Department of Transport Portfolio Committee on Transport Budget Vote 33 14 March 2006.

Department of Transport

Portfolio Committee on Transport

Budget Vote 33

14 March 2006

• Estimates of National Expenditure• Medium Term Budgets

Content of presentationDepartment

of Transport

• Programme purpose and measurable objectives• Strategic overview and key policy developments• Other initiatives• Programme outputs and budgets

Estimates of National Expenditure

Department

of Transport

Department

of TransportTransport Policy, Research and Economic Analysis

Measurable objective: Create an efficient transport system by developing policies that improve safety and travel times, reduce delays, and increase predictability, reliability and quality for local, regional and international services.

Purpose: Effectively manage a national innovative research and development programme, analyse strategic policies, develop appropriate legislation, and provide economic advice and analysis for all modes of transport.

Department

of TransportTransport Regulation and Accident and Incident Investigation

Measurable objective: Develop, implement and maintain regulatory frameworks to ensure improved safety, security and environmental sustainability across the transport sector and to ensure efficient transport services

Purpose: Create an enabling regulatory environment in the areas of safety, security and environmental compliance, and manage accident and incident investigations in all modes of transport

Department

of TransportIntegrated Planning and Inter-sphere Co-ordination

Measurable objective: Fully established, integrated transport plans that will incrementally improve public transport services and related infrastructure for social and regional development

Purpose: Manage and facilitate integrated planning and inter-sphere co-ordination for transport infrastructure and operations

Department

of TransportFreight Logistics and Corridor Development

Measurable objective: Efficient freight logistic operations that ensure the speedy, cost-effective and reliable movement of goods along a regional network of freight movement corridors, supported by integrated freight infrastructure planning, adequate infrastructure investment, and a national freight information system

Purpose: Manage the implementation of the transport logistics strategy and the development of freight movement corridors

Department

of TransportPublic Transport

Measurable objective: Increased provision of safe, reliable and more affordable public transport, that aims to benefit the most vulnerable passengers

Purpose: Develop practices and norms that will increase access to appropriate and quality public transport that meets the needs of both rural and urban passengers

Department

of TransportPublic Entity Oversight and Economic Regulation

Measurable objective: Develop, implement and maintain regulatory frameworks in line with the broader economical and industrial strategies to promote improved performance of the transport sector

Purpose: Develop appropriate mandates and monitoring mechanisms for public entities. Develop and oversee transport economic regulation in line with broad economic and transport policies

Department

of TransportStrategic overview and key policy developmentsOverarching objectives• The sustainable and efficient movement of people and goods, enabling

economic growth, social inclusion, and poverty alleviation

Key elements of the strategic approach remain:• Restructuring public transport subsidies to better target poorer commuters• Aligning subsidised transport services to support municipal integrated

transport plans • Streamlining the freight logistics network along key freight movement

corridors• Building capacity to monitor and oversee public entities• Developing regulatory systems and capacity to ensure that operators in the

transport sector meet the required safety and security standards• Establishing a single economic regulator for the transport sector.

Department

of Transport

Public transport infrastructure and operations for 2010 and beyond

• A new conditional grant was introduced in 2005/06 to fund, initially, public transport infrastructure for the 2010 Soccer World Cup

• Transport systems and operations must be prepared to accommodate the increased demand for transport during the 2010 Soccer World Cup. This requires co-ordinating and facilitating transport planning and delivery across the spheres of government

• The Department will consolidate all the 2010 transport plans into one national transport action agenda

Strategic overview and key policy developments (continued)

Progress with the Public Transport Infrastructure grant • Developed a draft “Towards a 2010 Transport Action Agenda”• Established an Interdepartmental Adjudication Committee• Developed Proposed Adjudication Criteria• Separate Guidelines were developed for National Transport Agencies,

Cities and Provinces to submit Transportation Management Priority Statements for candidate projects

• Projects amounting to R241,7 million were approved in 2005/06• Projects over the MTEF period will amount to R3,5bn.

Department

of TransportStrategic overview and key policy developments (continued)

Progress with the Public Transport Infrastructure grant (continued)

• Projects shall be evaluated on the extent to which they:• Meet the dual objective of long term mobility and support for 2010

FIFA World Cup• Prioritise public over private transport.• Able to improve public transport infrastructure, systems, operations

and non- motorized transport.• Reinforce public transport policies

• The grant provides for accelerated planning, establishment, construction and improvement of new and existing public transport and non-motorised transport infrastructure and systems`

Measurable objectives for the grant:• Improved public transport facilities, construction of access roads, airport-

city links, public transport priority lanes, bus stops, taxi ranks, rail systems transport plans, bicycle lanes, pedestrian lanes, signage, shelters, coaches IT solution throughout the country

Department

of Transport

Public Transport (rail, bus and taxi)• The chief objectives for a sustainable public transport system are to improve

the public transport system, broaden access to affordable transport, and stimulate economic activities

• Key challenges include:• Transforming the minibus taxi industry through taxi recapitalisation• Investing in passenger rail infrastructure and restructuring passenger

rail services• Appropriately targeting public transport subsidies


Rail• Investment will be focused in the passenger rail sector on corridors that

have the required passenger volumes to make rail a viable option• Rolling stock, signalling systems and infrastructure will be upgraded• Rail is the most affordable means of public transport for the poor, carrying

2,2 million passengers per day• The Gautrain will become part of a modally integrated transport service in

which the current commuter rail network is deployed

Department


Rail – interim rail plan approach• Short term: The rail operator will focus on stabilising and improving services

along the busiest commuter corridors by investing in railway infrastructure, upgrading rolling stock, and improving stations and operations

• Medium term: A broader recovery phase will be implemented, with significant projects to renew the rail fleet, increase services, and improve fare collection

• Longer term: The focus will be on establishing a rail economic regulator, extending the range of rail operators, and growing the rail share of the public transport market

Rail (continued)• Passenger rail services will be restructured into a single entity to make

passenger rail more efficient

Department


Rail – Gautrain• Cabinet endorsed the project as a key strategic project of national

significance, with potential to:• stimulate investment in infrastructure and the economy, and• facilitate public transport restructuring and transformation

• Payments will be made by the Province to the concessionaire in terms of the concession agreement according to the agreed milestone completion schedules

• The Province will draw 50% of the funds for payment from the conditional grant and 50% from the Provincial budget in 2006/07

• The Receiving Department’s rights and obligations will be managed by the Gauteng Management Agency

• The receiving officer will submit quarterly reports to the national transferring officer , detailing payments made to the concessionaire according to the key milestone payment schedules , detailing payments made to the concessionaire according to the key milestone payment schedules

• The integration exercise was concluded• For the Gautrain to operate successfully it must be a part of a modally

integrated transport service in which the current commuter rail network is deployed. Additional funding will be needed to upgrade infrastructure links

Department

of Transport

Bus• Bus subsidies will be transformed to public transport subsidies, with the aim

of:• Addressing modal inefficiencies• Targeting the rural and urban poor• Providing support for existing municipal bus services• Including smaller capacity vehicles where practical or cost effective• Facilitating improved services and safer buses

• MINMEC decided that bus subsidies should be transformed to public transport subsidies (tendered and negotiated contracts over the next two years)

• Provinces are now empowered to pursue the implementation of the tender contract system: Interim contracts provide no guarantee for improved services – no capital investments (bus fleets) take place, resulting in poor service provision and deteriorating safety

• A report on the optimisation of bus subsidies (October 2002) indicate an increase of 25 to 30% increase in the subsidy requirements to transform interim contracts – the challenge is to rationalise public transport subsidies by appropriate targeting within the budget constraints


Department

of Transport

Taxi• The taxi recapitalisation project will be rolled out over a seven year period at

a cost of R 7 billion (additional funding will be allocated as the process unfolds)

• Cabinet approved the following in July 2005:• Final vehicle safety Regulations• Rollout and implementation strategy• Rollout and implementation project plan

• Conversion of permits to operating licenses• A Scrapping Administration Agency will be created• Provincial readiness assessment was completed and business plans will be

developed to address provincial needs• First scrapping allowances will be paid during 2006/07• Anticipated that 60 000 vehicles will be scrapped over the medium term• The regulation of the industry is being finalised with amendments to the

National Land Transport Transitional (NLTTA) Act.


Department

of Transport

Freight• The freight logistics strategy will be implemented over the medium term to

guide investment in infrastructure and to eliminate bottlenecks in freight logistics operations

• The Freight Logistics strategy aims to unblock freight flows in order to• Achieve the speedy and seamless movement of goods• Improve the levels of investment in the freight logistics systems to

sustain the required levels of service - including investment in ports• Reduce the cost of freight transport• Reduce transit time

• Key corridors were identified to determine infrastructure investments• Developed a branch line strategy for the revival of sustainable branch lines

for local economic development• Draft National Freight Logistics Strategy approved by Cabinet• Initial phase of implementation is being implemented


Department

of Transport

Roads – MTEF outlook• Implementation of the Strategic Framework for Roads

• Revamp of institutional structures and service delivery models• Reclassification of SA’s road network system• Improvement of Road Network Management Systems• Assessment of Municipal road network and focus on access roads

• Conclusion of road transfers to SANRAL• Intensification of implementation of Overload Control Strategy• Roll out of Freight Logistics and Rural Transport Strategies• Strengthening of integrated planning and delivery through Roads

Coordinating Body


Department

of Transport

Roads – Planned outputs 2006/07• Strategic Secondary Road Network definition and integration with provincial

growth plans • Access roads development• Assessment of provincial and municipal road needs• Redefinition of road network in accordance with new road classification

system• Develop a road information management system• Develop a national road network system (border posts, strategic national

network and traffic control centres)


Roads – Planned outputs 2007/08 and 2008/09• Improve the Secondary Strategic Road Network to facilitate seamless freight

logistics• Access roads development• Develop a national road network system (border posts, strategic national

network and traffic control centres)

Department

of Transport

Transport regulation• The Road Traffic Management Corporation became operational (staff were

seconded)• The Special Investigating Unit is identifying irregular practices at driving

license and vehicle testing centres – the activity will continue over the MTEF• The migration to the new National Traffic Information System (NaTIS) is

targeted for completion by November 2006• Hardware deployed in Gauteng and Western Cape and continuing in

other Province• Overall hardware deployment is 70% complete

• A total of 151 patrol vehicles have been made available to traffic authorities• Road safety campaigns and the Arrive Alive campaigns will continue


Department

of Transport

Road Accident Fund restructuring• The Road Accident Fund Act requires that fault must be proven, leading to

high legal costs. No limits are set on claims. Settlement and administrative costs amount to 47%

• The Interdepartmental Committee recommended a policy change towards a no-fault benefit scheme

• Subject to a Cabinet decision, work on a no-fault benefit scheme will commence

• MTEF outlook:• 2006/07 - Establish a governance structure; develop a Green Paper;

establish programme management capacity; align the strategies for human resources, systems, processes, partnerships and infrastructure

• 2007/08 – Develop a White Paper; manage the programme and design the components of the new Road Accident Benefit Scheme (RABS) to enable accurate migration planning, budgets and resource requirements

• 2008/09 – Develop new RABS legislation; manage the programme; design processes; design organisational structure; develop and implement systems; establish infrastructure; establish human resources; establish partnerships

• 2009/10 – Oversight by Department; administer new RABS


Department

of Transport

Rural transport• Key strategic projects will be implemented to improve rural access and

mobility, such as:• Rural transport development programmes through the ISRDP• Urban renewal projects• Non-motorised transport promotion• Development of bicycle management plans linked to SWC 2010• Coordination and facilitation of labour intensive programmes and the

replication of the Zibambele labour contract project• Implementation of strategic actions in line with the National Land

Transport Strategic Framework• Develop a viable institutional framework for the transport authorities

• A Rural Transport Development Programme was developed and will be piloted for roll out to Provinces

Other initiatives

Department

of Transport

Economic regulation• Establishment of a Transitional Rail Economic Regulator to:

• Balance road and rail usage of freight to address the problem of degenerating road infrastructure

• Move freight into rail• Assist with passenger rail consolidation• Manage the contracting environment.

• Establishment of a Ports Regulator

• Consolidation of economic regulatory capacity in the longer term:• To achieve uniformity and consistency in the application of regulations• To improve the effectiveness of economic regulation

• There is a need to build proper foundations of economic regulation at a modal level before the actual consolidation is achieved. The first two years will be dedicated at creating modal regulatory pillars whilst the 3rd year (2008/09) will see the merger of modal regulators into a Transport Sector Economic Regulator.

Other initiatives (continued)

Department

of Transport

Overloading control• Implementation of the overload control strategy, which was developed jointly

by all spheres of Government responsible for traffic control• Upgrading of existing Weighbridges• Construction of the new Weighbridges in the Road Network in all major

freight corridors• Establishment of a Specialised Overloading Control Unit

Other initiatives (continued)

Civil Aviation• Creation of capacity to take over the functions of Commissioner of Civil

Aviation and aviation accident and incident investigation

Regional transport network initiative• Support construction bridges and river crossings between RSA and

Botswana• Improvements to the Sani Pass in Kwa-Zulu Natal

Department

of Transport

Sub Programme Output R Million2006/07

Transport Policy Analysis

• White Paper on National Maritime Transport Policy• Environmental policy framework• Integrated transport sector BEE charter

6,8

Transport Economic Analysis

• Economic performance indicators framework 7,3

Legislation • New aviation policy and bill• New national maritime transport bill

3,8

Research and Development

• Innovation and advancement of transport through research

• National household travel survey

5,6

Administration Support 4,8

Total 28,3

Outputs: Transport Policy, Research and Economic Analysis

Department

of Transport


Road Transport Regulation

• Regulation of driving standards 35,4

Civil Aviation Regulation

• Air transport liberalisation 15,3

Maritime Regulation • Independent port regulator • Maritime transport security legislation • Monitoring and enforcement of small vessel regulations

52,9

Rail Transport Regulation

• Rail economic regulator 4,0

Sub Total 107,6

Outputs: Transport Regulation and Accident and Incident Investigation

Department

of Transport


Accident and Incident Investigation

• Analysis and dissemination of road accident data • South African search and rescue (SASAR) manual • Multilateral search and rescue agreement on the sub-

regional Maritime Rescue Co-ordination Centre • Draft search and rescue regulations

40,7


Total 151,8

Outputs: Transport Regulation and Accident and Incident Investigation(Continued)

Department

of Transport


Transport Planning • Municipal transport plans that address transport service constraints and infrastructure backlogs

• Implementation of the National Land Transport Transition Act (2000)

23,1

Integrated Delivery Programme

• Provision and integration of public transport services• Non-motorised Transport delivery• Expanded public works programme implementation plan

47,3

Integrated Infrastructure and Network Development

• Road infrastructure strategic framework • National overload control strategy

2382,7

2010 Soccer World Cup Co-ordination

• Planning for transport operations during 2010 Soccer World Cup

702,3


Total 3161,3

Outputs: Integrated Planning and Inter-sphere Co-ordination

Department

of Transport


National Logistics Strategy

• National freight logistics strategy 13,6

Eastern Corridor and Western Corridor

• Corridor mapping • Efficiency gains in the movement of freight

10,3

Border Operations and Control

• Analysis of system inefficiencies in regional and international movement of goods and passengers

• Operational improvements in public entities responsible for movement of goods and passengers

1,5


Total 27,8

Outputs: Freight Logistics and Corridor Development

Department

of Transport


Public Transport Strategy and Monitoring

• Passenger transport strategy and implementation plan • Gautrain Rapid Rail Link

3,9

Public Transport Management

• Restructured bus operations• Restructured and safer commuter rail service • Restructured and consolidated passenger rail services

8 828,7

Taxi Recapitalisation Project Office

• Safer and more sustainable taxi services 326,3

Public Transport Business Development

• Business case for improving public transport 1,3


Total 9 165,8

Outputs: Public Transport

Department

of Transport


Public Entity Oversight • Performance agreements between government and public entity boards

• Governance and performance management systems• New benefit scheme for victims of road accidents

204,5

Economic Regulation • Review of the transport regulatory environment and its impact on competitiveness

2,2


Total 209,3

Outputs: Public Entity Oversight and Economic Regulation

• Addition allocations in Adjusted Budget 2005/06• Recent allocation history• Additional allocations in 2006 MTEF• Overview of 2006 budget• Breakdown of budgets• Expenditure trends

Medium Term BudgetsDepartment

of Transport

Department

of Transport Adjusted Budget 2005/06

DetailsR’000

2005/06Rollovers:

Development of Aviation and Maritime policies 1 884

African Union Conference 5 900

Oil pollution contract – unpaid invoices 4 000

Set up an office in the U.K. for the IMO representative 4 000

Arrive Alive – unpaid invoices 19 937

Complete overload control facilities in Limpopo, North West and KZN 4 213

Unforeseen and unavoidable expenditure:

Difference in escalation and fuel price for bus subsidies 19 230

Other adjustments:

Public Transport Infrastructure Fund – new Conditional Grant 241 710

VAT adjustment for the SARCC 146 621

Reduction in SARCC budget – transfer to Safety & Security (20 000)

Road Accident Fund 2 700 000

Devolution of funds from Public Works 11 351

Total 3 138 846

Department

of Transport Recent allocation history

MTEF CycleR’000

2003/04R’000

2004/05R’000

2005/06R’000

2006/07R’000

2007/08R’000

2008/09

2003 Baseline 6,159,709 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 4,627,230 4,334,223 5,425,242

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

Conditional Grants

included in 2006

Baseline:

Local Government: Public

Transport Infrastructure

Fund

241,710 519,000 624,000 1,790,000

Provincial Government:

Gautrain Rapid Rail Link3,241,000 2,151,000 1,736,000

Department

of Transport Additional allocations in 2006 MTEF

DetailsR’000

2006/07R’000

2007/08R’000

2008/09Road Infrastructure Framework 400 000 600 000 900 000

Passenger Rail 200 000 500 000 900 000

Road Accident Benefit Scheme 14 000

Transport Regulation 5 000 10 000 15 000

Regional Indicative Strategic Development 45 000 30 000 30 000

Rural Transport Strategy 30 000 30 000 30 000

PTIF: S.A. Rail Commuter Corporation 180 000 376 000 10 000

PTIF: Cross Border Road Transport Agency 1 000

Devolution of funds from Public Works 12 230 13 223 14 242

PTIF: Local Government: Public Transport Infrastructure and Systems

519 000 624 000 1 790 000

Provincial Government: Gautrain 3 241 000 2 151 000 1 736 000

Safety and Security (20 000)

Total 4 627 230 4 334 223 5 425 242

Department

of Transport Overview of 2006 budget

Details

R’000Actual

2002/03

R’000Actual

2003/04

R’000Actual

2004/05

R’000Budget2005/06

R’000Budget2006/07

R’000Budget2007/08

R’000Budget2008/09

Rail 2,227,419 2,360,148 2,498,550 2,844,677 3,161,140 3,775,197 4,502,717

Bus 1,846,724 2,068,500 2,172,740 2,297,753 2,415,235 2,535,997 2,789,596

Roads 1,203,064 1,290,556 1,440,789 1,752,720 2,292,075 3,041,929 3,509,964

Taxi 6,497 9,898 10,000 260,600 323,066 328,460 361,473

PTIF: Local Govt. 241,710 519,000 624,000 1,790,000

PTIF: Other 181,000 376,000 10,000

RAF 2,700,000 14,000

Gautrain 3,241,000 2,151,000 1,736,000

Other

434,480 503,441 557,789 643,545 723,942 766,729 813,321

Total 5,718,184 6,232,543 6,679,868 10,741,005 12,870,458 13,599,312 15,513,071

Growth 15,8% 9,0% 7,18% 60,8% 19,8% 5,7% 14,1%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09

Rail Bus Roads PTIF Gautrain

Major allocationsDepartment

of Transport

Department

of Transport Breakdown of major other budgets

Details R’000 2006/07 2007/08 2008/09Compensation of Employees 157,678 165,826 175,001Road Traffic Management Corporation (incl. NaTIS and Arrive Alive)

150,120 155,427 160,643

Administration 60,573 63,544 66,957Transport Policy 13,495 16,050 16,843RSR, SAMSA, SACAA, MRCC, MSCC, NSRI and Memberships 50,937 53,409 56,164Oil Pollution prevention services and Watch Keeping services 65,437 68,755 70,543Special Investigating Unit 16,625 17,625 19,733Inspectorates, Road, Rail, Maritime and Aviation regulation 31,719 38,792 46,300Overloading Control 24,779 8,221 8,796Rural transport projects 38,019 38,398 39,023Road infrastructure planning and Sani Pass (KZN DOT) 50,000 80,000 86,400Transport planning and infrastructure projects 32,290 37,312 40,026Freight Logistics projects and research 18,604 9,033 9,649Public Transport, including systems to devolve bus subsidies 10,908 11,448 12,557Public Entity Oversight and Economic Regulation 2,758 2,889 4,686

Total 723,942 766,729 813,321

Department

of Transport Breakdown of major other budgets (2006/07)

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1

2

34

56

78 9

10 11 1213

14

Details R’000 %

1 Compensation of Employees

157,678 21.8%

2 RTMC 150,120 20.7%

3 Oil Pollution prevention services and Watch Keeping services

65,437 9.0%

4 Administration 60,573 8.4%

5 RSR, SAMSA, SACAA, MRCC, MSCC, NSRI and Memberships

50,937 7.0%

6 Road infra. planning 50,000 6.9%

7 Rural transport projects 38,019 5.3%

8 Transport planning and infrastructure

32,290 4.4%

9 Inspectorates, Road, Rail, Maritime and Aviation regulation

31,719 4.4%

10 Overloading Control 24,779 3.4%

11 Freight Logistics 18,604 2.6%

12 Special Invest. Unit 16,625 2.3%

13 Transport Policy 13,495 1.9%

14 Public Transport 13,666 1.9%

15 Public Entity Oversight 2,756 0,4%

Total 723,942 100%

15

Department

of Transport Expenditure trends: Rail

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/090.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Expenditure Growth %

19,9% 6,0% 5,9% 13,9% 11,1% 19,4% 19,3%

2002/03: Growth of 20% due to an additional R146m for rolling stockand rail extensions and an additional R160m for subsidies2005/06 to 2008/09: Adjustments for VAT and additional allocations forpassenger rail infrastructure

Department

of Transport

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/090.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%


7,7% 12,0% 5,0% 5,8% 5,1% 5,0% 10,0%

2003/04: Additional allocations of R 150m per year in 2003 MTEF. From then onwards, only inflationary adjustments added to baseline.

Expenditure trends: Bus

Department

of Transport

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/090.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%


12,7% 7,3% 11,6% 21,6% 30,8% 32,7% 15,4%

2004/05 and 2005/06: Additional allocations of R200m, R250m and R300min 2003 MTEF and VAT adjustments in 2004 MTEF of R187m, R203m and R213m.2007/08: Additional R500m2006/07 onwards: Additional R400m, R600m, and R900m in 2006 MTEF.

Expenditure trends: Roads

Thank you

Department

of Transport

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Department of Transport Portfolio Committee on Transport Budget Vote 33 14 March 2006.

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