Department of Transport

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Department of Transport
Joint Budget Committee Theme 3 Employment and
Economic Development 1 November 2006
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Department of Transport
Contents of presentation

• Introduction
• Sustaining growth and accelerating development
• Economic policy and outlook
• Fiscal policy
• Taxation
• Spending priorities and public service delivery
• Division of revenue and medium term expenditure
  estimates
• Proposed projects Public Transport
  Infrastructure Fund 2010 FIFA Soccer World Cup

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Department of Transport
Introduction

• The vibrant economic growth projected for the
  South African economy needs to be sustained and
  supported by a sound and sustainable transport
  system.
• The Department of Transports major role is the
  development of policies, programmes and
  initiatives that provide an overall framework in
  which coordinated, integrated and targeted
  transport systems support the countrys
  socio-economic development.
• The Department of Transport is committed to have
  transport systems in place that enhances job
  creation, economic development, and poverty
  eradication and that reduces the cost of doing
  business and traveling times.
• Furthermore, transport is a responsibility that
  cuts across provincial boundaries and spheres of
  government it requires consistent
  inter-government cooperation and coordination at
  all levels.

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Department of Transport
Sustaining growth and accelerating development

• The economy grew by an average of 4,2 over the
  past 4 years, and is expected to grow by 4,5 in
  the next year, rising to 5,5 by 2009.
• The economic challenges are to sustain this
  growth, broaden participation, strengthen
  industrial development and trade performance, and
  accelerate the pace of job creation.
• These challenges will be met, amongst others, by
  continued expansion in public spending. Key
  public spending priorities over the MTEF include
• Investment in stadiums and public transport to
  support the 2010 FIFA World Cup
• Contributing to economic efficiency through
  investment in roads and rail.
• 2010 FIFA World Cup
• Successful management of an event of this
  magnitude requires the rapid and efficient
  movement of large numbers of people without
  unduly disrupting normal traffic.

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Department of Transport
Sustaining growth and accelerating development
(cont.)

• 2010 FIFA World Cup (continued)
• The Department of Transport has prepared a
  comprehensive plan for transport network
  extensions and upgrades encompassing road,
  commuter rail and the airports.
• Key Requirements for Public Transport
  Infrastructure Fund Funding
• for the 2010 FIFA World Cup
• Projects to prioritise public transport.
• Projects to satisfy both long term mobility
  (legacy) and event specific mobility
  requirements.
• Projects to have continuity from planning to
  execution.
• Projects to be executed in accordance with EPWP
  requirements.
• Projects to be based on local IDPs and ITPs,
  addressing community access and mobility needs.
• Projects to be practical and implementable ahead
  of 2010.

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Department of Transport
Sustaining growth and accelerating development
(cont.)

• 2010 FIFA World Cup (continued)
• Public Transport Infrastructure Fund Projects for
  2010 FIFA World
• Cup
• Request areas predominantly road and rail public
  transport and non-motorised transport.
• Project types include planning, physical
  infrastructure and systems.
• Planning includes transport planning, detailed
  project plans and designs.
• Infrastructure and systems projects include

• ITS infrastructure and systems
• NMT infrastructure
• Inner-city mobility systems
• Call centre systems

• Public transport road infrastructure
• Public transport interchange facilities
• Rail upgrades
• Inter-modal facilities

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Department of Transport
Economic policy and outlook

• Construction and refurbishment of stadiums in
  preparation for the 2010 FIFA World Cup, the
  Gautrain and a series of local transport,
  commercial and residential projects will generate
  wide-ranging economic spin-offs and
  opportunities.
• Investment in freight, roads and public transport
  will help to lower costs in the economy and
  expand capacity.
• Construction grew by 11,4 in the first half of
  2006, driven by strong investment in the economy,
  and employment in this sector grew by 14,3.
• Civil construction is expected to grow by 9 per
  cent in 2006 as major projects such as Gautrain
  and stadium construction and refurbishment get
  under way.
• Gautrain
• The Department of Transport paid the first claim
  of R928,8 million for the Gautrain project to the
  Gauteng Province on 30 October 2006.

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Department of Transport
Economic policy and outlook (continued)

• Freight logistics
• Rapid economic growth has increased the demand
  for distribution and logistics services.
• Significant improvements continue to be made in
  transport infrastructure to lower the overall
  cost of logistics.
• Transnet investments amounting to R64,5 billion
  will be spread across the five years to 2011.
  Approximately 50 per cent of the investment will
  be in rolling stock and port infrastructure.
• Transport
• The National Freight Logistics Strategy was
  finalised and approved by Cabinet in 2005.
• The first draft of the Branch Line Strategy was
  developed to revitalise non-core rail lines to
  ensure economic sustainability of small towns and
  rural communities.
• The Department led the revival of some rail
  branch lines, which include the Nkwalini Branch
  Line and the Belmont Douglas Branch Line.

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Department of Transport
Economic policy and outlook (continued)

• Freight logistics Transport (continued)
• The revival of these rail branch lines led to
  1170 job opportunities and included training of
  communities in train trades.
• The revitalisation of these lines has helped stop
  cargo shifts of 430,000 tons of sugarcane and
  500,000 tons of grain from rail to road
  respectively.
• Completed 4 provincial databanks started
  process in other 4 provinces.
• Developed the National Freight Databank 80
  complete with 2 Provinces left.
• Developed National Freight Information Systems
  completed 50 of user requirements.
• Established corridor and freight forums in the
  various provinces.
• Aviation sector and tourism
• Tourism played a relatively small role in the
  South African economy before 1994. Tourist
  arrivals grew from 1 million in 1990 to 7 million
  in 2005, now generating in excess of R 48 billion
  in revenue per annum, with volumes growing
  between 4 and 6 since 2000.

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Department of Transport
Fiscal policy

• Fiscal policy supports sustainable economic and
  social development through an appropriate balance
  between government expenditure, taxation and
  borrowing.
• Substantial allocations are provided for
  investment in infrastructure that will contribute
  to increased capacity in support of long-term
  sustainable growth, amongst others
• 2010 FIFA World Cup R12,1billion
• Rail rolling stock and signaling equipment
  R1,1billion
• Roads infrastructure R1,1billion
• Provincial infrastructure grant R4,2billion
• Public Private Partnerships Maputo Corridor and
  N4
• The concession contract for the N4 Platinum
  Highway completed the link with Maputu in the
  east to Walvisbay in the west, linking Namibia,
  Botswana, South Africa and Mozambique.
• Serving mining, agriculture, forestry,
  manufacturing and others.
• The distance saved between Gauteng and Walvisbay
  is 500km and exports from Gauteng through
  Walvisbay can reach European markets 10 to 15
  days earlier.

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Department of Transport
Fiscal policy (continued)
Roads - possible toll financing / financing
through loan funding
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Department of Transport
Taxation

• Taxi recapitalisation
• Qualifying taxi operators will be paid an
  allowance of R50 000 for each taxi being
  scrapped. Such payments will not trigger any
  income or capital gains tax.
• South-South co-operation
• SARS signed a customs agreement with China at the
  end of September 2006, and similar agreements are
  contemplated with Brazil and India.
• Transport
• Trilateral maritime and aviation agreements were
  signed between South Africa, India and Brazil in
  September 2006.
• The Airports Company of South Africa (ACSA) was
  awarded the tender for the concessioning of the
  New Delhi Airport.
• In 2005/06, the Department of Transport concluded
  Merchant Shipping Agreements with Gabon, Russian
  Federation, India and the Democratic Republic of
  Congo.

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Department of Transport
Spending priorities and public service delivery

• Adjusted Estimates of National Expenditure -
  Transport
• Additional funds allocated
• South African Rail Commuter Corporation Ltd.
• R439,732 million for liabilities arising from the
  consolidation with Metrorail.
• R180 million to cover operational losses.
• R45,1 million to cover a shortfall in bus
  subsidies due to increases in the fuel price.
• Rollovers of R211,5 million, of which R204
  million for the taxi recapitalisation process.
• Total additional allocation R 876,332 million

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Department of Transport
Spending priorities and public service delivery
(continued)

• Proposed revisions over the MTEF Transport
• R1,1 billion to the South African Rail Commuter
  Corporation Ltd. to improve ageing signaling
  systems and deteriorating rolling stock.
• R1,1 billion for maintenance and rehabilitation
  of national roads.
• Earmarked allocations to provinces for rural
  access roads, accelerating labour based
  construction.
• R5,5 billion for transfers to local government
  for investment in public transport.
• R4,75 billion for supporting infrastructure for
  the 2010 FIFA World Cup
• Special Investigating Unit (SIU)
• The Department of Transport contracted with the
  SIU to investigate fraud and corruption with
  issuing of driver and vehicle licenses. Some
  statistics after one year
• Current criminal cases 3072
• Current prosecutions 519
• Convictions 480

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Department of Transport
Division of revenue and medium term expenditure
estimates

• Strategic projects falling under the accelerated
  and shared growth initiative require joint
  funding and intergovernmental cooperation. These
  include
• Selected road and rail networks linking
  provincial economic centres to domestic and
  international markets.
• Provincial infrastructure grant increased by
  R4,3 billion over the next three years.
• An additional R6,7 billion for pubic transport
  and systems improvement to host cities for the
  2010 FIFA World Cup.
• Provincial infrastructure grant - scaling up EPWP
  in the roads
• sector
• Strategic objective
• Maximisation of job creation and skills
  development using labour intensive methods for
  the provision and upkeep of the much needed road
  infrastructure.

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Department of Transport
Division of revenue and medium term expenditure
estimates (cont.)

• Provincial infrastructure grant - scaling up EPWP
  in the roads
• sector (continued)
• Key focus
• Application of labour intensive methods to
• Capital road works.
• Road maintenance.
• National replication of best practice
• Gundo-Lashu through Vukuphile guidelines and
  roll-out .
• Zibambele through Zibambele guidelines and
  roll-out.
• Prioritisation of Access Roads development.
• Expansion of this approach to other road types.
• Streamlining this approach within roads authority
  budget and service delivery programmes.
• Recent performance
• Created 52000 work opportunities in 2005/06.
• Collectively Provincial Road Departments spent
  98.4 of Budgets, despite an overall increase of
  25 in budgets.

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Department of Transport
Division of revenue and medium term expenditure
estimates (cont.)

• Provincial infrastructure grant - scaling up EPWP
  in the roads
• sector (continued)
• Outputs over MTEF
• 3 600km of roads constructed or upgraded using
  labour intensive construction.
• 58 000km of roads maintained using labour
  intensive methods.
• 194000 job opportunities created
• 117 000 job opportunities during construction.
• 77 000 job opportunities at maintenance stage.
• Contractor development and worker training
  through Vukuphile programme
• Will be informed by the amount of learnerships
  awarded (contractors vs. km of roads per budget).
• Labour use per km (70-120 per km).
• Other
• In 2005/06, evaluation of road maintenance
  projects in rural areas indicated that 575
  transport projects were in the pipeline with the
  potential of 223 410 job creation opportunities
  for local people.

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Department of Transport
Proposed projects Public Transport Infrastructure
Fund 2010 FIFA Soccer World Cup
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Projects for 2005/06
Entity Project
Cape Town ITS system and public transport call centre
Ethekwini ITS system, Warwick junction upgrade and Reunion station upgrade
Tshwane Planning and preparations for construction of interchange
Johannesburg North/South public transport corridor (Phase 2 Soweto to Parktown)
Nelson Mandela Khulani public transport corridor
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Projects for 2005/06 (2)
Entity Project
Rustenburg Planning for taxi facilities and Non Motorised Transport
Polokwane Road upgrading for public transport and Non Motorised Transport Infrastructure
Mangaung Mangaung activity corridor and Elizabeth street pedestrianisation
Mbombela Planning support
Klerksdorp Planning support
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Projects for 2006/07
Entity Project
Cape Town N2 Airport-City link, Klipfontein corridor, City wide NMT system, ITS
Ethekwini Public Transport Call Centre
Tshwane Inner City Distribution System, Pedestrian link (Loftus stadium to rail station)
Johannesburg Public transport network improvements, ITS, Stadium precinct improvements, Inner City Distribution system
Nelson Mandela Coastal cycle pedestrian ways, Uitenhage Stanford corridors, completion of Khulani corridor, disabled facilities and ITS
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Projects for 2006/07 (2)
Entity Project
SARCC Station upgrades, pedestrian facilities, communication and safety systems
Polokwane NMT infrastructure upgrading (Phase 1)
Mangaung Bloemfontein public transport interchange, Selbourne Ave pedestrianisation
Ekurhuleni NMT facilities for Tembisa, Vosloorus, and inter-modal facilities in metro
Mbombela Hazyview pedestrian bridge
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Proposed Projects for 07/08 onwards
Entity Projects 07/08 (Rm) 08/09 (Rm) 09/10 (Rm) Total (Rm)
Ethekwini Warwick Junction Precinct, Inner City Distribution, M4 Highway-PT Lane, Park and Ride 556,4 568,6 520 1,645,0
Rustenburg Public Transport Facilities, Feasibility for Commuter Rail Service, PT Corridors design, Parking Areas, Improve selected Intersections Accesses, Signage 21 39,6 13,9 74,5
Mangaung Bloemspruit Pedestrian Route, Nelson Mandela Drive PT Upgrade and Widening at Parfitt Avenue intersection 313,6 124,5 0 438,1
Mbombela Mataffin Stadium Precinct, Eastern Residential Areas,NMT, Airport/City Link, TDM, Business Node 321,4 243,7 0 565,1
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Proposed Projects for 07/08 onwards (2)
Entity Projects 07/08 (Rm) 08/09 (Rm) 09/10 (Rm) Total (Rm)
Nelson Mandela Khulani Corridor, Standford Corridor, Uitenhage Corridor, Heugh Road Corridor, Stadium Precinct, Airport Projects 89,5 133,6 69,2 292,3
City of Tshwane CBD PT Projects, PT Operations, Wonderboom Airport Upgrade, ITS, TDM, Light Rail Proposal 1,060, 2 1,432,3 656,9 3,149,4
City of Johannes-burg Nasrec PT Projects, ITS, International Transit Shopping Centre, SPTN, Ellis Park PT Projects 441,6 244,7 0 686,3
Polokwane PT Ranks and Holding Areas, PT Security, TDM, Road Upgradings, NMT Infrastructure, 135,8 119,9 48 303,7
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Proposed Projects for 07/08 onwards (3)
Entity Projects 07/08 (Rm) 08/09 (Rm) 09/10 (Rm) Total (Rm)
Ekurhuleni Metro PT network Improvements, NMT Facilities, Park and Ride Facilities, PT Operational Plan 16,8 54,8 7,3 78,9
Gauteng Province Rehabilitation of R21 and Kya Sands-Lanseria Road, Bus Rapid Transit Planning, Gauteng OLS, Integrated Ticketing Systems, PT Information Systems, 203 164,9 21 388,9
KwaZulu Natal Integrated Inter-modal Facilities, PT Corridors Development, Road Signage, Road Upgradings 92,3 78,8 1 171,1
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Proposed Projects for 07/08 onwards(4)
Entity Projects 07/08 (Rm) 08/09 (Rm) 09/10 (Rm) Total (Rm)
Free State Setsotso, Mantsopa and Naledi Transport Centre 51,8 0 0 51,8
Eastern Cape Mthatha Airport upgrade, Grahamstown inter-modal facility, R72 road upgrade 104,7 107,7 35 247,4
GRAND TOTALS 3,408,7 3,313,1 1,372,3 8,092,5
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Department of Transport
Thank you
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