1. Department of Transport Select Committee on Finance Public Hearings on Division of Revenue Bill 2008/09 4 March 2008 1

2. Contents of presentation Department of Transport Overview of 2008 Medium Term Expenditure Budget Gautrain Rapid Rail Link Public Transport Infrastructure and Systems Grant 2

3. Overview of 2008 Budget Department of Transport Additional allocations: List of additional allocations Issues highlighted by the Minister of Finance MTEF Overview: Budgets per Programme Breakdown of major budgets Growth in major capital budgets Other budgets and major projects 3

4. Department of Transport Additional allocations 4 Details (R’000)2008/092009/102010/11 PTIS Grants to Local Government002,000,000 SARCC118,559230,307736,096 SARCC – incorporation of Shosholoza Meyl500,000450,000400,000 SANRAL13,01020,028830,367 Taxi recapitalisation200,000150,000100,000 Bus subsidies40,00050,00060,000 Non-personnel inflation adjustment47,96646,50246,830 Compensation of Personnel6,1758,0238,652 Regulating and training of the taxi industry6,000 Railway Safety Regulator5,000 Ports Regulator3,0005,000 Performance based quality contract model for buses 5,000 0 Performance management system2,0001,000 Efficiency saving-14,546-19,444-22,838 Total932,164957,4164,176,107

5. Department of Transport Issues highlighted by the Minister of Finance 5  PPP arrangements in funding large infrastructure projects, particularly in passenger rail  Institutional arrangements and concurrent functions in transport, specifically the roles and responsibilities in public transport  Progress on the Bus Rapid Transit system and PTIS spending and delivery in general  RISFSA road quality assessments, reclassification and criteria for prioritisation  Development of the institutional and regulatory framework to guide the implementation of the National Freight Logistics Strategy.  Alignment of the subsidised bus routes with the Public Transport Strategy and Rural Transport Strategy  Outstanding business plan for Shosholoza Meyl as a ring fenced business within the SARCC.  Finalisation of the National Land Transport Bill.

6. Department of Transport Budgets per Programme Table 33.1: Transport R thousand 2007/082008/092009/102010/11 Adjusted Appropri- ation Medium-term estimates MTEF Baseline 1. Administration144,408170,537179,230182,449 2. Transport Policy and Economic Regulation 33,34437,73340,24340,488 3. Transport Regulation and Accident and Incident Investigation 231,374255,863272,466285,766 4. Integrated Planning and Inter- sphere Co-ordination 5,382,0347,769,4538,735,25211,348,334 5. Transport Logistics and Corridor Development 18,63722,22521,32221,876 6. Public Transport10,559,22512,073,46312,985,88411,780,249 7. Public Entity Oversight and Border Operations and Control 174,910179,254177,57771,197 Total16,543,93220,508,52822,411,97423,730,359 6

7. Department of Transport Breakdown of major budgets Details R’0002007/082008/092009/102010/11 SARCC3,955,1974,871,2766,398,1017,273,958 SARCC – Shosholoza Meyl500,000450,000400,000 Bus subsidies2,835,9972,829,5963,048,8153,238,744 SANRAL3,391,9294,072,9745,524,9396,665,573 Taxi692,460565,567541,184514,304 PTIS (2010 Soccer World Cup)1,780,0003,480,0002,975,0004,464,500 Gautrain 3,029,4113,265,9932,507,211317,526 Other 858,938923,122966,724855,754 Total16,543,93220,508,52822,411,97423,730,359 % Growth23.83%23.96%9.28%5.88% 7

8. Department of Transport Breakdown of major budgets (Continued) Allocations for rail operations and capital remain the largest single budget item. 2008/09 5,371,276 2,829,596 4,072,974 3,480,000 3,265,993 The National contribution to the Gautrain Rapid Rail Link was introduced in 2006/07 at R3,241Bn, and declines to R317,5m in 2010/11 Allocations for infrastructure from the Public Transport Infrastructure and Systems Grant was introduced in 2005/06 at R241,7m, growing to R700m in 2006/07 and R1,8Bn in 2007/08. The budget for road infrastructure overtakes that of bus subsidies from 2007/08 onwards. R’000 8 Gautrain PTIS Grant

9. Department of Transport Growth in major capital budgets 9 (R’000) Gautrain PTIS Grant

10. Department of Transport Breakdown of other budgets and major projects Details R’0002008/092009/102010/11 Compensation of Employees196,176207,398203,772 P1: October Month & World Remembrance Day15,00015,75016,500 P1: VPN, ECM, Recruitment9,0009,4509,900 P1: Property management14,24215,66617,233 P1: Other54,42756,16758,716 P2: Transport Policy, Research and Economic Regulation15,43116,61217,194 P3: eNaTIS67,53169,37673,309 P3: Special Investigating Unit20,57922,35323,620 P3: Rail Economic Regulator8,2508,9629,470 P3: ICAO and IMO offices7,1407,7558,194 P3: Watch Keeping services26,27128,53630,152 P3: Oil Pollution prevention services47,29651,37454,286 P3: Maritime Security Coordination Centre6,3566,9047,295 P3: Commissioner of Civil Aviation4,5964,9925,275 P3: Maritime Rescue Coordination Centre (Transfer payment)5,0235,2735,589 P3: International membership fees4,8715,1145,420 P3: Road Transport Regulation projects20,15821,89523,137 P3: Other Regulation projects and Administration5,5705,9656,292 10

11. Department of Transport Breakdown of other budgets and major projects (Continued) Details R’0002008/092009/102010/11 P4: Transport planning and infrastructure projects13,21213,63313,922 P4: Rural transport and NMT projects45,36149,42152,222 P4: Road infrastructure planning61,90765,32667,674 P4: Sani Pass and Overload Control38,79642,56245,116 P4: 2010 SWC Monitoring and Evaluation20,00025,0000 P4: Other projects and Administration8,4659,1969,697 P5: Transport Logistics and Corridor Development11,4349,3629,866 P6: Bus contract model5,000 0 P6: Other projects and Administration19,15817,85718,319 P7: Transfers to RTMC103,88899,1920 P7: Transfers to RSR33,36134,52330,994 P7: Transfers to Ports Economic Regulator11,38213,6998,921 P7: Transfers to SAMSA8,5358,9599,497 P7: Transfers to SACAA7,4647,8368,306 P7: Performance Management System2,0001,000 P7: Other projects and Administration5,2424,6164,866 Total923,122966,724855,754 11

12. Gautrain Rapid Rail Link Department of Transport 12 Gautrain expenditure and budgets Introduction Accountability Achievements Quarterly reports Challenges

13. Department of Transport Gautrain expenditure and budgets Total budget R12,36 bn over 5 years 13 Actual --------Medium term budgets-------- R Million 2008/09

14. Department of Transport Introduction 14 Actual construction work has begun:  Main activities are concentrated at Johannesburg Park station, Rosebank station, Sandton station, Mushroom Farm park, Rhodesfield station, Marlboro Portal Depot located south of Midrand, and the sections between Sandton and OR Tambo International Airport.  Although the delivery programme shows some delays resulting from design developments, land handovers, and approvals of project designs by third parties, the parties are confident that these delays can be absorbed.  National government’s contribution to the Gautrain Rapid Rail Link conditional grant amounts to R12.4 billion between 2006/07 and the end of the construction phase in 2010/11. Provincial actual payments totaled 91 per cent of the approved payment schedule in December 2007, and the National payments amounted to 94 per cent (100% in January 2008).

15. Department of Transport Accountability  Business Plan concluded between the Department and the Gauteng Provincial Department of Transport, Roads and Works  Approval of key milestone related payment schedule  External certifier in place since 2006  Quarterly reports received on time  Dedicated expert appointed responsible for administering the Conditional Grant and implementation of the Gautrain Integration Plan  Gautrain Management Agency Act and Board appointed 15

16. Department of Transport Accountability (continued) Alignment of Framework to 2005/06 Cabinet resolution on integration:  Establish a Gautrain Public Transport Integration Committee comprising of the three metros (Tshwane, Johannesburg and Ekurhuleni), DOT and the SARCC - primary task development of an Gautrain Integration Implementation Plan i.e:  Rail Plan corridor alignment  New commuter rail links including station precinct developments  A single architecture integrated ticket system  Operating Licence Strategies  Operating contracts with Metropolitan bus services, Subsidised Bus Services, Metrorail and Recapitalised Taxi Operators. 16

17. Department of Transport Achievements 17

18. Department of Transport Achievements (continued) 18

19. Department of Transport Fifth Quarterly Report Progress  Land:  1057 of 1236 properties secured  Utilities:  Rate of monthly expenditure improved however, still lower than anticipated – currently being investigated  Design:  Concessionaire has fallen short of planned design submission targets 19

20. Department of Transport Fifth Quarterly Report Progress (continued)  Construction  project 38% completed at the end of November 2007, however planned percentage was set at 46%  Project 2.5 – 4 months behind schedule since effective date of September 2006  Parties are of opinion that delays can be mitigated  Financial  Private sector funding from lenders used Feb – November 2007  For the balance of the year all DORA funding will be used 20

21. Department of Transport Challenges  Requested Business Plan amendments, payment schedule and forecast for 2007/08 and updated milestones from Gautrans – no response from Gauteng Provincial Department of Transport, Roads and Works  Annual forecast of payment in terms of a Milestone completion schedule inaccurate and places unnecessary cash flow burden on Department’s budget – correspondence is not responded to by the Gauteng Provincial Department of Transport, Roads and Works 21

22. Department of Transport Introduction Key Requirements for PTIS Funding PTIS Projects PTIS expenditure and budgets Allocations per City / Entity PTIS Expenditure Report at 31 December 2007 22 Public Transport Infrastructure and Systems (PTIS)

23. Department of Transport Introduction  Established in March 2005 to improve public transport infrastructure and systems in SA  The right for SA to host the 2010 FIFA World Cup™ priority was given to World Cup related projects.  A Transport Action Plan for 2010 has been developed to guide preparations for the event  Priority Statements developed by host cities, other municipalities and provinces  Allocations are approved based on recommended project proposals  Monitoring and management contract for PTIF in place 23

24. Department of Transport Introduction (continued) Integrated public transport networks have been introduced in major cities, with cities developing operational plans to address:  demand analysis  modeling of patronage  route and corridor structure and selection of feeder routes  location of stations, transfer stations, parking facilities, terminals and depots  system design and sizing  intersection design and signal phasing; and traffic impacts 24

25. Department of Transport Introduction (continued)  The majority of cities have chosen a bus rapid transit system, proven in developing countries worldwide to be the most cost effective and flexible mass mover  Johannesburg, Tshwane, Cape Town and Nelson Mandela Bay have made significant progress in design approvals  Stakeholder management will be key to initiating discussions with current operators regarding their role in integrated service provision 25

26. Department of Transport Key Requirements for PTIS Funding Projects should:  prioritise public transport,  satisfy both long term mobility (legacy) and event specific mobility requirements,  continuity from planning to execution,  be executed in accordance govt. procurement and related requirements,  based on local IDPs and ITPs, addressing community access and mobility needs, and  be practical and implementable ahead of 2010. 26

27. Department of Transport PTIS Projects  Request areas predominantly road and rail public transport and non-motorised transport  Project types include planning, physical infrastructure and systems  Planning includes transport planning, detailed project plans and designs  Infrastructure and systems projects include: 27  Public transport road infrastructure  Public transport interchange facilities  Rail upgrades  Inter-modal facilities  HOV lanes  BRT systems  ITS infrastructure and systems  NMT infrastructure  Inner-city mobility systems  Call centre systems  Public transport vehicles  Airport- City links

28. Department of Transport PTIS expenditure and budgets Total budget R13,7 bn over 6 years 28 Actual Estimate----Medium term budgets----- R Million 2008/09

29. Department of Transport Allocations per City / Entity Actual EstimateBudget Totals R'0002005/062006/072007/082008/092009/102010/11Period Johannesburg106,900184,000329,000661,171600,214950,4712,831,756 Tshwane13,15011,000105,000510,169565,245864,1802,068,744 Ethekwini22,60011,760125,000624,949376,926529,6991,690,934 Cape Town8,000120,000230,000424,843291,912527,2701,602,025 SARCC179,000476,000210,000450,0001,315,000 Nelson Mandela53,65068,600132,000305,484147,079323,0581,029,871 Mangaung23,60029,23025,000242,61782,168183,551586,166 Inter-city buses500,000 SANRAL130,000100,000200,000430,000 Mbombela1,81083055,000170,54460,833135,893424,910 Polokwane4,00010,40050,000143,20766,146147,161420,914 Non Host Cities4,00082,20090,00018,35966,695152,880414,134 Rustenburg4,000033,00068,65767,782150,337323,776 CBRTA1,000 Total241,710698,0201,780,0003,480,0002,975,0004,464,50013,639,230 29

30. Department of Transport Allocations per City / Entity (continued) 30 Total R13,64 Billion from 2005/06 to 2010/11

31. Department of Transport PTIS Expenditure Report at 31 December 2007 31 Host City R Million 2006/072007/08 Trans- ferred % Spent QTR 1 Trans- ferred QTR 2 Trans- ferred Spent QTR 1 and 2 % Spent Johannesburg18438.0%82 5633.9% Cape Town12042.0%58 1613.9% Mangaung2958.0%13 728.8% Tshwane110.6%26 00.8% Mbombela1100.0%14 39.9% Nelson Mandela6964.0%33 1522.7% Polokwane1092.0%10 211.0% Ethekwini1264.0%31 2032.1% Rustenburg4419.5%

32. Department of Transport  Expenditure not satisfactory  Most Host Cities used own funds for projects  Most of the projects were at planning phase while others had to re-align their plans/ design to the National Public Transport Strategy and that resulted in slow take off. However construction is underway in almost all Host Cities  The Department will endeavour to assist municipalities with technical capacity. Priority will be given to the “FIFA guarantees”  Measures to deal with under expenditure include: Dispatching teams of technical experts to assist with fast tracking implementation 32 PTIS Expenditure Report at 31 December 2007 (continued)

33. Department of Transport 33 PTIS Expenditure Report at 31 December 2007 (continued)  Measures to deal with under expenditure include: (continued): Teams were deployed to assist with the design of Integrated Public Transport Networks and/or Bus Rapid Transport systems, whichever apply This work has been concluded in almost all the cities and it should accelerate the implementation of projects

34. Department of Transport Thank you 34