Department of Transport Select Committee on Finance Public Hearings on Division of Revenue Bill 2009/10 3 March 2009

Contents of presentation Additional allocations: List of additional allocations MTEF Overview: Budgets per Programme Breakdown of major budgets Growth in major capital budgets Other budgets and major projects Conditional Grants: Bus subsidies Gautrain Other Grants: Roads, overload control & rural transport Public Transport Infrastructure and Systems (PTIS) 2

Additional allocations Details (R’000) 2009/10 2010/11 2011/12 SANRAL 70,047 298,928 1,062,807 PTIS: SANRAL 6,559 SARCC 98,177 338,381 818,752 Compensation of employees SARCC 71,357 75,867 78,832 PTIS: SARCC 14,758 Bus operations and fuel costs 483,094 624,289 720,163 PTIS Grants to Local Government 93,177 325,275 416,638 Gautrain Rapid Rail Link 325,480 23,134 Taxi operations 200,000 100,000 50,000 Railway Safety Regulator 3,000 5,000 Compensation of employees 5,401 5,095 5,271 Capital 1,854 3,572 4,576 Reduction in transfers to Departmental Agencies (1,103) (683) (722) Efficiency saving (18,337) (19,099) (6,450) Reduction in goods and services (5% per year) (30,609) (29,821) (31,284) Total 1,322,855 1,749,938 3,123,583 3

Medium-term estimates Budgets per Programme Table 33.1: Transport R thousand 2008/09 2009/10 2010/11 2011/12 Adjusted Appropri-ation Medium-term estimates MTEF Baseline 1. Administration 245,165 231,023 230,753 235,291 2. Transport Policy and Economic Regulation 47,211 51,592 52,083 54,766 3. Transport Regulation and Accident and Incident Investigation 432,563 195,580 207,997 224,190 4. Integrated Planning and Inter-sphere Co-ordination 8,767,012 8,855,424 11,908,301 13,444,044 5. Transport Logistics and Corridor Development 35,076 31,809 38,992 40,288 6. Public Transport 12,277,229 14,191,689 12,953,416 13,829,382 7. Public Entity Oversight and Border Operations and Control 2,688,584 177,712 88,755 92,980 Total 24,492,840 23,734,829 25,480,297 27,920,941 4

Breakdown of major budgets Details R’000 2008/09 2009/10 2010/11 2011/12 SARCC 4,917,290 6,567,635 7,688,206 8,607,979 SARCC – Shosholoza Meyl 500,000 450,000 400,000 424,000 Bus subsidies 2,984,131 3,531,909 3,863,033 4,153,232 SANRAL 4,072,974 5,594,986 6,964,501 8,128,314 Taxi 571,567 751,561 624,409 605,303 PTIS (2010 Soccer World Cup) 3,480,000 3,089,494 4,789,775 5,149,008 Gautrain 3,265,993 2,832,691 340,660 Disaster Fund Grant - Provincial roads 1,035,473 RAF 2,500,000 Other 1,165,412 916,553 809,713 853,105 Total 24,492,840 23,734,829 25,480,297 27,920,941 % Growth 48.05% -3.09% 7.35% 9.58% 5

Breakdown of major budgets (Continued – excl Breakdown of major budgets (Continued – excl. once off allocations in 08/09) R’000 Gautrain PTIS Grant 2009/10 7,017,635 3,531,909 5,594,986 3,089,494 2,832,691 Allocations for rail operations and capital remain the largest single budget item. The budget for road infrastructure overtook that of bus subsidies from 2007/08 onwards. Allocations for infrastructure from the Public Transport Infrastructure and Systems Grant was introduced in 2005/06 at R241,7m, growing to R3,1bn in 2009/10. The National contribution to the Gautrain Rapid Rail Link was introduced in 2006/07 at R3,241Bn, and declines to zero in 2011/12 6

Growth in major capital budgets 7

Breakdown of other budgets and major projects Details R’000 200910 2010/11 2011/12 Compensation of Employees 212,798 208,867 221,272 P1: October Month & World Remembrance Day 26,362 36,575 37,515 P1: Conferences (AFI-RAN) 3,800 P1: Arrive Alive 14,250 P1: NLTIS, VPN, ECM, Recruitment 15,152 15,580 16,144 P1: Security, Skills development 8,740 P1: Centres of Development 8,178 8,669 9,189 P1: Comms: BEE, events, exhibitions, web & audio visual, branding 10,925 P1: Property management 14,884 16,372 17,356 P1: Other 45,236 49,166 45,897 P2: Transport Policy, Research and Economic Regulation 15,806 16,361 17,341 P2: Rail economic regulation 11,382 11,623 11,893 P3: eNaTIS 3,682 7,419 11,598 P3: Special Investigating Unit 21,235 22,439 23,785 P3: Rail Economic Regulator 4,257 4,498 4,768 P3: ICAO and IMO offices 7,365 7,785 8,251 P3: Watch Keeping services 27,109 28,644 30,363 8

Breakdown of other budgets and major projects (Continued) Details R’000 200910 2010/11 2011/12 P3: Oil Pollution prevention services 48,805 51,572 54,666 P3: Maritime Security Coordination Centre 6,559 6,930 7,346 P3: Commissioner of Civil Aviation 4,742 5,011 5,312 P3: Maritime Rescue Coordination Centre (Transfer payment) 5,236 5,533 5,865 P3: International membership fees 5,114 5,420 5,745 P3: Road Transport Regulation projects 20,800 21,980 23,299 P3: Other and Administration 5,592 5,876 6,229 P4: Transport planning and infrastructure projects 12,096 12,371 13,164 P4: Rural transport and NMT projects 52,293 55,231 58,520 P4: Road infrastructure planning 2,829 2,449 5,252 P4: Sani Pass and Overload Control 44,416 48,688 52,399 P4: 2010 SWC Monitoring and Evaluation 23,750 P4: Other and Administration 4,389 4,619 4,897 P5: Transport Logistics and Corridor Development 19,475 26,593 27,151 P6: Bus contract model 4,750 P6: Project Implementation 2010 and beyond 7,600 P6: Other and Administration 11,092 11,501 12,191 9

Breakdown of other budgets and major projects (Continued) Details R’000 2008/09 2009/10 2010/11 P7: Transfers to RTMC 83,603 P7: Transfers to RSR 37,260 35,634 37,475 P7: Transfers to Ports Economic Regulator 13,603 8,832 9,361 P7: Transfers to SAMSA 8,896 9,402 9,966 P7: Transfers to SACAA 7,781 8,223 8,716 P7: Performance Management System 950 1,007 P7: RAF restructuring 13,300 P7: Other and Administration 4,311 4,535 4,807 Total 916,553 809,713 853,105 10

Bus subsidies Subsidy levels have been insufficient since 2005/06 to halt the declining levels of service, escalation in costs and the growth in demand In order to improve operational and financial efficiency a more focussed approach to determining service priorities will need to be developed Implementation Plan: Conditional Grant to Provinces introduced Phased implementation in co-operation with Provinces Negotiated performance based contracts for route operations Formalisation of unscheduled Interim Contract services Define operating areas that will not be served Implementation of supporting infrastructure Continued enforcement and monitoring of all contracted Public Transport Operations 11

Bus subsidies: Interventions for achieving change 2009/10 onwards Bus Subsidy Funding - Conditional Grant in DORA Critical conditions: Interim contracts to be converted to negotiated (kilometre based) contracts by September 2009 Alignment with IRPTN` Finalise integrated road based networks Develop KPI’s Identify key role-players who are to be part of the operating entity Engage with all parties to establish operating entity Implement depots and vehicles if so decided Recruit/develop admin capacity to manage the contracts Contracting authorities will have to: Change in compensation method – based on fixed kilometre KPI’s New national monitoring model Fare levels as set by the authority Fleet replacements to be based on requirements of the contracting authority Contracting authority may purchase existing assets (eg depots) and contract compliant vehicles Operators will have to accept: 12

  Bus subsidies: Intervention conditions Operators that accept will sign an negotiated contract that includes: KPI’s Provision that the operator will be provided with an opportunity to be party to a new integrated contract regime for some or all of the services within the contract area Operators that do not accept will continue on month-to-month basis and their contracts will be terminated as and when required  13

Gautrain Allocations from 2006/07 to 2010/11 14

Gautrain Annual allocations are paid in terms of a payment schedule Key and General Milestones have to be achieved before payment The Provincial Support Team then checks whether Milestones have indeed been achieved The Milestones are certified by the Independent Certifier (IC) The certified claim is submitted by the IC to the Gauteng Management Agency to check claims for compliance The GMA then sends the claim to the Department with a request for payment from the DORA Grant The Department satisfies itself that there has been compliance with the DORA requirements and the conditions contained in the DORA Framework Currently, indications are that Phase 1 of the Project, i.e. the section between OR Tambo International Airport and Sandton will be completed in September 2010, while the rest of the Project will be completed in September 2011. 15

Roads, Overload Control and Rural Transport Grants These grants to be introduced in 2010 budget 16

Road Grants The grant was introduced to develop road infrastructure projects that promote regional integration, development and connectivity between neighbouring states Construction of the Sani Pass: Phase 1 – Upgrade of P318 Sani Pass (km 0 to 13.6) - completion scheduled for April 2010. Phase 2 – Upgrade of sections 1 and 2 (km 14 to 25 and 25 to 33): Environmental Impact Assessment Studies underway with record of decision scheduled for announcement in September 2009 Engineering designs are underway and are at various stages of completion by the joint venture consultant team Future road construction projects to be identified for inclusion in the Division of Revenue Act 17

Overload Control Grants To achieve the objectives of the national overload control strategy, a 3-year grant has been developed in conjunction with National Treasury Grant funds are currently being used for upgrading the weighbridge infrastructure facilities in Mpumalanga and Limpopo In Mpumalanga, projects for the upgrade of weighbridge infrastructure were completed in October 2008: Kinross Traffic Control Centre Ermelo Traffic Control Centre In Limpopo, the detailed design, planning and bill of quantities have been compiled, and construction works are set to begin in 2009/10 on: Rathoke Traffic Control Centre Mooketsi Traffic Control Centre Future allocations: 2009/10 Gauteng R4,8m Limpopo R4,8m 2010/11 Eastern Cape R5,1m Mpumalanga R5,1m 18

Rural Transport Grants Purpose : To improve mobility and access in rural municipalities in support of Integrated Development Plans Reasons for not incorporating in equitable share: This is a specific purpose grant mainly for the provision of rural transport infrastructure and services. This grant ensures that district municipalities are giving priority to the following rural transport interventions: infrastructure construction maintenance, upgrading and rehabilitation support rural development and accelerated and shared growth initiatives in line with government priorities It is also used as vehicle for stimulating the use of labour intensive methods in large infrastructure programmes / projects to create jobs and develop required skills in terms of the Expanded Public Works Programme 19

Rural Transport Grants Timeframes : MTEF Allocations R8.9 million 2008/09, R9.8 million 2009/10 R10.4 million 2010/11 R11,1 million 2011/12. Details of Projects : 2008/09 Allocations: DM PROJECT BUDGET Chris Hani Intermodal Public Transport Facility R 4,1m Thabo Mofutsanyane Upgrading of Access Road to a Thusong Service Centre R 2.0m Dr Ruth S. Momphati Construction of 2No. Pedestrian Bridges Sekhukhune Development of a Pedestrian & Bicycle Paths Master Plan R0.8m 20

Public Transport Infrastructure and Systems Grants Contents: PTIS Background Allocations Conclusion 21

Background Information The PTIS grant is aimed at improving transport infrastructure & systems for 2010 and beyond; Total PTIS grant from 2005/06 to 2010/11 = R13.639bn Total Host Cities PTIS grant = R10.979bn which is 80% of PTIS Grant Ongoing Monitoring and Evaluation of progress is in place, with monthly reporting Five Host Cities currently receiving technical assistance (Polokwane, Rustenburg, Mangaung, Mbombela and Tshwane) 22

PTIS Allocations per City and/or Entity Allocations per City / Entity Budget Totals R'000 2009/10 2010/11 Period Johannesburg 600,214 950,471 2,831,756 Tshwane 565,245 864,180 2,068,744 Ethekwini 376,926 529,699 1,690,934 Cape Town 291,912 527,270 1,602,025 SARCC 450,000 1,315,000 Nelson Mandela 147,079 323,058 1,029,871 Mangaung 82,168 183,551 586,166 Inter-city buses 500,000 SANRAL 200,000 430,000 Mbombela 60,833 135,893 424,910 Polokwane 66,146 147,161 420,914 Non Host Cities 66,695 152,880 414,134 Rustenburg 67,782 150,337 323,776 CBRTA 1,000 Total 2,975,000 4,464,500 13,639,230 23

PTIS Allocations per City and/or Entity Total R13,64 Billion from 2005/06 to 2010/11 24

Thank you 25 25