Department of Transport

Joint Budget Committee

Hearing on the BudgetVote 33: Transport

6 March 2007

Content of presentationDepartment

of Transport

• Recent budget allocation history

• Additional allocations in 2007 MTEF

• Overview and breakdowns of the 2007 Budget

• World Cup Support: Public Transport Infrastructure Fund

• S.A. National Roads Agency Ltd. (SANRAL)

• Scaling up of the Extended Public Works Programme (EPWP) in the Roads Sector

• Improvement of the Strategic Secondary Road Network

• Regional Road Infrastructure Development

• Passenger Rail: S.A. Rail Commuter Corporation (SARCC)

• Skills Development within the Department of Transport

Department

of Transport Recent budget allocation history

MTEF CycleR’000

2004/05R’000

2005/06R’000

2006/07R’000

2007/08

R’0002008/09

R’0002009/10

2003 Baseline 6,451,172 6,817,522 7,226,573

+ 2004 Additional 307,872 307,905 357,927

= 2004 Baseline 6,759,044 7,125,427 7,584,500 7,963,725

+ 2005 Additional 476,732 658,728 1,301,364

= 2005 Baseline 7,602,159 8,243,228 9,265,089 10,087,829

+ 2006 Adjusted 3,138,846

+ 2006 Additional 887,230 1,559,223 1,899,242

+ 2006 Cond. Grants 3,760,000 2,775,000 3,526,000

= 2006 Baseline 10,741,005 12,870,458 13,599,312 15,513,071 15,392,658

+ 2007 Additional 876,332 830,200 1,153,300 2,506,300

+ 2007 Cond. Grants 1,428,411 2,909,993 3,555,600

= 2007 Budget 13,746,790 15,857,923 19,576,364 21,454,558

Department

of Transport Additional allocations in 2007 MTEF

Details

R’000

2007/08

R’000

2008/09

R’000

2009/10

Road Infrastructure Framework 350,000 550,000 1,150,000

Passenger Rail 200,000 250,000 656,000

Amendment of Programme Structure 15,000 15,000 15,000

Road Traffic Management and Enforcement (AARTO) 5,000 8,000

Mobilisation of the Ports Regulator 5,000 5,000 5,000

Railway Safety Regulator 5,000 5,000 5,000

Accident and incident investigation capacity 200 300 300

Public Transport Infrastructure Fund (PTIF):

• S.A. Rail Commuter Corporation 100,000 200,000 450,000

• S.A. National Roads Agency 130,000 100.000 200,000

• Monitoring and Evaluation 20,000 20,000 25,000

Conditional Grants:

• PTIF: Local Government: Public Transport Infrastructure and Systems

550,000 1,380,000 2,325,000

• Provincial Government: Gautrain 878,411 1,529,993 1,230,600

Total 2,258,611 4,063,293 6,061,900

Department

of Transport Overview of 2007 budget

Details R’000

R’000

Actual

2003/04

R’000

Actual

2004/05

R’000

Budget

2005/06

R’000

Budget

2006/07

R’000

Budget

2007/08

R’000

Budget

2008/09

R’000

Budget

2009/10

Rail subsidies

2,360,148 2,498,550 2,844,677 3,780,872 3,955,197 4,752,717 6,167,794

Bus subsidies

2,068,500 2,172,740 2,297,753 2,460,335 2,535,997 2,789,596 2,998,815

Roads 1,290,556 1,440,789 1,752,720 2,292,075 3,391,929 4,059,964 5,504,911

Taxi 9,898 10,000 27,396 527,066 328,460 361,473 387,654

PTIF: Local Govt.

241,710 519,000 1,174,000 3,170,000 2,325,000

PTIF: Other 181,000 606,000 310,000 650,000

RAF 2,700,000 14,000

Gautrain 3,241,000 3,029,411 3,265,993 2,507,211

Other

503,441 557,789 545,636 731,442 836,929 866,621 913,173

Total 6,232,543 6,679,868 10,409,892 13,746,790 15,857,923 19,576,364 21,454,558

Growth 9,0% 7,18% 55,84% 32,05% 15,36% 23,45% 9,59%

PTIF funding:2010 FIFA SoccerWorld Cup

Department

of Transport Major budgets for 2007/08(* Infrastructure)

Details R’000 %

Rail subsidies (SA Rail Commuter Corporation Ltd.)

* 3,955,197 24,9%

Bus subsidies 2,535,997 16,0%

Roads (S.A. National Roads Agency Ltd.) * 3,391,929 21,4%

Taxi 328,460 2,1%

Public Transport Infrastructure Fund (2010 Soccer World Cup)

* 1,780,000 11,2%

Gautrain Rapid Rail Link * 3,029,411 19,1%

Other 836,929 5,3%

Total 15,857,923 100,0%

Department

of Transport Breakdown of major other budgets (* Infrastructure)

Details R’000 2007/08 2008/09 2009/10

Compensation of Employees 180,826 190,001 199,375

Road Traffic Management [Corporation] (incl. NaTIS and Arrive Alive) 160,427 168,643 166,178

Road infrastructure planning and Sani Pass (KZN DOT) * 80,000 86,400 94,790

Oil Pollution prevention services and Watch Keeping services 68,755 70,543 77,157

RSR, SAMSA, SACAA, MRCC, MSCC, NSRI, Ports Regulator and Memberships

63,609 66,464 69,528

Administration 63,544 66,957 70,417

Inspectorates, Road, Rail, Maritime and Aviation regulation 38,792 46,300 50,641

Rural transport projects 38,398 39,023 42,812

Transport planning and infrastructure projects * 37,312 40,026 43,916

Public Transport, including systems to devolve bus subsidies 31,448 12,557 11,468

Monitoring and evaluation – Soccer World Cup * 20,000 20,000 25,000

Special Investigating Unit 17,625 19,733 21,583

Transport Policy 16,050 16,843 18,864

Freight Logistics projects and research 9,033 9,649 7,507

Overloading Control * 8,221 8,796 9,649

Public Entity Oversight & Economic Regulation 2,889 4,686 4,288

Total 836,929 866,621 913,173

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

R'000 6,232,543 6,679,868 10,409,892 13,746,790 15,857,923 19,576,364 21,454,558

Growth 9.00% 7.18% 55.84% 32.06% 15.36% 23.45% 9.59%

Actual / Budget: Actual Actual Actual Budget Budget Budget Budget

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10

Department

of Transport Total expenditure over MTEF

7,000,000

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Rail 2,360,148 2,498,550 2,844,677 3,780,872 3,955,197 4,752,717 6,167,794Bus 2,068,500 2,172,740 2,297,753 2,460,335 2,535,997 2,789,596 2,998,815Roads 1,290,556 1,440,789 1,752,720 2,292,075 3,391,929 4,059,964 5,504,911PTIF 0 0 241,710 700,000 1,780,000 3,480,000 2,975,000Gautrain 0 0 0 3,241,000 3,029,411 3,265,993 2,507,211

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10

Expenditure trends - major budget allocations

Department

of Transport

• Allocations for rail operations and capital remain the largest single budget item.• The budget for road infrastructure overtakes that of bus subsidies from 2007/08 onwards.• Allocations for infrastructure from the Public Transport Infrastructure Fund was introduced in

2005/06, and grows significantly thereafter.• The National contribution to the Gautrain Rapid Rail Link was introduced in 2006/07.

Department

of Transport

World Cup Support: Public Transport Infrastructure Fund (PTIF)

STRATEGIC OBJECTIVE• Support the success of the 2010 FIFA World Cup. As the eyes of

the world will be on South Africa, transport must run so smoothly as to be invisible.

• Accelerate the pace of implementation of Government policies and strategies, and ensure a lasting transport legacy.

KEY FOCUS AREAS• Public transport infrastructure development and improvement

(through the PTIF) to prioritise public transport over private car use • Introduction of travel demand management (TDM) in order to

ensure better traffic management e.g. High Occupancy Vehicle (HOV) lanes, Intelligent Transport Systems (ITS), park & rides etc.

• Introduce comprehensive public transport services, particularly the Bus Rapid Transit (BRT) system in host cities

Department

of Transport

Established in March 2005; early focus on 2010 related projects

Funding: 2005/06- R241m; 2006/07- R700m; 2007/08- R1,8bn; 2008/09- R3,5bn; 2009/10- R3bn TOTAL= R9,25bn

Project types include planning, physical infrastructure and systems

Infrastructure and systems projects include:Public transport road infrastructure Public transport interchange facilities Rail upgrades Inter-modal facilities HOV lanesBRT systems

ITS infrastructure and systemsNMT infrastructure Inner-city mobility systems Call centre systemsPublic transport vehiclesAirport- City links

World Cup Support: Public Transport Infrastructure Fund (continued)

Department

of Transport

PROJECT TYPESALLOCATED FUNDS (Rm)

PTI 2760

ITS/TDM 509

STADIUM LINK 630

NMT 117

RAIL 1316

PLANNING 84

AIRPORT 181

NATIONAL ROADS 430

BRT 826

Legend (all funds in Rm)

PTI Public Transport Infrasructure

ITS/TDM Intelligent Transport Systems / Travel Demand Management

NMT Non-motorised Transport

BRT Bus Rapid Transit

0

500

1000

1500

2000

2500

3000

Series1

World Cup Support: PTIF per Category

Department

of Transport

World Cup Support: PTIF per Host City

HOST CITY FUNDS (Rm)

JOHANNESBURG 1320

CAPE TOWN 766

NELSON MANDELA 520

ETHEKWINI 749

MBOMBELA 211

POLOKWANE 179

RUSTENBURG 69

SARCC 566

MANGAUNG 322

TSHWANE 694

0200400600800

100012001400

Series1

JOHANNESBURG

CAPE TOWN

NELSON MANDELA

ETHEKWINI

MBOMBELA

POLOKWANE

RUSTENBURG

SARCC

MANGAUNG

TSHWANE

Department

of Transport

STRATEGIC OBJECTIVES• To develop and maintain the strategic national road network, ensuring high

quality performance, in order to support economic development and ensure access to communities and social services

• Manage the non-toll portion of the national road system, focusing on rehabilitation, road maintenance and road network protection

• Improve the quality index of roads transferred from Provinces to SANRAL, and ensure their sustainable management as part of the primary road network

KEY FOCUS AREAS• Prioritisation of the maintenance of the high quality portion of the non-toll

primary road network to prevent its deterioration• Improvement of the fair and poor quality portion of the non-toll road network

in order to improve its overall quality• Rehabilitation of part of the national road network that is beyond its design

life i.e. pavement age beyond 20 years.

S.A. National Roads Agency (SANRAL)

Department

of Transport

S.A. National Roads Agency (SANRAL) (continued)

• The SANRAL budget increases by over R2billion of over the 2007 MTEF from R2.29 bn in 2006/07 to R 5,7bn in 2009/10.

• This additional allocation comprises of R430m earmarked from the Public Transport Infrastructure Fund (PTIF) for world cup support and R2,050bn allocated for capex and maintenance of national roads.

Note: Operation and Maintenance comprises admin and technical services, and the maintenance budget

Split between Capital and Operational Expenditure (R million) 2007/08 2008/09 2009/10

Capex O&M Capex O&M Capex O&M 1 814 905 1 790 373 2 505 615 1 719 580 3 421 932 2 350 485

Department

of Transport

STRATEGIC OBJECTIVE• Maximization of job creation and skills development using labour intensive

methods for the provision and upkeep of the much needed road infrastructure.

KEY FOCUS AREAS• Application of labour intensive methods to:

• Capital road works• Road maintenance

• National replication of best practice:• Gundo-Lashu through Vuk’uphile guidelines and roll-out • Zibambele through Zibambele guidelines and roll-out

• Prioritisation of Access Roads development in accordance with RISFSA• Expansion of this approach to other road types• Streamlining this approach within roads authority budget and service delivery

programmes

Scaling-up of the EPWP in the Roads Sector

Department

of Transport

Scaling-up of the EPWP in the Roads Sector (continued)

• Response to Cabinet call to increase the scope and impact of the EPWP programme.• The roads sector offers high potential for large scale employment creation through

the use of labour intensive methods for construction and maintenance.• An additional allocation of R3 billion has been allocated to roads sector over the 2007

MTEF via the Provincial Infrastructure Grant (PIG).

Department

of Transport

Improvement of the Strategic Secondary Road Network

STRATEGIC OBJECTIVES• Road Network integration – particularly primary and secondary road networks• Improving the condition of the secondary road network• Ensuring seamless and rapid movement of freight on secondary roads from production

areas to customers.• Reducing the cost of transporting goods in the secondary road network.• Reducing congestion on key freight and public transport corridors.• Improving the safety of vehicles and road users.

KEY FOCUS AREAS• Rehabilitation and resurfacing of identified strategic secondary roads.• Expansion of key corridors to enable freight • Improving the quality index of roads within the strategic secondary road network.

ALLOCATIONS• R500 million has been allocated through the Provincial Infrastructure Grant (PIG) to for

provinces to improve this road network during the 2007/08 financial year.• Allocation is expected to increase over the MTEF period.

Department

of Transport

Regional Road Infrastructure Development

STRATEGIC OBJECTIVE• Development and improvement of regional road links in order to respond to

NEPAD and the SADC protocol on Transport, Tele-communication and Meteorology

KEY FOCUS AREAS• Road infrastructure within South Africa that leads to borders with

neighbouring countries• Bridges and other facilities at border posts

Allocations• R85m, with R25m spent in 2006/07 and allocations of R30m and R30m to be

spent over 2008/09 and 209/10 respectively for the Sani Pass access road• R20m to be spent in 2007/08 for a bridge between South Africa and

Botswana• Additional allocations expected over the MTEF upon completion of the

DOT’s Action Plan for Regional Transport Infrastructure

Department

of Transport

Passenger Rail: S.A. Rail Commuter Corporation (SARCC)STRATEGIC OBJECTIVE

To ensure efficient and seamless movement of people through the provision of safe, reliable, affordable and sustainable passenger rail services; and to develop rail assets using best practices in the interest of all stakeholders

KEY INVESTMENT CRITICAL FOCUS AREAS

• Accelerated rolling stock upgrade programme - punctuality i.e. reduce train delays and cancellations

• Signaling and Telecommunications - enhanced operational safety and Communication to customers

• Effective Revenue Management – reduce fare evasion, Station & train safety & security, Station improvement and upgrades, procure new automatic fare collection system

Department

of Transport

Passenger Rail: S.A. Rail Commuter Corporation (SARCC)

Department

of Transport

SARCC: Capital shortfall

• SARCC MTEF capital allocation has been redirected to ensure alignment with the Rail Plan Corridor Strategy

• Capital programme has been oversubscribed by an average of R1. 2 Billion for the past 10 years.

• Majority of additional capital funding focused on the rolling stock upgrade programme with 80% of available capital spend on rolling stock and 20% infrastructure projects

• Infrastructure projects has been postponed, rolled over and extended on an annual basis resulting in safety risks and contravention of Rail Safety Regulator regulations

• Lack of adequate infrastructure contribute to 30% of commuter rail’s poor performance

Department

of Transport

Gautrain Achievements

• Business Plan concluded between the Department and the Gauteng Provincial Department of Transport, Roads and Works

• Compliance with the provisions of the Division of Revenue Act nr 2 of 2006,

• Approval of key milestone related payment schedule by Treasury, • External certifier appointed - R 3.2 Billion transferred to date,• First quarterly report secured Jan 2007, project progressing in terms

of Business Plan and key milestones • Secured project financial closure - Jan 2007

Department of Transport

Skills Development within the

Department of Transport

Department of Transport

Internal • At least 222 out of 362 staff size were exposed to skills

related interventions. Total percentage of staff trained to date is 63%.

• 18 on site programmes were conducted to address work place skills plan priorities.

• An amount of R 1,7m ,1.19% of the total payroll was budgeted for training and 10% of the above mentioned percentage was contributed to TETA for administrative reasons as prescribed in the skills levies act .

• An amount of R14 455 658.21/ 10% of the total payroll was

spent on skills development interventions and other related costs.

CURRENT STATUS QUO

Department of Transport

– The following amongst others reflect an indication of some of the key on site interventions delivered :

– Econometrics Modelling – Advanced project management– Contract Management– Policy Development and Management– Supply Chain Management – Management Development : Advanced and elementary– Transport Management

Allocation on training of staff is R 1,701 500 whereas expenditure is R 1, 863 394.

HRD PRIORITY INTERVENTIONS

Department of Transport

Bursaries : – At least 28 bursaries were awarded and

this resulted in the total of 122 bursary holders. An amount of R 385 000 was allocated and R317 438 spent.

Learnerships/ InternshipsAt least 55 interns and 7 learners were

recruited. An amount of R 1, 495 991. 96 was spent on learnerships.

OTHER KEY INTERVENTIONS

Continue

Work place Skills Plan 2006/07

- The skills plan complied with TETA requirements and was therefore approved.

- 20% of planned training activities NQF aligned and implementation of mandatory requirements.

Skills required to deliver on the Transport Mandate

• DoT and Provincial DoT's Skills Needs.

Engineering (civil, transport, mechanical, traffic and rail) Transport policy and planning Transport Economics Research capability Project Management Contract management Project Finance Regulation Economics General Management

Skills required to deliver on The Transport Mandate

• Transport agencies Skills Needs: Airline Pilots Airport Planning Air Traffic Control Flight Procedural Specialists Aviation Operations (Passenger and Cargo) Aviation Legislation Engineering (rail, signal, electrical, civil, mechanical,

telecommunications) Port Operations Rail Operations (freight and passenger)

Road Infrastructure

• In SA, on average there is currently 15 000 Civil Engineers, technologists and technicians countrywide.

• The national target output set is 350 graduates annually, however only approximately 130 graduates are produced.

• At least an estimate of 6000 civil engineers, technicians and technologists is required to meet the current labour market challenges

Skills Development Plan

Partnerships with Universities. Centers of Development

• Develop strategic partnerships with universities to deliver on specific targetted programme e.g. transport management programme.

• Identify appropriate distance learning programmes in order to ensure a flexible approach in staff learning and development.

• Promote the development and alignment of short programmes in order to address specific capacity development challenges.

• Review and strenghten the centre of development programme to be in line with the capacity development needs.

Continue

- The Department is currently funding 481 students in various transport related fields

- 350 black students : 131 whites and 281 Africans are funded

- An amount of R10 085m was allocated for the said financial year. The above mentioned amount included the approved rollover to the amount of R3m.

Current Initiatives

• Capacity Assessment project• Integration of transport programmes within FET • Development of skills development programmes in critical areas

( transport planning, Maritime security )• Review transport curriculum to address industry specific needs • Conducted Transport Management programme and other

middle management related programmes• Intensified efforts on the recruitment and placement of

learnerships/ internships• Awarded targeted Bursary schemes through the COD initiative• Rail Capacity building task team

Next Steps

Recommended implement able capacity development interventions

1. Prioritise skill shortage areas / Aligned to Transport Agenda: e.g.• Engineering ( Civil, mechanical, signaling, aeronautical, marine)• Transport Economists• Econometrix• Development Finance• Transport Planners• Transport policy analysts• Operations ( Rail, Port )

2. Agree on targeted Continental and International agreement: e.g.• Canada- Transport Regulation, Marine Engineering, Aircraft

maintenance Engineering etc• Netherlands- Road Traffic / Safety• China- Infrastructure Dev.• UK- Public Transport, Railway Engineering,

Transport policy analysts

continue

• Columbia, Brazil and India:Public Transport

• India : Rail

• Australia - Agency management and monitoring,

• Australia, USA and Canada : Aerospace Engineering

• USA - Road Freight transportation

• Singapore - Port Operations

• Japan - Transport and econometrix

Next Steps

3. Set targets for number of Learnerships and Internships

• For the transport sector (government)

• National and Provincial Departments

• Agencies and Public Entities

• Local government level

4. Research and facilitate the establishment of an Institute to professionalise transport.

5. Provide incentive based opportunities to encourage participation in high level projects as well as to provide competitive and attractive incentives in the scarce skills areas.

6. Identify areas for exchange programmes, scholarships, secondments, redeployments of technical experts etc

Next Steps

7. Institute retention strategies, programmes to attract retired employees

8. Development and implementation of mentorship programmes.

9. Establishment of the Transport sector Skills Development task team under the leadership of DOT that will provide guidance, report and continuously monitor the integration of skills development initiatives to government programme of action, ASGISA, JIPSA etc.

Department of Transport

The following reflects an indication of the expenditure patterns on

skills development interventions:

FINANCIAL STATUS

Intervention type

Budget Expenditure

Overall percentage spent

Bursaries R 385 000 R 317 438.57

R 82.45%

Training of staff R 1,701 500 R1, 629 793.75

R 95%

Learnerships/ internships

R473 000 R1 495 991.96

31% overspent

Centers of Development

R10 085 R 9 075 578.92

89.99%

TETA Contributions

R 150 000 R 95 026.01

R63,35%

Thank you

Department of Transport