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Department of Transport

Department of Transport. Select Committee on Finance and Appropriations FFC recommendations on the Division of Revenue 2010/2011 5 August 2009. 1. Contents. FFC Submission on the 2010/2011 Division of Revenue Bill: Public Infrastructure investment

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Department of Transport

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  1. Department of Transport Select Committee on Finance and Appropriations FFC recommendations on the Division of Revenue 2010/2011 5 August 2009 1

  2. Contents • FFC Submission on the 2010/2011 Division of Revenue Bill: • Public Infrastructure investment • Management and financing of road infrastructure • Other recommendations • Additional information on Transport Grants: • Gautrain Rapid Rail Link • Public Transport Infrastructure and Systems • Public Transport Operations • Sani Pass (Roads) • Overload Control • Rural Transport Services and Infrastructure Schedule 5 6 4 5 5 6 2

  3. FFC Submission on the 2010/2011 Division of Revenue Bill • Public Infrastructure investment • Management and financing of road infrastructure 3

  4. Public Infrastructure investment 4

  5. Public Infrastructure investment(continued) 5

  6. Management and financing of road infrastructure Figure 15: condition of surfaced roads in South Africa , 1998 - 2008 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 Very poor Poor Fair Good Very good 0% 20% 40% 60% 80% 100% 6

  7. Repair Cost = R 0,1mill / km Repair Cost = R 0,6mill / km (Ratio 1:6) Good Fair Repair Cost = R 1,8mill / km Ratio 1:18 Poor 3-5 Years Very Poor 5-8 Years Road Infrastructure (continued) Cost of maintenance delay 7

  8. R 20.00 Poor Condition Very Poor Condition Good Condition Articulated Truck R 18.00 More than 100 % Increase in Road User Costs R 16.00 R 14.00 R 12.00 R 10.00 Vehicle Operating Costs (R/km) R 8.00 R 6.00 Passenger Car R 4.00 R 2.00 R 0.00 0 2 4 6 8 10 12 14 16 18 20 Good Poor International Roughness Index (m/km) Road Infrastructure (continued) Impact of maintenance delay on road user cost (Over 90% of total transportation costs is road user costs) 8

  9. Road Infrastructure (continued) • In the following provinces, more than 30% of roads are in poor to very poor condition: • Eastern Cape (46%, 2000) • Free State (59%, 2007) • Kwa Zulu Natal (46%, 2005) • Mpumalanga (65%, 2004) • Limpopo (60%, 2000) • Northern Cape (47%, 2004) • North West (45%, 2007 9

  10. Road Infrastructure (continued) Road damage 10

  11. Road Infrastructure (continued) Road damage Strand, Western Cape Umdloti, KZN 11

  12. Road Infrastructure (continued) Road damage 12

  13. Management and financing of road infrastructure (cont.) 13

  14. Management and financing of road infrastructure (cont.) The quality of road infrastructure is positively linked to capacity, e.g. SANRAL capacity is in line with the quality of roads under its control (national roads) Dedicated funding is positively linked to quality of roads, however, not linearly: There is under spending in some Provinces and Municipalities on roads although there is a crisis with funding for roads 14

  15. Management and financing of road infrastructure (cont.) 15

  16. Management and financing of road infrastructure (cont.) Figure A1: Roads Coordinating Body 16

  17. Management and financing of road infrastructure (cont.) 17

  18. Road Infrastructure (continued) 18

  19. Road Infrastructure (continued) Road accidents South Africa has one of the highest road accident fatality rates in the world 19

  20. Road Infrastructure (continued) Road accidents • Some road accidents are caused by the state of our roads • There is also a growing trend of growing costs associated with litigation where courts have ruled against the State for negligence in maintaining road infrastructure 20

  21. Road Infrastructure (continued) • Fiscal injections alone is not a panacea to road conditions. Given this, certain policy interventions are necessary • There is a need for policy interventions such as: • Axle weight limits • Targeted rail investments and interventions to move non time sensitive goods and commodities to rail • Law enforcement - Trucks use the secondary road network to avoid weighbridges 21

  22. DoT recommendations 22

  23. Thank you 23

  24. Gautrain Rapid Rail Link Allocations from 2006/07 to 2010/11 24

  25. Gautrain Rapid Rail Link (continued) • Annual allocations are paid in terms of a payment schedule • Key and General Milestones have to be achieved before payment • The Provincial Support Team then checks whether Milestones have indeed been achieved • The Milestones are certified by the Independent Certifier (IC) • The certified claim is submitted by the IC to the Gauteng Management Agency to check claims for compliance • The GMA then sends the claim to the Department with a request for payment from the DORA Grant • The Department satisfies itself that there has been compliance with the DORA requirements and the conditions contained in the DORA Framework • Currently, indications are that Phase 1 of the Project, i.e. the section between OR Tambo International Airport and Sandton will be completed in 2010, while the rest of the Project will be completed in September 2011. 25

  26. Public Transport Infrastructure and systems • The Public Transport Infrastructure and Systems (PTIS) grant is aimed at improving transport infrastructure & systems for 2010 and beyond; • Total PTIS grant from 2005/06 to 2011/12 = R18,767bn • Total Host Cities PTIS grant = R10.979bn which is 80% of PTIS Grant • Ongoing Monitoring and Evaluation of progress is in place, with monthly reporting • Five Host Cities currently receiving technical assistance (Polokwane, Rustenburg, Mangaung, Mbombela and Tshwane 26

  27. Public Transport Infrastructure and systems (continued) 27

  28. Public Transport Infrastructure and systems (continued) 28

  29. Public Transport Operations • The grant replaced the former bus subsidies: • Subsidy levels have been insufficient since 2005/06 to halt the declining levels of service, escalation in costs and the growth in demand • In order to improve operational and financial efficiency a more focused approach to determining service priorities will need to be developed • Implementation Plan: • Conditional Grant to Provinces introduced • Phased implementation in co-operation with Provinces • Negotiated performance based contracts for route operations • Formalisation of unscheduled Interim Contract services • Define operating areas that will not be served • Implementation of supporting infrastructure • Continued enforcement and monitoring of all contracted Public Transport Operations 29

  30. Operators will have to accept: Bus Subsidy Funding - Conditional Grant in DORA Critical conditions: Interim contracts to be converted to negotiated (kilometre based) contracts by September 2009 Alignment with IRPTN • Change in compensation method – based on fixed kilometre • KPI’s • New national monitoring model • Fare levels as set by the authority • Fleet replacements to be based on requirements of the contracting authority • Contracting authority may purchase existing assets (eg depots) and contract compliant vehicles Contracting authorities will have to: • Finalise integrated road based networks • Develop KPI’s • Identify key role-players who are to be part of the operating entity • Engage with all parties to establish operating entity • Implement depots and vehicles if so decided • Recruit/develop admin capacity to manage the contracts Public Transport Operations (continued) Interventions to achieve change 2009/10 onwards: 30

  31. Public Transport Operations (continued) Intervention conditions:  • Operators that accept will sign a negotiated contract that includes: • KPI’s • Provision that the operator will be provided with an opportunity to be party to a new integrated contract regime for some or all of the services within the contract area  Operators that do not accept will continue on month-to-month basis and their contracts will be terminated as and when required 31

  32. Roads, Overload Control and Rural Transport Note: Sani Pass grant to be replaced by a roads grant from 2010/11 Overload control grant to be allocated for 2011/12 32

  33. Road Grants • The grant was introduced to develop road infrastructure projects that promote regional integration, development and connectivity between neighbouring states • Construction of the Sani Pass: • Phase 1 – Upgrade of P318 Sani Pass (km 0 to 13.6) - completion scheduled for April 2010. • Phase 2 – Upgrade of sections 1 and 2 (km 14 to 25 and 25 to 33): • Environmental Impact Assessment Studies underway with record of decision scheduled for announcement in September 2009 • Engineering designs are underway and are at various stages of completion by the joint venture consultant team • Future road construction projects to be identified for inclusion in the Division of Revenue Act 33

  34. Overload Control Grants • To achieve the objectives of the national overload control strategy, a 3-year grant has been developed in conjunction with National Treasury • Grant funds are currently being used for upgrading the weighbridge infrastructure facilities in Mpumalanga and Limpopo • In Mpumalanga, projects for the upgrade of weighbridge infrastructure were completed in October 2008: • Kinross Traffic Control Centre • Ermelo Traffic Control Centre • In Limpopo, the detailed design, planning and bill of quantities have been compiled, and construction works are set to begin in 2009/10 on: • Rathoke Traffic Control Centre • Mooketsi Traffic Control Centre • Future allocations: 34

  35. Rural Transport Grants • Purpose : • To improve mobility and access in rural municipalities in support of Integrated Development Plans • Reasons for not incorporating in equitable share: • This is a specific purpose grant mainly for the provision of rural transport infrastructure and services. • This grant ensures that district municipalities are giving priority to the following rural transport interventions: • infrastructure construction • maintenance, upgrading and rehabilitation • support rural development and • accelerated and shared growth initiatives in line with government priorities • It is also used as vehicle for stimulating the use of labour intensive methods in large infrastructure programmes / projects to create jobs and develop required skills in terms of the Expanded Public Works Programme 35

  36. Rural Transport Grants(continued) • MTEF Allocations: • R8.9 million 2008/09, • R9.8 million 2009/10 • R10.4 million 2010/11 • R11,1 million 2011/12. • Details of Projects : 2008/09 Allocations: 36

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