The Minister of Transport, Ms Sindisiwe Chikunga, on the occasion of the Transport Budget Vote in the National Council of Provinces
As I deliver my maiden Budget Vote speech as the Minister of Transport to this National Council of Provinces, I firmly believe that, the Road to socio-economic Development begins with the Development of a Road... the rail tracks of time and experience, have a tendency to test the tenacity and commitment to meaningful development.
I say, this because, a nation’s development is largely measured amongst others by the civilization of its transport infrastructure and systems. Through an integrated transport system, we are able to link producers to markets, workers to employment, students to schools and universities, and the sick to hospitals. Our rail and roads are critical drivers and enablers to our country’s Economic Reconstruction and Recovery Plan (ERRP).
Therefore, our unwavering commitment to be the heartbeat of South Africa’s Social Development and Economic Growth stands firm and solid; on a developmental road to deliver tangible outcomes that our people can see and experience.
Our 2023/24 financial year budget allocation is R79,565 billion which will be channelled towards delivering a better transport system, infrastructure and services for all South Africans. It is important to note that of the R79, 565 billion, total transfers and subsidies account for approximately 98% of the department’s expenditure to the tune of R77.9 billion, in the 2023/24 financial year. Of this, R47.2 billion are transfers to our public entities and agencies, and R30.2 billion is transfers to other spheres of government.
Public Transport
Our work towards delivering a public transport system that meets the needs of our people continues to gain traction. The department plans to achieve seamless integration of all modal public transport operations that provide a public transport system for the delivery of efficient, affordable, safe and reliable transport.
We will achieve this by directing the Public Transports Network Grant (PTNG) towards critical interventions that will deliver tangible outcomes. The grant is intended to provide funding for accelerated construction and improvement of public and non- motorised transport infrastructure that forms part of a municipal integrated public transport network; to support the planning, regulation, control, management and operations of fiscally and financially sustainable municipal public transport network services.
The PTNG allocation for the 2023/24 financial year stands at R6.8 billion. The cities of Msunduzi, Mbombela and Buffalo City, remain suspended from the grant. We have committed to work closely with them to meet the National Treasury conditions for re-admission to the grant.
The breakdown of the allocation of the PTNG for the 2023/24 financial year, per City is as follows:
Nelson Mandela Bay – R346 million Mangaung – R270 million Ekurhuleni – R773 million Johannesburg – R1.2 billion Tshwane – R830 million eThekwini – R952 million Polokwane – R214 million Rustenburg – R258 million Cape Town – R1.8 billion George – R145 million.
We are processing the Public Transport Subsidy Policy, which will be published for comments soon after approval by Cabinet. The Public Transport Funding Model will also be approved this financial year. The Public Transport Operations Grant which provides supplementary funding towards public transport services provided by Provincial Departments of Transport in the form of bus subsidies has been allocated R7.4 billion in the 2023/24 financial year. The allocation is distributed as follows per Province: Gauteng – R2.9 billion
KwaZulu-Natal – R1.4 billion Western Cape – R1.2 billion Mpumalanga – R742 million Limpopo – R441 million Free State – R326 million Eastern Cape – R295 million North-West – R136 million Northern Cape – R66 million. We continue to strengthen the regulation of the taxi industry through the revamping of the regulatory system to ensure safe and legal operations. These efforts will be bolstered by the passing of the National Land Transport Amendment Bill, which will enable us to regulate the e-hailing sector and address challenges facing metered taxis.
The Taxi Recapitalisation Programme (TRP) remains an important intervention in the transformation of the industry, underpinned by improvement of passenger safety. The budget for the Taxi Recapitalisation Programme increases from R477 million to R479 million in 2023/24.
Roads Programme
Investments in road networks are targeted at ensuring that passengers and freight carriers, which haul almost 80% of South Africa’s freight load, have adequate access to safe roads. In this regard, we are working towards finalising South Africa’s Roads Funding Policy by the end of this financial year.
For this financial year we have budgeted R42.6 billion to fund efforts to construct, upgrade and maintain the national and provincial road networks. Allocation to SANRAL is R25.4 billion. Of this budget R15.8 billion is to strengthen and upgrade the national non-toll network. Amongst the SANRAL Mega projects we are continuing with construction of the Moloto Road Corridor, the N2/N3/N7 road-network expansion and N2 Wild Coast projects. The N2 Wild Coast projects include the construction of the two iconic bridges, Msikaba being the highest and Mtentu being the longest bridge in the continent of Africa.
We are also in the process of undertaking construction work in the North Bound section of the 3.9km long Hugeunot Tunnel, making it the longest road-based tunnel in Africa. These SANRAL Mega Projects confirm the diverse engineering
excellence and profound expertise found right here in South Africa.
Refurbishment, Rehabilitation and Eradication of Potholes Particularly In Provincial and Municipal Road
Our work to improve the condition of our road network, which includes refurbishment, rehabilitation and eradication of potholes particularly in Provincial and Municipal roads continues to gain momentum. For the Provincial Roads’ Maintenance grant, we have allocated R15.9 billion, of which R4.6 billion is specifically earmarked for road refurbishment, disaster relief and the construction of 96 Welisizwe bridges in rural areas.
The allocation of the PRMG to various Provinces for the 2023/24 financial year is broken down as follows:
KwaZulu-Natal – R3.4 billion Eastern Cape – R2.1 billion Limpopo – R1.8 billion.
Free State – R1.8 billion Mpumalanga – R1.5 billion Western Cape – R1.4 billion North-West – R1.4 billion Northern Cape – R1.4 billion Gauteng – R1.1 billion.
Similarly, we have allocated R115 million in the form of the Rural Roads Asset Management System Grant (RRAMS) intended to assist district municipalities to set up rural roads asset management systems and collect road, bridges and traffic data on municipal road networks in line with the Road Infrastructure Strategic Framework for South Africa.
We also recognise the value of working with research institutions like the Centre for Scientific and Industrial Research (CSIR) for innovative solutions, like the nano technology solution, which we will be piloting this year in the gravel road upgrade programme. It is our intent to employ the nano technology solutions to upgrade our gravel roads to well-engineered, and all-weather condition network. We are also committed to working with the private sector in a structured manner to address this challenge and create a multiplier effect, in the rehabilitation and maintenance of our provincial and municipal road network.
Rebuilding Infrastructure Damaged By Floods
The work continues to restore and rebuild infrastructure that was damaged by floods during April 2022 that affected the Provinces of KwaZulu-Natal, Eastern Cape and North-West.
In KwaZulu Natal R953 million has been prioritised to repair of 2022 April flood damage road infrastructure, allocated in October Adjustment Budgets. Further R293 million has been allocated in the 2023/24 Budget to repair infrastructure damaged by 2019 floods, as declared.
For Eastern Cape Province R800 million was allocated during 2022 October Budget Adjustment to deal with floods that happened in April 2022 and incurred serious damages on the provincial road network.
Northern West province also experienced damages to road network as a result of April Floods and R111 million was allocated through adjustment budget to repair roads and restore access.
We are committed to ensuring that we build the capacity of our municipalities through support interventions to achieve efficiencies in road maintenance.
In this regard we are also going to establish a Roads War Room to address all road- based challenges
Road Safety
We are purposeful in our efforts to arrest the carnage on our roads. On the 15th May 2023, we joined hands with nations of the world to echo our support as South Africa for the commemoration of the United Nations Global Road Safety Week.
In this regard, the Road Traffic Management Corporation (RTMC) has introduced a new era in traffic policing Training Curriculum. We now have the first cohort of graduates, qualified with an NQF Level six qualification and have joined the ranks of our traffic law enforcement officers.
This new generation brings to the table, fresh and innovative solutions to the intractable challenge of the carnage on our road. They are reinforced by technological innovations to reign in the lawlessness on our roads and provide visibility 24/7 and 365 days.
We have previously committed to maximising visibility of our traffic law enforcement officers by declaring traffic policing a 24- hour, 7-day job. The number of Provinces that have completed the necessary processes has increased and our intention is to ensure that the remaining Provinces finalise outstanding work in this regard by the end of this financial year. For this task, we have allocated a budget of R220 million this financial year to the Road Traffic Management Corporation (RTMC).
The CBRTA and Road Freight Industry
We remain resolute as government to deal with challenges confronting the freight industry. In June, last year, the Minister of Transport together with the Ministers of Labour, Police and Home Affairs, signed an 11 – Point Plan with the entire Freight Industry to find common ground, and thus find each other in stabilising the industry. Ours is to continue to build the sector to grow a transformed and inclusive economy served by a modern and resilient transport system.
The Cross-Border Road Transport Agency is central in regulating the road freight industry and ensuring its ability to meaningfully contribute to the economy through the implementation of Linking Africa Plan and through the Africa’s Continental Free Trade Agreement. The C-BRTA is a self- funding entity, its expenditure is expected to increase from R274 million to R286 million in 2023/24.
Road Accident Fund
The Road Accident Fund is mandated to compensate South African road users for losses or damages caused by motor vehicle accidents within the borders of South Africa.
Over the medium term, a change in the settlement policy of loss‐of‐income claims from lump sum to annuity sees a moderation in the payment of claims to match the fund’s pay‐as‐you‐go principle.
The budget allocated to the RAF for the 2023/24 financial year is R 48, 633 billion.
Road Traffic Infringement Agency
With regard to the targeted roll-out of the Administrative Adjudication of Road Traffic Offences (AARTO) Act, we remain confident that the Constitutional Court will find in our favour on the matter of the constitutionality of the AARTO legislation.
We must therefore brace ourselves for a full speed implementation of this important law, once judgement has been handed down.
Expenditure for the RTIA is expected to increase at an average annual rate of 4.5 per cent, from R487 million in 2023/24 to R555.6 million in 2025/26, with goods and services accounting for an estimated 60.8 per cent (R969.8 million) of this spending.
The agency derives its revenue mainly through administrative fees and transfers from the department. Revenue is set to increase in line with expenditure.
Rail Programme
In the 6th Administration, we have made significant milestones which include the historic White Paper on National Rail Policy, manufacturing of modern trains at the Gibela factory in Ekurhuleni, recovery of critical commuter rail corridors following devastating theft and vandalism of our rail infrastructure.
On PRASA
Our work to rebuild commuter rail continues in earnest. In the last financial year we committed to recover 10 priority corridors. I am pleased that we not only achieved the target, but we exceeded it by recovering 13 corridors. This financial year we plan to recover 16 Strategic Rail Corridors, eight (8) in Gauteng, Four (4) in KZN and four (4) in the Western Cape:
The full recovery of the Central line in Cape Town remains our topmost priority. We are working closely with the Department of Human Settlements and the City of Cape Town to relocate the illegal settlements on the rail reserve, which will enable us to achieve full recovery of the line. For the 2023/24 financial year, we will transfer R20.5 billion to the Passenger Rail Agency of South Africa. These funds will mainly focus towards implementing PRASA’s strategic corridor recovery programme, signalling and continuing with its rolling stock renewal drive. Capital expenditure is expected to increase from R12.5 billion to R12.9. The portion of the transfers to the agency for operational expenditure increases from R7.2 billion R7.5 billion in 2023/24.
National Rail Policy
In his State of the Nation Address, President Cyril Ramaphosa indicated that the National Rail Policy will guide the modernisation and reform of the rail sector, providing, among other things, for third-party access to our rail network.
I must announce that the Department has commenced the process to develop the urgently required National Rail Master Plan.
Transport Economic Regulation Bill
For purposes of effective transformation of the transport sector, we have processed through Parliament the Transport Economic Regulation Bill. This Bill when passed will ensure a level playing field in the sector and ensure regulation of monopolies towards fair pricing and easier access to new entrants among other aims.
The Transport Sector Integrated B-BBEE Council
It gives me pleasure to announce that we appointed and introduced the Integrated Transport Sector B-BBEE Council. The urgent task of the Council includes ensuring that as a sector we have Integrated Transport Sector B-BBEE Codes to address acute transformation challenges experienced in the main within the aviation, road freight and maritime sectors as well as to create a tool to bring awareness and address the skills shortage in ensuring development of Black professionals.
Railway Safety
Implementation of the Rail Policy
The Railway Safety Bill seeks to improve the regulatory framework regulating railway safety to improve the safety of passengers and freight. Currently, the Bill is under deliberations at the Portfolio Committee on Transport (PCoT).
The Rail Safety Regulator
The RSR continues to elevate the safety of our railways to global standards. To this end, the RSR will be hosting international rail experts from all over the world at the International Rail Safety Council here on South African soil from 01-06 October 2023 in Cape Town.
The RSR, as with all our entities, continues to prioritise the emancipation of Women and the 2023/24 financial year will see a 40% growth in this proportion.
Our integrated National Information monitoring system will enable us to move away from paper-based reporting and enable seamless online application and issuance of safety permits, thereby increasing safety within our railways, while also decreasing barriers to entry for small, black-owned, and women-owned rail operators. RSR budget allocation for 2023/24 financial year is R 76,086 million.
Maritime Programme
The maritime sector remains strategic in enabling economic growth and increased trade. Our efforts to support the maritime manufacturing capabilities, boat building, skills development and training will be strengthened and will be led by SAMSA. We are testing out different solutions to address the Tax Regime as an instrument to attract shipping companies to register their vessels in South Africa leading to the growth of our register.
Ports Regulator and the Blue Economy
The Ports Regulator of South Africa through the tariff application process has allowed The Authority (TNPA) to raise funding of R14 billion in the FY2023/24. It is through this tariff methodology that the Authority must create jobs, improve existing and build new infrastructure to address port inefficiencies. Targeted investments within the port system will greatly benefit the port community and in turn benefit the citizens of South Africa. The National Ports Consultative Committee (NPCC) has just concluded a stakeholder engagement session that seeks to inform the port communities of the opportunities, share insight of planned infrastructure development (Port Development Framework Plans) and in turn, promote inclusivity in this male dominated industry.
Aviation Programme
Airports Company South Africa
Our aviation infrastructure programme will provide support to the Airports Company South Africa’s Recover and Sustain Strategy that includes playing an active role to support provincial airports and invest in specialised airports such as drone airports, taking advantage of emerging opportunities brought about by technology.
Revenue is expected to increase to R5.7 billion in 2023/24, driven by the expected increase in passenger numbers as the air travel industry continues to recover from the COVID-19 pandemic.
We will support ACSA to grow its footprint and play a bigger role in building and managing airports in the country and elsewhere in the continent. We equally intend supporting the growth of the domestic aviation industry.
For the year 2022/2023, OR Tambo International won Best Cargo Airport in Africa. Cape Town International Airport won the Best Airport, and the Best Airport Staff in Africa award, while King Shaka International Airport won the Best Regional Airport in Africa award.
The Air Traffic and Navigation Services Company
The Air Traffic and Navigation Services Company maintains its focus on providing safe, efficient and cost-effective air traffic management solutions and related service, with the bulk of its budget expected to be used on communication, surveillance and simulator systems. Its total revenue is expected to increase from R1.3 billion in 2022/23 to R1.9 billion in 2023/24.
South African Civil Aviation Authority
Expenditure for the South African Civil Aviation Authority (SACAA) is expected to increase to R894 million in 2023/24.
SACAA will focus on strengthening their efforts in the implementation of General Aviation Safety Strategy through the use of innovation and technological solutions.
I am pleased to announce that the SACAA led a coordinated process of audits conducted by the following international bodies.
- The United States Federal Aviation Administration (FAA) following an audit conducted in November 2021. The final outcome audit assessment confirmed that South Africa has retained its category 1 status with the United States. The benefit of this outcome is that South African airlines, can operate directly into the United States with no hindrance.
- August 2022, South Africa was also subjected to a Universal Security Audit Programme by ICAO. I am pleased to confirm that South Africa has now received the final report from ICAO and the State received an unqualified audit opinion with no significant security concerns raised by ICAO.
- In November 2022, South Africa’s aviation security cargo system was assessed by the United States Transport Security Administration (TSA). The outcome of this assessment confirmed yet again that the cargo security system of South Africa is on par with that of the US. As a result, the TSA granted South Africa permanent recognition. This means that South African cargo operators wishing to operate in the USA can do so unhindered, without a need to undergo individuals’ assessment by the USA.
- In March 2023 we were again audited by ICAO under its Universal Safety Oversight Audit Programme. From this audit, South Africa did not attract any significant safety concern and received an overwhelming Effective Implementation (EI) score of around 92%. This is a significant improvement from the 87.39% that ICAO gave the country in the 2017 audit. The recognition of South Africa’s aviation systems by leading aviation States and Bodies has huge economic benefits for the State and the operators in our country.
The Transport Sector remains thee instrument for the much needed catalytic Economic Reconstruction and Recovery for South Africa.
We pride ourselves as Team Transport for the progress and achievements recorded. Our developmental commitment to address the roads, public transport and rail matters amongst others are at the apex of our priorities as a Ministry.
To this end, I would like to appreciate the support of the Deputy Minister, the Director-General, the Boards, the CEOs, the Executive Management of both DOT and our SOEs and Public and Entities, as well as the Ministry led by the Chief of Staff and the Departmental Staff complement and industry stakeholders.
I present the budget allocation for the Department of Transport, Vote number 40 for the Financial Year 2023/24.
I thank you.
