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Department of Transport

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Summary of expenditure per Programme for 2008/09. Under expenditure per Programme ... Transport Policy and Economic Regula-tion. Econo-mic classifi-cation. 9 ... – PowerPoint PPT presentation

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Title: Department of Transport


1
Department of Transport
Standing Committee on Appropriations Expenditure
2008/09 12 August 2009 10h00 Committee Room 2,
Upper Ground Floor 90 Plein Street, Parliament,
Cape Town
1
2
Contents
  • Introduction
  • Adjusted Budget for 2008/09
  • Summary of expenditure per Programme for 2008/09
  • Under expenditure per Programme per economic
    classification
  • Requests for roll over to 2009/10
  • Summary of under / (over) expenditure in 2008/09
  • Reasons for under spending

2
3
Introduction
  • According to the letter from the Committee the
    Department under spent its budget for 2008/09 by
    R57,9 million (5,6) less than the adjusted
    budget
  • The correct figures are
  • The Department over spent its budget by R345,8
    million (1,4 of the total adjusted budget)
  • Current expenditure was under spent by R37,4
    million (0,15 of the total adjusted budget)
  • Current expenditure (only compensation of
    employees plus goods and services) was under
    spent by R51,5 million (0,21 of the total
    adjusted budget)

3
4
Introduction (continued)
Actual expenditure against budget (high level
economic classification)
4
5
Introduction (continued)
Summary of expenditure per economic
classification
5
6
Adjusted Budget for 2008/09
R000
6
7
Summary of expenditure per Programme
7
8
Under expenditure per Programme per economic
classification
8
9
Expenditure per economic classification as of
budget
9
10
Expenditure per economic classification against
budget
R000
R000
10
11
Requests for roll over to 2009/10
Relevant under expenditure
Rollover request
11
12
Summary of under / (over) expenditure in 2008/09
12
13
Reasons for under spending
  • Compensation of employees
  • Goods and services
  • Transfer payments

13
14
Compensation of employees

14
15
Compensation of employees (continued)

15
16
Compensation of employees (continued)
  • Moratorium placed on filling of posts if all
    funded posts are filled, the Department will
    over spend on compensation of employees
  • Refer once off additional funds allocated on the
    Adjusted Budget for 2008/09 for higher than
    budgeted wage increases for the Department of R46
    million. If not sustained, moratorium on filling
    of posts will have to be maintained

16
17
Compensation of employees (continued)
  • Measures that were introduced to reduce the
    vacancy rate
  • Concurrent headhunting with normal recruitment
    process was implemented
  • Retention Strategy was approved on 2008/06/11 and
    is currently being implemented (Counter offer
    targets women, people with disabilities,
    rewarding of above average performance, people
    development and capacity building, empowerment of
    managers on Labour relations matters)
  • Appointment of second appointable candidates who
    are women or people with disabilities
  • Office Administrator posts were advertised as
    standard vacancies
  • Approval was granted to access advertise
    identified posts on Job Access to accelerate the
    appointment of persons with disability

17
18
Compensation of employees (continued)
  • Branch Managers were given quotas to meet on
    people with disability and women at SMS levels
  • The pro forma submission for the filling of posts
    has been improved to include Branch EE status
    updates
  • SMS Members will be assessed in terms of meeting
    the EE targets under the People Management and
    Empowerment CMC which carries a weighting of 20
  • Tender to appoint a pool of recruitment agencies
    to assist the Department with headhunting of
    suitable candidates when normal recruitment
    process is unsuccessful
  • HR Interventions to assist the fast tracking of
    the filling of the posts, signing of Performance
    Agreements, Performance assessment process
  • Contract employees were employed to fill posts
    and perform functions related to vacant posts
    until the posts could be permanently filled

18
19
Goods and services

19
20
Goods and services (continued)

20
21
Goods and services (continued)

21
22
Transfer payments

22
23
Transfer payments (continued)
  • The Division of Revenue Act places
    responsibilities on transferring national
    officers, such as
  • Monitoring of expenditure and performance
    information
  • May transfer funds only after information
    required is secured
  • Submit monthly information to Treasury
  • The Department could not make the transfer
    payments to the Passenger Rail Authority of South
    Africa (PRASA) due to non-compliance by PRASA

23
24
Transfer payments (continued)

24
25
BUS SUBSIDIES CONTENTS

  • CURRENT CONTRACTUAL OBLIGATIONS
  • SUBSIDY DISTRIBUTION
  • SUBSIDY BUDGET ALLOCATION
  • SHORTFALL PER PROVINCE
  • INTERVENTION MECHANISMS
  • CONCLUSION
  • IMPLEMENTATION

25
26
Current Contractual Obligations
  • Competitive tendering introduced in 1997
  • Current Contract Regime
  • Interim Contract ticket based
  • Tender Contract kilometre based
  • Negotiated Contract kilometre based

26
27
National Budget - Subsidy Distribution 2008/09

27
28
SUBSIDY DISTRIBUTION

Tendered/Negotiated Contracts vs Interim Contracts
Total Subsidy Split between Provinces for all
Contracts
28
29
SUBSIDY BUDGET ALLOCATION
  • Department annually motivated increases for bus
    subsidy baseline allocation since 1997/98
  • This was to provide for restructuring of public
    transport and to cater for growth in the current
    subsidised services
  • No increases granted to the baseline until 2009/10

29
30
SUBSIDY BUDGET ALLOCATION
  • Annual subsidy allocation was solely inflation
    related up to 2009/10 and made no provision for
    service improvement
  • No funding to cater for increases in demand for
    public transport

30
31
SUBSIDY BUDGET ALLOCATION
  • For the period 2004/05 2007/08 the average year
    on year subsidy baseline increase was 5.5
  • During the same period escalation (capital,
    labour fuel costs) on contracts averaged
    between 10 to 12
  • Passenger growth for the same period averaged 10

31
32
Subsidy Allocation 2005/06

32
33
Subsidy Allocation 2006/07

33
34
Subsidy Allocation 2007/08

34
35
Subsidy Allocation 2008/09

35
36
SHORTFALL PER PROVINCE

37
INTERVENTION MECHANISMS
  • A Public Transport Operations Grant replaced the
    former bus subsidies
  • Subsidy levels have been insufficient since
    2005/06 to halt the declining levels of service,
    escalation in costs and the growth in demand
  • In order to improve operational and financial
    efficiency a more focused approach to determining
    service priorities will need to be developed
  • Implementation Plan
  • Conditional Grant to Provinces introduced
  • Phased implementation in co-operation with
    Provinces
  • Negotiated performance based contracts for route
    operations
  • Formalisation of unscheduled Interim Contract
    services
  • Define operating areas that will not be served
  • Implementation of supporting infrastructure
  • Continued enforcement and monitoring of all
    contracted Public Transport Operations

37
38
INTERVENTION MECHANISMS (continued)

Interventions to achieve change 2009/10 onwards
38
39
INTERVENTION MECHANISMS (continued)

Intervention conditions
?
  • Operators that accept will sign a negotiated
    contract that includes
  • KPIs
  • Provision that the operator will be provided with
    an opportunity to be party to a new integrated
    contract regime for some or all of the services
    within the contract area

?
Operators that do not accept will continue on
month-to-month basis and their contracts will be
terminated as and when required
39
40
Conclusion
  • Subsidy levels have been insufficient since
    2005/06 to halt the declining levels of service
  • Current levels of subsidy are unable to meet the
    escalation in costs and the growth in demand
  • Bus operators will not recapitalise their fleets
    due to the continued uncertainty of government
    policy regarding the contract system
  • In order to improve operational and financial
    efficiency a more focussed approach to
    determining service priorities will need to be
    developed

40
41
Conclusion (continued)
  • The method of contracting road based public
    transport services has to change to better
    reflect the complexities of the network by
    eliminating the costly duplication of services
    between modes
  • Metropolitan and other large towns must have full
    control of their public transport services and
    this is achieved by ensuring all services are
    scheduled, monitored and managed
  • Alignment between the current public transport
    services and the introduction of the IRPTN is
    critical

41
42
IMPLEMENTATION PLAN
  • Phased implementation in co-operation with
    Provinces
  • Negotiated performance based contracts for route
    operations
  • Formalisation of unscheduled Interim Contract
    services
  • Define operating areas that will not be served
  • Implementation of supporting infrastructure
  • Continued enforcement and monitoring of all
    contracted Public Transport Operations

42
43
Thank You Dankie Enkosi

43
44
Financial transactions in assets and liabilities
in 2008/09


44
45
Programme 1

Expenditure per economic classification
45
46
Programme 2

Expenditure per economic classification
46
47
Programme 3

Expenditure per economic classification
47
48
Programme 4

Expenditure per economic classification
48
49
Programme 5

Expenditure per economic classification
49
50
Programme 6

Expenditure per economic classification
50
51
Programme 7

Expenditure per economic classification
51
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