. Integrated Transport Planning 88 083 61 813 61 725 26 358 88 70% 3. Rail Transport 18 311 364 14 722 801 14 175 847 4 135 517 546 954 77% 4. Road Transport 23 042 697 18 273 786 18 213 344 4 829 353 60 442 79% 5. Civil Aviation 149 526 117 291 104 026 45 500 13 265 6. Maritime Transport 121 089 83 889 78 798 42 291 5 091 65% 7. Public Transport 11 518 861 6 842 657 6 641 665 4 877 196 200 992 58% Total Department 53 615 077 40 379 905 39 561 031 14 054 046 818 874 The Department has a total adjusted budget of R 53 615 billion. To date of reporting the department has spent R39 561 billion or 74% of the allocated budget.

Expenditure per Economic Classification Adjusted Budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent   R'000 Compensation of Employees 389 806 274 826 280 816 108 990 (5 990) 72% Goods and Services 679 264 480 918 515 988 163 276 (35 070) 76% Transfers & Subsidies 52 540 290 39 620 567 38 756 972 13 783 318 863 595 74% Machinery and Equipment 5 717 3 594 7 107 (1 390) (3 513) 124% Payment for financial assets - 148 (148) 0% Total Department 53 615 077 40 379 905 39 561 031 14 054 046 818 874 Compensation of Employees: The department does not anticipate overspending , additional funding has been approved but not yet appropriated. Goods and Services: Overspending due to the cost of maintaining and operating eNatis, state funerals and AU conference. Transfers and Subsidies: Underspent due to delays in approving the revised cash flow projections for PRASA and PRMG as well as slow spending in the Taxi Recapitalisation project. Machinery and Equipment: Reclassification of operating leases due to modified cash, funds will be shifted from goods and services to cover the overspending.

Cashflow projection 3rd quarter Expenditure per Economic Classification: Programme 1 Per Economic Classification Adjusted budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent   R'000 Compensation of Employees 175 812 120 954 129 088 46 724 (8 134) 73% Goods and Services 194 130 146 893 144 372 49 758 2 521 74% Transfers & Subsidies 10 637 7 693 7 996 2 641 (303) 75% Machinery and Equipment 2 878 2 128 4 138 (1 260) (2 010) 144% Payment for financial assets 32 (32) 0% Total 383 457 277 668 285 626 97 831 (7 958) Compensation of Employees: The programme does not anticipate overspending , additional funding has been approved but not yet appropriated. Goods and Services: Overspent due to the transport costs for the state funerals, AU conference. Machinery and Equipment: Reclassification of operating leases due to modified cash, funds will be shifted from goods and services to cover the overspending.

Cashflow projection 3rd quarter Expenditure per Economic Classification: Programme 2 Per Economic Classification Adjusted budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent   R'000 Compensation of Employees 42 480 29 839 31 948 10 532 (2 109) 75% Goods and Services 44 957 31 789 28 895 16 062 2 894 64% Transfers & Subsidies - 9 (9) 0% Machinery and Equipment 646 185 828 (182) (643) 128% Payment for financial assets 45 (45) Total 88 083 61 813 61 725 26 358 88 70% Compensation of Employees: The programme does not anticipate overspending , additional funding has been approved but not yet appropriated Goods and Services: Underspent due to the following projects: White paper on National Transport Policy, NATMAP, Transport Policy Framework, National Transport Planning Databank and Single Transport Economic Regulator. Machinery and Equipment:Reclassification of operating leases due to modified cash, funds will be shifted from goods and services to cover the overspending.

Expenditure per Economic Classification: Programme 3 Adjusted budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent R'000 Compensation of Employees 20 687 15 140 14 809 5 878 331 72% Goods and Services 15 101 11 819 6 046 9 055 5 773 40% Transfers & Subsidies 18 275 426 14 695 842 14 154 798 4 120 628 541 044 77% Machinery and Equipment 150 - 194 (44) (194) 0% Payment for financial assets Total 18 311 364 14 722 801 14 175 847 4 135 517 546 954 Goods and Services: Underspending due to outstanding invoice for the National Rail Policy Green Paper and The draft National Railway of amendment Bill on consultation stage. Transfers and Subsidies: Underspent due to delays in approving the revised cash flow projections for PRASA . Machinery and Equipment: Overspending as a result of the replacement and purchases of laptops and desktops for new employees further shifts will be effected from goods and services.

Cashflow projection 3rd quarter Expenditure per Economic Classification: Programme 4 Per Economic Classification  Adjusted budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent R'000 Compensation of Employees 50 284 36 834 33 234 17 050 3 600 66% Goods and Services 48 416 35 949 158 461 (110 045) (122 512) 327% Transfers & Subsidies 22 943 366 18 200 497 18 021 046 4 922 320 179 451 79% Machinery and Equipment 631 506 559 72 (53) 89% Payment for financial assets - 44 (44) 0% Total 23 042 697 18 273 786 18 213 344 4 829 353 60 442 Compensation of Employees: The programme does not anticipate an underspending , additional funding has been approved but not yet appropriated. Goods and Services: Overspent due to the cost of the unfunded mandate of maintaining and operating the eNatis system. Transfers and Subsidies: Underspending due to delays in approving the revised cash flow projections for PRMG by National Treasury. Machinery and Equipment: Reclassification of operating leases due to modified cash, funds will be shifted from goods and services to cover the overspending.

Cashflow projection 3rd quarter Expenditure per Economic Classification: Programme 5 Per Economic Classification  Adjusted budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent R'000 Compensation of Employees 34 854 25 054 24 645 10 209 409 71% Goods and Services 75 513 60 130 46 661 28 852 13 469 62% Transfers & Subsidies 38 739 31 767 32 145 6 594 (378) 83% Machinery and Equipment 420 340 571 (151) (231) 136% Payment for financial assets - 4 (4) 0% Total 149 526 117 291 104 026 45 500 13 265 70% Compensation of Employees: The programme does not anticipate an underspending , additional funding has been approved but not yet appropriated. Goods and Services: Underspending due to the outstanding invoices mainly from Telkom for watch keeping services and regulating committee, the amendment of the Civil Aviation Act as well as the state of action plan on Co2 emission. Transfers and Subsidies: Once of payments for international membership fees. Funds will be shifted to cover the over expenditure. Machinery and Equipment: Reclassification of operating leases due to modified cash, funds will be shifted from goods and services to cover the overspending.

Cashflow projection 3rd quarter Expenditure per Economic Classification: Programme 6 Per Economic Classification  Adjusted budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent R'000 Compensation of Employees 21 728 16 297 14 267 7 461 2 030 66% Goods and Services 69 709 52 346 40 581 29 128 11 765 58% Transfers & Subsidies 29 317 14 911 23 577 5 740 (8 666) 80% Machinery and Equipment 335 371 (36) 111% Payment for financial assets - 2 (2) 0% Total 121 089 83 889 78 798 42 291 5 091 65% Compensation of Employees: The programme does not anticipate an underspending , additional funding has been approved but not yet appropriated. Goods and Services: Underspent due to the delays in the appointment of the services providers on the following projects: The White Paper on the Maritime Transport Policy, Cabotage Strategy, Review of the Merchant Shipping African Maritime Charter and Feasibility study on the TUG boat services. Transfers and Subsidies: The programme does not anticipate an overspending, additional funding to the Ports Regulator has been approved but not yet appropriated. Machinery and Equipment: Reclassification of operating leases due to modified cash, funds will be shifted from goods and services to cover the overspending.

Cashflow projection 3rd quarter Expenditure per Economic Classification: Programme 7 Per Economic Classification  Adjusted budget Cashflow projection 3rd quarter Expenditure Available Under / (Over) spent % Spent R'000 Compensation of Employees 43 961 30 708 32 827 11 134 (2 119) 75% Goods and Services 231 438 141 992 90 971 140 467 51 021 39% Transfers & Subsidies 11 242 805 6 669 857 6 517 401 4 725 404 152 456 58% Machinery and Equipment 657 100 446 211 (346) 68% Payment for financial assets - 20 (20) 0% Total 11 518 861 6 842 657 6 641 665 4 877 196 200 992 Compensation of Employees: The programme does not anticipate an overspending , additional funding has been approved but not yet appropriated. Goods and Services: Underspent due to the following projects: Implementation of the IPTN in district municipalities as well as delays in the review of taxi scrapping model. Transfers and Subsidies: Taxi Recapitalisation underspent due to slow spending. Machinery and Equipment: Reclassification of operating leases due to modified cash, funds will be shifted from goods and services to cover the overspending.

Transfer Payments Transfer Payments (R'000) Adjusted budget Expenditure Available % Spent Conditional Grants:   Provincial Roads Maintenance 9 807 435 8 064 945 1 742 490 82% Public Transport Operations 4 939 448 3 431 160 1 508 288 69% Public Transport Network 5 953 090 2 948 697 3 004 393 50% Rural Road Asset Management 96 842 100% Public Corporatios: Passenger Rail Agency of South Africa (PRASA) 18 222 047 14 101 386 4 120 661 77% Departmental Agencies & Accounts: S.A. National Roads Agency 12 843 488 9 712 419 3 131 069 76% Road Traffic Management Corporation 184 104 138 078 46 026 75% Railway Safety Regulator 53 379 S.A. Civil Aviation Authority 20 124 15 193 4 931 Ports Regulator of South Africa 27 627 23 220 4 407 84% Road Traffic Infringements Agency 11 497 8 623 2 874 Maritime Rescue Co-ordination Centre 7 205 5 404 1 801 Transport SETA 1036 881 155 85% Total 52 167 322 38 600 227 13 567 095 74%

Transfer Payments Transfer Payments (R'000) Adjusted budget Expenditure Available % Spent Other:   Taxi scrapping 331 013 121 044 209 969 37% Non Profit Institutions 2 415 100% South African National Taxi Council 19 254 16 500 2 754 86% Higher Education Institutions(Bursaries to non-employees) 9 433 6 970 2 463 74% International Organisations 10 685 9 451 1 234 88% Leave pay and donations 168 365 (197) 217% Sub-total 372 968 156 744 216 224 42% Total 52 540 290 38 756 972 13 783 318

PROVINCIAL ROAD MAINTENANCE GRANT PROVINCES Budget Transfer Spent by Province Variance % R'000 % Eastern Cape 1 248 047 1 011 123 1 020 190 81% Free State 1 142 796 976 942 972 596 85% Gauteng 455 811 387 634 325 441 KwaZulu-Natal 1 779 255 1 503 564 989 357 Limpopo 994 762 777 861 757 972 78% Mpumalanga 1 719 417 1 363 830 1 300 594 79% North West 788 060 671 238 485 301 Northern Cape 820 325 717 017 702 505 87% Western Cape 858 962 655 736 624 465 76% Overall Total 9 807 435 8 064 945 7 178 421 82%

PUBLIC TRANSPORT OPERATIONS GRANT PROVINCES Budget Transfer Spent by Province Variance %   R'000 % Eastern Cape 199 595 145 160 141 559 73% Free State 220 669 148 304 146 231 67% Gauteng 1 860 049 1 288 124 1 204 076 69% KwaZulu-Natal 924 766 653 624 691 778 71% Limpopo 298 298 198 745 198 918 Mpumalanga 502 271 342 909 340 376 68% North West 92 313 61 938 61 461 Northern Cape 44 907 29 793 30 458 66% Western Cape 796 580 562 768 533 982 Total 4 939 448 3 431 365 3 348 839

PUBLIC TRANSPORT NETWORK GRANT PROVINCES  Budget Transfer Spent by Municipality Variance %   R'000 % EC: Buffalo City EC: Nelson Mandela Bay 372 256 186 128 2 098 50% FS: Mangaung 0% GT: City of Tshwane 931 609 465 804 453 829 GT: Ekurhuleni 339 296 200 000 116 019 59% GT: City of Johannesburg 1 151 368 575 684 242 339 KZN: Msunduzi 213 271 65 000 12 938 30% KZN: eThekwini 882 168 441 084 527 048 LP: Polokwane 184 189 92 094 27 334 MP: Mbombela 116 540 52 152 36 441 45% NW: Rusternburg 552 567 250 000 205 322 WC: George 116 325 74 000 39 937 64% WC:City of Cape Town 1 093 501 546 751 357 737 Overall Total 5 953 090 2 948 697 2 021 042

Governance Management of Audit Findings Progress Report on the implementation of the action plan to address 2014/15 audit findings attached as an annexure to the 3rd Quarter Report. Risk Management Strategic Risk Progress Report attached as an annexure to the 3rd Quarter Report

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