Department of Transport

Select Committee on Finance

Public Hearings on Division of Revenue Bill 2009/10

3 March 2009

Contents of presentation

• Additional allocations:• List of additional allocations

• MTEF Overview:

• Budgets per Programme • Breakdown of major budgets • Growth in major capital budgets • Other budgets and major projects

• Conditional Grants:• Bus subsidies• Gautrain• Other Grants: Roads, overload control & rural

transport• Public Transport Infrastructure and Systems (PTIS)

2

Additional allocations

Details (R’000) 2009/10 2010/11 2011/12

SANRAL 70,047 298,928 1,062,807

PTIS: SANRAL 6,559 0 0

SARCC 98,177 338,381 818,752

Compensation of employees SARCC 71,357 75,867 78,832

PTIS: SARCC 14,758 0 0

Bus operations and fuel costs 483,094 624,289 720,163

PTIS Grants to Local Government 93,177 325,275 416,638

Gautrain Rapid Rail Link 325,480 23,134 0

Taxi operations 200,000 100,000 50,000

Railway Safety Regulator 3,000 5,000 5,000

Compensation of employees 5,401 5,095 5,271

Capital 1,854 3,572 4,576

Reduction in transfers to Departmental Agencies (1,103) (683) (722)

Efficiency saving (18,337) (19,099) (6,450)

Reduction in goods and services (5% per year) (30,609) (29,821) (31,284)

Total 1,322,855 1,749,938 3,123,583

3

Budgets per Programme

Table 33.1: Transport

R thousand

2008/09 2009/10 2010/11 2011/12

Adjusted

Appropri-ation

Medium-term estimates

MTEF Baseline

1. Administration 245,165 231,023 230,753 235,291

2. Transport Policy and Economic Regulation

47,211 51,592 52,083 54,766

3. Transport Regulation and Accident and Incident Investigation

432,563 195,580 207,997 224,190

4. Integrated Planning and Inter-sphere Co-ordination

8,767,012 8,855,424 11,908,301 13,444,044

5. Transport Logistics and Corridor Development

35,076 31,809 38,992 40,288

6. Public Transport 12,277,229 14,191,689 12,953,416 13,829,382

7. Public Entity Oversight and Border Operations and Control

2,688,584 177,712 88,755 92,980

Total 24,492,840 23,734,829 25,480,297 27,920,941 4

Breakdown of major budgetsDetails R’000 2008/09 2009/10 2010/11 2011/12

SARCC 4,917,290 6,567,635 7,688,206 8,607,979

SARCC – Shosholoza Meyl 500,000 450,000 400,000 424,000

Bus subsidies 2,984,131 3,531,909 3,863,033 4,153,232

SANRAL 4,072,974 5,594,986 6,964,501 8,128,314

Taxi 571,567 751,561 624,409 605,303

PTIS (2010 Soccer World Cup) 3,480,000 3,089,494 4,789,775 5,149,008

Gautrain 3,265,993 2,832,691 340,660 0

Disaster Fund Grant - Provincial roads

1,035,473 0 0 0

RAF 2,500,000 0 0 0

Other 1,165,412 916,553 809,713 853,105

Total 24,492,840 23,734,829 25,480,297 27,920,941

% Growth 48.05% -3.09% 7.35% 9.58%

5

Breakdown of major budgets (Continued – excl. once off allocations in 08/09)

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

Rail 5,417,290 7,017,635 8,088,206 9,031,979

Bus 2,984,131 3,531,909 3,863,033 4,153,232

Roads 4,072,974 5,594,986 6,964,501 8,128,314

PTIS 3,480,000 3,089,494 4,789,775 5,149,008

Gautrain 3,265,993 2,832,691 340,660 0

2008/09 2009/10 2010/11 2011/12

• Allocations for rail operations and capital remain the largest single budget item.

2009/10

7,017,635

3,531,909

5,594,986

3,089,494

2,832,691

• The National contribution to the Gautrain Rapid Rail Link was introduced in 2006/07 at R3,241Bn, and declines to zero in 2011/12

• Allocations for infrastructure from the Public Transport Infrastructure and Systems Grant was introduced in 2005/06 at R241,7m, growing to R3,1bn in 2009/10.

• The budget for road infrastructure overtook that of bus subsidies from 2007/08 onwards.

R’000

Gautrain

PTIS Grant

6

Growth in major capital budgets

(R’000)

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Gautrain 0 3,241,000 3,029,411 3,265,993 2,832,691 340,660 0

PTIS 241,710 697,020 1,780,000 3,480,000 3,089,494 4,789,775 5,149,008

Roads 565,333 833,952 1,429,350 1,806,944 2,841,470 4,065,177 5,062,566

Rail 688,300 1,029,598 1,696,078 2,367,686 3,831,791 4,813,273 5,566,768

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

7

Breakdown of other budgets and major projects

Details R’000 200910 2010/11 2011/12

Compensation of Employees 212,798 208,867 221,272

P1: October Month & World Remembrance Day 26,362 36,575 37,515

P1: Conferences (AFI-RAN) 3,800 3,800 3,800

P1: Arrive Alive 14,250 0 0

P1: NLTIS, VPN, ECM, Recruitment 15,152 15,580 16,144

P1: Security, Skills development 8,740 8,740 8,740

P1: Centres of Development 8,178 8,669 9,189

P1: Comms: BEE, events, exhibitions, web & audio visual, branding 10,925 10,925 10,925

P1: Property management 14,884 16,372 17,356

P1: Other 45,236 49,166 45,897

P2: Transport Policy, Research and Economic Regulation 15,806 16,361 17,341

P2: Rail economic regulation 11,382 11,623 11,893

P3: eNaTIS 3,682 7,419 11,598

P3: Special Investigating Unit 21,235 22,439 23,785

P3: Rail Economic Regulator 4,257 4,498 4,768

P3: ICAO and IMO offices 7,365 7,785 8,251

P3: Watch Keeping services 27,109 28,644 30,363 8

Breakdown of other budgets and major projects (Continued)

Details R’000 200910 2010/11 2011/12

P3: Oil Pollution prevention services 48,805 51,572 54,666

P3: Maritime Security Coordination Centre 6,559 6,930 7,346

P3: Commissioner of Civil Aviation 4,742 5,011 5,312

P3: Maritime Rescue Coordination Centre (Transfer payment) 5,236 5,533 5,865

P3: International membership fees 5,114 5,420 5,745

P3: Road Transport Regulation projects 20,800 21,980 23,299

P3: Other and Administration 5,592 5,876 6,229

P4: Transport planning and infrastructure projects 12,096 12,371 13,164

P4: Rural transport and NMT projects 52,293 55,231 58,520

P4: Road infrastructure planning 2,829 2,449 5,252

P4: Sani Pass and Overload Control 44,416 48,688 52,399

P4: 2010 SWC Monitoring and Evaluation 23,750 0 0

P4: Other and Administration 4,389 4,619 4,897

P5: Transport Logistics and Corridor Development 19,475 26,593 27,151

P6: Bus contract model 4,750 0 0

P6: Project Implementation 2010 and beyond 23,750 7,600 7,600

P6: Other and Administration 11,092 11,501 12,191 9

Details R’000 2008/09 2009/10 2010/11

P7: Transfers to RTMC 83,603 0 0

P7: Transfers to RSR 37,260 35,634 37,475

P7: Transfers to Ports Economic Regulator 13,603 8,832 9,361

P7: Transfers to SAMSA 8,896 9,402 9,966

P7: Transfers to SACAA 7,781 8,223 8,716

P7: Performance Management System 950 950 1,007

P7: RAF restructuring 13,300 13,300 13,300

P7: Other and Administration 4,311 4,535 4,807

Total 916,553 809,713 853,105

Breakdown of other budgets and major projects (Continued)

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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 focussed 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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Finalise integrated road based networks

Develop KPI’s

Identify key role-players who are to be part of the operating entity

Engage with all parties to establish operating entity

Implement depots and vehicles if so decided

Recruit/develop admin capacity to manage the contracts

Contracting authorities will have to: Change in compensation method – based on fixed

kilometre

KPI’s

New national monitoring model

Fare levels as set by the authority

Fleet replacements to be based on requirements of the contracting authority

Contracting authority may purchase existing assets (eg depots) and contract compliant vehicles

Operators will have to accept:

Bus Subsidy Funding - Conditional Grant in DORA

Critical conditions:

Interim contracts to be converted to negotiated (kilometre based) contracts by September 2009

Alignment with IRPTN`

Bus subsidies: Interventions for achieving change 2009/10 onwards

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Operators that accept will sign an negotiated contract that Operators that accept will sign an negotiated contract that includes:includes:

KPI’sKPI’s

Provision that the operator will be provided with an Provision that the operator will be provided with an opportunity to be party to a new integrated contract regime opportunity to be party to a new integrated contract regime for some or all of the services within the contract areafor some or all of the services within the contract area

Operators that do Operators that do notnot accept will continue on month-to- accept will continue on month-to-month basis and their contracts will be terminated as and month basis and their contracts will be terminated as and when requiredwhen required

Bus subsidies: Intervention conditions

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0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

R'000 3,241,000 3,029,411 3,265,993 2,507,211 340,660

2006/07 2007/08 2008/09 2009/10 2010/11

Gautrain

Allocations from 2006/07 to 2010/11

14

Gautrain

• 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 September 2010, while the rest of the Project will be completed in September 2011.

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Roads, Overload Control and Rural Transport Grants

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Sani Pass 30,000 34,347 37,650 40,520

Overload control 8,796 10,069 11,036 11,879

Rural transport 8,900 9,800 10,400 11,100

2008/09 2009/10 2010/11 2011/12

R’000 These grants to be introduced in 2010 budget

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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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• 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:

Overload Control Grants

2009/10 Gauteng R4,8m Limpopo R4,8m

2010/11 Eastern Cape R5,1m Mpumalanga R5,1m18

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

• Timeframes : 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:

DM PROJECT BUDGET

Chris Hani Intermodal Public Transport Facility

R 4,1m

Thabo Mofutsanyane Upgrading of Access Road to a Thusong Service Centre

R 2.0m

Dr Ruth S. Momphati Construction of 2No. Pedestrian Bridges

R 2.0m

Sekhukhune Development of a Pedestrian & Bicycle Paths Master Plan

R0.8m

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Public Transport Infrastructure and Systems Grants

Contents:

• PTIS Background• Allocations• Conclusion

21

Background InformationBackground Information

The PTIS grant is aimed at improving transport infrastructure & systems for 2010 and beyond;

Total PTIS grant from 2005/06 to 2010/11 = R13.639bn 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)

22

PTIS Allocations per City and/or Entity

Allocations per City / Entity Budget Budget Totals

R'000 2009/10 2010/11 Period

Johannesburg 600,214 950,471 2,831,756

Tshwane 565,245 864,180 2,068,744

Ethekwini 376,926 529,699 1,690,934

Cape Town 291,912 527,270 1,602,025

SARCC 450,000 1,315,000

Nelson Mandela 147,079 323,058 1,029,871

Mangaung 82,168 183,551 586,166

Inter-city buses 500,000 500,000

SANRAL 200,000 430,000

Mbombela 60,833 135,893 424,910

Polokwane 66,146 147,161 420,914

Non Host Cities 66,695 152,880 414,134

Rustenburg 67,782 150,337 323,776

CBRTA 1,000

Total 2,975,000 4,464,500 13,639,230

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Allocated (Rm)

2,069

1,691 1,6021,315

1,030

586 500 430 425 421 414 324

1

2,832

Johannesburg Tshwane Ethekwini Cape Town

SARCC Nelson Mandela Mangaung Inter-city buses

SANRAL Mbombela Polokwane Non Host Cities

Rustenburg CBRTA

Total R13,64 Billionfrom 2005/06 to 2010/11

PTIS Allocations per City and/or Entity

24

Thank you

25 25