1 SARCC Portfolio Committee on Transport Budget Presentation 18 MARCH 2005

2 Presentation Outline Introduction – Eddie Lekota - CEO SARCC Overview Business Focus Finance Budgets Conclusion

3 Business Focus Service Rolling Stock Safety & Security Focused Projects Service Extension Funding

4 CAPEX Allocation

5 Table 1 ROLLING STOCK PER REGION - 65,50% - 60,50% - 67,50% - 66,90% % Utilized Coaches req. for min. Service Available coaches for service Contractual Allocation (coaches) TshwaneDurbanW-CapeWitsREGION

6 2003/4 AUDIT REPORT Property Plant and Equipment Rolling Stock Classification Impairment Depreciation AUDIT QUALIFICATION

7 PROGRESS TO DATE 1. POLICIES IN PLACE Investment Materiality Framework Capitalisation and Maintenance Research and Development PPE –Accounting Policy

8 COMPLIANCE TO GAAP - PPE 1.Items of Assets (PPE) not carried at fair value, retrospective application of AC123 (revised) will be conducted. 2.A detailed analysis of ensuring that our fixed asset system has all the functionalities to calculate all the requirements of AC123 is underway. 3.All assets are to be split into components. A guideline is being prepared for the identification of minimum components. 4.The Residual values and useful lives will be evaluated every year. 5.SARCC’s Group Policy and Procedure Manual will be updated regularly to comply with the requirements. Annual Report 2004/5 Qualification

Budget Allocations R'million Actual Budget 2002/ / /2005 AOPERATIONAL SUBSIDY: Income1,8472,0342,172 Subsidy 1,546 1,6791,874 Rental of assets 60 Property Development Net interest BLess: Expenditure1,806 2,021 2,172 Commuter services1,216 1,291 1,414 Asset rental/Spoornet station maintenance Heavy repairs/Operational Property expenses Insurance Head Office & other (A-B) Operational Subsidy Surplus CAPITAL SUBSIDY: Capital Rolling Stock 100 Additional Capital

– 2008 Budget Allocation R'million Budget 2005/ / /2008 AOPERATIONAL SUBSIDY: Income2,0692,1942,310 Subsidy 1,7801,887 1,982 Rental of assets 60 Property Development BLess: Expenditure2,2642,3992,525 Commuter services1,4841,5741,656 Asset rental/Spoornet station maintenance 48 Heavy repairs/Operational Property expenses Insurance Head Office & other Khayelitsha extension operational requirements 3 3 Operational Subsidy (shortfall)/surplus (195)(205)(215) (A-B) CAPITAL SUBSIDY: Capital Rolling Stock100 Additional Capital ,016 VAT(85)(102)(125)

11 Subsidy Allocation

12 CONCLUSION Budget Vs Strategy Implications of the Consolidation