Responding to our Strategic Challenges 24 August 2010 Portfolio Committee on Transport committee

1. CROSS-BORDER ROAD TRANSPORT AGENCY Responding to our Strategic Challenges24 August 2010Portfolio Committee on Transport committee

2. Presentation Outline • Staff Turn over • Unrealised Value of the C-BRTA • Turnaround strategy • Resources needed to meet mandate

3. 2006 2007 2008 2009 • KEY EVENTS • Board Induction in November (Insufficient) • Firefighting commences • BM assigned to undertake a Status Quo Analysis • STAFF MOVEMENTS • Current Board appointed in October • KEY EVENTS • Inaugural Strategy Session held in January • Board adopts C-BRTA Strategy Framework 2007-2010 in May • 6 Objectives define this Strategy • No Business/Operational Plan to guide Management • Turn Around Strategy Objective implemented • Minister briefed on progress achieved • STAFF MOVEMENTS • COO joins in February (Not part of the Strategy Session) • CEO leaves in March. • No CEO for the rest of that year. • CFO dismissed later this year. • Interviews for CEO position held • Key Appointments made: • CFO • Law Enforcement • HR • Facilitation • KEY EVENTS • Strategy Session held in April • Incoming CEO part of the Strategy Session (Deliberate move) • Director Induction on Corporate Governance • Operation Clean Audit is mooted. • Organised Labour part of the Strategy Session • CEO’s holds a Strategy Session later this year • STAFF MOVEMENTS • COO resigns • Company Secretary resigns • Key Appointments made: • Company Secretary • CFO • Legal Executive • KEY EVENTS • Management Strategy Session in January • STAFF MOVEMENTS • CEO suspended • CEO resigns • CS’s contract expires • Some Board Members are retired and subsequently reappointed • Key Appointments made: • Strategy Executive • Corporate Affairs Executive • Company Secretary • Caretaker CEO

4. Unrealised Value of the C-BRTA The founding assumption was that the C-BRTA would finance its operations through “selling” cross-border permits and through issuing of “penalties” to those who violate permit conditions. Experience suggests that these funding mechanisms have been inadequate in meeting operational costs and capital funding requirements of this Agency. The costs of providing a satisfactory service far outweigh revenues generated through the provision of the function, esp. in regard to law enforcement. What is clear is that due to its historic untenable financial position, this Agency has never been able to provide for more than the bare minimum in terms of responding to the strategic intent of its founders.

5. Unrealised Value of the C-BRTA (2) In essence, the C-BRTA has not been able to develop the capacity to play a strategic role in driving the agenda of harmonising road transport operations in the SADC region. It has also not been able to take up the role of championing regional integration as contemplated in Agency’s founding address of the 18th August 1998 (by Minister Mac Maharaj). The combination of these factors have had the effect of undermining the legitimacy of this Agency as a strategic resource of the Minister of Transport in addressing and resolving SADC issues. As a consequence of this failure, the C-BRTA’scapacity to lead in its area of operations has been diminished and its image severely tarnished.

6. Turnaround Strategy

7. Key Strategic Thrusts The C-BRTA is called upon to focus on improving safety, security, reliability, quality and speed in the transportation of goods and people across our borders. This Agency is expected to drive processes aimed at the realisation of regional economic integration and the harmonisation of transport systems, policies and approaches across the region The aim of these interventions is the development of a new competitive edge for the region as a whole.

8. Interventions (1) Define the role of the C-BRTA in reducing operational constraints at ‘targeted’ border posts Championing the development of One-Stop Border Posts (OSBP) Actively engage with processes of turning Southern Africa into a regional economic force

9. Interventions (2) Crystallise the role of the C-BRTA in driving regional integration Provide leadership on the harmonisation of transport modelswith the SADC region Obtain agreement on the use of commercial principles in the public sector and identify opportunities within our mandate We need to review the composition of the Board as prescribed in the Act There is a need for strengthening the Agency’s legislative framework in order to protect the internal integrity of the C-BRTA

10. Interventionsin Law Enforcement • To enable the division to fulfil its strategic mandate and to achieve optimal performance: • Increase the visibility of cross-border law enforcement functions by increasing the number of personnel in the law enforcement division to 299 (from 74!) • Develop standard operating procedures aimed at rationalising road transport law enforcement • Strategic location of cross-border law enforcement functions at border posts • Integration of processes with Finance to enable the implementation of an accrual based accounting system; • Establishment of a Law Enforcement Database and an Inspection Database;

11. Interventionsin Law Enforcement (2) • To develop a sustainable funding model for the law enforcement function: • Immediate (current financial year): Secure the R60 million grant to address immediate imperatives in the law enforcement division • Short term (next financial year): Obtain agreement on the need for Govt to subsidise the provision of the law enforcement function • Medium term (over the next 3 years): Increase the number of personnel in the law enforcement division to 299 (from 74!)

12. Strategic Tasks in Regulatory Function • To enable the division to fulfil its strategic mandate and to achieve optimal performance: • Obtain permission to increase tariffs by 25% for 2010/11 • Finalise the development of a Regulatory Model to support the work of the Regulatory Committee in adjudicating on cross-border permit applications • Development of standard minimum requirements for cross-border vehicles • Improve the accessibility of the C-BRTA by providing some of the functions from within the regional offices • Explore and develop the concept of “electronic application” for cross-border permits

13. Strategic Tasksin Regulatory Function (2) • To enable the division to fulfil its strategic mandate and to achieve optimal performance: • Drive the full implementation of the C-BRTA Amendment Act by ensuring the transfer of cross-border functions from the Operator Licence Boards to the C-BRTA • Develop mechanisms for detecting fraudulent permits and improve security features on cross-border permits • Revise the C-BRTA Regulations to transfer the authority for permit revision to the Agency from 2011 onward • Exploring the possibility of expanding the mandate of the C-BRTA in regard to the regulation of long distance or interprovincial transport operations • Engaging the Shareholder on the need for the continued existence of the Operator Licence Boards

14. Facilitation & Industry Development • To drive the harmonisation of road transport and regional integration within SADC: • Obtain agreement in regard to the liberalisation of market access within the SADC region • Obtain consensus on interventions aimed at reducing cross-border operational constraints, including the role of transport in championing the establishment of One-Stop Border Posts • Establish and maintain consultative structures for road transport management with regard to cross-border operations • Develop programmes and toolkits aimed at supporting emerging cross-border operators • To develop and market professional seminars, industry development workshops, information manuals, intelligence on transport needs and opportunities, etc.

15. Facilitation & Industry Development (2) • To facilitate structured engagements between the C-BRTA and its stakeholders: • Convene a Cross-Border Road Transport Indaba to engage all our stakeholders regarding their expectations on our changing role and strategic functions • Champion the development of partnerships between government and transport operators, users and other interest groups through forums such as the International Corridor Working Groups and the Joint Route Committees. • Drive engagements within the SADC region aimed at the review of transport agreements entered into between S.A. and her regional counterparts – towards a SADC multilateral agreement • Develop a Programme of Action for monitoring and evaluating the success of the C-BRTA in engaging with our counterparts and cross-border operators

16. Introducing Research and Advisory To improve the quality of strategic insight in reports produced by the C-BRTA Develop insights on the country’s policy stance in areas of trade facilitation and liberalisation of market access in order to guide the work of the Agency Provide strategic support to the Minister of Transport in his engagements with the SADC counterparts To conduct route utilisation assessments and to develop guidelines for determining need/demand analysis Continuous strategic assessment of the impact of the value-add of the work undertaken by each of the four core functions and the overall strategic positioning of the Agency

17. Introducing Research and Advisory (2) Develop the Agency’s research and technical capabilities to support its strategic tasks Position the Agency as a driver of strategic thinking aimed at developing the region as an economic powerhouse Develop strategic partnershipsand spearhead cross-border transport issues in the region Drive the regional road safety programmeon behalf of the Minister of Transport

18. Operation Clean Audit 2012 • Developing a register of all the Audit qualifications and a work-plan for the systematic resolution of these matters • Carefully monitoring progress in regard to progress achievement in the execution of the work-plan and ensure monthly reporting on progress achieved • Address other non-compliance issues: • Establish a functioning Supply Chain Management unit; • Establish a Risk Management Unit and a risk management framework for the C-BRTA • Introduce proper delegations and other internal control measures, etc. • Make an effort to resolve all audit issues within the current financial year.

19. Operation Clean Audit 2012 (2) Complete the business reengineering process and develop job profiles, segregation of duties and related management control systems using the information derived from this exercise Development of Standard Operating Procedures (SOPs) for law enforcement and regulatory functions Implement performance information and reporting systems Create a conducive working environment with a view to arresting the high turnover at senior management level Allow for the development of administrative systems and operational stability in the Agency

20. The Cross-Border Road Transport System Developing a business case for funding of a new Cross-Border Road Transport Management System (for the SADC region) Explore the possibility of obtaining donor funding for the development of a CBRTMS for SADC

22. Resources needed to meet mandate

23. Funding Imperatives (1) • To strategically reposition the C-BRTA to provide strategic and technical leadership in the SADC region: • Secure support of the Ministry in regard to the emerging strategic tasks of the C-BRTA • Securefundingfor supporting the emerging strategic tasks of the C-BRTA • Explore alternative funding avenues for supporting the work of the C-BRTA, e.g. the World Bank, USAID, DBSA, etc. • Using commercial principles, think creatively about other possible means of generating revenues for the Agency.

24. Funding Imperatives (2) • Immediate funding challenges: • Obtain the Minister’s approval for the 25% revision of permit application tariffs • Obtain agreement on the need for a R200 million cash injection over a 3 year timeframe to enable the C-BRTA to recapitalise itself and to develop secure systems • Secure the right to revise C-BRTA’s permit tariffs

25. I THANK YOU 24th August 2010