1. Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

2. Presentation Outline Vision and Mission Mandate and Strategic Imperatives Cross border environment Review of Organisational Performance Progress on Strategic Projects Strategic Partnerships Development & Empowerment Programmes Employment Equity Financial Information Audit Outcomes 2013/14 Looking into the future Key Challenges and Intervention Areas Concluding Remarks

3. Vision and Mission Vision To be the leading cross-border road transport Agency within the region Mission To spearhead social and economic development within the SADC region through facilitating unimpeded cross border road transport Strategic Outcome Oriented Goals Enhance organizational Performance Facilitate Unimpeded flow of Cross Border Transport Promote Regional integration Promote safe and reliable cross-border transport; and Strategic positioning to enhance organizational Sustainability

4. Mandate & Strategic Imperatives To eliminate impediments in the flow of passengers and freight by road across regional borders To introduce regulated competition in cross-border passenger transport To liberalise market access in the cross-border freight transport To reduce operational constraints for the cross-border road transport industry To enhance and strengthen the capacity of public sector; and To build industry partnership and to empower the cross-border road transport industry. Established in terms of Act No. 4 of of 1998

5. i Cross border environment

6. Reflecting on the 10 Point Plan ItemInterventionStatus Unresolved areas 1Developing strategic partnerships with stakeholders 2Consensus on organizational mandate Resolved areas 3Resolving governance lapses at Board level 4Improve image of Agency by obtaining a clean audit 5Developing a sound funding model 6An organizational structure consistent with the mandate Partly resolved 1Recruiting suitably qualified personnel 2Organizational culture and values 3Developing leadership cohesion at all levels 4Inculcating a performance driven culture

7. The Agency attained its second consecutive unqualified audit opinion since establishment 15 years ago. 2010/11 and 2011/2012 2013/14 2012/13 QUALIFIED AUDIT UNQUALIFIED AUDIT UNQUALIFIED AUDIT Audit Outcomes - 2014

8. ORGANIZATIONAL PERFORMANCE 2013/14

9. Review of Organisational Performance P ERFORMANCE TARGETS N UMBER OF INDICATORS % O BTAINED 65% of the targets set were achieved, representing an overall performance improvement of 17% from the previous financial year Performance targets fully achieved (100%)40 100% and above There was significant progress on many other indicators during the financial year. Recovery plans were put in place in some areas.

10. Review of Organisational Performance Key achievements:  Increase in industry development programmes implemented to support cross- border operators.  Completed 8 route surveys in Zimbabwe, Zambia, Malawi, Botswana, Mozambique, Swaziland, Lesotho and Namibia – this will form basis for scientific tool improvement to regulate the cross-border market. (To assist decision on split between taxis and buses – to inform on number of permits to be issued per corridor.  Launched Cross-Alive Road Safety campaigns in support of the UN Decade of Action for Road Safety.  Entered into partnerships with key strategic stakeholders who play a critical role in the cross-border industry: (Department of Trade and Industry, Department of Tourism, Department of International Relations and Cooperation, Department of Home Affairs, Department of Environmental Affairs, South African Revenue Service.  Formalised relationships with other stakeholders.

11. Review of Organisational Performance - Law Enforcement W ORK A CTIVITY 2012/132013/14D IFFERENCE % M OVEMENT Y EAR - ON - YEAR MOVEMENT Vehicle Inspections132,372211,79879,42660% Prosecutions15,38429,41114,02791.2% Compliance Rate88.79%81%(7.79%)(8.77%)

12. Review of Organisational Performance - Permits Issued W ORK ACTIVITY 2012/132013/14% M OVEMENT Y EAR - ON - YEAR MOVEMENT Total Permits issued75 00080 0346.7% PERMITS ISSUED PER CATEGORY Passenger transport - Taxi10 53911 0955.30% Passenger Transport - Buses3 1442 781 Freight transport55 05363 93516.10% Tourist transport1 6822 21331.50%

13. Permits Issued for Passenger Transport (Taxi) Permits issued per country during 2013/14Permits issued in 2012/13 and 2013/14 Country2012/132013/14% Movement Botswana33943728.90% D.R. of Congo04400% Lesotho2,9682,718(8.40%) Malawi220900% Mozambique4,3324,3901,30% Namibia7915494.90% Swaziland453422(6.80%) Zambia4035(12.50%) Zimbabwe2,3122,88224,60% Cabotage1433135% Total10,53911,0955.30%

14. Country2012/132013/1 4 % Movement Botswana100484384% D. R. of Congo2314(39%) Lesotho595506(14.90%) Malawi12716723.90% Mozambique631542(14.10%) Namibia11053(51.80%) Swaziland18273(59.80%) Zambia7765(15.60%) Zimbabwe1,299877(32.50) Permits Issued for Passenger Transport (Buses) Permits issued in 2012/13 and 2013/14Permits issued per country during 2013/14.

15. Country2012/132013/14% Movement Botswana7,7698,1805.30% D.R. of Congo4,9503,328(32.70%) Lesotho4,3154,026(6.70%) Malawi1,3221,81427.10% Mozambique8,46310,62525,50% Namibia5,8006,2347.50% Swaziland5,3575,281(1.40%) Zambia8,57413,72160% Zimbabwe8,43210,66626.50% Cabotage7160(15.50%) Permits Issued for Freight Transport Permits issued in 2012/13 and 2013/14 Permits issued per country in 2013/14

16. Permits Issued for Tourist Transport 2012/20132013/2014% Movement Regional 1,6822,213 31.50%

17. CHANGING GEARS STRATEGIC PROJECT PROJECT OBJECTIVE PROGRESS TO DATEFUTURE PLANS Strategic Value Proposition Plan To outline the future strategic value of the Agency within the transport industry Situational analysis completed Industry environmental scanning and stakeholder engagements on- going; and Integration of all strategic projects. Present a plan to DoT and the Minister of Transport (Shareholder with defined roles and strategic value propositions for the Agency in the cross border industry; Support the DoT in drafting legislation that may be required to change the mandate of the C-BRTA; Progressive implementation of the Strategic Value Proposition Plan in the cross border industry. Progress on Strategic Projects (1)

18. CHANGING GEARS STRATEGIC PROJECT PROJECT OBJECTIVE PROGRESS TO DATEFUTURE PLANS Operator Compliance Accreditation Scheme (OCAS) Accreditation of cross-border operators based on their risk profiles to reduce transit delays. Identifying the key OCAS system requirements; On-going technical stakeholder engagements; Benchmarking and tailoring completed; Draft Design Framework of OCAS governance approved by Regulatory Committee; and Development of business rules. Strategic stakeholder engagements with the regional stakeholders to formally adopt OCAS at a regional level; Piloting – 2016. Progress on Strategic Projects (2)

19. CHANGING GEARS STRATEGIC PROJECT PROJECT OBJECTIVE PROGRESS TO DATEFUTURE PLANS Market Access Regulation (MAR) Scientific determination of supply and demand within cross-border corridors. Draft Market Access Regulation Model finalised; The MAR Model has been expanded to cater for six (6) major cross border routes and is scheduled has been completed. Pilot and refine the MAR model in 2014/15; and Fully implement the MAR tool from 2015 onwards. 25 Progress on Strategic Projects (3)

20. CHANGING GEARS STRATEGIC PROJECT PROJECT OBJECTIVE PROGRESS TO DATE FUTURE PLANS Business Case for corridor and cross- border management reforms To define the role of the C- BRTA in border management and corridor management reforms. Project Completed Engage cross border industry stakeholders on proposed corridor and border management reforms and impact, 2014/15; Feasibility study on the recommended corridor and border management reforms. Share findings and recommendations with key stakeholders Development of implementation plans Progress on Strategic Projects (4)

21. CHANGING GEARS STRATEGIC PROJECT PROJECT OBJECTIVE PROGRESS TO DATE FUTURE PLANS Industry Partnership Development Plan (IPDP) To create mutually beneficial partnerships with industry stakeholders Stakeholder mapping Completed C-BRT stakeholder forum launched Build strong stakeholder relationships and partnerships in the cross border industry aimed at reducing operational constraints; and Drive initiatives on the development of SMMEs and empowerment of the historically disadvantaged individuals. Progress on Strategic Projects (5)

22.  REGIONAL: SADC Secretariat, Joint Committees, Joint Route Management Groups (JRMGs);  NATIONAL: Participation in Border Control Operational Coordinating Committee (BCOCC), Inter-Agency Clearing Forum (IACF), Department of Home Affairs (DHA), South African Revenue Service (SARS); National Intelligence Coordinating Committee (NICOC), National Joint Operational and Intelligence Structure (NATJOINTS);  PROVINCIAL: Transport MECs, HODs (Provincial Transport Departments);  LOCAL LEVEL: Metros and Municipalities; Strategic partnerships (1)

23.  INTERNAL: Route Committees, Operator Forums, Stakeholder Forums, Joint law Enforcement Initiatives, SMME development initiatives Strategic partnerships (2)

24.  Development of a Women-In-Transport programme aimed at introducing women operators to cross-border road transport.  On-Going SMME Development Programmes for aspiring Cross-Border Operators.  Training of inspectors on the C-BRT Act, Administrative Adjudication of Road Traffic Offices (AARTO, National Land Transport Act (NLTA), Professional conduct and law enforcement.  A significant number of senior management (8) within the Agency attended and successfully completed a Senior Management Development Programme. Development & Empowerment Programmes

25. HUMAN RESOURCES

26. Employment Equity RACE GENDER

27. FINANCIAL OVERVIEW

28. Financial Performance 2013/14 2012/132013/2014 REVENUE Permit IncomeR165,93mR96,46m Penalty IncomeR20mR35,05m Other IncomeR2,40mR 3,33m Interest ReceivedR4,92mR 5,98m EXPENSES Employee CostsR101mR118m Operating Expenses R57,58mR69,01m SURPLUS / (DEFICIT) R34,50m(R46,52m)

29. Financial Position 2013/14 ASSETSLIABILITIES 2012/132013/14 CURRENT ASSETS Receivables R3,81mR3,91m Cash and Cash Equivalents R125,46mR120,31m NON-CURRENT ASSETS Property, Plant and Equipment R8,27mR7,97m Intangible Assets R1,15mR1,67m TOTAL ASSETS R138,68mR133,86m 2012/132013/14 CURRENT LIABILITIES Lease obligations R0,68mR0,52 Payables R18,20mR55,46m Provision R9,06mR13,75m NON-CURRENT LIABILITIES Retirement benefit obligations R1,65mR1,56m TOTAL LIABILITIES R29,59mR71,28m ACCUMULATED SURPLUS R109,10mR62,58m

30. Irregular, Fruitless & Wasteful Expenditure 2011/122012/132013/14 Fruitless and Wasteful Expenditure R456, 823R11, 689R2,224 Irregular ExpenditureR14, 265, 818R920, 010R827, 753 Fruitless & wasteful expenditure relate to interest paid to Telkom on overdue accounts. Irregular expenditure relate payment on month to month contracts entered into for regional office accommodation and security in the previous financial years.

31. AUDIT OUTCOMES

32. Audit Outcomes - 2014 Outcomes Audit Opinion  Unqualified audit opinion  No material audit adjustments to the annual financial statements Emphasis of matter  Funding of Operations – Court action was instituted by cross- border hauliers, challenging the new fees for cross-border road transport permits, which was effective from 01 April 2011. The outcome of this court action might have an impact on C-BRTA’s ability to generate the budgeted revenue levels. Conclusion on pre-determined objectives  Usefulness of reported performance information: -50% of Strategic Support targets and indicators were not verifiable  Reliability of reported performance information -Significant targets within Road Transport Inspectorate and Strategic support were not reliable when compared with reported information.

33. Audit Outcomes – 2014 - continue Outcomes Compliance with legislation  Contract management ineffective resulting in irregular expenditure

34. 2014/15 & BEYOND

35. Looking into the Future (1)  Introduction of the Operator Compliance Accreditation Scheme within S.A. and the SADC region  Implementation of Operator Value-Orientated Strategy.  Need for protection of S.A. domestic operators in regard to conditions obtaining in our neighbouring countries – need for review of Bilateral Agreements & implementation of the SADC Protocol.  Harmonization of Regulatory Systems between the C-BRTS & OLAS.  Need to focus on the funding model as it is evident that the current model is not sustainable.

36. Looking into the Future (2)  Need to develop the capability and competency for addressing the question of un-roadworthy cross-border vehicles and the review of SADC vehicle standards.  Strengthening Partnerships with the South African Revenue Service (SARS) and other Border Authorities.  Appreciating the changing dynamics in border towns and the need to respond to provincial imperatives (on-going engagements with Provinces).  Refining the work of the Profiling unit to provide intelligence to support the cross-border transport industry.  Achieve a clean audit opinion (clean administration)

37. KEY CHALLENGES

38. Key Challenges & Intervention Areas  Resolution of the Lesotho/Free State Cross Border passenger transport issue.  Provision for dealing with overloaded cross-border vehicles (below 3.5 tons) and use of bus trailers for the transportation of goods.  On-going litigation on the increased permit tariffs in 2011 and the newly increased tariffs in 2014.

39. Concluding Remarks  The Agency is poised to support the National Development Plan by championing objectives articulated in Chapter 3 (Gaining Global Market Share & S.A. as an integral part of regional growth); Chapter 4 (Regulation and Transport); and Chapter 7 (Positioning S.A. in the globalising world) of the NDP.  Going forward, the C-BRTA is gearing towards developing and implementing an “Operator Value -Orientated Strategy”  The C-BRTA is geared to demonstrate its commitment to adding public value through its strategic interventions.  All future plans are aligned to the Medium Term Strategic Framework (MTSF) 2014-2019 objectives.

40. i thank you