1. Cross-Border Road Transport Agency CROSS BORDER ROAD TRANSPORT AGENCY (C-BRTA) STRATEGIC AND ANNUAL PERFORMANCE PLANS 2014/15 PORTFOLIO COMMITTEE ON TRANSPORT 26 TH August 2014 by Sipho G. Khumalo

2. Cross-Border Road Transport Agency Presentation Outline 1. Strategic Thrust 2. Mandate 3. Vision & Mission 4. Strategic Oriented Goals 5. Financial Performance as at 31 March 2014 5. Progress on Strategic Projects 6. Annual Performance Plan 2014/15 7. Burning Issues and Interventions 8. Strategic Impediments & Initiatives 9. Concluding Remarks

3. Cross-Border Road Transport Agency NATIONAL DEVELOPMENT PLAN STATE OF THE NATION ADRESS PRESIDENTIAL INAUGURAL ADRESS MEDIUM TERM STRATEGIC FRAMEWORK C-BRT ACT MINISTER’S DELIVERY AGREEMENT WITH THE PRESIDENT C-BRTA Strategic Thrust 3

4. Cross-Border Road Transport Agency March 2013 MTSF 2014/2019: PRIORITY 11: CREATE A BETTER SOUTH AFRICA AND CONTRIBUTE TO A BETTER AFRICA AND A BETTER WORLD Increase in foreign direct investment Increase South Africa’s Exports Furtherance & Strengthen of Regional Integration Enable Regional Growth Increase Intra Regional Trade RSA a globally competitive economy Government Key Strategic Focus Areas 4

5. Cross-Border Road Transport Agency MINISTER’S DELIVERY AGREEMENT: JOB CREATION. WOMEN EMPOWERMENT. YOUTH DEVELOPMENT. SKILLS DEVELOPMENT. EMPOWERMENT OF PEOPLE LIVING WITH DISABILITIES. NATIONAL DEVELOPMENT PLAN: CAPACITY BUILDING OF STAFF AT ALL LEVELS. CAPACITY BUILDING OF STATE OWNED ENTERPRISES. IMPLEMENTATION OF A FOCUSED REGIONAL INTEGRATION STRATEGY. Other Strategic Priorities 5

6. Cross-Border Road Transport Agency Mandate To improve the flow of passengers and freight by road transport in the region To introduce regulated competition in cross-border road passenger transport To reduce operational constraints for the cross-border road transport and to support trade facilitation To support the development of the cross-border road transport industry and to establish meaningful industry partnerships To strategically reposition the work of the C-BRTA. 6 Established in terms of the Cross-Border Road Transport Act, No. 4 of 1998

7. Cross-Border Road Transport Agency 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 Facilitate Unimpeded flow of Cross Border Transport Promote Regional integration Promote safe and reliable cross-border transport; and Strategically positioning the work of the C-BRTA in order to enhance organizational Sustainability 7

8. Cross-Border Road Transport Agency 2010/2011 CASH FLOWS FY2009/2010 FY2010/2011 Net cash from operating activities (day- to-day income and expenses) R4.67m(7.35) Asset acquisitions(R0.89m)(6.56) Total cash movement for the yearR3.62m(13.94) Total cash in the bankR16.95mR3.02m DEPLETION OF CASH RESERVES Cash Flows: 2010/2011 11

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10. Cross-Border Road Transport Agency Reflecting on the 10 Point Plan (as of June 2013) ItemInterventionProgress 1Recruiting suitably qualified personnel 2Consensus on the mandate & legitimacy of the C-BRTA 3Image rebuilding through obtaining an unqualified audit opinion 4Resolving governance lapses at Board level 5Developing a funding model responsive to operational imperatives 6An organisation structure that is consistent with the mandate 7Developing leadership & managerial cohesion at all levels 8Developing a responsive organisational culture and values 9Inculcating performance standards & accountability 10Developing strategic partnerships with key stakeholders 14

11. Cross-Border Road Transport Agency Audit Outcomes The Agency attained its first unqualified audit opinion since establishment 15 years ago. 15 2010/11 and 2011/2012 2013/14 2012/13 QUALIFIED AUDIT UNQUALIFIED AUDIT UNQUALIFIED AUDIT

12. Cross-Border Road Transport Agency Strategic Partnerships REGIONAL: SADC Secretariat, JC, JRMG NATIONAL: BCOCC, NICOC, NATJOINTS, IACF, DEP. Of Tourism, BRAND SA, DHA, SARS, PROVINCIAL: Transport MECs and Provincial transport Depts LOCAL LEVEL: Metro’s and Municipalities INTERNAL: Route Committees, Operator Forums, Stakeholder Forums, Joint law Enforcement Initiatives, SMME development initiatives

13. Cross-Border Road Transport Agency Employment Equity 2013/2014 financial year 17 Employment Equity for 2013/2014

14. Cross-Border Road Transport Agency 18 Employment Equity … Employment Equity (2)

15. Cross-Border Road Transport Agency 2010/2011 CASH FLOWS INCOME ACTUALBUDGET% VARIANCE TOTAL INCOME140, 815, 272185, 768, 921(24%) Permit revenue96, 456, 191160, 903, 021(40%) Penalty revenue35, 052, 80020, 865, 90068% Interest received5, 977, 3004, 000, 00050% Other income3, 328, 981-100% 19 Financial Performance as at 31 March 2014

16. Cross-Border Road Transport Agency 2010/2011 CASH FLOWS EXPENDITURE ACTUALBUDGET% VARIANCE TOTAL EXPENDITURE187, 331, 310185, 768, 921(1%) Staff costs & Directors Remuneration 118, 189, 614124, 629, 4326% Audit Fees (Inter. & External)3, 329, 0123, 350, 9001% Consultation costs9, 808, 69113, 192, 41426% Legal fees1, 161, 0632, 700, 00057% Other operating expenses50, 128, 17239, 489, 541(27%) Depreciation and amortisation 4, 714, 7582, 407, 320(96%) 20 Financial Performance as at 31 March 2014 (2)

17. Cross-Border Road Transport Agency 2010/2011 CASH FLOWS DEFICIT FOR THE YEAR ACTUALBUDGET Total income 140, 815, 272185, 768, 921 Total Expenditure 187, 331, 310185, 768, 921 Deficit for the year(46, 516, 038)- 21 Financial Performance as at 31 March 2014 (3)

18. Cross-Border Road Transport Agency Progress on Strategic Projects (1) 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 Shareholder to formally adopt OCAS at national level; Development of OCAS scheme standards; and Piloting – 2016.

19. Cross-Border Road Transport Agency Progress on Strategic Projects (2) 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

20. Cross-Border Road Transport Agency Progress on Strategic Projects (3) 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 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. 24

21. Cross-Border Road Transport Agency Progress on Strategic Projects (4) 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 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. 23

22. Cross-Border Road Transport Agency Progress on Strategic Projects (5) 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 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 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. 22

23. Cross-Border Road Transport Agency Regulatory Committee Mandate Section 23 of the C-BRT Act mandates the Board to regulate access to the cross-border road transport market. Regulatory Committee established in terms of section 13 of the C-BRT Act to assist the Board in the execution of its regulatory functions. Regulates market access through permit administration process based on provisions of the road transport agreements. Liaison with Transport Appeal Tribunal on matters of mutual interest.

24. Cross-Border Road Transport Agency Annual Performance Plan 2014/15 32 Strategic Objectives 2014/19Key Performance Indicators (APP 2014/15) To introduce and implement regulated competition 1.Implement the scientific tool used by the Regulatory Committee (MAR); To revise the C-BRTA mandate2. Initiatives taken to revise the C-BRTA mandate; To promote efficiencies in permit issuing. 3. Develop and implement the new permit system; To generate and deploy strategic intelligence capabilities to improve compliance with road transport legislation 4.Developed and Implemented Operator Compliance Accreditation Scheme (OCAS); 5. Operationalise smart law enforcement system; 6. Permanent deployment of Inspectors within 2km proximity from major borders; 7. Number of inspections conducted;

25. Cross-Border Road Transport Agency Annual Performance Plan 2014/15 33 Strategic ObjectivesKey Performance Indicators To increase strategic influence with stakeholders so as to enable the organisation to achieve its objectives. 8.Implement empowerment initiatives focusing on historically disadvantaged individuals; 9. Percentage achieved on client satisfaction survey conducted; To proactively provide value added advisory services to the Minister of Transport and other relevant stakeholders. 10.Cross-border road transport report submitted to the Minister and other relevant stakeholders; Annual Performance Plan 2014/15 (2)

26. Cross-Border Road Transport Agency Annual Performance Plan 2014/15 (3) 34 Strategic ObjectivesKey Performance Indicators To develop and implement a high performance culture in the organization. 11. Improve organizational culture; 12. Enhance performance standards aligned to organisational strategic objectives and values; To ensure the financial viability and sustainability of the C-BRTA 13. Develop and implement financial sustainability strategy/model; and To improve the internal control environment 14. Maintain an unqualified audit opinion.

27. Cross-Border Road Transport Agency MTEF Budget Per Classification 35 2014/152015/162016/17 Revenue Permit fees R185mR199mR214m Penalties R24mR25m Interest R5mR6m TOTAL REVENUE R214mR229mR245m Current Payments Compensation for employees R142mR152mR164m Goods and Services R72mR77mR81m Capital Assets Capital Expenditure R20mR10m TOTAL EXPENDITURE R234mR239mR255m

28. Cross-Border Road Transport Agency MTEF Budget Per Division 36 2014/152015/162016/17 CURRENT EXPENDITURE Facilitation and Industry Development R20mR21mR23m Road Transport Inspectorate R78mR83mR87m Regulatory and Legal Services R27mR29mR31m Strategic Support R24mR26mR28m Administration (Governance, CEO’s Office, Corporate Service and Finance) R65mR70mR76m TOTAL CURRENT EXPENDITURE R214mR229mR245m

29. Cross-Border Road Transport Agency Critical Matters and Interventions 30 Key ChallengesInterventions On-going litigation against the C-BRTA on the increase of permit fees The Agency’s application for leave to appeal was unsuccessful. The legal representatives of the Agency were instructed to petition the Supreme Court of Appeal for leave. The petition is pending. Resolution of the Lesotho/Free State passenger movement resulting in non- adherence to SACU MOU Departmental leading role in the amendment of the C- BRT Act. Consulted: Select Committee on Public Services, Executive Council: Free State Province, the Regulatory Committee of the C-BRTA, the Inter Agency Clearing Forum, National Intelligence Coordinating Committee, JCPS Cluster, NATJOINTS, Gauteng MEC of Roads and Transport, Ministry of Transport of the Kingdom of Lesotho, passenger transport operators affected. 37

30. Strategic Impediments & Initiatives Need to focus on the funding model as it is evident that the current model is not sustainable. Need to use JCs and JRMGs as outcome-based meetings through which we add value to the industry, coupled with structured reporting of outputs of these meetings, through the Regulatory Committee, with Ministerial and Parliamentary structures. Focus on developing country profiles to empower operators in member state countries and Focus on beyond the borders, where our operators face major impediments. Need to develop a comprehensive plan for addressing the question of un- roadworthy cross-border vehicles and to foster a review of SADC vehicle standards. 38

31. Cross-Border Road Transport Agency Strategic Impediments & Initiatives (2) Focus on Road Safety. Need to develop the capability and competency for championing issues pertaining to “vehicle safety” and introducing the Australian-type accreditation systems within S.A. Need for appreciating the changing dynamics in border towns and the need to respond to provincial imperatives e.g. Musina. Ficksburg Strengthening partnerships with SARS and other players in the Border environment. Need for protection of our S.A. domestic operators in regard to conditions obtaining in our neighbouring countries – need for review of Bilateral Agreements & monitoring of implementation of the SADC Protocol. 39

32. Cross-Border Road Transport Agency Need for activation of the entire mandate of the C-BRTA to enable seamless and efficient passenger and freight logistics in the cross-border space. Harmonisation of regulatory frameworks between the C-BRTA system and other licensing authorities (Provincial) Elevation of the Profiling unit to provide intelligence to support the cross-border transport industry. Remote issuance of cross-border permits within two working days to enhance customer services and reduce cost of doing business. Empower cross-border operators to diversify their business models (service stations, etc) Strategic Impediments & Initiatives (3) 40

33. Cross-Border Road Transport Agency Concluding Remarks The C-BRTA is geared to demonstrate its commitment to adding public value through its strategic interventions. This Agency is also poised to support the National Programme of Action of government of industrialization and job creation. The Agency is committed to maintaining an unqualified audit opinion. Going forward, the C-BRTA is gearing itself to improve its service offerings by overhauling its permit administration system. 42

34. Cross-Border Road Transport Agency i thank you, sincerely.