mtc strategic plan 2012 to 2016

MAYIBUYE TRANSPORT CORPORATION

STRATEGIC PLAN

For the

Fiscal years 2012 – 2016

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To obtain additional information and/or copies of this document, please contact: The Chief Executive Officer PO Box 19596 TECOMA 5214 Ms Charon Cronje Tel: (043) 745 2582 Fax: (040) 745 2586 Email: [email protected]

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FOREWORD BY MEMBER OF THE EXECUTIVE AUTHORITY

The Department of Transport strives to provide a regulated, safe, reliable and affordable multi-model transport system that ensures mobility of people, affording access to services and opportunities that promote socio-economic development and improves quality of life in the Eastern Cape Province. In meeting this priority, the Department remains committed to responding to the needs of a predominantly rural province faced with challenges of rural development and poverty alleviation. As such, the Department plays a critical role in providing access to employment opportunities and job creation possibilities through training, for the unemployed, including the youth, by

delivering a transport solution that promotes the movement of commuters and goods. Mayibuye Transport Corporation (MTC) provides a crucial connection in this transport solution with its pro-rural focus, servicing the neediest citizens of the Province.

We support MTC’s development as a viable and sustainable entity, endorsing the recapitalisation project

towards strengthening MTC’s fleet and infrastructure. This actively builds capacity in a safe, effective and

efficient transportation system that promotes access as a priority to socio-economic growth and development of the Province.

The Department acknowledges MTC in reviewing its Strategic Plan and Annual Performance Plan in line

with government’s focus on improved service delivery. It will execute its oversight responsibility for this

plan to ensure that the mandate of a quality service to its commuters is realized.

The Department also acknowledges the key achievements of MTC which will contribute to executing the Annual Performance Plan. The key achievements include:

Increasing the bus fleet by concluding lease agreements;

Improving the quality of the bus fleet by implementing an in-house bus refurbishment strategy;

Increasing own-revenue collection by implementing an upgraded revenue collecting ticket system.

In the 2012/13 financial year Mayibuye will continue with servicing the rural communities within their areas of operation. They will also continue with the skills development of their staff. To this end the Corporation has instituted a Management Development Programme with a strong focus on women, for which we commend them.

By virtue of the powers vested in me as Executing Authority of the Department of Transport, I hereby

approve Mayibuye Transport Corporation’s Strategic Plan and Annual Performance Plan for 2012/13.

The Honourable Thandiswa Marawu MEC: TRANSPORT

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REVIEW BY THE CHAIRPERSON OF THE BOARD

This document presents the Strategic Plan for Mayibuye Transport Corporation (MTC). It is a document that aims to delineate the territory in which we seek to be unique.

We continue to serve the most impoverished sectors of our society and we strive to not only continue doing this, but to serve them better and also to reach a greater share of the target market. To date, the Corporation continues to reap the benefits of its services and it is worthy to note that the Corporation performed admirably under difficult conditions relative to our competitors.

We will ensure that we continue in our strive to serve the rural communities of our Province in a convenient, safe and affordable way. MTC has thus identified the following strategic goals to achieve its mandate:

Ensure an efficient, effective and service oriented organisation;

Render safe, affordable and reliable transportation service; and

Institutionalise bus operations best practices

We are confident that the above goals will instil shareholder and stakeholder confidence in Mayibuye Transport Corporation. We appreciate and understand the enormity of the challenges at hand, but we are committed to embrace this journey of excellence and continue our efforts to improve our customer service through the effective and efficient application of our available resources. I commit MTC to the full implementation of this strategic plan.

PLC Maseti Chairperson of the Board: Mayibuye Transport Corporation

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OVERVIEW BY CHIEF EXECUTIVE OFFICER

We present this reviewed Strategic plan as the outcome of a rigorous strategic planning process. The Plan reflects on the performance of the Corporation, and sets out the reviewed strategic priorities for the 2012/13 financial year and the three outer years of the Medium Term Expenditure Framework.

The Corporation reviewed its organisation structure and adopted a design that is to set the stage for improved service delivery and ultimately implementation of this plan. We will continue to improve on our existing quality of the services that we provide and aim to further enhance our delivery capabilities and to embrace world class service standards.

In addition to comparing and contrasting service standards and improvements in the sector, we also looked to strategic theory to ensure that we contribute to the development of a good and acceptable plan.

As I also mentioned in the previous year review, we appreciate the fact that strategy is not just a matter of following techniques, of drawing charts and plotting where we may fail. Over the years we have become acutely aware that strategy is not just an analytical process, but requires intuition, crafting, creative skill, sensitivity to trends in the environment and an appreciation of what we can and cannot deliver. This plan is the outcome of our collective ability to learn and adapt, experiment with ideas and renew our commitment to the people of our Province.

Through the realisation of the reviewed strategic goals, the successful execution of our strategy will contribute to a better service to the people in the Province that we serve.

________________________________________ L.R. MBINDA CHIEF EXECUTIVE OFFICER MAYIBUYE TRANSPORT CORPORATION

CEO - L.R. Mbinda

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OFFICIAL SIGN-OFF

It is hereby certified that this Strategic Plan:

Was developed by the management of the Mayibuye Transport Corporation under the guidance of the Board of Directors;

Takes into account all the relevant policies, legislation and other mandates for which the Mayibuye Transport Corporation is responsible;

Accurately reflects the strategic goals and objectives which the Mayibuye Transport Corporation will endeavour to achieve over the period of 5 years.

Mr Lourens Coetzer

Chief Financial Officer Signature:

Date:

Mr Richmond Luthando Mbinda

Chief Executive officer Signature:

Date:

Approved by:

PLC Maseti

Chairperson: Board of Directors Signature:

Date:

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TABLE OF CONTENTS

OFFICIAL SIGN-OFF ............................................................................................................................................. v LIST OF ABBREVIATIONS ...................................................................................................................................vii STRATEGIC OVERVIEW ......................................................................................................................................... 9

1. Vision .............................................................................................................................................................. 9

To be a leading quality public transport service provider. .................................................................................. 9

2. Mission............................................................................................................................................................ 9

3. Values ............................................................................................................................................................. 9

4. Legislative and other mandates ................................................................................................................... 10

4.1. Policy mandates ........................................................................................................................................ 10

4.2. Relevant court rulings ............................................................................................................................... 11

5. Situation analysis .......................................................................................................................................... 11

5.1. Performance environment ......................................................................................................................... 14

5.2. Organisational environment ...................................................................................................................... 14

5.3 Description of the strategic planning process .......................................................................................... 16

6. Strategic goals of the Corporation ................................................................................................................ 17

STRATEGIC OBJECTIVES ..................................................................................................................................... 21

7. Programme 1: Administration ...................................................................................................................... 21

7.1. Strategic Objectives .................................................................................................................................. 22

7.2. Resource considerations .......................................................................................................................... 28

7.3. Risk management ..................................................................................................................................... 28

8. Programme 2: Engineering ......................................................................................................................... 31



8.3. Risk management ..................................................................................................................................... 33

9. Programme 3: Operations ........................................................................................................................... 35



9.3. Risk management ..................................................................................................................................... 37

LINKS TO OTHER PLANS ..................................................................................................................................... 39 Executive Summary ........................................................................................................................................... 39 Project Profile .................................................................................................................................................... 40

Background ........................................................................................................................................................ 40

Project Goal ....................................................................................................................................................... 40

Impact 40

Activity and resource schedules ........................................................................................................................ 41

Activity schedule ................................................................................................................................................ 41

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LIST OF ABBREVIATIONS

CEO Chief Executive Officer CSI Corporate Social Investment

CFO Chief Financial Officer DOT Department of Transport

CSO Chief Strategy Officer MTC Mayibuye Transport Corporation

AFS Annual Financial Statements MEC Member of the Executive Council

AG Auditor-General MTEF Medium Term Expenditure Framework

AO Accounting Officer MTSF Medium Term Strategic Framework

APP Annual Performance Plan NTR National Treasury Regulations

ASGISA Accelerated and Shared Growth Initiative for SA OD Organisational Development

BEE Black Economic Empowerment OHSA Occupational Health and Safety Act

DoRA Division of Revenue Act PFMA Public Finance Management Act

ECPA Eastern Cape Provincial Administration PGDP Provincial Growth and Development Plan

EWP Employee Wellness Policy PMDS Performance Management Development System

EXCO Executive Council QMS Quality Management System

GRAP Generally Recognised Accounting Practices SCM Supply Chain Management

GSDE Guide to Service Delivery Excellence SCOPA Standing Committee on Public Accounts

HDI Historically Disadvantaged Individuals SLA Service Level Agreement

HoD Head of Department SM Senior Management

HRM Human Resource Management SMME Small Medium Micro Enterprise

HRD Human Resource Development ToR Terms of Reference

IA Internal Audit FMS Fleet Management System

IBAC Interim Bid Advisory Committee SABOA South African Bus Operator’s System

IFMS Integrated Financial Management Systems SABEA South African Bus Employer’s Association

IT Information Technology SARPBAC South African Road Passenger Bargaining Council

IYM In-Year-Monitoring COS Certificate of Fitness

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Part A

Strategic Overview

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STRATEGIC OVERVIEW Mayibuye Transport Corporation (MTC) was established in accordance with the Ciskei Corporations Act of 1990, to render an effective and efficient public transport service primarily for workers to industries and other places of employment in the adjacent South African urban areas. The Corporation operates under the jurisdiction of the Eastern Cape Department of Transport as a parastatal bus passenger transport service provider. The Corporation is funded through a grant-in-aid from the Provincial Department of Transport. In synchronisation with its developmental mandate, MTC has developed this Strategic Plan, which reflects our roadmap to chart the way forward in line with National Treasury Guidelines.

1. Vision

To be a leading quality public transport service provider.

2. Mission

To maintain the highest possible standards in the provision of an effective and efficient transport service to communities in the Province on selected routes by:

Providing an enabling environment conducive to the provision of an affordable, convenient and safe mode of public transport.

Keeping abreast of trends and developments in the sector to meet changing customer and

stakeholder needs; and

Creating of strategies that lend support to socio-economic growth in the Eastern Cape in all MTC’s areas of operation.

3. Values

We strive for EXCELLENCE through:

Integrity Work ethically, honestly and transparently.

Consultation Create an enabling environment for community and stakeholder participation.

Innovative Strive towards radical and revolutionary changes in thinking, services, processes or organization.

Accountability Act honorably and take ownership of our actions and the outcomes thereof.

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4. Legislative and other mandates

The Mayibuye Transport Corporation is a Schedule 3C entity established in terms of the main objectives of the Urban Transport Act (No 78 of 1977); National Transport Act (No. 5 of 2009); Eastern Cape Roads Act (No. 3 of 2003); Passenger Transportation (Interim Provisions) Act (No 11 of 1999) as well as the Road Transportation Act (No. 74 of 1977).

Additional legislation that also impacts on the mandate and operations of the Corporation include:

Public Finance Management Act (PFMA), Treasury Regulations and Provincial Directives

Preferential Procurement Policy Framework Act

Division of Revenue Act

Promotion of Administrative Justice Act

Public Service Act and Regulations

Labour Relations Act

Employment Equity Act

Skills Development Act

Skills Development Levies Act

South African Qualifications Authority Act

Basic Conditions of Employment Act

Occupational Health and Safety Act

Promotion of Access to Information Act

4.1. Policy mandates

In developing this Plan, the Mayibuye Transport Corporation identified the following key policy statements that have an impact on public transportation development initiatives and interventions:

Policy Policy Directive Implications for MTC

NATIONAL LAND TRANSPORT STRATEGIC FRAMEWORK

Provisioning of rural transport. MTC shall ensure adequate access of transport to the rural areas within the areas that it operates from.

ASGISA Poverty Reduction through accessible public transport in the rural areas.

To be considerate towards socio-economic status of the rural people when increasing fares.

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Policy Policy Directive Implications for MTC

JIPSA Halving unemployment and poverty by 2014.

Increasing GDP growth to 6% (2010- 2014).

MTC shall ensure that it opens its doors for learnership and internship programmes and continue to recruit both skilled and unskilled job seekers for capacity building and training together with SETA’s.

PGDP To reduce by between 60% and 80% the number of households living below the poverty line 2014.

MTC shall ensure accessibility of rural public transport so as to minimise the need for the urban migration.

To ensure universal primary education (UPE) by 2014, with all children proceeding to the first exit point in a secondary education.

MTC seeks to assist the Department of Education in carrying and provisioning of the scholar transport so as to ensure accessibility of quality and formal education.

4.2. Relevant court rulings

The Mayibuye Transport Corporation is currently not subject to any court rulings requiring it to perform particular actions or functions.

5. Situation analysis

Mayibuye Transport Corporation (MTC) was established in accordance with the Ciskei Corporations Act of 1990, to render an effective and efficient public transport service primarily for workers to industries and other places of employment in the adjacent South African urban areas. In 1994, MTC was placed under the jurisdiction of the Eastern Cape Department of Transport. It is a parastatal bus passenger transport service provider that belongs to the Eastern Cape Provincial Government. In terms of the National Land Transport Transition Act - section 47(3), parastatal public transport service providers need to be restructured to become independent, financially ring-fenced entities that can compete for public transport contracts in an open tender system. At present, MTC is funded through a grant-in-aid from the Department of Transport. The Department had been unable to provide the Corporation with an adequate capital grant. MTC is challenged in that it is unable to meet the needs of the current customers or the thousands of other people in desperate need of public transport.

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The challenges in relation to the provision of public transport services can be summarized as follows:

90% of customers and potential customers live in the rural areas.

The customers cannot afford expensive public transport.

Infrastructural backlogs in the operational routes resulting in MTC incurring huge mechanical repair and maintenance costs.

MTC receives an annual grant-in-aid from the Department of Transport. It is utilised against a backdrop of backlogs in the refurbishment and purchasing of new buses, maintenance of depots, the monitoring of transport routes, and upgrading poorly developed infrastructure in the depots. The provision of a safe, comfortable and reliable transport service is hampered by these factors.

Budgetary constraints to implement planned projects and capacitate the organisation with adequate human resources.

Increasing competition from privately owned transport services.

Lack of organisational capacity to deliver to mandates due to gross skills gaps and linked challenges e.g. high average age of employees

In addressing these needs, MTC is doing the following:

Continue to lobby for additional funding in the form of a Recapitalisation Project, through the controlling Department, the Department of Transport (DOT), to mobilize support for the recapitalisation of the MTC fleet and depot upgrading;

Lobbying the DOT to constantly monitor and motivate for the upgrade of rural roads especially those where MTC operates;

Prioritize multi-skilling, and diversification of staff capacity through artisan programmes and other forms of skills development;

Identify critical vacancies for funding per financial year;

Market and sustain MTC as a strong brand;

Maintain a policy, procedural and management framework for an effective, efficient and sustainable organisation;

Keep in tune with operational best practices and the delivery of a safe, efficient and reliable transport service.

Successful lobbying for the Recapitalisation Project will have significant impact in addressing some of the challenges mentioned above.

In line with government’s prioritising of access to basic and critical services, and continued rural development, the bus service persists in contributing to the economic and social development of the country, providing mobility to millions of people who are dependent on public transport. MTC remains a major player in the transport industry, also participating in the rollout of the Buffalo City Integrated Transport System.

The transport sector continues to be characterised by increasing growth and competition for services. Illegal operators, who offer unsafe and high-risk transport services, attractive to commuters due to cheaper

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costs, exacerbate challenges. Despite operating in a highly competitive environment, MTC continues to have a pro-rural focus, continuing to promote access to rural communities, though this negatively affects the prospects of fee increases even when the environment dictates such. Through the development the Recapitalisation Project via DOT, MTC is hopeful that a positive consideration of the project will have a hugely positive impact in increasing operations on the social routes it serves, as well as open opportunities to further expansion of these routes.

The Recapitalisation Project would present a window of opportunity for a highly challenged entity. It will provide the sorely needed capital injection to boost the fleet and upgrade infrastructure, enhancing MTC’s quality in offering a reliable, safe and effective transport service to current and potential customers, simultaneously contributing a solution to the challenges confronting MTC. The Corporation has a compliment of 69 buses, 48 of which are older than 12 years. In order to maintain these vehicles as required, it is necessary to upgrade the four (4) depots from which MTC operates, that is, Reeston, which incorporates the head office, Zwelitsha, Queenstown and Alice. These depots are neglected because of financial constraints in the funding from the Department over the last 10 years. Due to the lack of proper facilities, the maintenance of buses has not been as thorough as it could have been. Half of the ancillary vehicles’ fleet have long exceeded useful life, putting more strain on the operating budget.

In view of the above, it is clear that the Corporation will require a major capital injection in order to restructure it into an independent, financially ring-fenced entity that will be able to compete in the open market for public transport contracts on a level playing field. It will allow MTC to enter into relationships with other service providers, which would enhance its chances of a Negotiated Contract with the National Department of Transport.

At a national level, trends point to a growing passenger base of the industry since the 2009/10 financial year. The current year is still the dominant focal point as the country is garnering its resources to build a dependable public transport system.

Government’s positive financial boost for public transport and roads infrastructure signifies a more prominent role for public transport in South Africa. The economic lag and price of crude oil have also been factors affecting the transport landscape, affirming buses as an important mode of transport. The need for sustained growth in this industry is important, promoting South Africa at a time when the whole world is looking to the country to provide a coherent and integrated transportation service for the 2010 World Cup, and ensuring sustained economic growth through a reliable transport infrastructure. Public Transport: A highly competitive environment: MTC’s competitors include public transport providers such as privately owned bus companies, taxis, trains and informal public transport providers such as light delivery vehicles, as well as illegal operators. The introduction of the demerit point system has prompted MTC to proactively address the training of fleet managers and to focus on the potential risk of unroadworthy vehicles. The age of the fleet negatively affects MTC’s operations in this regard.

The following strategic interventions were introduced to augment internal capacity and deliver a safe, reliable and effective service:

The capacitating of engineering staff through hands-on training.

The purchasing of updated equipment.

Reducing the turn-around times for servicing and maintenance of buses.

Driver of the Year competition.

These strategies have been included in the Strategic Plan and subsidiary plans to display a commitment to

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providing lasting solutions to these problems. Providing a cost effective transport service: Striking a balance between providing a safe, reliable, affordable and accessible public transport service in a highly competitive environment, as well as generating profit, remains a challenge for a government-funded corporation the size of MTC. The Recapitalisation Project towards a renewal of the fleet would alleviate maintenance and operational costs and allow more cost-effective operations. It will also afford the purchasing of buses adapted to accommodate people with disabilities, promoting access towards improved quality of life. The primary impact of such a recapitalization programme will improve quality public transport services and will enhance co-operative governance, as the Department will work closely with the Buffalo City Municipality with the implementation of their Public Transport Plan. The improvement of the services within the rural areas will provide increased mobility and access to economic opportunities, centres of learning, the legal profession, medical facilities and various trips for social purposes like shopping, and access to pension payout points.

The project will contribute to poverty alleviation by providing accessibility to economic opportunities through increased mobility by reliable, safe and affordable public transport.

The Mayibuye Transport Corporation has improved its relations with the DOT and this has resulted in a healthy, cordial and fruitful partnership between the shareholder and the entity.

5.1. Performance environment

The performance of the MTC is influenced by the following identified opportunities and threats:

Opportunities Threats

Market Growth (Commuters).

Favourable political outlook.

Department of Transport Funding.

Business Ventures through lease agreements.

BRT opportunity

a. Completeness of Revenue

b. Integration Benefits

Alternative sources of Transportation for commuters.

Budget Cuts (Grant- in-Aid).

New Legislation: AARTO (Demerit Point System).

Unfavourable Economic Conditions.

Competition with AB350.

Deteriorating Provincial Roads.

BRT Threats.

5.2. Organisational environment

In order for Mayibuye Transport Corporation to successfully meet the external challenges identified, the organisation must be properly prepared and equipped to function at optimal levels. Three performance areas were considered:

Concept

Competence

Commitment

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Each of these was rated on a scale of 1 – 100 (percentage), where 100 represents optimal performance.

Figure 5: Mayibuye Transport Corporation-perceived performance as at 03 October 2011

Concept underpins the Understanding of purpose, clarity of focus, knowledge of the organisational

direction and the sharing of these within the organisation.

Weaknesses

The strategic direction of the Corporation is not well understood by all especially the lower level staff and operators.

Planning activities are not followed through well enough throughout the Corporation.

The management and review of performance is not consistently assessed in a balanced way.

The overall rating for Concept was 45%

Competence underpins the skills, knowledge and attributes of the people within the organisation.

Strengths

There is a significant degree of technical experience and expertise within the Corporation especial with reference to mechanical and panel beating experience and expertise.

Weaknesses

There is a strong perception amongst the executive of a mismatch between skills required in certain positions and those of incumbents, that is to say, person to post matching.

Skills transfer in the organisation is generally weak.

The overall rating for Competence was 35%

Concept

Competence Commitment

45%

40% 35%

Concept

Competence Commitment

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Commitment underpins the enthusiasm and zeal of staff in the execution of functions and duties.

Weaknesses

Is Commitment to continuously improve and display commitment is lacking especially at middle and lower level management level.

The inability to implement the approved PMDS has resulted in a lack of application and effort across all levels of the Corporation.

The overall rating for Commitment was 40%

Strategic Response to IDENTIFIED WEAKNESSES

The analysis above is based on the perception of the executive of the MTC and is modelled on the concepts of commitment, competence and concept. It is a useful conceptual strategic management tool with which to critically assess the position of the organisation in relation to the identified variables.

The Mayibuye Transport Corporation has a history of poor strategic management, strategic management oversight and organisation performance management. With the successful redesign of the Corporation’s organisation structure an office tasked with the strategic planning and implementation was created. This will ensure greater focus on quality of strategic plans with greater emphasis on implementation.

A challenge for the organisation to move from planning to implementation would be to get the strategic conversation right (Manning, 2001:14). The purpose of leadership in organisations is to create a context in which people will perform to their full potential. According to Manning this context is the mental space where people either reveal or conceal their ability. He furthermore illustrates that context is a product of conversation since organisations are nothing more than managed conversations.

The strategic conversation is not a default activity that just sort of happens, but is a deliberate process and a leadership tool. The ongoing task of management will be to focus and inspire staff. To quote Manning: “what gets measured gets managed. But we conveniently forget that it’s only what is spoken about, constantly, passionately, consistently, that will be either measured or managed. Talk about the right things, in the right way to the right people and extraordinary things happen but get the conversation wrong and you’re sunk”(2001:15).

The Corporation realises that if this is what it wants to achieve it has to get its strategic conversation right and within that context create a service delivery capability that is supported by a workable performance management system.

5.3 Description of the strategic planning process

The management of the MTC initiated their planning by following the process outlined below:

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The diagrammatic presentation of the planning process outlined above is aligned to the National Treasury Framework for Strategic Plans and Annual Performance Plans which includes the Medium Term Strategic Framework. Our strategic planning sessions were conducted in close consultation and guidance from the Provincial and National Treasury on the framework for Strategic and Annual performance Plans. This was furthermore aligned to the Eastern Cape Provincial Planning Cycle to ensure that the Corporation’s planning is integrated with the planning within our controlling Department in particular and the Province in general.

6. Strategic goals of the Corporation

The following section outlines strategic goals of the Mayibuye Transport Corporation.

In refining this Strategic Plan, the management of the Mayibuye Transport Corporation revisited the SIX (6) goals developed during the previous year’s strategic review:

All of the SIX (6) goals remained relevant for the organisation;

However, the first FOUR (4) goals that focussed on the internal support operations of the organisation and were attached to programme one were revised and (coalesced) to become goal ONE (1).

Goals FIVE (5) and SIX (6) remained unchanged but have now become goals TWO (2) and THREE (3) respectively.

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STRATEGIC GOAL 1 Ensure an efficient, effective and service oriented organisation.

STRATEGIC GOAL 2: Render a safe, affordable and reliable service.

STRATEGIC GOAL 3: Institutionalise operations best practices.

Strategic Goal 1 Ensure an efficient, effective and service oriented organisation.

Goal Statement Providing functional support systems that ensure strategic leadership and good governance.

Justification In order for the MTC to deliver on its mandate and adheres to its values, it is critical to regularly establish the extent to which the organisation meets its performance targets. Performance management, in this instance, has two parts: firstly, establishing and agreeing on performance measures and secondly, determining the extent to which performance measures have been achieved (performance reviews). Both parts take place cyclically, and must therefore be completed within certain timeframes.

To ensure efficiency and effectiveness at strategy implementation level the implementation of a culture of performance can never be over-emphasised.

Links The administration pillar of MTC is linked through providing strategic leadership and direction, creating an environment for strong and good governance, the development of corporate policies, procedures and systems as well as their monitoring and evaluation. This pillar also contributes towards monitoring the Corporation’s compliance with various legislative mandates and develops a plan for realizing same. It also seeks to develop and implement sound human resources and financial practices at MTC.

Strategic Goal 2 Render safe, affordable and reliable transportation service.

Goal Statement Maintain and enhance standards and condition of fleet by executing preventative and predictive maintenance and thereby reducing the rate of breakdowns.

Justification To ensure the continuous safety of our commuters.

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Links All legislative compliance requirements

Health and Safety Act

Road traffic Act

Strategic Goal 3 Institutionalise bus operations best practices.

Goal Statement To ensure that the MTC operates a responsive bus service that complies with all relevant legislation and stakeholder’s expectations.

Justification The institutionalisation of best practice bus operations will ensure that Corporation becomes a credible and key transport service provider.

Links Linked to all legislation compliance requirements

AARTO

Road Transportation Act

Health and Safety Act

National Land Transport Act.

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Part B

Strategic Objectives

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STRATEGIC OBJECTIVES The table below sets out the Programme Structure of the Mayibuye Transport Corporation.

Programme Sub-programme

1. Administration 1.1. Office of the CEO

1.2. Office of Strategic Management

1.3. Office of the Chief Financial Management

1.4. Supply Chain Management

1.5. Human Resource Management

2. Engineering Services and Management 2.1. Engineering

3. Operations Services and Management 3.1. Operations

7. Programme 1: Administration

Programme Purpose

The Administration Programme, which is comprised of the Office of the CEO, Office of Strategic Management, Finance, Supply Chain Management and Human Resource Management and undertakes vital administrative and strategic leadership responsibilities.

The Office of the CEO ensures that effective planning and reporting systems are established based on internal management co-operation and communications, and that external partnership networks are developed and managed for the benefit of the Mayibuye Transport Corporation. The Office of Strategic Management provides strategic leadership and management in accordance with legislation, policies and furthermore ensured support to the Office of the CEO, the Board and all programmes within the Corporation.

This programme also ensures the provision of systematic financial management systems designed to co-ordinate the organisation’s budget and resource requirements. Such activities include ensuring compliance with regulatory provisions required to facilitate the funding of the MTC as well as to take appropriate steps to ensure that expenditure occurs within the approved budget and to prevent overspending of the budget. Systematic financial management systems also entail the maintenance of a procurement system that is fair, equitable, transparent and cost-effective; and also ensures that effective and appropriate steps are taken to prevent unauthorised, irregular or fruitless and wasteful expenditure.

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Sub-programmes

Office of the CEO Sets priorities and strategic direction in order to meet the objectives of the Corporation.

Strategic Management Translates policies and priorities into strategies for effective service delivery and to manage, monitor and control performance and to provide strategic direction.

Financial Management Provides an internal enabling function and support service to the other programmes with regard to Financial Management and Information Technology.

Supply Chain Management Provides supply chain management and advisory services for the Corporation.

Human Resources Provides an internal enabling function and support service to the other programmes with regard to Human Resource Management and Development.

7.1. Strategic Objectives

Strategic Objective 1 Provide Strategic direction through effective leadership and good governance.

Objective Statement Develop and implement strategic leadership and good governance practices.

Baseline To give strategic direction and governance leadership to the Corporation.

Justification Effective strategic leadership and governance would assist the Corporation to collectively, drive the business towards fulfilment of the goals and objectives of the Corporation, and greatly improve the ability of the Corporation to provide strategic input for decision making.

Provides enabling processes for the core functions of the Corporation. Strategic support and leadership through integrated planning.

Links This strategic objective supports the goal of providing efficient, effective and service oriented organisation.

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Strategic Objective 2 Develop and implement stakeholder relationship management strategy.

Objective Statement Manage stakeholder relationships to improve the operating position of the Corporation.

Baseline Improved Service delivery to communities.

Justification Public Transport in the Province to the poor is very limited. By strengthening of stakeholder relationships accessibility to economic opportunities for alleviation of poverty may be enhanced.

Links Improved Service delivery to communities.

Strategic Objective 3 Implementation of organisation wide Performance Management System

Objective Statement Establish and implement a comprehensive organisational Performance Management System by 2012.

Baseline MTC performance is managed in line with the National Treasury Framework for Managing Programme Performance Information, through quarterly and annual performance reports.

Justification Effective organisation performance management focuses on results, rather than behaviours and activities and aligns organisational activities and processes to the goals of the organisation. It also cultivates a system-wide, long-term view of the organisation and produces meaningful measurements that are useful in benchmarking, or setting standards for comparison with best practices in other organisations.

Links This strategic objective supports the goal of ensuring an efficient and effective service oriented organisation.

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Strategic Objective 4 Design and implement an effective Business Performance Improvement Strategy.

Objective Statement Develop and continuously implement business processes that are streamlined and effective.

Baseline The current business processes are ineffective and this may impact negatively on delivery. The revised strategy for the Corporation calls for key business processes to be reengineered and improved to allow for greater achievement of the set goals.

Justification This objective will improve the overall performance of the organisation.

Links Improved service delivery to the community.

Strategic Objective 5 Establish and implement an organisation wide Business Excellence Model.

Objective Statement To enable the Corporation to examine its business practices using an internationally recognised framework.

Baseline There is currently no baseline in the Corporation for measuring Excellence.

Justification The implementation of a model of service excellence is important because it is an approach to continuous improvement and has the potential to increase the rate of progress.

Links This objective supports the goal of improving the effectiveness and efficiency of the organisation.

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Strategic Objective 6 Maintain reliable and sustainable Financial Management practices.

Objective Statement To implement measures and controls for effective financial management within the Corporation.

Baseline The Corporation received qualified audit opinions for the 2009/10 and 2010/11 financial years. Internal controls and risk management will be improved to ensure an improved audit opinion for 2011/12.

Justification Effective management of the Corporation’s revenue, expenditure, assets and liabilities.

Links This strategic objective supports the goal of ensuring an efficient and effective organisation.

Strategic Objective 7 Provide a reliable and integrated ICT platform.

Objective Statement Develop and continuously implement an integrated ICT platform that is aligned to the core business of the Corporation.

Baseline The current Master Systems plan (MSP) is outdated and is up for review. The new MSP for the Corporation calls for strategic integration that seeks to address the achievement of the set goals.

Justification The review of the MSP is important to determine both current and future organisational requirements.

Links This strategic objective supports the goal of an effective and efficient organisation.

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Strategic Objective 8 Establish a world class and compliant Procurement Management System.

Objective Statement Develop and continuously implement a Supply Chain Management System that is compliant with Treasury Regulations, PFMA and World Class Standards.

Baseline Current SCM practices in the organisation are not standardised and division of work not clearly mapped. Members of staff still hold on to status quo by continuing to engage in purchasing which mostly leads to irregular SCM practices.

Justification The implementation of world class procurement practices will ensure that the Corporation complies with the requirements of the Treasury Regulations and PFMA.


Strategic Objective 9 Implement an individual Performance Management and Development System (PMDS).

Objective Statement Implement an effective and efficient individual performance management and development system by 2012.

Baseline The implementation of a performance management system at all levels in the Corporation that is aligned to the goals and objectives in strategic plan is new. Managers and staff have been trained on the approved PMDS.

Justification An effective performance management and development system provides a framework to value our staff, provides a working environment that acknowledges their contribution and builds capacity to ensure organisational effectiveness. The effective and efficient implementation of the PMDS is therefore a crucial part of improving overall organisational performance.


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Strategic Objective 10 Develop and implement an Integrated Human Resource Plan.

Objective Statement Develop and continuously implement an integrated HR plan that is aligned to the core business of the Corporation by 2012/13.

Baseline There is currently no Human Resource Plan that is aligned to the strategic plan and organisational structure in place. The new and updated structure as well as strategy calls for the integration of the Corporation’s human resource needs for the achievement of the set goals.

Justification The development of an integrated human resource plan is important to determine both current and future organisational requirements for both employees and contingent personnel in terms of their skills/technical abilities, competencies, flexibility etc. The analysis requires consideration of the internal and external factors that can have an effect on the resourcing, development, motivation and retention of employees.


Strategic Objective 11 Implement an effective and efficient inspectorate and safe operating environment.

Objective Statement Continuously promote a sustainable operation and secure working environment.

Baseline There is no structured security solution in the Corporation.

Justification The reinforcement of an efficient inspectorate unit and sustainable security services will enhance the integrity of the Corporation.


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7.2. Resource considerations

7.2.1. Reconciling performance targets with budget and MTEF.

7.3. Risk management

A breakdown of the key risks for the programme, including mitigating factors, is provided below:

Political Change Risk

Risk Definition: Changes in political administration at provincial level may result in a change or shift of a policy and this may affect the stability and sustainability of the Corporation.

Current Control Measure: The existence of a good relationship between the MEC, the accounting authority, the legislature and other stakeholders contributes to political stability in the Corporation.

Risk Management Strategy: Allow risk, but monitor the risk by ensuring that detective controls are adequate and effective.

Actions to Improve Risk: The current control measures provide an adequate response in so far as the Corporations’ ability to mitigate this risk is concerned.

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Communication Risk

Risk Definition: Lack of clear and comprehensive communication up, down, and laterally within the Corporation and may result in misunderstanding regarding management’s expectations and untimely identification of performance shortfalls.

Current Control Measure: A communication protocol will be developed.

Risk Management Strategy: Manage the risk by ensuring that detective and preventive controls are adequately monitored.

Actions to Improve Risk: Structured inter-functional engagements will be established and strengthened in order to improve co-ordination between functions and programmes.

Information Technology

Risk Definition: Lack of integration of systems may result in inappropriate decisions.

Current Control Measure: System to improve and integrate the Corporation ICT is currently under review.


Actions to Improve Risk: An undertaking is also being put in place to ensure that Information technology is coordinated by the ICT unit.

Human Resources Risk

Risk Definition Inability to effectively attract and retain the required human resources to sustain and achieve the Corporation’s service delivery mandate.

Current Control Measure: The HR plan is being developed to address issues highlighted in management meetings. This goes towards making the Corporation an employer of choice.

Risk Management Strategy: Allow risk, but monitor the risk by ensuring that detective controls are adequate and effective.

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Actions to Improve Risk: The current recruitment and retention policy will be reviewed.

Cash Flow Risk

Risk Definition Inability to settle third party and salary payments

Current Control Measure: Budget support and guidance is provided. A review of variance explanations is done. Cash flow forecasting performed.

Risk Management Strategy: Monthly cash flow reporting

Actions to Improve Risk: Improve revenue collection and implement cost control measures

Physical Security Risk

Risk Definition Inadequate physical security of assets and facilities may allow unauthorised access thereby increasing the risk of theft, vandalism and damage to Corporations property.

Current Control Measure: Security contract management should be enhanced.

Risk Management Strategy: Prioritise risk by ensuring that contract management receives better attention and that risk is minimised.

Actions to Improve Risk: Improve internal security capacity, and ensure better contract management of external security.

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8. Programme 2: Engineering

Programme Purpose

The purpose of the Engineering Programme is to ensure the efficient and effective provision of public transport services through a safe and reliable fleet at all depots of the MTC.

The Programme is responsible for all the corporations’ fleet related activities, the management of inventory as well as facilities and infrastructure management

Sub-programmes

There are no sub programmes in this Programme.


Strategic Objective 1 Enhance vehicle availability.

Objective Statement Ensure the availability of the required number of ancillary vehicles and buses.

Baseline The Corporation was operating 54 busses and 27 ancillary vehicles during the past financial year. The objective will be to achieve the target of 77 busses and 31 ancillary vehicles by 2012.

Justification This will enable the Corporation to achieve the annual target of transporting 3 million passengers.

Links This objective will contribute to the goal of rendering a reliable service.

Strategic Objective 2 Implement fleet maintenance and refurbishment program.

Objective Statement Ensure the effective and efficient maintenance and refurbishment of buses.

Baseline Fleet maintenance is an ongoing operating activity. However, the refurbishment is the current strategy of dealing with ageing fleet in the absence of full implementation of the recapitalisation programme.

Justification This provides for the enabling of services that are reliable and safe which in turn will improve the corporate image of the Corporation.

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Links This objective will contribute to the goal of rendering a safe and reliable service

Strategic Objective 3 Enhance passenger safety.

Objective Statement Ensure the commuters are transported safely in a safe travelling environment at all times.

Baseline No major accidents have reported during the period under review.

Justification This objective will contribute towards improved passenger safety in the Province.

Links This objective will contribute to the goal of rendering a safe and reliable service.

Strategic Objective 4 Ensure adequate and conducive infrastructure for productive operations.

Objective Statement Provide for a conducive office and maintenance infrastructure in all depots to enhance the operational productivity of the Corporation.

Baseline A condition assessment was commissioned in 2006. The assessment highlighted all areas of depot and office upgrading which included the Alice depot which requires urgent attention and the lack of office space in Head Office and Zwelitsha.

Justification This objective will improve the infrastructural backlog.

Links This objective will contribute to the goal of rendering a safe and reliable service through the provision of adequate maintenance infrastructure.

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Human Risk

Risk Definition: There is a general shortage of critical skills in the programme especially artisans in the diesel mechanical area.

Current Control Measure: The Corporation should strive to increase its intake of apprentices.

Risk Management Strategy: Manage the risk by ensuring that there is a gradual increase in the apprentices over the Medium Term period.

Actions to Improve Risk: Corporation to tap into the Provincial Skills Development Forum.

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Inability to recapitalise fleet risk

Risk Definition: The fleet of the MTC is ageing with some busses exceeding the 15 year life span.

Current Control Measure: Improve refurbishment and maintenance programme.

Risk Management Strategy: Monitor the risk by ensuring that detective controls are adequate and effective.

Actions to Improve Risk: Improve refurbishment and maintenance programme on identified buses.

Facilities and Infrastructure risk

Risk Definition: Some of the facilities within the Corporation like Alice Depot are currently in a dilapidated state. Workshop equipment to be upgraded.

Current Control Measure: Adherence to the infrastructure improvement plan.

Risk Management Strategy: Prioritise risk by ensuring that it receives the highest level of attention and removing the activities that gives rise to the risk.

Actions to Improve Risk: Adherence to and implementation of the infrastructure improvement plan.

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9. Programme 3: Operations

Programme Purpose

The purpose of the Operations Programme is to ensure the efficient and effective management all the operational activities of the MTC.

The Programme is responsible for coordination of bus services on all routes, the enhancing of revenue streams and the coordination of capital fund expenditure.

There are no sub programmes in this Programme.


Strategic Objective 1 Improve driver performance.

Objective Statement To ensure that all drivers meet world class standards in terms of driver performance and capabilities.

Baseline The current scores of driver performance have still not reached the desired target of 95%.

Justification This objective contributes to manage and minimise maintenance costs as well as the rate of the occurrence of accidents.

Links This objective contributes to the goal of institutionalising bus operations best practices.

Strategic Objective 2 Increase ridership.

Objective Statement To ensure that the number of passengers accessing bus services increases.

Baseline The Corporation currently transports 2 million passengers in our areas of operation and would strive to reach the target of conveying a total of 3 million as per the Provincial Department of Transport target.

Justification This objective contributes to increasing mobility in all MTC routes by providing people with access to places of employment, schools, clinics and other core services that enhances the quality of life.

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Strategic Objective 3 Maximise Revenue.

Objective Statement To increase the Corporations own revenue to cover variable expenses.

Baseline Not all social routes are operated. Private hire opportunities are not fully exploited.

Justification This objective contributes towards enhancing own revenue generating capability.




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Human Resource risk

Risk Definition: High and rapid driver turnover rate.

Current Control Measure: There is currently an ongoing education and awareness programme operative in the Corporation.


Actions to Improve Risk: Implement in-house training and development programmes for new and existing drivers.

Ageing Fleet Risk

Risk Definition: High maintenance cost and unreliable service.

Current Control Measure: Scheduled maintenance of busses to be adhered to by Engineering support.


Actions to Improve Risk: Improvement of driver behaviour through defensive driving training programmes.

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Loss of market share

Risk Definition: Potential of market share loss as a result of ageing fleet and unreliable service.

Current Control Measure: Monitor illegal operators in our roots and adhere to operating schedules.


Actions to Improve Risk: Conducting customer satisfaction surveys and establishment of community forums in all MTC routes.

Completeness of Revenue risk (Loss of Revenue)

Risk Definition: Loss of revenue due to theft and collusion between bus drivers and inspectors as well as drivers and cashiers.

Current Control Measure: Regular surprise checks by designated members of management.


Actions to Improve Risk: Reconciliation reports generated to detect and manage discrepancies in revenue.

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LINKS TO OTHER PLANS

Executive Summary

Narrative Summary

Project Goal To recapitalize the bus fleet and depot facilities of Mayibuye Transport Corporation.

Impact

An upgraded bus fleet and maintenance facilities will secure sustainability of and enhance the quality and reliability of the Corporation’s bus passenger transport services.

Project Purpose

To prepare the Corporation for restructuring into an independent, financially ring-fenced entity in preparation in the implementation but not limited to Buffalo City Municipality’s Public Transport Plan.

Outcomes Safe, reliable and affordable public transport on identified routes in Buffalo City and relevant rural areas, an empowered bus company and improved maintenance facilities.

Outputs Improved quality bus passenger transport services.

Performance Indicators Passengers being transported on an improved bus fleet in a safe, reliable and affordable manner.

Electronic monitoring of contracted buses.

Restructured public transport service provider.

Key Activities/ Inputs Provide funding for the upgrading of depots and monitor that the work is done.

Provide funding for recapitalizing the bus fleet, depot infrastructure and monitor that it is done.

Restructure the Corporation to become an independent, financially ring-fenced entity.

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Project Profile

Background

At present, MTC is funded through a grant-in-aid from the Department of Roads & Transport. The Department had been unable to provide the Corporation with an adequate capital grant. At present the Corporation is operating 69 buses of which 48 are older than 12 years. We are currently incurring high maintenance and fuel costs as a result of the age of MTC’s Fleet. In order to maintain these vehicles as required, it is necessary to upgrade the four (4) depots that MTC is operating from i.e. Reeston, which incorporates the head office, Zwelitsha, Queenstown and Alice. These depots have become neglected as a result of financial constraints in the funding from the Department over the last 10 years. Due to the lack of proper facilities, the maintenance of buses has not been as thorough as it could have been. Half of ancillary vehicle fleet has long exceeded its useful life putting more strain on the operating budget. In view of the above, it is clear that the Corporation will require a major capital injection in order to restructure it into an independent, financially ring-fenced entity that will be able to compete in the open market for public transport contracts on a level playing field. It will allow MTC to enter into relationships with other service providers which would enhance its chances of being granted a Negotiated Contract with the national Department of Transport. Project Goal

The project goal is to provide safe, reliable and affordable passenger transport services within the Buffalo City Municipality area in terms of their Public Transport Plan (PTP) and in the rural areas served by Mayibuye Transport Corporation. This will improve the accessibility and mobility of passengers, whereby their economic activities will be enhanced. This aspect is of particular importance within the impoverished rural areas around Buffalo City, Alice and Queenstown. The quality and reliability of the services will also be improved with newer and properly maintained buses. Impact

The primary impact of such a recapitalization programme will improve quality public transport services and will enhance co-operative governance as the department will work closely with the Buffalo City Municipality with the implementation of their Public Transport Plan. The improvement of the services within the rural areas will provide increased mobility and access to economic opportunities, centres of learning, the legal profession, medical facilities and various trips for social purposes like shopping and access to pension pay-out points. The project will alleviate poverty by providing accessibility to economic opportunities through increased mobility by reliable, safe and affordable public transport.

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Activity and resource schedules

Activity schedule

ACTIVITY NUMBER OF UNITS

DATE OF IMPLEMENTATION

PERIOD OF CONTRACT

BUDGET REQUIRED

Upgrading of 4 depots

N/A 1 October 2012 1 October 2012 – 31 March 2014

R17,500,000

Purchasing of buses

48 1 October 2012 – 31 March 2014

N/A R76,800,000

Purchasing of disability friendly buses

5 1 October 2012 – 31 March 2014

N/A R10,500,000

Acquisition of Semi-lux buses

5 1 April 2013 1 April 2013 – 31 March 2014

R13,500,000

Purchasing of operating equipment

58 1 October 2012 1 October 2012 – 31 March 2014

R2,320,000

Purchasing of pool vehicles

20 1 October 2012 1 October 2012 – 31 March 2014

R4,000,000

TOTAL R124,620,000

mtc strategic plan 2012 to 2016

Documents