Department of Transport

Joint Budget Committee

1 November 2007

Contents of presentationDepartment of TransportExpenditure trends for 2006/07 Audit outcomes for 2006/07 Mandates Medium term policy priorities Significant MTEF allocations: Planning assumptionsRisk assessmentsPersonnel, skills development and training Personnel establishment and vacancy ratiosSkills development and training programmesInfrastructure and maintenance budgets Transfer and grant management Monitoring and evaluation systems 2

Expenditure trends for 2006/07Department of TransportAdjusted budget Reprioritisation Under expenditure 3

Department of Transport4Expenditure trends for 2006/07:Adjusted Budget

DetailsR000Original budget per 2006 ENE12 870 458Adjusted Budget:Funds rolled over from the previous year:211 500Capacity development - academic institutions3 000Late invoice for oil pollution prevention services3 300Integrated rural mobility access project1 200Service providers assisting with the taxi recapitalisation programme, and provinces assisting with the permit conversion process54 000Scrapping of old taxi vehicles150 000Unforeseen and unavoidable expenditure:45 100Additional bus subsidies - increases in the fuel price45 100Other adjustments:619 732Operational costs for the S.A. Rail Commuter Corporation (SARCC) for liabilities for employees transferring from other passenger rail entities439 732Operational shortfall of the SARCC following a due diligence report180 000Total of Adjusted Budget876 332Final budget for 2006/0713 746 790

Department of Transport5Expenditure trends for 2006/07:Reprioritisation

DetailsR000Shifted from savings in Compensation of Employees across Programmes for promoting October Transport Month14 000Reduced Transfers and increased Goods and Services to assist Provinces with the taxi recapitalisation process68 000Shifted R7 million across Programmes and R7 million within Programme 1 for further October Transport Month projects (renaming of OR Tambo, taxi communications, Remembrance Day)14 000Additional funds made available across Programmes for Arrive Alive communications9 000Shifted funds across Programmes for Capacity Development2 400Shifted funds across Programmes for:Corporate SupportHuman Resource ManagementGovernment Fleet Services1 000800800

Department of Transport6Expenditure trends for 2006/07:Under expenditure

Details of major amounts under spentR000Scrapping of old taxis252 500Taxi recapitalisation projects30 400Rural Mobility and Access projects28 000Special investigations into Driver and Vehicle Testing Centres18 500Restructuring of the Road Accident Fund14 000Vacant posts that could not be filled14 700Policy development projects7 000Delays in establishment of Rail Economic Regulator and development of legislation for Maritime Security7 000Development of the NLTTA and National Transport Master Plan7 800Infrastructure and systems for 2010 Soccer World Cup1 900Freight Logistics projects2 700Other1 900Total386 400

Audit outcomes for 2006/07Department of TransportEmphasis of matter Other matters: Non-compliance with legislation Matters of governance Corrections made to financial statements Value-for-money matters Internal control 7

Department of Transport8Audit outcomes for 2006/07:Emphasis of matter

AUDIT REPORTACTIONS TAKENACTIONS TO BE TAKENPrevious qualification:Treasury indicated that the contract for the production of credit card format drivers licences should be treated as a Trading AccountFinancial statements compiledAudit being finalised up to 2006Approval obtained to create a trading AccountIn process of appointing contractors to operationalise the Trading Account and to ensure complianceOperationalise the Trading AccountTransfer the contract to the RTMC

Department of Transport9Audit outcomes for 2006/07:Other matters

AUDIT REPORTACTIONS TAKENACTIONS TO BE TAKENNon-compliance with legislation:Internal audit plan and three year rolling plan not reviewed and no follow up audits doneRisk assessment completedAudit Committee approved the Internal audit plan and three year rolling plan on 26/9/07Follow up audits in processFollow up audit reports will be tabled at Audit Committee meeting on 22/11/2007The fraud prevention plan and risk management policy were not officially approvedThe plan and policy were approved after year-end and accepted by Audit CommitteeImplementation plan was presented to Risk Management Committee on 29/10/2007Salary reports and payroll certificates not signed off in timeSigned off for 2006/07Being followed up monthlyDelegated to Budget Controllers to fast track. Progress will be tabled at EXCOIrregular and fruitless and wasteful expenditure not reportedProcess to deal with such cases developed and circular issuedCases identified will be reportedMonthly reports in terms of DORA not submittedNow receiving confirmations that reports were submitted

Department of Transport10Audit outcomes for 2006/07:Other matters

AUDIT REPORTACTIONS TAKENACTIONS TO BE TAKENNon-compliance with legislation:No co-ordination between internal audit divisions of DOT and Gauteng w.r.t. GautrainInternal Audit are in consultation with Internal Auditors of GautrainCo-ordination plan to be implementedNon-compliance with National Road Traffic Act by Driving License Testing CentresInspection reports Legislation in the process of being reviewed to enable DOT to suspend Testing CentresMatters of governance:Not all SCOPA resolutions were implementedIrrecoverable levies due by DLTCs were written offProcesses were put in place to fast track filling of vacanciesAudit committee not functioning effectivelyNew fully functional Audit Committee appointed

Department of Transport11Audit outcomes for 2006/07:Other matters

AUDIT REPORTACTIONS TAKENACTIONS TO BE TAKENMaterial corrections made to financial statements:Corrections were made to the financial statements emanating from audit findingsProcesses were put in place to deal with irregular and fruitless and wasteful expenditureClassification of certain expenditure was resolved with TreasuryBank reconciliation process was reviewedMisallocations were correctedDisclosures were corrected and processes were pt in place to ensure correct disclosure

Department of Transport12Audit outcomes for 2006/07:Other matters

AUDIT REPORTACTIONS TAKENACTIONS TO BE TAKENValue for money matters:Tenders awarded and management of contracts were not always done effectivelyIn process of appointing a consultant to oversee the management of contracts in DOTThe number of vacancies remained at a high levelProcesses were put in place to fast track filling of vacancies.The vacancy rate did not decline due to the high number of resignations in 2006/07Internal control:eNaTIS audits were completed during the preproduction / development stage of the systemAuditors were engaged to commence with the post implementation auditThe post implementation audit started and the report will be separately tabled in ParliamentThere was an absence of officially approved policiesSeveral policies and strategies were approved after year-endDraft policies and procedures will be tabled at EXCO for approval

Department of Transport13Audit outcomes for 2006/07:Other matters

AUDIT REPORTACTIONS TAKENACTIONS TO BE TAKENRisk assessment: There was a lack of sound practices for fraud prevention and for ensuring compliance with legislationThe risk assessment was completed and the Internal Audit Plan was based on the risk assessment.The reviewed fraud prevention plan was accepted by the Audit CommitteeFraud prevention plan must be fully implemented. Will be presented to Risk Management Committee on 29/10/2007Monitoring of controls: Review of reconciliations, confirmations from external parties and internal audit processes were not effectiveInternal checking procedures were developed and implementedReconciliations of suspense accounts are done monthly, and the bank reconciliation process was reviewedInternal audit started to function effectively

MandatesDepartment of TransportTransport Policy, Research and Economic Analysis Transport Regulation and Accident and Incident Investigation Integrated Planning and Inter-sphere Co-ordination Freight Logistics and Corridor Development Public Transport Public Entity Oversight and Economic Regulation 14

Department of Transport15Transport Policy, Research and Economic Analysis: Effectively manage a national innovative research and development programme, develop and analyse strategic policies, develop appropriate legislation, and provide economic advice and analysis for all modes of transport MandatesTransport Regulation and Accident and Incident Investigation:

Create an enabling regulatory environment in the areas of safety, security and environmental compliance, and manage accident and incident investigations in all modes of transportIntegrated Planning and Inter-sphere Co-ordination:

Manage and facilitate integrated planning and inter-sphere co-ordination for transport infrastructure and operations.

Department of Transport16Freight Logistics and Corridor Development:

Manage the implementation of the transport logistics strategy and the development of freight movement corridors Mandates (continued)Public Transport:

Develop practices and norms that will increase access to appropriate and quality public transport that meets the needs of both rural and urban passengers. Public Entity Oversight and Economic Regulation:

Develop appropriate mandates and monitoring mechanisms for public entities. Develop and oversee transport economic regulation in line with broad economic and transport policies

Medium term policy prioritiesDepartment of TransportTransport Policy, Research and Economic Analysis Transport Regulation and Accident and Incident Investigation Integrated Planning and Inter-sphere Co-ordination Freight Logistics and Corridor Development Public Transport Public Entity Oversight and Economic Regulation 17

Department of Transport18Transport Policy, Research and Economic Analysis Medium term policy priorities:

Performance indicator data framework:Continue to establish uniformity between local and international concept definitionsIncorporate other performance indicatorsAnnual database updatesSept 2008Review the White Paper on Transport PolicyNov 2008Develop a policy on the transportation of hazardous substancesMarch 2008Develop a scholar transportation policyJuly 2008Obtain Cabinet approval of the Integrated Transport BEE Charter and implement the CharterOver MTEFComplete baseline studies on the economic performance of the Transport SectorSept 2008Implement the legislative programme: Transport Agencies General Laws Amendment Bill, Cross Border Road Transport Amendment Bill, etc.AnnuallyImplement the transport innovation and technology research strategy, Implement a new National Household Travel Survey2009/10

Department of Transport19Transport Regulation and Accident and Incident Investigation Medium term policy priorities:

Complete migration of eNaTIS to the StateDec 2008Airlift strategy implemented: Air services negotiations with 10 statesMarch 2008Set up independent Ports Regulator, and Port Consultative Committee in each commercial portSept 2007& over MTEFRedefine port limitsJune 2008Marine environment protectionApr 2009Maritime Transport security legislation2007/08Introduction of periodic vehicle testingDec 2008Implementation of security improvement process at vehicle stations and drivers license testing stationsMarch 2009Develop Regional Integrated Search and Rescue Strategy for approval by Cabinet2008/09

Department of Transport20Integrated Planning and Inter-sphere Co-ordination Medium term policy priorities:

Develop the final Land Transport Bill and supporting RegulationsDec 2008Finalise Rural Transport StrategyDec 2007Establish Integrated Rural Transport Development Programme with geographical information system mappingMarch 2008Finalise road network reclassificationDec 2008Calendar for non motorised transport marketing and communication planMarch 2008Complete best practices study on Transport AuthoritiesMarch 2008Road Infrastructure Strategic Framework road quality assessmentDec 2008Develop National Overload Control StrategyMarch 2008Continue with infrastructure rollout monitoring and evaluationOngoing

Department of Transport21 Integrated Planning and Inter-sphere Co-ordination (continued)Medium term policy priorities:

Finalise 2010 transport operational planning frameworkOct 2007Monitor and report on municipal progress regarding infrastructureMonthlyITS programme presently being rolled out to Durban and Cape TownDec 2008Second round of Transport Plans - based on new RequirementsDec 2008Pilot programme to address the lack of transport capacity, to plan and execute, at the level of District MunicipalitiesMarch 2008Develop a National Transport Master PlanDec 2008Phase 1 (Status Quo report) has been completedPhase 2 (analysis underway)

Department of Transport22Freight Logistics and Corridor Development objectives Medium term policy priorities:

Freight Business Intelligence:2009/10Integration all freight information systems & create one data centre that could include other areas of transportProvide government with transport operations intelligence on all modesResolve gaps between forecast demand & planned capacityProvide government with the ability to integrate SARS system with DOT systems in order to know what moves through our borders by tracking supplier manifests as declared with SARSNational Freight Databank:2008/09Collect and consolidate all freight statistics in one centralProvide infrastructure utilisationWhat moves where, how & in what quantitiesProvision of Origin-Destination pairsProvision of least cost routingProvision of transit & turnaround times of various supply chains

Department of Transport23Freight Logistics and Corridor Development objectives (continued) Medium term policy priorities:

Freight Monitoring Framework:

Track movement of containers, wagons & locomotives & general freightDeal with overloadingForce filling at sourceIdentification of hot spotsCompliance with Container Safety Initiative & International Shipping & Ports Security code2008/09

Department of Transport24 Freight Logistics and Corridor Development prioritiesMedium term policy priorities:

National freight databanks:Finalise Eastern CapeUndertake national update2008/09National Freight information system:Develop freight information platformDesign business intelligence frameworkDevelop legislative framework for freight information filling2008/09Sub Sectoral strategy:Develop Rail Economic Regulator legislative framework.Finalise rail industry architectureDevelop draft branch line and network management strategyFinalise MOU with Spoornet2009/10Corridor mapping:Design and develop 2014 scenarioIntegrate freight platform with monitoring framework outputs and develop corridor performance tools2009/10

Department of Transport25 Freight Logistics and Corridor Development priorities (continued)Medium term policy priorities:

Modeling of customs and other processes on key corridor movement of cargo:Finalise and integrate freight business intelligence framework with freight platform and superimpose information GIS platform2007/08Support the design and integration of Dube Trade Port:Finalise and approve design plans for the construction of Dube Trade Port and King Shaka international airport2007/08Report on system inefficiency in movement of goods and passengers in all ports of entry:Alignment of freight business intelligence framework, and freight platform with SARS statistics collectionOne stop border post developed and constructed2009/10Operational improvement in public entities responsible for cross border movement:Integrated freight information systems between DOT, CBRTA and SARSOver MTEF

Department of Transport26Public Transport Medium term policy priorities:

Facilitate the implementation of public transport strategy and development of phase 1 operational plan for the Integrated Rapid Public Transport Network in 12 cities aligning with 2010 plans:Network operational plans completed in up to 12 cities and 6 districts (subject to availability of R3m to R5m to assist)Dec 2008Implementation processes commenceDec 2007Phase 1 Integrated Rapid Public Transport Networks operational in up to 12 cities and 6 districtsFrom 2009/10

Department of Transport Public Transport (continued)27Medium term policy priorities:

Monitor the progress in TRP scrapping based on the 80% target by 2010OngoingSupport the taxi recapitalisation programme by:Finalising a skills strategy for the taxi industry and start implement programmeSept 2008Facilitate the availability of New Taxi Vehicles (NTV) that fully comply with safety requirements and colour coding specificationsOngoingTransformation of bus subsidies into public transport subsidies to include taxis (public transport strategy)Timelines are detailed in the next 5 slidesDevelop an Investment Strategy for passenger railFocus on the turnaround strategy for SARCC/MetrorailShosholoza Meyl consolidation into SARCC/Metrorail

Department of Transport 28Transformation of bus subsidies into public transport subsidies to include taxisMedium term policy priorities:

Sheet1

Project Plan - Design of Operational Plans

Milestone2007/082008/09

SeptOctNovDecChristmas BreakJanFebMarAprMayJunJulAugSepOctNov

1Appointment of Service Providers

2Undertake Road Based Passenger census (Bus & Taxi)

3Analysis of census information

4Brief of Province/Metro's on integrated design

5Finalisation of Design & Operating Plan

6Submission of designs & operating plan for DOT approval

7Provincial/Metro Tender Authorities approval/advert

8Preparation of Bids by Operators

9Evaluation and Appointment

10Commencement of Operations

Extensive Negotiation will be required

M

M

M

Final

M

Require Specialised Team

Must be aware December/January problematic

Status of 7 Provinces

Status of 2 Metro's

Subject to procurement of assets

Sheet2

Project Plan - National Rail Commuter (Passenger) Plan

20042005

MayJunJulAugSepOctNovDecChristmas BreakJanFebMar

1Tender specifications and National Commuter Rail Plan project scoping as per SARCC budget

2Rescope project to align with merger Business Case requirements

3Negotiate and appoint consultants

4Brief Transnet on Metrorail and Spoornet's involvement.

5Establish project structure for steering phase 1 - Interim Rail Passenger Plan (Business Plan).

6First IRPP project meeting.

7Confirm Government requirements for Business Plan.

8Final brief to consultants.

9Obtain Transnet/Spoornet position on relevance of Intercity Business Plan.

10Appoint entity project structures

11Project management, steering and monitoring.

12Deliverable of Business Plan

13Plan and implement phase 2 of National Rail Passenger Plan

M

M

M

M

Draft

Final

15 Oct

Sheet3

Department of Transport 29Development of an Investment Strategy for passenger railMedium term policy priorities:

Sheet1

Project Plan

2007/082008/09

SeptOctNovDecChristmas BreakJanFebMarAprMayJunJulAugSepOctNov

1Appointment of Service Providers

2Interim Report

3Workshop

4Draft Final Report

5Workshop

6Approved Final Report

7Commence Implementation

M

M

M

Final

M

Must be aware December/January problematic

Maximum period of 18 months

Sheet2

Project Plan - National Rail Commuter (Passenger) Plan

20042005

MayJunJulAugSepOctNovDecChristmas BreakJanFebMar

1Tender specifications and National Commuter Rail Plan project scoping as per SARCC budget

2Rescope project to align with merger Business Case requirements

3Negotiate and appoint consultants

4Brief Transnet on Metrorail and Spoornet's involvement.

5Establish project structure for steering phase 1 - Interim Rail Passenger Plan (Business Plan).

6First IRPP project meeting.

7Confirm Government requirements for Business Plan.

8Final brief to consultants.

9Obtain Transnet/Spoornet position on relevance of Intercity Business Plan.

10Appoint entity project structures

11Project management, steering and monitoring.

12Deliverable of Business Plan

13Plan and implement phase 2 of National Rail Passenger Plan

M

M

M

M

Draft

Final

15 Oct

Sheet3

Department of Transport 30Focus on the turnaround strategy for SARCC / MetrorailThe Turn Around Strategy is phase 1 of the Rail Plan and focus on the following: This phase is a 3 year phase that commenced in 2007/08

Accelerated Rolling Stock Strategy500 coaches 2007/08700 coaches 2008/09700 coaches 2009/10

Upgrading of Signaling & Telecommunications50% of A&B priority corridors

Improved Train punctuality95% related to constrains of operating environmentMedium term policy priorities:

Department of Transport 31Focus on the turnaround strategy for SARCC / Metrorail (continued)Phase 2 Sustain Business

Phase 3 Grow Business

Phases 2 & 3 are not mutually exclusive and may unfold simultaneously depending on the outcome of the investment strategy i.e. Private Sector participation or the availability of funds over the MTEFMedium term policy priorities:

Department of Transport 32Shosholoza Meyl consolidation with SARCC / MetrorailMedium term policy priorities:

Department of Transport33Public Entity Oversight and Economic Regulation Medium term policy priorities:

Finalisation of new performance agreements between government and public entity boards for 2008/09Feb 2008Continue with financial and non financial oversight compliance and evaluation reportingQuarterlyImplement a new benefit scheme for victims of road accidentsMarch 2008Implement the framework of the economic regularity requirements for reformed rail sector, including access to new operators (Nov 2007):Develop governance model for the Rail Economic RegulatorComplete the framework to guide the drafting of legislation for the Rail Economic RegulatorNov 2007

Significant MTEF allocationsDepartment of TransportMajor budgets Breakdown of other budgets (2008/09) Planning assumptions Risk assessments 34

Department of Transport35Significant MTEF allocations:Major budgets

Details R0002007/082008/092009/102010/11Rail subsidies (SA Rail Commuter Corporation Ltd.)3,955,1974,752,7176,167,7946,537,862Bus subsidies2,535,9972,789,5962,998,8153,178,744Roads (S.A. National Roads Agency Ltd.)3,391,9294,059,9645,504,9115,835,206Taxi328,460361,473387,654410,913Public Transport Infrastructure Fund (2010 Soccer World Cup)1,780,0003,480,0002,975,0002,464,500Gautrain Rapid Rail Link3,029,4113,265,9932,507,2112,657,644Other836,929866,621913,173809,501Total15,857,92319,576,36421,454,55821,894,370% Growth18,7%23,5%9,6%2,1%

Department of Transport36Significant MTEF allocations:Major budgets

2007083,955,1972,535,9973,391,9291,780,0003,029,411

Department of Transport37Significant MTEF allocations:Major budgets - Growth

Department of Transport38Significant MTEF allocations:Breakdown of other budgets

Details R0002008/092009/102010/11Compensation of Employees190,001199,375195,120Road Traffic Management Corporation (incl. NaTIS and Arrive Alive)168,643166,17871,005Road infrastructure planning and Sani Pass (KZN DOT)86,40094,790100,478Oil Pollution prevention services and Watch Keeping services70,54377,15781,786RSR, SAMSA, SACAA, MRCC, MSCC, NSRI, Ports, Memberships66,46469,52863,099Administration66,95770,41774,642Inspectorates, Road, Rail, Maritime and Aviation regulation46,30050,64153,679Rural transport projects39,02342,81245,381Transport planning and infrastructure projects40,02643,91646,551Public Transport, including systems to devolve bus subsidies12,55711,46812,156Monitoring and evaluation Soccer World Cup20,00025,0000Special Investigating Unit19,73321,58322,878Transport Policy16,84318,86419,996Freight Logistics projects and research9,6497,5077,957Overloading Control8,7969,64910,228Public Entity Oversight & Economic Regulation4,6864,2884,545Total866,621913,173809,501

Department of Transport39INTEGRATED PLANNING AND INTER-SPHERE COORDINATION:

Preparations for the support of the 2010 FIFA World Cup are progressing well and will continueThe Initial National Transport Operational Plan for 2010 will guide Host Cities Transport Operational PlansMost of the SANRAL projects that have seen a considerable increase on the Roads budget are at a pre-implementation stage inferring therefore that designs have been finalised.

FREIGHT LOGISTICS AND CORRIDOR DEVELOPMENT:

Setting up of the infrastructure agency and wagon lease pool agency to manage the identified lines once they are transferred to DOT. A framework for the agency/utility would be developed to clearly articulate the mandate, functions and structure. The cost implications for such an exercise is expected to be higher in the first three years, e.g R20m yearly, and to stabilise thereafterSignificant MTEF allocations:Planning assumptions

Department of Transport40FREIGHT LOGISTICS AND CORRIDOR DEVELOPMENT (Cont.):Significant MTEF allocations:Planning assumptions Note: The above amounts were not allocated on the budget

Description2007/8R0002008/9R0002009/10R0002010/11R000Planned targetsRail Economic Regulator6 50011,50040 00060 000Develop institutional & regulatory frameworksNational Freight Databank3 00010 0005 0007 000Finalise EC databank, undertake national update & maintain systemFreight Monitoring Framework050 000150 000170 000Develop framework, pilot @ Durban-Gauteng corridor & rollout to key corridorsFreight Business Intelligence23 00047 00013 00017 000Develop hard & software, maintenance & upgrade

Department of Transport41PUBLIC TRANSPORT:

Operational plans for Integrated Rapid Public Transport Network in 12 cities:

Scoping plans for all cities and operational plans will be aligned with the subsidised public transport service designsPortions for implementation will be funded via PTIS

Transformation of road based public transport subsidies:

Service designs will include entire city in an integrated mannerImproved access and coveragesubsidy will benefit all public transport users including taxi usersservice levels will increase beyond peak services

Significant MTEF allocations:Planning assumptions

Department of Transport42PUBLIC TRANSPORT (continued):

Development of Investment Strategy for passenger rail:

Will consider private sector participation in passenger rail environment

Shosholoza Meyl merger:

Turnaround of long distance passenger rail will be initiated once merger completed

Taxi Recapitalisation:

increase in the number of vehicles scrapped to achieve the 80% target by 2010New compliant vehicle supply will increase from 2008 when latest safety regulations come into effect from Jan 2008Significant MTEF allocations:Planning assumptions

Department of Transport43FREIGHT LOGISTICS AND CORRIDOR DEVELOPMENT:

Rail Economic Regulator:

Resistance from state-owned enterprises with the proposed rail industry architecture.Differing perspectives across government departments on sub-components of strategies.

National Freight Databank:

Resistance from private sector to provide information might lead to improper planning for infrastructure & operationsAbsence of information will not enable to development of 2014 freight scenariosSignificant MTEF allocations:Risk assessments

Department of Transport44FREIGHT LOGISTICS AND CORRIDOR DEVELOPMENT (Cont.):

Freight Monitoring Framework:

Absence of framework will not enable government to know what moves on infrastructure for planning capacity purposesMovement of bulk freight not meant for secondary network

Freight Business Intelligence:

Lack of alignment with other systems will lead to duplication & incompatible planning toolsDisintegrated decision-makingSignificant MTEF allocations:Risk assessments

Department of Transport45PUBLIC TRANSPORT:

Operational plans for Integrated Rapid Public Transport Network in 12 cities:

Poor cooperation and coordination between some provinces and citiesLack of network planning and management capacity at local and provincial spheresPTIS only cover part of the funding for planning and implementations

Transformation of road based public transport subsidies:

Budget allocations do not address 12% annual growth in subsidised passenger services and excludes taxi userscurrent baseline allocations insufficient to cover operational costs as wellSignificant MTEF allocations:Risk assessments

Department of Transport46PUBLIC TRANSPORT (continued):

Shosholoza Meyl merger:

Funding not available to cover liabilities that will be assumed by SARCC/Metrorail delays

Taxi Recapitalisation:

Funding for scrapping may not be in line with the targets for 2010Vehicle supply may not be aligned to demand

Significant MTEF allocations:Risk assessments

Personnel, skills development and trainingDepartment of TransportPersonnel establishment Vacancy ratios Employment equity Skills development and training programmes 47

Department of Transport48Financial Year: 2004 - 2005The organizational structure expanded from 4 Branches comprising of 482 posts to 6 Branches with 557 posts

Financial Year: 2005 - 2006The organizational structure remained unchanged

Financial Year: 2006 2007The organizational structure expanded from 6 Branches comprising of 557 posts to 7 Branches comprising of 1023 posts of which 674 were activatedPersonnel establishment

Department of Transport49Vacancy ratio for the past three years

Financial Year 2005 2006:557:32%Financial Year 2006 2007:621:41%Financial Year 2007 2008:674:38%Vacancy ratios

Department of Transport50Vacancy ratios

DetailsPostsVacantFilled% Vacant% Filled2005/0655717837932%68%Posts added6464Appointments(66)66Resignations79(79)2006/0762125536641%59%Posts added5353Appointments(88)88Resignations36(36)2007/08 latest67425641838%62%

Current vacancy ratios would have been if no posts were added:In 2007/0833%67%In 2006/07 and in 2007/0825%75%

Department of Transport51Employment equity

Current Employment Equity Status: 30 September 2007 CategoryDPSA TargetsCurrent statusBlack people at senior management level75%88,16%Women at senior management level30%34,21%People with disabilities at all levels2%1,3%

National demographicsAfricanColouredAsianWhite79%8,9%2,5%9,6%Male / FemaleMFMFMFMFPosts filled I.r.o. race80,43%(333)3,14%(13)3,62%(15)12,81%(53)Posts filled I.r.o. gender48% 15952% 17454%746%647%753%838%2062%33

Department of Transport52Skills development and training programmes

Infrastructure and maintenance budgetsDepartment of TransportCapital budgets and growth Public Transport Infrastructure and Systems Grant Roads Rail 53

Department of Transport54Infrastructure and maintenance budgets Capital budgets (R000) and year-on-year growth

Gautrain100%-6,5%7,8%-23,2%6,0%PTIS100%188,8%155,0%95,5%-14,5%-17,2%Roads8,5%12,1%41,2%79,1%26,4%51,2%6,0%Rail-1,5%5,1%49,6%64,7%33,7%53,6%6,0%

Department of TransportPublic transport infrastructure and systems 55

Department of Transport Public transport infrastructure and systems56

Department of TransportCapital expenditure on roads (Non-toll roads 2006/07) 57

DescriptionNumber of projectsLength (km)Cost R000Strengthening23381503 336Improvements21123291 293New Facilities13233110 975Total57737905 6042005/0659417436 404

Department of TransportOperating expenditure on roads(Non-toll roads 2006/07) 58

DescriptionNumber of projectsLength (km)Cost R000Routine Maintenance9013 600693 988Periodic Maintenance441 206503 228Special Maintenance22126151 024Total 15614 9321 348 2402005/0613315 0561 209 240

Department of Transport59Capital expenditure on rail Capital budget allocation:

80% to Rolling Stock20% to infrastructure and other projects, including Signaling, Perway and Structures, Telecommunications and Electrical refurbishment

Rolling Stock refurbishment in 2006/07:

General OverhaulUpgradesTotalMotor coaches573087Trailer coaches12697223310

Department of Transport60COMMUTER RAIL:

Rolling Stock Maintenance:The maintenance budgets are misaligned, results in deferred maintenance and a limited ability to repair train sets

General Overhaul / Refurbishment:To stabilise and sustain the current levels of service, which are far from the required level of service, will require 700 coaches to be General Overhauled or Refurbished in each year of the MTEF

Signaling:Signaling is currently the most critical infrastructure asset in relation to safety. The SARCC needs to:Replace all signaling more than 50 years old to support the 5 minutes headways corridorsProvide Centralised Train Control centres in each region in order to increase and sustain the safety level of train movement.Infrastructure and maintenance budgets

Department of Transport61 Note: The above amounts were requested, but not allocated on the budgetInfrastructure and maintenance budgetsAdditional fund requests: mega rail projects

BSC Performance no 1

OBJECTIVEMEASURE2004/052005/062006/07

Increase fare revenueFare Revenue Rm973.31019.61059.7

Passenger trips Million491.9511.9529.7

Improve Customer SatisfactionCustomer Survey63%66%58%

Train Punctuality88.1%88.6%86.6%

Train Cancellations2.2%3.5%2.3%

Improved operational safetyNo of derailments *252420

No of collisions *13812

No of SPAD's231223

DIFR1.91.71.3

Improved safety and security for passengers, assets & employeesCrime Index0.4300.4160.526#

Fatalities (excl. suicides)214205231#

Injuries157518771532

* Include incidents in yards

# Reflects impact of Security industry strike (Apr - Jun 2006)

perf no 2

Performance on allocations

AuditedAuditedAudited

R'000R'000R'000

USE OF ALLOCATION2004/052005/062006/07

Operational subsidy received1,715,9101,619,4662,751,274

% Opex cost covered by subsidy87%67%76%

Capital Subsidy Received782,640*980,247*1,208,598

Capital Subsidy Expenditure846,2341,058,8741,104,148

% Spend on capital108%#108%#91%

#Due to roll overs

*VAT implications

Sum New proposal no 3

MTEF Proposals: 2008/09 - 2010/11

R'000R'000R'000R'000

2008/092009/102010/112011/12

Change to Baseline: Operational Subsidies Grant:

Recurring Consolidation Cost202,560211,675220,142228,948

Rolling Stock Maintenance156,000171,600188,600207,636

Infrastructure Maintenance33,00065,00071,00078,100

391,560448,275479,742514,684

Change to Baseline: Capital Subsidy Grant:

Rolling Stock : GO's & Upgrades1,276,8511,195,4854,158,000#4,573,800#

Rolling Stock : New350,0001,575,000#1,575,000#

Rolling Stock Depots Upgrade100,000100,000

Rolling Stock Facilities Upgrade80,00075,000

Infrastructure529,51889,111*1,966,110#2,293,795#

2,236,3690.01,459,5960.07,799,1100.08,442,595

Shosholoza Meyl

Operating Deficit494,160554,179664,480724,283

Capital Investment Requirement402,700447,700855,300677,100

Cost of employee liabilities44,000

940,8600.01,001,8790.01,519,7800.01,401,383

Change to Baseline: Operational Subsidies Grant:929,7200.01,002,4540.01,144,2220.01,238,967

Change to Baseline: Capital Subsidy Grant:2,639,0690.01,907,2960.08,654,4100.09,119,695

#No baseline applied

* Additional allocation made in 2007/08 for 2009/10 FY of R656m

Total no 4

MTEF ALLOCATION 2007/08 - 2009/10

AuditedAuditedAuditedEstimated Outcome

R'000R'000R'000R'000R'000R'000

2004/052005/062006/072007/082008/092009/10

SARCCOperational1,695,1482,156,3772,751,2742,259,1192,485,0312,683,650

Additional request192,000391,560448,275

Revised Operational2,451,1190.02,876,5910.03,131,925

Shosholoza Meyl (SM)Operational812,000538,160554,179

Total Operational (incl SM)3,263,1190.03,414,7510.03,686,104

Capital665,000688,3001,029,5981,696,0782,267,6863,484,144

Additional request2,236,3691,459,596

Revised Capital1,696,0780.04,504,0550.04,943,740

Shosholoza Meyl (SM)Capital122,300402,700447,700

1,818,3780.04,906,7550.05,391,440

SARCCPTIF180,000.00476,000210,000450,000

Total Funding0.00.03,960,8720.05,557,4970.08,531,5060.09,527,544

Capex SARCC no 5

MEGA RAIL PROJECTS

R'000R'000R'000R'000

ProjectDescriptionTotal project cost2008/092009/102010/11

Rolling Stock:Accelerated GO's and Upgrade programme17,352,6623,091,0003,458,0004,158,000

Infrastructure: Upgrades and ReplacementUpgrades & replacements as per NRPP5,209,7001,436,5922,532,3691,966,110

Rolling Stock: RecapitalizationRecapitalize 7500 coaches70,000,000350,0001,575,000

Rolling Stock: DepotsUpgrades of depots for new RS and upgrade of facilities for improvement in current RS availability315,00080,000175,000100,000

4,957,5926,165,3697,799,110

Capex Ext Projects no 6

MEGA RAIL PROJECTS

R'000R'000R'000R'000

ProjectDescriptionTotal project cost2008/092009/102010/11

ADDITIONAL REQUESTS OVER MTEF

Moloto Rail CorridorConnection of Mphumalanga to employment destinations in Tshwane. 1st Phase (Gauteng - Siyabuswa) 113km.9,500,000500,0001,000,0001,500,000

Bridge CityPart of Inanda, Ntuzuma, KwaMashu redevelopment. 3km rail extension, capacity improvements and new station350,0001,00083,400125,000

Cape Town International Airport LinkRail link between Cape Town International Airport and Cape Town CBD as part of ACSA Cape Town Airport Master Plan.565,0008,000120,000200,000

Hammanskraal"Zone of Choice" by Tshwane City Development Strategy. Re-introduction also a requirement of the Moloto rail corridor. Costs exclude Rolling Stock300,0002,00074,00080,00080,000

Motherwell Rail ExtensionThis loop will enhance rail option towards the medium term. 4 Stations and 7,5km rail extensions600,0006,00054,000206,000

Mamelodi Capacity enhancementsDoubling of the 5,5km line between Eerste Fabrieke & Greenview to alleviate capacity limitations of the track.128,0002,000126,000

Gauteng - Rustenburg - SunCityRe-introduction of intercity rail services to Rustenburg and investigation of special trains to Sun City261,00040,000121,000100,000

TOTAL COST PER ANNUM559,0001,578,4002,211,000

Sheet1

MTEF ALLOCATION 2007/08 - 2009/10

AuditedAuditedAuditedEstimated Outcome

R'000R'000R'000R'000R'000R'000

2004/052005/062006/072007/082008/092009/10

AllocationOperational1,695,1482,156,3772,751,2742,259,1192,485,0312,683,650

Capital665,000688,3001,029,5981,696,0782,267,6863,484,144

Specific capital allocationsPTIF180,000.00476,000210,000450,000

Total Funding0.00.03,960,8720.04,431,1970.04,962,7170.06,617,794

Perf Allocation

AuditedAuditedAudited

R'000R'000R'000

2004/052005/062006/07

Current Received1,695,1482,156,3772,751,274

Capital Subsidy Received665,000688,3001,029,598

Total Received2,360,1482,844,6773,780,872

PTIF allocated180,000.00

AuditedAuditedAudited

R'000R'000R'000

USE OF ALLOCATION2004/052005/062006/07

Operational subsidy received1,715,9101,619,4662,751,274

Profit / -Loss from Operations-354,633-705,7462,080

Capital Subsidy Received782,640980,2471,208,598

Capital Subsidy Expenditure846,2341,058,8741,055,649

Cust Satisf

Customer satisfaction scores: Based on Survey 1 of 2006

WitsTshwanedurbanCape townELPE

Average2005686666646869

2006605867525959

Passenger trips

2005190,472,08077,568,13660,119,034174,740,0417,248,5631,761,050511,908,904

2006197,673,99980,105,63664,725,439177,615,3347,923,4721,685,432529,729,312

Weighted Score

Trips & average200512,952,101,4405,119,496,9763,967,856,24411,183,362,624492,902,284121,512,45033,837,232,01866.1%

200611,860,439,9404,646,126,8884,336,604,4139,235,997,368467,484,84899,440,48830,646,093,94557.9%

MTEF Proposal detail

AuditedEstimateMedium Term Estimate

2006/072007/082008/092009/102010/11

SARCC excl. Shosholoza Meyl

Baseline allocationCurrent2,131,5422,259,1192,485,0312,683,6502,844,669

Capital1,029,5981,696,0782,267,6863,484,144

Previous allocations3,161,1403,955,1974,752,7176,167,7942,844,669

Adjustments budgetChanges to baseline current allocation193,000391,560448,275479,742

Changes to current (once-off)619,732

Changes to baseline capital allocation0.02,236,3691,459,5967,799,110

Proposed Allocation3,780,8724,148,1977,380,6468,075,66511,123,521

Specific & exclusive capital allocationsPTIF allocated180,000476,000210,000450,000

Special Funding881,0002,222,4002,651,000

Total Funding requested (Operational, Capital, PTIF)3,960,8724,624,1978,471,64610,748,06513,774,521

Shosholoza Meyl

Current (Operational Shortfall)637,400494,160554,179664,480

Capital (including COPEX)122,300402,700447,700855,300

Once Off Current174,60044,000

Total Shosholoza Meyl934,300940,8601,001,8791,519,780

TOTAL incl. SHOSHOLOZA MEYL (excl. PTIF)5,082,4978,321,5069,077,54412,643,301

TOTAL incl. SHOSHOLOZA MEYL (incl. PTIF)5,558,4979,412,5060.011,749,9440.015,294,301

* Includes Mega projects for rail extensions, loops, turnouts

Transfer and grant managementDepartment of TransportBus subsidies Taxi recapitalisation Commuter rail and roads Public Transport Infrastructure and Systems Grant 62

Department of Transport63Bus subsidies:

Transfer payments based on actual services renderedInterim Contract based on ticket sales-therefore difficult to control demandSubsidy Management System (SUMS) in place to monitor and verify and independent monitoring takes place at provincial level and on an ad hoc basis from NationalMonthly operator audits carried out by external auditors to certify claims

Taxi Recapitalisation:

Scrapping allowances are transfer paymentsThe Operating Licences Administration System (OLAS) and the NATIS are used to verify information before transfers can be effectedTransfer and grant management

Department of Transport64Commuter Rail and Roads:

Based on operational and capital budgets that are transferredStrategic Plans are approved by the MinisterMemoranda of Agreement are entered intoQuarterly reports are reviewedRepresentation on Boards

Public Transport Infrastructure and Systems Grant:

Funds are transferred in terms of Division of Revenue ActA monitoring and management contract is in placeUtilisation of funds and cash flows are managed through Memoranda of Agreement with municipalitiesMonthly and quarterly reports are reviewedTransfer and grant management

Monitoring and evaluation systemsDepartment of TransportPublic Entity Oversight:

Functional analysis Shareholder relationships Systems, planning and implementation

Credit card license contract NaTIS maintenance and development 65

Department of Transport66Programme

Develops appropriate monitoring mechanisms and ensures effective corporate governance. It establishes and oversees transport regulation in line with broad economic and transport policies

Public Entity Oversight Compliance with government policy in relation to their strategies, business plans, governance, financial management and operational plans, through monitoring and evaluation process

Border Control

Implement and oversee policy, legislation, regulation, processes, systems, structures and long term oversight regarding border controlMonitoring and evaluation systems: Functional analysis

Department of Transport67Monitoring and evaluation systems: Shareholder relationships

Department of Transport68Frameworks

Shareholders Compact:

Fostering accountability to the ShareholderMandate determination for the public entity

Performance Agreement

Determines clear target setting for each sectorIdentifies and quantifies project determinationEconomic and social development projects

Business Projects

Social responsibility e.g. EPWPCommunity development and poverty alleviation projects Monitoring and evaluation: Systems, planning & implementation

Department of Transport69Frameworks (continued)

Strategic and corporate plans

Detailed planning aligned to the MTEF and the MTSF

Legislative compliance / PFMA

Board constitutionCompliance to the quarterly reporting requirementsFinancial management and planningShareholder and public accountability Monitoring and evaluation: Systems, planning & implementation

Department of Transport70Planning to reflect the key strategic imperatives

Planning to map out the strategy Budgeting to reflect the strategy and funding Targeting to respond to key objectives Approval of strategic plan Executive Authority

Implementation

Reporting on progress

Quality reportsRelevance of informationTimeous reports

Strong oversight role by Boards

Quarterly and annual reports Monitoring and evaluation: Systems, planning & implementation

Department of Transport71400 Driving License Testing Centres (DLTCs) pay R46,50 into the bank accounts for each driving license order processed

The eNaTIS team provides the contractor with a monthly data extract of card orders received (captured on eNaTIS)

The contractor performs a monthly reconciliation of revenue received versus card orders received from the eNaTIS information

Monthly statements are sent to DLTCs and outstanding payments are followed up in writing

The contractor prepares a payment certificate on a monthly basis for cards produced (the price per card is according to contractual bandwidths)

Payment certificates are approved by the Chief Director or the eNaTIS project manager with reference to reconciliations with information from eNaTIS

Note: DOT is in the process of appointing a contractor to operationalise and manage the Trading EntityMonitoring and evaluation: Credit card license contract

Department of Transport72All enhancements to the system are agreed upon between the Department of Transport, the Road Traffic Management Corporation (RTMC) and the nine provinces

Agreed enhancements are reported to the Road Traffic Management Coordinating Committee (RTMCC)

The project manager signs off payment certificates after checking that the work was completed

The process of transferring the eNaTIS services from the contractor to the State in terms of a transfer management plan has commenced with the assistance of the State Information Technology Agency (SITA)Monitoring and evaluation:NaTIS maintenance and development

Department of TransportThank you73