Department of Transport

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Department of Transport
Select Committee on Finance and
Appropriations FFC recommendations on the
Division of Revenue 2010/2011 5 August 2009
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Contents

• FFC Submission on the 2010/2011 Division of
  Revenue Bill
• Public Infrastructure investment
  
• Management and financing of road infrastructure
  
• Other recommendations
• Additional information on Transport Grants
• Gautrain Rapid Rail Link
• Public Transport Infrastructure and Systems
  
• Public Transport Operations
  
• Sani Pass (Roads)
• Overload Control
• Rural Transport Services and Infrastructure
  

Schedule 5 6 4 5 5 6
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FFC Submission on the 2010/2011 Division of
Revenue Bill

• Public Infrastructure investment
  
• Management and financing of road infrastructure
  

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Public Infrastructure investment

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Public Infrastructure investment (continued)

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0 20 40
60 80
100
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Road Infrastructure (continued)

Cost of maintenance delay
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Road Infrastructure (continued)

Impact of maintenance delay on road user cost
(Over 90 of total transportation costs is road
user costs)
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Road Infrastructure (continued)

• In the following provinces, more than 30 of
  roads are in poor to very poor condition
• Eastern Cape (46, 2000)
• Free State (59, 2007)
• Kwa Zulu Natal (46, 2005)
• Mpumalanga (65, 2004)
• Limpopo (60, 2000)
• Northern Cape (47, 2004)
• North West (45, 2007

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Road Infrastructure (continued)

Road damage
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Road Infrastructure (continued)

Road damage
Strand, Western Cape
Umdloti, KZN
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Road Infrastructure (continued)

Road damage
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The quality of road infrastructure is positively
linked to capacity, e.g. SANRAL capacity is in
line with the quality of roads under its control
(national roads) Dedicated funding is positively
linked to quality of roads, however, not
linearly There is under spending in some
Provinces and Municipalities on roads although
there is a crisis with funding for roads
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Figure A1 Roads Coordinating Body
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Road Infrastructure (continued)

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Road Infrastructure (continued)

Road accidents
South Africa has one of the highest road accident
fatality rates in the world
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Road Infrastructure (continued)

Road accidents

• Some road accidents are caused by the state of
  our roads
• There is also a growing trend of growing costs
  associated with litigation where courts have
  ruled against the State for negligence in
  maintaining road infrastructure

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Road Infrastructure (continued)

• Fiscal injections alone is not a panacea to road
  conditions. Given this, certain policy
  interventions are necessary
• There is a need for policy interventions such as
• Axle weight limits
• Targeted rail investments and interventions to
  move non time sensitive goods and commodities to
  rail
• Law enforcement - Trucks use the secondary road
  network to avoid weighbridges

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DoT recommendations

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Thank you
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Gautrain Rapid Rail Link
Allocations from 2006/07 to 2010/11
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Gautrain Rapid Rail Link (continued)

• Annual allocations are paid in terms of a payment
  schedule
• Key and General Milestones have to be achieved
  before payment
• The Provincial Support Team then checks whether
  Milestones have indeed been achieved
• The Milestones are certified by the Independent
  Certifier (IC)
• The certified claim is submitted by the IC to the
  Gauteng Management Agency to check claims for
  compliance
• The GMA then sends the claim to the Department
  with a request for payment from the DORA Grant
• The Department satisfies itself that there has
  been compliance with the DORA requirements and
  the conditions contained in the DORA Framework
• Currently, indications are that Phase 1 of the
  Project, i.e. the section between OR Tambo
  International Airport and Sandton will be
  completed in 2010, while the rest of the Project
  will be completed in September 2011.

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Public Transport Infrastructure and systems

• The Public Transport Infrastructure and Systems
  (PTIS) grant is aimed at improving transport
  infrastructure systems for 2010 and beyond
• Total PTIS grant from 2005/06 to 2011/12
  R18,767bn
• Total Host Cities PTIS grant R10.979bn which is
  80 of PTIS Grant
• Ongoing Monitoring and Evaluation of progress is
  in place, with monthly reporting
• Five Host Cities currently receiving technical
  assistance (Polokwane, Rustenburg, Mangaung,
  Mbombela and Tshwane

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Public Transport Infrastructure and systems
(continued)
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Public Transport Infrastructure and systems
(continued)
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Public Transport Operations

• The 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

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Public Transport Operations (continued)
Interventions to achieve change 2009/10 onwards
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Public Transport Operations (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
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Roads, Overload Control and Rural Transport
Note Sani Pass grant to be replaced by a roads
grant from 2010/11 Overload control grant to be
allocated for 2011/12
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Road Grants

• The grant was introduced to develop road
  infrastructure projects that promote regional
  integration, development and connectivity between
  neighbouring states
• Construction of the Sani Pass
• Phase 1 Upgrade of P318 Sani Pass (km 0 to
  13.6) - completion scheduled for April 2010.
• Phase 2 Upgrade of sections 1 and 2 (km 14 to
  25 and 25 to 33)
• Environmental Impact Assessment Studies underway
  with record of decision scheduled for
  announcement in September 2009
• Engineering designs are underway and are at
  various stages of completion by the joint venture
  consultant team
• Future road construction projects to be
  identified for inclusion in the Division of
  Revenue Act

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Overload Control Grants

• To achieve the objectives of the national
  overload control strategy, a 3-year grant has
  been developed in conjunction with National
  Treasury
• Grant funds are currently being used for
  upgrading the weighbridge infrastructure
  facilities in Mpumalanga and Limpopo
• In Mpumalanga, projects for the upgrade of
  weighbridge infrastructure were completed in
  October 2008
• Kinross Traffic Control Centre
• Ermelo Traffic Control Centre
• In Limpopo, the detailed design, planning and
  bill of quantities have been compiled, and
  construction works are set to begin in 2009/10
  on
• Rathoke Traffic Control Centre
• Mooketsi Traffic Control Centre
• Future allocations

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Rural Transport Grants

• Purpose
• To improve mobility and access in rural
  municipalities in support of Integrated
  Development Plans
• Reasons for not incorporating in equitable share
• This is a specific purpose grant mainly for the
  provision of rural transport infrastructure and
  services.
• This grant ensures that district municipalities
  are giving priority to the following rural
  transport interventions
• infrastructure construction
• maintenance, upgrading and rehabilitation
• support rural development and
• accelerated and shared growth initiatives in line
  with government priorities
• It is also used as vehicle for stimulating the
  use of labour intensive methods in large
  infrastructure programmes / projects to create
  jobs and develop required skills in terms of the
  Expanded Public Works Programme

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Rural Transport Grants (continued)

• MTEF Allocations
• R8.9 million 2008/09,
• R9.8 million 2009/10
• R10.4 million 2010/11
• R11,1 million 2011/12.
• Details of Projects 2008/09 Allocations

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