1. DEPARTMENT OF TRANSPORT BRIEFING TO THE PORTFOLIO COMMITTEE ON TRANSPORT FIRST QUARTERLY EXPENDITURE 2014/15 23 SEPTEMBER 2014 1

2. Expenditure to 30 June 2014:  Expenditure per Programme and Performance  Expenditure per Economic Classification  Expenditure per Programme per Economic Classification and Performance  Details of Transfer Payments  Monitoring mechanism for transfer payments 2

3. The Department has a total budget of R48 727 billion. To date of reporting the department has spent R14 414 billion or 30% of the allocated budget. Expenditure per Programme and Performance Programme Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 1. Administration 382 860 74 856 103 315 279 545 (28 459)26.98% 2. Integrated Transport Planning 81 184 21 753 11 409 69 775 10 34414.05% 3. Rail Transport 15 034 556 7 753 837 7 749 426 7 285 130 4 41151.54% 4. Road Transport 21 645 287 5 093 184 5 203 740 16 441 547 (110 556)24.04% 5. Civil Aviation 148 271 52 173 32 126 116 145 20 04721.67% 6. Maritime Transport 110 589 23 045 19 831 90 758 3 21417.93% 7. Public Transport 11 323 771 1 425 462 1 294 352 10 029 419 131 11011.43% Total Department 48 726 518 14 444 310 14 414 199 34 312 319 30 11129.58% 3

4. Total Number of quarterly targets = 80 % Achievement = 66 quarterly targets (82.5%) % Not Achieved = 14 quarterly targets (17.5%) 4

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6. Compensation of Employees: Underspent as a result of vacant posts. Goods and Services: Overspending due to eNatis. Machinery and Equipment: Underspent due to the renovation of the building. Expenditure per Economic Classification Per Economic Classification Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 Compensation of Employees 383 381 90 614 83 756 299 625 6 85821.84% Goods and Services 584 737 126 022 286 657 298 080 (160 635)49.02% Transfers & Subsidies 47 754 194 14 226 116 14 042 975 33 711 219 183 14129.41% Machinery and Equipment 4 206 1 558 811 3 395 74719.28% Total Department 48 726 518 14 444 310 14 414 199 34 312 319 30 11129.58% 6

7. UNDERSPENT Transfers & Subsidies; the first quarterly payment to Higher Education Institutions has not yet been paid due to delays in receiving invoices. Expenditure per Economic Classification: Programme 1 ProgrammePer Economic Classification Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 Administration Compensation of Employees 172 806 38 388 37 204 135 602 1 18421.53% Goods and Services 196 572 31 701 65 517 131 055 (33 816)33.33% Transfers & Subsidies 11 182 3 777 95 11 087 3 6820.85% Machinery and Equipment 2 300 990 499 1 801 49121.7% Total 382 860 74 856 103 315 279 545 (28 459)26.99% 7

8. Total Number of quarterly targets = 19 % Achievement = 16 quarterly targets (84%) % Not Achieved = 3 quarterly targets (16%) 7

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10. 1 st Quarter Targets:  Develop the draft Communication and Marketing Strategy;  Submit the Merchant Shipping Bill to Cabinet to seek approval to table in Parliament;  Submit final draft of the Adjudication of the Road Traffic Offences Amendment Bill to NEDLAC for approval;  Finalise the draft National Road Traffic Amendment Bill; 7

11. 1 st Quarter Targets:  Finalise the draft National Land Transport Amendment Bill;  Develop the draft International Relations Strategy;  Fill 20 vacant positions;  Conduct stakeholder consultations on the development of the Transport Sector HRD Strategy;  Negotiate MoU with SA Graduate Development Association for future graduate placement; 7

12. KEY NOTABLE ACHIEVEMENTS:  30 vacant positions were filled in the period under review;  The Merchant Shipping Bill submitted to Cabinet and subsequently approved. The DoT currently awaits the date for presentation to the Parliament Portfolio Committee on Transport;  Negotiations conducted with the South African Graduate Development Association (SAGDA) to develop a joint MoU to facilitate graduate placement across all spheres of government and to integrate workplace readiness and learner assessment within the programme. 7

13. UNDERSPENT Goods and Services is under spending due to the following projects: National Transport Planning databank projects, development of National Freight Logistics Strategy, Multi Modal Transport Planning and Co-ordination Act and Regional Corridor Strategy. Expenditure per Economic Classification: Programme 2 ProgrammePer Economic Classification Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 Integrated Transport Planning Compensation of Employees 39 382 9 485 8 924 30 458 56122.66% Goods and Services 41 573 12 118 2 438 39 135 9 6805.86% Machinery and Equipment 229 150 47 182 10320.52% Total 81 184 21 753 11 409 69 775 10 34414.05% 13

14. Total Number of quarterly targets = 12 % Achievement = 9 quarterly targets (75%) % Not Achieved = 3 quarterly targets (25%) 9

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16. 1 st Quarter Targets:  Develop the inception report for the development of the Multi-Modal Transport Planning and Coordination Bill;  Facilitate consultation with Inter-Ministerial Committee in preparation for the approval of the NATMAP 2050;  Develop the concept document for the gap analysis exercise on the existing National Transport Policy of 1996. 9

17. 1 st Quarter Targets:  Identify priority projects for funding and consult potential funders (Durban-Free State-Gauteng Logistics and Industrial Corridor projects);  Develop the implementation plan for the development of the Regional Corridor Strategy;  Conduct literature review on freight accidents;  Develop technical specifications for the review of the National Freight Logistics Strategy. 9

18. 1 st Quarter Targets:  STER: Finalise the revised Position Paper and submit the Bill to the Minister;  Appoint Transport BBBEE Charter Council members and submit to the Minister for approval;  Conduct rural accessibility index survey for identified rural districts. 9

19. 1 st Quarter Targets:  Energy Consumption Reduction Study: Collect data for the compilation of a Status Quo Report;  Review GreenHouse Gas Inventory Report for Tier 1. 9

20. KEY NOTABLE ACHIEVEMENTS:  Situational assessment conducted and Position Paper finalised for the establishment of the Single Transport Economic Regulator (STER);  Transport BBBEE Charter Council approved by Minister and the shortlisting of Council members finalised;  Rural Accessibility Index Survey carried out in various district municipalities in the Free State, KwaZulu-Natal, Limpopo, Mpumalanga, North West, Northern Cape, and Western Cape. 9

21. UNDERSPENT Goods and Services mainly due to the prioritisation on the establishment of Project Implementation Management Office (PIMO) between the Department and Passenger Rail Agency of South Africa (PRASA) for the Feasibility study on Moloto Rail Corridor, Rail Policy Act and Branchline Strategy. OVERSPENT Machinery and equipment is mainly due to office furniture that were purchased during the renovation of the building for the year. Transfers and subsidies a total amount of R7 693 billion has been paid to PRASA which constitutes 51% of the total budget of PRASA for the year. Expenditure per Economic Classification: Programme 3 Programme Per Economic Classification Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 Rail Transport Compensation of Employees 20 770 5 191 4 438 16 332 75321.37% Goods and Services 15 909 3 966 266 15 643 3 7001.67% Transfers & Subsidies 14 997 804 7 744 650 7 253 154 -51.64% Machinery and Equipment 73 30 72 1 (42)98.63% Total 15 034 556 7 753 837 7 749 426 7 285 130 4 41151.54% 21

22. Total Number of quarterly targets = 6 % Achievement = 6 quarterly targets (100%) % Not Achieved = 0 quarterly targets (0%) 11

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24. 1 st Quarter Targets:  Conduct stakeholder consultations on the National Rail Transport Policy Green Paper;  Prepare request for proposal to appoint transaction advisers for the development of the Branchline Strategy;  Benchmark international guidelines on regulatory information. 11

25. 1 st Quarter Targets:  Moloto Rail Corridor: Monitor the establishment of the project implementation office at PRASA;  Railway Safety Regulation Gap Analysis: ◦ Conduct literature review ◦ Conduct stakeholder consultations. 11

26. KEY NOTABLE ACHIEVEMENTS:  Literature review exercise completed on the Railway Safety Regulation Gap Analysis;  Establishment of the Project Implementation Management Office (PIMO) for the Moloto Rail Development Project on track. The PIMO to be launched during October Transport Month; 11

27. UNDERSPENT Goods and Services was underspent on S’hamba Sonke programme and Road Infrastructure Policy. OVERSPENT Goods and Services was over spent by an amount of R162 million due to the cost of e-Natis maintenance and operations. Expenditure per Economic Classification: Programme 4 Programme Per Economic Classification Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 Road Transport Compensation of Employees 50 599 11 700 10 497 40 102 1 20320.75% Goods and Services 49 058 10 218 166 081 (117 023) (155 863)338.54% Transfers & Subsidies 21 544 976 5 071 087 5 027 086 16 517 890 44 00123.33% Machinery and Equipment 654 179 76 578 10311.62% Total 21 645 287 5 093 184 5 203 740 16 441 547 (110 556)24.04% 27

28. Total Number of quarterly targets = 10 % Achievement = 8 quarterly targets (80%) % Not Achieved = 2 quarterly targets (20%) 13

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30. 1 st Quarter Targets:  Rehabilitate 165 lane-km of surfaced roads;  Reseal 450 lane-km of roads;  Re-gravel 450 km of gravel roads;  Patch 121 500 m 2 of blacktop;  Blade 70 000 km of gravel roads; 13

31. 1 st Quarter Targets:  Conduct stakeholder consultations and literature review on the development of the Road Infrastructure Policy for SA;  Establish the framework for development of the Road Safety Policy;  Align and Design high-impact Road Safety Programmes in conjunction with the Road Traffic Management Corporation and other road entities. 13

32. KEY NOTABLE ACHIEVEMENTS:  418 lane-km of surfaced roads rehabilitated;  774 km of gravel roads re-gravelled;  337 592 m 2 of blacktop patched;  21 997 km of gravel roads bladed. 13

33. UNDERSPENT Goods and Services is under spent due to the following projects: National Airports Development Plan and the National Civil Aviation Policy. Transfers and subsidies due to payment of foreign membership fees to the African Civil Organisation, International Civil Aviation Organisation and COSPAS-SARSAT. Expenditure per Economic Classification: Programme 5 Programme Per Economic Classification Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 Civil Aviation Compensation of Employees 36 060 10 288 7 994 28 066 2 29422.17% Goods and Services 75 586 20 222 11 812 63 774 8 41015.63% Transfers & Subsidies 36 198 21 529 12 286 23 912 9 24333.94% Machinery and Equipment 427 134 34 393 1007.96% Total 148 271 52 173 32 126 116 145 20 04721.73% 33

34. Total Number of quarterly targets = 12 % Achievement = 9 quarterly targets (75%) % Not Achieved = 3 quarterly targets (25%) 34

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36. 1 st Quarter Targets:  Develop technical specifications for the permission application process;  Submit first drafts of the ACSA Act and ATNS Act Amendments Bills for internal legal processing;  Develop technical specifications for the National Civil Aviation Policy;  Develop technical specifications for the National Airport Development Plan. 36

37. 1 st Quarter Targets:  Submit draft Civil Aviation Act, 2009 Amendment Bill for internal legal processing;  Negotiate 1 bilateral air service agreement;  Investigate aircraft accidents and release reports;  Review Aviation Industry Transformation Letsema 2013. 37

38. 1 st Quarter Targets:  Review International Civil Aviation Day (ICAD) 2013 and identify the host province to host ICAD 2014;  Visit 27 schools in 3 provinces to promote civil aviation as a career of choice among learners.  Conduct consultation with ICAO on the 1st draft Action Plan on Carbon Dioxide Emission Reduction;  Create industry awareness on the phasing out of the Chapter 2 Aircraft (Advertisements and meetings). 38

39. KEY NOTABLE ACHIEVEMENTS:  31 aircraft investigation reports released and 12 safety recommendations generated;  54 schools visited between April – June 2014 in three provinces. The aviation career awareness campaigns reached out to an estimated number of 750 learners in Limpopo, 996 learners in Gauteng and 684 in Mpumalanga. 39

40. UNDERSPENT Goods and Services is due to the following projects: Maritime Transport Policy and Legislation, Feasibility for undertaking the tug boat and Ratification of African Maritime Charter. OVERSPENT The membership fees to the International Maritime Organisation and the Indian Ocean Memorandum of Understanding which has been paid earlier than what was projected. Expenditure per Economic Classification: Programme 6 Programme Per Economic Classification Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 Maritime Transport Compensation of Employees 22 123 5 241 4 728 17 395 51321.37% Goods and Services 69 651 13 551 10 049 59 602 3 50214.43% Transfers & Subsidies 18 468 4 213 4 998 13 470 (785)27.06% Machinery and Equipment 347 40 56 291 (16)16.14% Total 110 589 23 045 19 831 90 758 3 21417.93% 40

41. Total Number of quarterly targets = 9 % Achievement = 7 quarterly targets (77.7%) % Not Achieved = 2 quarterly targets (22.2%) 17

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43. 1 st Quarter Targets:  Amended Maritime Security Regulations: Incorporate inputs from stakeholder consultations into the existing regulations;  Conduct site visits as a fact-finding mission on the implementation of conventions;  Cape Town Agreement: Submit the Convention to the State Law Adviser to obtain legal opinion. 17

44. 1 st Quarter Targets:  Submit the African Maritime Charter to the State Law Adviser to obtain legal opinion;  Submit the Maritime Labour Bill to Parliament for approval;  Develop technical specifications for the development of the Salvage Strategy;  Submit MARPOL IV & VI Conventions to Parliament for approval. 17

45. KEY NOTABLE ACHIEVEMENTS:  Site visits successfully conducted as a fact-finding mission on the implementation of conventions and the process of inviting auditors for the mock audit exercise is currently underway;  The Maritime Labour Bill was submitted to Parliament for presentation to the Parliament Portfolio Committee on Transport. 17

46. UNDERSPENT Goods and services due to the following projects: National Land Transport Amendment Bill, Review of the Rural Transport Strategy, Integrated Public Transport Network and National Learner Transport Policy. Transfers and subsidies due to expenditure for Taxi Recapitalisation: an amount of R66 million has been spent which was journalised in July 2014. Expenditure per Economic Classification: Programme 7 Programme Per Economic Classification Budget Cashflow projection 1st quarter Expenditure Available Under / (Over) spent % Spent R'000 Public Transport Compensation of Employees 41 641 10 321 9 971 31 670 35023.95% Goods and Services 136 388 34 246 30 494 105 894 3 75222.36% Transfers & Subsidies 11 145 566 1 380 860 1 253 860 9 891 706 127 00011.25% Machinery and Equipment 176 35 27 149 815.34% Total 11 323 771 1 425 462 1 294 352 10 029 419 131 11011.43% 46

47. Total Number of quarterly targets = 12 % Achievement = 11 quarterly targets (91.6%) % Not Achieved = 1 quarterly targets (8.3%) 19

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49. 1 st Quarter Targets:  Develop draft public transport planning requirements;  Transport Appeal Tribunal Act: Process 5 appeals;  National Learner Transport Policy: Facilitate inter- Ministerial consultations between DoT and DBE;  Shova Kalula Programme: Conduct provincial consultations. 19

50. 1 st Quarter Targets:  Review of the Rural Transport Strategy: Conduct consultations with two selected provinces (Northern Cape and Mpumalanga);  Development of IPTN plans in district municipalities: Conduct consultations with the two identified district municipalities and develop the MoA;  Public Transport Stakeholder Relations Framework: Conduct consultations with two (2) provinces. 19

51. 1 st Quarter Targets:  Taxi Recapitalisation Programme (TRP): Scrap 1 875 Old Taxi Vehicles;  Public Transport Cooperative Model: Conduct status quo analysis;  Integrated Public Transport Networks: Conduct bilateral project progress meetings with six (6) municipalities;  Place nine (9) interns in municipalities. 19

52. KEY NOTABLE ACHIEVEMENTS:  IPTNs ◦ Tshwane receiving buses for the October 2014 launch of operations. ◦ Nelson Mandela Bay planning to launch Cleary Park service by October 2014; ◦ George also launching in November 2014.  The National Land Transport Amendment Bill approved by Minister to proceed to NEDLAC;  Consultation between DoT and DBE regarding finalisation of the National Learner Transport Policy in June 2014 and draft Policy subsequently amended. 19

53. Transfer Payments (R'000)BudgetExpenditureAvailable% Spent Conditional Grants: Provincial Roads Maintenance9 361 4982 044 0267 317 47222% Public Transport Operations4 832 7091 250 8603 581 84926% Public Transport Infrastructure and Systems4 968 029- 0% Public Transport Network Operations902 817- 0% Rural Road Asset Management75 223- 0% Public Corporatios: Passenger Rail Agency of South Africa (PRASA)14 946 3007 693 1467 253 15451% Departmental Agencies & Accounts: S.A. National Roads Agency11 916 9472 979 2358 937 71225% Road Traffic Management Corporation176 008- 0% Railway Safety Regulator51 504 0100% S.A. Civil Aviation Authority19 2394 80914 43025% Ports Regulator of South Africa16 8524 21312 63925% Road Traffic Infringements Agency15 3003 82511 47525% Maritime Rescue Co-ordination Centre6 8871 7225 16525% Transport SETA231- 0% Transfer Payments 53

54. Transfer Payments (R'000)BudgetExpenditureAvailable% Spent Other: Taxi scrapping423 604- 0% Non Profit Institutions1 606- 0% South African National Taxi Council18 4073 00015 40716% Higher Education Institutions10 790- 0% International Organisations10 0826 5263 55665% Leave pay and donations161317 (156)197% Total47 754 19414 043 18333 711 01129% Conditional Grants to Municipalities are paid in the second quarter (01 July) inline with municipal financial year. A total of R7 693 billion has been paid to PRASA which constitutes 51% of its annual budget. The total budget for the Railway Safety Regulator was transferred as per the payment schedule as they receive their permit fees in July onwards. The transfer payments to the South African Civil Aviation Authority and the Marine Rescue Coordination Centre were delayed due to late invoicing and receiving of compliance certificate. Taxi scrapping expenditure will reflect in the next report after the journal been processed. The first quarterly payment to Higher Education Institutions has not yet been paid due to delays in receiving invoices. The membership fees to the International Maritime Organisation and the Indian Ocean Memorandum of Understanding were invoiced and paid earlier than what was projected. Transfer Payments (Continued) 54

55. ProvinceBudgetTransferSpent by Province R'000 % Eastern Cape1 294 279281 682108 759 8.40% Free State1 025 682215 12661 385 5.98% Gauteng514 903104 101139 360 27.07% KwaZulu-Natal1 788 158392 192556 600 31.13% Limpopo1 127 310249 342145 581 12.91% Mpumalanga1 594 840341 858409 136 25.65% North West690 005140 43116 344 2.37% Northern Cape640 472156 05497 688 15.25% Western Cape685 849163 240191 188 27.88% Total9 361 4982 044 0261 726 041 18.44% PRMG paid according to the approved payment schedule. 55

56. ProvinceBudgetTransferSpent by Province R'000 % Eastern Cape195 28250 960 26.09% Free State215 90056 60055 319 25.62% Gauteng1 819 854464 100422 522 23.22% KwaZulu-Natal904 783237 100257 607 28.47% Limpopo291 85272 10073 613 25.22% Mpumalanga491 418126 800121 224 24.67% North West90 31823 90018 432 20.41% Northern Cape43 93711 3009 879 22.48% Western Cape779 365208 000189 473 24.31% Total4 832 7091 250 8601 199 029 24.81% Public Transport Operations Grant (PTOG) 56

57.  Approved cash flow projections (drawings)  Approved payment schedule for provinces and municipalities aligned to cash flow projections (DORA)  Compliance Certificate in terms of section 38 of the PFMA and DORA  Memorandum of understanding  Monthly financial reports in terms of section 45 of the PFMA  Quarterly financial and non-financial reports to the department and National Treasury 24