Honourable Chairperson;
Deputy Minister of Transport, Ms Sindisiwe Chikunga;
My colleagues Ministers present;
Chairperson of the Transport Portfolio Committee, Ms Ruth Bhengu and Honourable members of the Portfolio Committee;
Chairperson of the Select Committee on Public Services, Mr Pat Sibande and Honourable members of the Select Committee;
Honourable members of Parliament;
The Acting Director General of Transport, Dr Maria du Toit and senior officials from the Ministry and the Department;
Chairpersons and Chief Executive Officers of State Owned Companies and agencies
Esteemed Members of Executive Councils and Heads of Department from provinces;
Your excellencies Transport Sector Stakeholders;
Esteemed and distinguished guests;
Comrades and friends;
Members of the media;
Ladies and gentlemen.
The 25th May 2013 marked a day of historical importance – the 50th anniversary of the formation of the Organisation of African Unity (OAU).
The fervent desire by Africans to be the architects and masters of their own destiny led to the formation of the OAU on the 25th May 1963, in Addis Ababa, Ethiopia.
Historically, it has been a long and winding road from then to now:
at times characterized by the autumn of despair;
at other times by the winter blight of coups d’e tats
and civil wars sprouting petals and roses of blood.
at other times, Africa has been characterized
by the eternal spring of hope
and summers filled with the clear
innocent unreserved laughter
of children
ringing to a clear
blue sky
In South Africa, we stand at the threshold of our country celebrating twenty years of freedom and democracy.
This time next year, we shall have completed our second decade of democracy. It is indeed a singular privilege and honour to present our Budget Vote on the eve of such a momentous milestone for our country.
Over the past nineteen years, since the advent of the democratic dispensation, the African National Congress led government has made significant strides to transform the transport industry, from non-motorised to air transport, to meet the social and economic needs of our people, especially the urban and the rural poor – the wretched of South Africa.
When the ANC government came to power in 1994, it inherited a transport system voetstoots that had, at best, invested to benefit the white minority component of our society, and at worst, a transport system that had been under-funded, neglected and which was based on blinkered apartheid spatial patterns.
In order to deal with this situation, the ANC government developed the National Transport Policy that was published in August 1996.
Although significant strides have been made since then – occasioned by major capital injection into transport related infrastructure, there is still much to achieve.
All across some of our cities, including Johannesburg, Cape Town, Nelson Mandela Bay, Rustenburg and others, we are seeing investments in transport infrastructure, such as the Bus Rapid Transport system which is a catalyst for urban regeneration, reconnecting isolated nodes and bringing disconnected communities closer to economic opportunities.
To meet our commitments as host nation to the 2010 FIFA World Cup, government accelerated its build programme and invested billions to ensure a safe, efficient and reliable public transport system that resulted in world-class airports, roads, upgraded train stations and refurbished coaches. This drive to reshape public transport travel in South Africa continues.
Transport infrastructure and services remain crucial for generating economic growth, alleviating poverty, reducing the scourge of inequality and increasing domestic and international competitiveness.
In financing transport infrastructure we are aware of South Africa’s institutional, economic and social characteristics including various demands made on tax based revenues. We accept the fact that there is no universal funding model – it is a considered choice among several models each with their pros and cons. To this end, we welcome the willingness of the private sector to invest in transport infrastructure.
Our effort to make transport the heartbeat of the economy continues. We are aware that transport is an enabling sector which impacts on growth and development in other sectors of the economy.
The department is in the process of finalising the National Transport Master Plan (NATMAP) before it is submitted to Cabinet.
The NATMAP will constitute a long term plan to further position transport as an enabler for social and economic development by rolling out infrastructure and services that respond to the needs of all South Africans and ensures we meet our Millennium Development Goals.
NATMAP will focus on integrated transport planning to ensure that the different modes of transport complement each other.
The alignment between the National Transport Master Plan (NATMAP) and the National Development Plan (NDP) which sets out critical national policy goals to be achieved by 2030, includes implementing the user pay principle in a manner that does not have a crushing effect on the working class and the poor.
Within the prevailing economic climate, the fiscus alone is not able to finance the current infrastructure backlog in South Africa.
The budget
The Budget allocation for the Department of Transport for the financial year 2013/14 is R42.3 billion (R42 275 340 000), and this includes allocations to provinces, municipalities, state owned companies and agencies.
Of the allocated amount, R18 billion (R18 850 917 0000) will be transferred to provinces and municipalities towards road maintenance.
Effective coordination with provinces and municipalities is therefore needed to ensure that the department is not only a conduit of funds to the other spheres of government, but that, importantly, it plays a leading role in monitoring and evaluating the implementation of government programmes.
To this end, and in the spirit of cooperative governance, SANRAL will provide a critical supporting role in the implementation of the Maintenance Programme.
Another portion of the budget amounting to R21.9 billion (R21 941 930 000) will be transferred to state owned companies and agencies which are the delivery agents of the department.
The department is building the requisite internal capacity in order to better enable it to conduct the necessary oversight over the State Owned Companies and agencies under its remit.
Significant progress has been made to align the strategies and annual performance plans of the State Owned Companies and agencies of the department.
After distributing the allocated Budget to provinces, municipalities, State Owned Companies and agencies, the Department is left with R921 million (R921 562 000) to carry out its policy development and oversight responsibilities.
It is common cause that sound economic infrastructure is a precondition for economic growth. It is for this reason that the Department of Transport has intensified efforts to develop and improve South Africa’s transport system to serve as a catalyst for social and economic development.
Accordingly, the spending focus over the next year will predominantly be on:
1. Maintaining road infrastructure;
2. Upgrading the rail infrastructure and services; and
3. Constructing and operating public transportation infrastructure
Expenditure on these three areas will include the following transfers, which comprise an average of 96.1% of the total budget allocation of the Department of Transport over the medium term.
The State Owned Companies that fall under the remit of the Department of Transport will be allocated the following disbursements and grants:
- The Passenger Rail Agency of South Africa (PRASA) - R 3.678 billion for current operations and R 7.481 billion for capital infrastructure;
- The South African National Road Agency (SANRAL) – R3.454 billion for current operations and R7.043 billion for capital infrastructure.
And grants will be allocated to:
- The Provincial Road Asset Maintenance Grant – R8.696 billion;
- The Rural Roads Asset Management System Grant – R52.2 million; and
- The Public Transport Infrastructure, Operations and Network Grants – R5.55 billion.
Other transfer payments will include:
- The Road Traffic Management Corporation – R167 million;
- The Railway Safety Regulator – R46. 5 million;
- The Road Traffic Infringement Agency – R25 million;
- The South African Maritime Safety Authority – R6.4 million;
- The South African Civil Aviation Authority – R18.155 million; and
- The taxi recapitalization programme – R522 million
In line with the perspective of an integrated transport model, the spending focus over the medium term will be on developing and implementing strategies based on a multi-modal national system of transport. Major projects in this regard will include:
i. The establishment of a single transport economic regulator;
ii. Establishment of a macro planning framework;
iii. Implementation of a national corridor framework;
iv. Finalising the update of the national freight database; and
v. The completion and analysis of the National Household Survey
The following over-arching development principles remain cardinal, in relation to the foregoing, namely:
1. Balancing the development of new infrastructure with the ongoing maintenance of the existing infrastructure;
2. Improving infrastructure links with rural and financial and human resource challenged provinces;
3. Addressing capacity constraints and improving co-ordination and integration; and
4. Scaling up investment in infrastructure
Four key sectors remain central to the envisaged developments, namely, transport, water and sanitation, energy and communications.
In this regard, the Department of Transport continues to play a central role in the following two strategic infrastructure projects:
1. The Durban-Free State- Gauteng logistics and industrial corridor
2. Unlocking the economic potential and opportunities in the North West province.
The department further plays a supportive role in other strategic infrastructure projects.
Balanced investment in transport infrastructure will lead South Africa to efficient and sustainable growth, mobility and community access. It is important that the cost of doing business in South Africa is reduced in order to ensure that our economy remains competitive in global markets.
Honourable Chairperson,
Upgrading the railway infrastructure and services
Within the period under review, the procurement process for the fleet renewal programme of the Passenger Rail Agency of South Africa (PRASA) was concluded in December 2012.
The success of the programme will lead to:
- A new coach building and locomotive assembly plant being established in the Gauteng province;
- As a result of this, 8 300 direct jobs will be created; and
- Another 22 000 jobs will be created through localisation
The accelerated rolling stock programme has been concluded and has resulted in:
- 579 coaches being delivered in 2012/13 to Metro Rail;
- 3 Coaches to Shosholoza Meyl and
- 9 locomotives upgraded at a cost of more than R1.3 billion.
Furthermore 49 stations were upgraded and improved as part of the National Station Improvement Programme at a cost of R221 million. The total capital spend of R6.2 billion was reached at the end of March 2013.
The conundrum we face is that, whilst the increase in capital subsidy is in line with the strategy to modernise public transport, the operational subsidy is, however, below the levels required to sustain the envisaged growth strategy. The operational subsidy decreased by 1% in real terms between 2010 and 2012.
In the medium term, the focus in rail will continue to be on the upgrade and expansion of the priority commuter rail corridors.
The safety of communities, especially children, who reside very close to railway lines, as a result of poor apartheid spatial development planning, continues to be a serious concern for the Rail Safety Regulator.
Evidential data points to the fact that accidents where persons get struck by trains in Gauteng, KwaZulu-Natal and in the Western Cape, is primarily because of poor spatial planning.
On the other hand, criminal activities such as cable theft, the theft and vandalizing of signaling equipment remains a serious concern, as it results in exorbitant operational costs.
PRASA, the Rail Safety Regulator and the South African Police Services continue to refine and align their systems in order to deal decisively with this problem that amounts to economic sabotage.
South African National Road Agency Limited (SANRAL)
As we mentioned earlier, SANRAL received R3.454 billion for current operations and R7.043 billion for capital infrastructure.
South Africa has a total road network of 750 000 km of which 17 000km is managed by SANRAL.
Non-toll road network accounts for 83.1% of the national road network which is funded by the fiscus, the balance of 16.9% form part of the toll portfolio network of roads.
During the 2012/13 financial year, SANRAL awarded 202 contracts for new works, rehabilitation and improvement, periodic and special maintenance, routine road maintenance, community development, supervision and other activities to the value of R11.6 billion with R9.5 billion being spent on non-toll roads.
SANRAL spent a total of R1.8 billion on contracts with Small Medium and Micro Enterprises (SMMEs) of which R1.2 billion went to black owned firms, for both toll and non-toll roads.
Sanral will continue to implement non-toll projects during the MTEF period.
With regard to the road traffic management,
The Road Traffic Management Corporation (RTMC) has redefined the National Rolling Enforcement Plan to provide a platform for co-ordinated law enforcement and visible policing in South Africa.
It has exceeded its target of stopping and checking a million vehicles per month, by approximately 1.5%. Its new target is now 1.1 million per month.
Road traffic interventions for the 2013/14 period will include the following three focus areas:
i. The International Road Assessment Programme, which will assess road safety solutions that relate to the road infrastructure. The aim has been set to pass 4000 km of road in the 2013/14 financial year;
ii. The establishment of a Crash Information Management System, which will provide the public with statistics; and
iii. The establishment of a new qualifications framework for traffic officers.
The Deputy Minister will expand further on the work of our road safety agencies and cover other aspects of her delegated responsibilities.
With regard to Maritime
The lode star of our campaign to promote the Maritime sector and to encourage its greater industrialization was to declare the year 2013 as Maritime Year.
South Africa has a coastline of over 3000km, and is a strategic hub for international merchant ships, connecting the global East and West.
Notwithstanding its strategic location, South Africa does not own a single flag carrying ship, which means that it has to rely on foreign shipping companies to transport its outbound and inbound seaborne cargo, at a direct cost to the economy of approximately R34 billion, according to the 2012 estimates.
We are working closely with SAMSA and maritime stakeholders to unlock South Africa’s maritime potential.
Furthermore, we signed the Djibouti Code of Conduct, that empowers South Africa to share resources and information with other countries, in the fight against piracy and other crimes at sea.
This year’s major projects will include:
1. The finalisation of enabling Maritime Transport Policy, the development of a Green Paper on maritime shipping and concluding consultations on the Ballast Water Management Bill;
2. The finalisation and launch of the Inland Waterways Strategy;
3. The finalisation and adoption of the Maritime Transport Broad Based Economic Empowerment (BBBEE) implementation plan, and the appointment of its Council;
4. Together with the Departments of Higher Education and Training, and Basic Education, we will launch Maritime Education and Training initiatives at no less than ten (10) Further Education and Training (FETs) Colleges countrywide and at least one High School per coastal province.
Conclusion
Honourable Chairperson, in conclusion, I wish to thank the Deputy Minister, the Ministry and Department officials and staff for their unwavering commitment and support.
I implore honourable Members to support the Department’s budget for the 2013/2014 financial year.
I thank you.
