1. Portfolio Committee Department of Transport Annual Report 2005 12 October 2005 Department of Transport

2. Contents of presentation Department of Transport Past Performance Financial Report Audit Report

3. Past Performance Department of Transport Past Performance Framework policy development Ports and freight Service delivery Bus subsidy reform Taxi recapitalisation Passenger rail (infrastructure upgrading) Public entity oversight RTMC, RAF and Roads coordination Transport regulation, monitoring and systems PIF, BEE, planning support and NATIS

4. Department of Transport The National Ports Bill in Parliamentary process The process of setting up of the Independent Port Regulator was initiated 2005/06 update: The National Ports Bill went successfully through the legislative process The Act is in the process of being prepared for proclamation The setting up of the Independent Port Regulator has commenced The Department is in the process of completing Port Regulations The process of appointing a Board for the Independent Port Regulator has been initiated. Ports 2004/05 progress

5. Department of Transport Bus subsidy reform 2004/05 progress Developed a passenger charter All interim contracts now on the Subsidy Management System Developed a model for supervision and monitoring 2005/06 update: MINMEC decision that bus subsidies should be transformed to public transport subsidies All interim contracts must be transformed into tendered and negotiated contracts over the next two years Funding requirements (+25-30%) hamper the transition to tendered contracts

6. Department of Transport Freight 2004/05 progress Identified key corridors in order to determine infrastructure investments Initiated a branch line strategy for the revival of sustainable branch lines for local economic development 2005/06 update: Draft National Freight Logistics Strategy approved by Cabinet Initial phase of implementation of the Eastern and Western Corridor Strategies are currently being implemented An economic analysis is being performed to assess freight transportation costs and their impact on competitiveness A National Freight Databank is being developed

7. Department of Transport Taxi recapitalisation 2004/05 progress Revised approach approved by Cabinet Provincial readiness assessment was completed 2005/06 update: The following issues were approved by Cabinet in July 2005: Final vehicle safety Regulations Rollout and implementation strategy Rollout and implementation project plan The vehicle safety Regulations were gazetted on 1 September 2005 The tender specifications for the Scrapping Administration Agency in the process of being finalised. Agency expected to be operational by January 2006 Conversion of permits to operating licences will be completed by 30 November 2005 The regulation of the industry has been initiated with amendments to the NLTTA Act.

8. Department of Transport Passenger rail infrastructure and service upgrading 2004/05 progress Passenger rail coaches overhauled and upgraded: Quantities 2002/032003/042004/05 Overhauls238300401 Upgrades1255364 For Mabopane station: Electric installations and ablution facilities completed Construction of taxi lanes in progress Fire detection and prevention systems completed For Khayelitsha railway extension: Design and planning completed Labour intensive procurement model completed Cabinet approved the consolidation of passenger rail entities

9. Department of Transport Passenger rail infrastructure upgrading (continued) 2004/05 progress 2005/06 update: Due diligence was completed for three entities The business plan for the consolidated entities is being finalised An interim rail plan was completed Developed a stabilisation plan for commuter rail Surveys were completed for Akasiaboom Station modal integration initiatives

10. Department of Transport Road Accident Fund legislative amendments and restructuring 2004/05 progress Revised and published RAF amendment Bill Convened an Interdepartmental Committee for Road Accident Victims Held open stakeholder meetings Appointed a project manager and expert group A draft policy framework for a no-fault system was developed A comparative analysis of fault based and no-fault systems was initiated 2005/06 update: Undertook an international best practice assessment Completed a risk assessment and risk strategies relating to a future no-fault system Completed an implementation plan and budget on the process of restructuring In process of finalising proposals to Cabinet on the no-fault system

11. Department of Transport Roads co-ordination 2004/05 progress Integrated planning and delivery was strengthened through the Roads Coordinating Body. Completed audit and specifications of inter and intra road asset management systems The Trans Kalahari Corridor action plan implementation was underway through the TKC Management Committee The road classification system was completed as part of the new road strategic framework. 2005/06 update: Road Strategic Framework finalised for tabling in Cabinet Municipal road network assessment study commissioned.

12. Department of Transport Road infrastructure upgrading 2004/05 progress The primary road network was extended by 2070 km of roads The N1 Vaal, N1 Great North and N4 East Toll plazas were opened Poverty alleviation projects at national level created 1,457 jobs; resulted in the building of 110 ramps or crossings; the construction of 91 km of sidewalks; the upgrade of 310 km of gravel roads; road clearance of 374 km and the construction of 9 bridges The infrastructure of 23 border posts was upgraded SANRAL was a major contributor to a locally developed Pave Concrete Pavement Design method The landmark Nelson Mandela Bridge was completed An upgrade of the N2 in support of the Coega development was 55 per cent completed at a cost of R 42 million 90 per cent of the N4 Platinum Highway project has been open to traffic and all toll plazas were opened by December 2003. On the N2, 50 bridges were repaired and 13 rehabilitated

13. Department of Transport Road infrastructure upgrading 2005/06 update: Road maintenance and job creation enhanced within EPWP framework through the use of the Zibambele program in several provinces Over 3000 km of provincial roads transferred to SANRAL in 2005. Road construction sector transformation incorporated into the construction BEE Charter

14. Department of Transport Performance Indicator Framework 2005/06 update The objective is to develop transport performance indicators to measure the performance of the various modes of transport A draft Performance Indicator Framework (PIF) was developed and is currently being tabled for discussion with various internal and external stakeholders. Finalisation is expected by December 2005. The indicators will enable policy makers to identify development needs of the transport sector and to benchmark transport sub-sectors’ performance Indicator trends will provide information regarding economic opportunities available to the sector

15. Department of Transport BEE Strategy 2004/05 progress The following sub-sector charters had been completed: -Public Sector (Department of Transport, Provincial Departments of Transport and State Owned Enterprises) -Maritime Transport and Service Industry -Freight Forwarding and Clearing -Rail and Bus Sectors 2005/06 update: Draft Integrated BEE Charter (includeds 8 sub-sector scorecards) has been developed & will launched at the end of 2005 Outstanding charters are: Road freight, Aviation and Taxi industry – expected completion by December 2005

16. National Household Travel Survey 2004/05 progress The National Household Travel Survey’s (NHTS) objective is to provide: strategic insight into the travel patterns and transport problems of the people of South Africa a scientific platform for future transport policies informed planning for transport provision resource for local government’s integrated transport plans (ITPs) The collection of data for the National Household Survey was completed The analysis of data was completed 2005/06 update: The survey results were submitted to Cabinet in July 2005 and was released in September 2005 Department of Transport

17. Transport planning 2004/05 progress The National Land Transport Transitional Act requires Provinces to complete Provincial Land Transport Frameworks (PLTF’s) and Municipalities to prepare Integrated Transport Plans (ITP’s), comprising of Current Public Transport Records (CPTR’s), Operating License Strategy (OLS), Rationalisation Plans and Public Transport Plans (PTP’s). Progress: Eight Provinces completed their PLTF’s. Eighty per cent of Municipalities completed their ITP’s. The others are expected by December 2005

18. Department of Transport NLTTA promotion 2004/05 progress Held training workshops in all the provinces as part of awareness with respect to the NLTTA as well as for transport planning. Implemented parts of the Act in ISRDP nodes (Bohlabela, Kgalagadi, OR Tambo and Uthungulu District Municipalities. Established a pilot Transport Authority in Ethekwini

19. Department of Transport National Traffic Information System (NaTIS) 2004/05 progress Draft Law Enforcement Code completed and ready for discussion eNaTIS hardware successfully deployed in Gauteng (100% completed) Overall hardware deployment was 30% complete Deployment was initiated in Mpumalanga, Limpopo and KwaZulu-Natal 50% of the expenditure on the migration project was incurred to March 2005 2005/06 update: New central data and disaster recovery centre completed eNaTIS hardware successfully deployed in Western Cape Targeted completion date is March 2006

20. Department of Transport Non-Motorised Transport 2004/05 progress Allocated R16,4 million for Non-Motorised Transport over the last 5 years. Provinces contributed R4million Delivered 11 410 bicycles Established 22 facilities for sale and maintenance Infrastructure activities were planned and designs for construction are underway Ten animal drawn carts have been completed to test new technology – complies with SABS standards and SPCA specifications Completed construction of bicycle paths in Atteridgeville and Galeshewe

21. Department of Transport South Africa has successfully complied with the International Ship and Port Security Code as set down by the International Maritime Organization. The Maritime Security Regulations were developed and were implemented from 1 July 2004. Nine Regulations were finalised over the past three years The first Maritime Yearbook was showcased The first Maritime awards ceremony was hosted 2005/06 update: The Maritime Security Coordinating Centre was set up in 2005. The Suppression of Unlawful Acts by sea and the Protocol was ratified in July 2005 Bilateral merchant shipping agreements were signed with Libya and Gabon Convened Joint Bilateral Shipping Committees with Iran, Algeria, Mozambique and Cuba Maritime Transport Regulation 2004/05 progress

22. Contents of presentation Department of Transport Financial Report

23. Department of Transport Financial Overview Overview of expenditure against budgetR’000 Budget allocation6 759 044 Rollovers40 127 Shifted to Vote 25: Safety and Security(30 000) Total of Adjusted budget6 769 171 Compensation of employees82 934 Goods and Services330 856 Financial transactions in assets and liabilities26 563 Transfers and Subsidies6 214 951 Expenditure on capital assets14 075 Total expenditure6 669 379 Under spent against budget99 792

24. Department of Transport Under expenditure Details of major amounts under spentR’000 Assistance for Overloading Control13 500 Arrive Alive – committed but not spent19 900 Migration to new NaTIS system17 700 Policy development15 200 Establishment of Road Traffic Infringements PPP4 747 Implementation of NLTTA16 100 Contract for oil pollution prevention8 000 Establishment of Ports Regulator6 700 Total of above101 847

25. Department of Transport DetailsR’000 Shifted to NaTIS to increase funding for the migration to the new system 8 400 Shifted to fund a contract with the Special Investigation Unit to investigate fraudulently issued driver’s and vehicle licenses 16 800 Funding of investigations not budgeted for1 000 Funding of a due diligence exercise for the merging of Rail entities 3 300 Provision of financial assistance to the Cross Border Road Transport Agency 2 000 Reprioritisation during the year

26. Department of Transport Transfers and Subsidies paid DetailsR’000 Rail capital and subsidies2 498 550 National roads1 441 731 Bus subsidies2 172 740 Urban transport pilot projects44 024 Railway Safety Regulator15 000 South African Maritime Safety Authority10 768 S.A. National Taxi Organisation10 000 South African Civil Aviation Authority6 028 Cross Border Road Transport Agency2 000 Capacity Development8 106 International membership fees3 316 Other2 688 Total6 214 951

27. Contents of presentation Department of Transport Audit Report

28. Department of Transport Major issues in Audit Report Qualification: The Auditor-General could not determine the impact of the credit card drivers license manufacturing contract on the financial statements. The Department will arrange for the following: 1) Surplus funds to be paid to the revenue fund. 2) Financial records to be written up 3) Audit of the financial records by the Auditor-General Fruitless and Wasteful expenditure of R 958 683: Funding for the migration to the new NaTIS system was inadequate in 2003/04. Amounts totaling R 50,7 million was shifted to fund the project, but the interest that accrued was only paid in 2004/05.

29. Department of Transport Major issues in Audit Report (continued) Irregular expenditure: Reported in 2004/05 – R 1 251 032: The Information Technology Committee approved a procurement of R 63 292 that was not evaluated according to regulations. A subsequent evaluation indicated that the successful supplier would have been awarded the contract if the evaluation was done properly. An investigation initiated by the Department revealed that officials requested an insurance fund to pay a contractor amounts totaling R 1 187 740 from a surplus that belonged to the State. The officials acted on a recommendation from a senior official that these funds could be utilised. The recommendation was however not approved.

30. Department of Transport Major issues in Audit Report (continued) Unauthorised expenditure: Unauthorised expenditure of R 20,8 million was written off in those cases in which a response was received from the State Tender Board. It is expected that the remaining R 3,1 million will be written off when responses are received from the State Tender Board. Incompleteness of driver’s license registration fees: It is expected that the historical levies that could not be collected will be written off because it is uneconomical to recover.

31. Department of Transport Major issues in Audit Report (continued) Non compliance with PFMA and Public Service Regulations: The internal audit plan could not be approved because it was not risk based. A new risk assessment was completed for operational risks after year-end. Internal audit is also in the process of outsourcing an strategic risk assessment. A new Audit Committee was appointed. The new strategic plan and annual report were tabled within the required time frames. National Road Traffic Act: The Department is in the process of developing a Best Practice Model for Driving License Testing Centres, and established a Forum of Inspectorates to enhance compliance and service delivery.

32. Department of Transport Major issues in Audit Report (continued) Internal Control weaknesses: Weekly progress reports are compiled and followed up w.r.t. subsistence and travel advances. A new travel policy is in the process of being prepared for approval. Income tax Salary income tax control account: An automatic entry that credits SARS with income tax deducted was reversed by PERSAL for March 2005. Finance only discovered this before the books closed in May 2005. The correcting entry was incorrectly posted, but was subsequently corrected. Monthly reconciliation’s are recorded for all control accounts. Long outstanding debts were not properly followed up due to a lack of capacity in Finance. Additional capacity is being outsourced to assist with debt collections. A workshop was held on all audit issues to inform the development of further internal controls.

33. Department of Transport Issues from previous Audit Reports resolved Proper fixed asset register now in place Controls surrounding inventories implemented Formal written policies finalised and implemented New Audit Committee appointed Bus subsidy contract monitoring mechanisms put in place Payment of sessional allowances clarified

34. Department of Transport Thank you