Tag Archive | ministry of transport

Operation Phakisa to develop merchant shipping

Operation Phakisa: SA needs own merchant ships…

mapafrica&saCurrently, the cabinet is focused on Operation Phakisa, or South Africa’s exploitation of its oceanic resources, bearing in mind it has 6,000kms of coastline. In its budget vote presentation to Parliament, the department of transport (DoT) has indicated that it has every intention of not only building a South African maritime fleet but encouraging “Panama type” registration for vessels around the world.

Dramatically announcing that South Africa had to become “a maritime nation”, minister of transport, Dipuo Peters, said that a maritime delivery unit had been established within DoT to support the NDP’s key growth strategy for the development of the oceanic economy, launched earlier by the President in his SONA address as Operation Phakisa.

Focus on shipping world

MSC-Beatrice-PanamaCurrently she said DoT had introduced a new shipping tax regime for international shipping which exempts qualifying ship owners from paying income tax; capital gains tax; dividend tax; and withholding tax on interest for a number of years.

Minister Peters said, “We believe this tax exemption will undoubtedly encourage the South African ship register to be sought-after internationally and we are further engaging national treasury to consider a special tax regime for coastal and regional shipping.”

In June 2012, a department of DoT led by Tsietsi Mokhele of the SA Maritime Safety Authority, called for a policy framework to enable the establishment of both a coastal and a blue-water merchant fleet, following a meeting with the then NA Speaker, Max Sisulu, who had called for more information on where South Africa stood with regard to maritime affairs internationally.

All foreign vessels

Mokhele told Parliament’s transport portfolio committee that about 98 percent of South Africa’s total import and export trade was currently carried by foreign ships and currently South Africa does not have a single own-flagged commercial vessel on its shipping register.

He said at the time, “South Africa has no ships on its register and paid in 2007 about R37bn in maritimeSAFMARINE_CHAMBAL transport services to foreign owners and operators and had approximately 12,000 vessels visiting the country’s eight commercial ports each year”.

In the previous year (2011), 264 million tons of cargo were moved by sea at an estimated cost of R45bn to the country the committee heard and in the BRICS grouping, South Africa stood alone with no vessels, whilst Brazil operated a fleet of 172 merchant vessels, India 534, China 2044 and Russia 1891.

Not self-reliant

“We are almost 100 percent dependent on foreign shipping to get our goods to market, despite South Africa being a maritime country with over 3,000km of coastline and a vast seaward economic exclusion zone”, he said.

Mokhele told parliamentarians that the country’s sea-borne cargo constituted at that time a “significant” 3.5 % of global sea trade. “Yet all the benefits of shipping cost overheads to export destinations in the case of South Africa accrue to the nation from which the ship transport emanates”, he said.  He claimed that all South Africa’s maritime fleet had been “sold off by the apartheid government”.

Infrastructure is there

oil_tankerDuring this year’s budget vote speech, minister Peters said the facts were extraordinary and she confirmed that SA had a massive coastline positioned on sea trading routes with thee world’s largest bulk coal terminal port in Richards Bay; the busiest port in African Africa with the largest container facility in the Southern Africa; the deepest container terminal in Africa; Cape Town had the biggest refrigerated container facility in Africa and Saldhana Bay was the largest port in Africa by water footprint.

She added that South Africa is among the top fifteen countries that trade by sea with 96% of the country’s imports and exports moving by sea transportation yet the country had no merchant fleet of any kind.

Elements to Operation Phakisa

Minister Peters said that Operation Phakisa focused on three areas, namely, offshore oil and gas exploration; aquaculture; and marine protection services and oceans governance, the last named being run by the aforementioned SAMSA whose new maritime safety programme has a specific focus on ship safety inspection programmes which have resulted in “nil” reported ship losses in SA waters.

Working with treasury, minister Peters said that DoT had been able to increase the mortgage ranking for financial institutions supporting the maritime sector – particularly, those that finance actual vessel purchases. Also the Transnet Port Regulator in Durban had brought greater certainty to port regulations with a new framework on which the 2015/16 tariff would be based.

Plans starting

oil rigIt was now proposed to establish a National Ship Register for registration of vessels worldwide; work with the private sector to develop initiatives and support the local ship building, ship repairs and maritime skills development.

On matters of policy and legislative framework and Operation Phakisa generally, minister Peters said that DoT would finalise a national maritime transport policy; a policy towards the cabotage (the illegal hire of transport for passengers or goods between two destinations in the same country) and coastal and international waters law.

Small  beginnings

The budget of R392m had been set aside for all maritime related programmes and projects, the minister said which was approved.

In the meantime, the minister has tabled the Merchant Shipping Amendment Bill which carries out very necessary amendments to the Merchant Shipping Act of 1951 to bring it line with South Africa’s Constitution.

The Amendment Bill also gives effect to the Maritime Labour Convention and the Work in FishingCoega harbour equip Convention both Conventions being adopted by UN’s ILO. International Labour Organisation.”  This aligns domestic legislation to global instruments ensuring global protection to the rights of seafarers and decent working and living conditions thus enabling South Africa to intervene in cases where foreign ships enter SA ports have contravened the rights of seafarers.”

The adoption of this legislation, its promoters say, will improve the operations and image of SA’s emerging maritime industry and is also an imperative in international trade.
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Transport ministry studies taxi, e-tolls and rail

Minister briefs on transport…..

dipou petersTransport minister, Dipuo Peters, told parliamentarians during the annual budget vote debate during a transport portfolio committee meeting that she had to re-look at the failing taxi recapitalisation programme; encourage Gauteng road users to pay e-tolls by announcing incentives; tackle urgently the upgrading of roads; and consider methods to restore freight rail transport as a the primary carrier for the Durban/Gauteng corridor.

The minister said that she recognised that the taxi industry played a critical role in the South African economy by providing 300,000 jobs and contributing an estimated,R40bn to the economy, she said.

Upgrade of taxi industry

The need to modernise the taxi industry still remained as an urgent issue, she continued, and also there was a need to further deploytaxi industry  taxi drivers to other industries, including the bus rapid transit system, possibly aviation and to ports and shipping.

She attributed the slow pace of the recapitalisation programme to the fact that heavily indebted taxi operators chose to remain with old taxis rather enter the process of recapitalisation.   Also, the scrapping allowance had been overtaken by rising prices of new taxis. The entire system needed a priority overhaul, she said, since the safety of the South African passengers was at risk.

Later it became evident during debate that the taxi recapitalisation programme had for all intents and purposes stalled, since only 2,752 vehicles had been scrapped in some eighteen months.

Easing off the pressure

On the subject of e-tolls, Minister Peters said that in order to “make things easier” for the public, DoT was providing an extension of the payment period from seven days to fifty one days; a 48% e-tag-holder discount; 60% discount on the alternative tariff if a non registered user paid within the same 51 days; time-of-day discounts applicable in certain cases; frequent user discounts and a cap on class A2/light vehicles

The minister was asked if Sanral intended to continue its “prosecution and possibly criminalisation of some one-million people who have not paid their e-toll bills”. She replied that she hoped the new arrangements would assist in reducing the financial burden for motorists. She urged Gauteng users of tolled roads to “accept their responsibilities in the interests of better roads for South Africa if SANRAL were to perform their duties and meet their targets.”

She asked MPs to take the lead and say publicly that they were.


The total DoT budget was R48.7bn. for 2014/15, rising to R53.9bn. in 2015/16. This amount included allocations to provinces, municipalities, state owned companies and agencies. Road transport received 43.7%, rail transport had 34.9% and public transport 21%, whilst civil aviation and maritime each received 0.4%. DoT was responsible for transfer of payments and conditional grants to provinces and municipalities.

On the issue of road conditions nationally, DOT heads stated that only 10% of roads were in “poor” condition and the department indicated that it would provide R21.9bn in critical support to SANRAL who were the roads delivery agent for DoT.

Commuter rail focus

metrorailOn rail issues and rail transport, Mawethu Vilana, acting DG for DoT, said passenger rail accounted for a large slice of the commuter transport used by the national work force, R15bn being allocated to the railways accordingly.    He said DoT was trying to reduce the cost and to improve the services of Metrorail, as well as accelerate implementation of integrating rail services with other transport services.   A White Paper would be issued on rail integration issues.

Integration of systems

This was enlarged upon by Mathabatha Mokonyama, DG of public transport, who said the focus was on accelerating integrated transport systems “so as to improve its overall productivity” and DoT would to allocate R81m to the integration process, expected to increase to R84m in 2015/16 and again to R89m in 2016/17.

Mokonyama reconfirmed that whilst rail transport played a major role, DoT had to focus on reducing the cost of public transportcity deep generally and it would also monitor the progress of the Passenger Rail Agency in its objective to restore to the country national rail passenger systems.

He indicated that rail freight transport had to play a larger role in order to compete with road, particularly the Durban/Gauteng corridor and to service industry in Mpumalanga.

Draft White Paper on way

Mokonyama again pointed to the new draft updated White Paper on Transport which was on its way as a framework for public discussion. DoT would also update the Moving South Africa plan and the seven-year old rural transport strategy. This new planning called for further updated legislation.

Minister Peters, in conclusion, conceded under questioning that DoT urgently needed to update scholar transport policies and re-introduce urgency to programmes to reduce road fatalities.

In an odd ending to the debate, when discussing the budget vote on maritime issues, it was said by the DoT maritime services DG that there was a need to establish a maritime shipping sector. The chair promptly asked, “What has happened to the country’s ships?”

The deputy minister of transport, Sindisiwe Chikunga, replied “All our ships were sold on the eve of democracy to make sure that the current government did not participate in the international shipping industry”.

This position was to be reversed, she concluded.

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Merchant Shipping Bills on oil pollution levies approved

International merchant shipping protocols met…..

oil_tankerAccording to a cabinet statement, a number of draft Merchant Shipping Bills from the minister of transport dealing with South Africa’s signature to international conventions on oil pollution have been approved, thus giving effect to obligations under the international maritime protocols regarding damage, loss through oil pollution at sea and the collection of levies.
The first draft Bill is the Merchant Shipping (Civil Liability Convention) Bill relating to the International Maritime Organisation Protocol of 1992, giving effect to law to in South Africa which will be in terms of the International Convention on Civil Liability for Oil Pollution Damage, a centralised body dealing with oil pollution at sea and compensation to a point, it appears.

Access to body of funds

Also approved by cabinet is the Merchant Shipping (International Oil Pollution Compensation Fund) Bill which has as its purpose the implementation of aligning to the Protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, known as the Fund Convention.

This important legislation gives South Africa access to the Fund Convention, an internationally resourced compensation fund which contributes to damages arising from oil spills and which is basically financed and run by cargo vessel owners.

The Bill defines the work of this fund further by stating that such “is to pay compensation to victims of pollution damage where they have been unable to obtain compensation, or compensation in full, under the provisions of the Civil Liability Convention”, described in the first draft Bill.

Liabilities defined and oil defined

Both of these Bills, inter alia, deal with questions of liability, compensation, loss or damage caused by contamination of oil from tankers.

Also proposed and approved by cabinet are two more Bills, the Merchant Shipping (International Oil Pollution Compensation Fund) Contributions Bill and the Merchant Shipping (International Oil Pollution Compensation Fund) Administration Bill, the first named Bill allowing for the inclusion of South Africa in the International Maritime Organisation Protocol and for it to be implemented.

SARS get in

The last named Bill, the Merchant Shipping Administration Bill, enables SARS to collect levies and for them to pay over to the International Oil Pollution Compensation Fund such contributions in terms of the Contributions Bill, this therefore being “a money bill” in terms of the Constitution.

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Parliament not satisfied with road death figures


Road death numbers not adding up

An opposition motion for clarification by the minister of transport, Ben Martins, on apparent discrepancies in road deaths reported by the ministry of transport has led to a call by the portfolio committee on transport for the minister to meet with parliamentarians to try and establish the reason for what is suspected to have been a major increase in mortality numbers according to recent figures given.

Iian ollisn a letter from Ian Ollis MP (DA), addressed to the chairperson of the transport committee Ruth Bhengu, it was pointed out that “the recent road death toll figures released by the Minister of Transport, Mr Ben Martins, raise serious concerns which require the immediate attention of the portfolio committee on transport. The figures given in the recent annual strategy and budget report of the department of transport indicate a substantial increase over the previous year.”

It was also pointed out that there were discrepancies between the figures released by the department of transport on annual figures generally and studies done by the National Institute of Mortality Studies and the Medical Research Council both in 2012.

Reasons requested

The motion went on to say that the minister “should report on the reason for the increase in road deaths; the estimation of the correct figures; the successes and challenges of current road safety campaigns and what was being done to address South Africa’s poor ranking by World Health Organization (WHO) on the subject.”

Other members of the committee asked whether the high rate of road mortality and thus South Africa’s poor ranking, was the result of road infrastructure collapse, the recklessness of drivers, or a combination of this and other issues.

Chairperson Bhengu said that a specific answer had to come from the minister on these issues and she wanted to know from the department of transport as well on the question of transport of schoolchildren. She was aware that in some instances children “were crammed onto bakkies” and this was lethal, she added.

A reply is expected from the minister shortly.

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Transport Laws Bill enabling e-tolling tabled in Parliament

Public hearings to be scheduled

The minister of transport has now tabled the Transport Laws and Related Matters Amendment Bill in Parliament, the department of transport department having gazetted a notice announcing such intention in early August this year and obtaining cabinet approval for the Bill that month.

The Bill provides the South African National Roads Agency Limited (SANRAL) with the necessary legal structures to enforce e-tolling, SANRAL having the responsibilities of planning, design, construction and maintenance of roads in South Africa.

However, it became quite clear during the furore that surrounded the announcement of the development of the Gauteng Freeway Improvement Project (GFIP) that SANRAL had neither the competence or legal structure in place for e-tolling in place and that the development was “out of sync” with the necessary legal requirements for both the implementation of e-tolling and its enforcement of a user-pay system.

All of this followed the setting aside of an interim order that halted the GFIP and implementation of e-tolling by the Constitutional Court in September 2012.

The Transport Laws Bill specifically allows for SANRAL to operate a road network that makes use of “intelligent transport systems” therefore giving SANRAL authority to exercise e-tolling; in effect a response to the constitutional decision.

The Bill will also provide more enforcement powers to ensure that motorists pay e-tolls and since SANRAL is responsible for any strategic planning for South Africa’s roads, such which allow the process on a national basis.

In their recent annual report, the department of transport shows that only 5% of South African roads involve tolling but as minister Ben Martins explained to Parliament, this is a critical area of South Africa’s economic pulse and this particular portion of South Africa’s road network is mainly responsible for South Africa’s economic future.

The bill was previously published for comment in March 2010. The memorandum contained in the Bill clearly states that such legal background is necessary for any future road infrastructure development and states unambiguously that the funding of the GFIP is to come from the e-tolls raised from motorists.

On the issue of future funding, the memorandum departs from usual legal parlance and states. “The non-collection of tolls may impact negatively on the ability of the other State-Owned- Enterprises to raise capital for their infrastructure programmes and thus the need for the Bill must also be seen in the context of Government’s plans to fund its envisaged infrastructure programme”.

An inter-ministerial committee and COSATU, the latter objecting to the Bill, have met to discuss their differences.

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e-tolling on a user pay basis mapped out

 From “Q&A” replies….

The minister of transport, Ben Martins, in a written reply to a parliamentary question asking if the decision to fund e-tolling out of the public pocket was final and whether his ministry would consider alternative forms of road financing,   replied that “toll financing on a user pays basis provides infrastructure earlier than would have been possible through general taxation. As a result, the benefits of increased roadway capacity are available to the public sooner.”

His reply stated that in 2005, when the implementation of the Gauteng Freeway Improvement Project (GFIP) was under consideration, the then minister of transport, Jeff Radebe, required the proposal to be evaluated by an inter-governmental municipality working group. The working group at that point considered the need for the project, policy, project principles and funding options.

Funding options considered were:

  •  fuel taxes where it was not ring fenced
  • vehicle registration/license fees and traffic fines
  • development impact fees
  • shadow tolling – no tolls are levied from road users under this approach. Instead, the shadow tolls are paid by government to the operator based on traffic counts on the road, an agreed rate per  vehicle/vehicle type and an agreed set of performance criteria.
  • tolling – a user-based funding mechanism for road infrastructure development. It enables the mobilisation of substantial capital funds upfront, usually through debt equity, for the construction of infrastructure such as freeways.

It was agreed at that time that the GFIP would be implemented using the user-pay principle (tolling), the reply states, so that there would be sufficient money on hand to start, the main principle being that with a user-based funding mechanism for development, the mobilisation of substantial capital funds upfront is enabled, usually through debt or equity, for the construction of large infrastructure such as freeways.

Toll financing, the minister said in his reply, had the distinct advantage of providing infrastructure earlier than would have been possible with financing through general taxation. As a result, the benefit of increased roadway capacity would be available to the public sooner, he said.

In general, tolling is regarded by the ministry, said minister Martins, to be an equitable way of funding large infrastructure projects and did not compromise fiscal integrity.

He pointed out that South Africa had a total estimated road network of 740 000 kilometers in the form of paved and gravel roads.      The provincial and national road network comprises 82 000 kilometers of road.        In all, only 3120 kilometers of this road network are toll roads.

Parliamentary hearings are now to follow.

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Search and Rescue Bill to set up search centres

A new Bill has been approved by the cabinet re-enforcing the work by the South African Search and Rescue Organisation in setting up rescue coordination centres and sub-centres.

The Bill will be entitled the South African Maritime and Aeronautical Search and Rescue Amendment Bill and will be tabled in Parliament shortly.     The Bill will line up South Africa’s rescue activities with that of the International Maritime Search and Rescue Convention of 1979.

Falling under the ministry of transport, the Bill widen the abilities for search and rescue regulations in South Africa and will increase the number of reporting centres where calls from aircraft or vessels in distress can be directed.

The government statement on the subject said, “This Bill seeks to streamline processes, roles and responsibilities as prescribed during the execution of maritime and aeronautical rescue operations.”

“This is aimed at an improved response mechanism and turnaround time. It also gives a right for delegation of powers and duties bestowed on the Minister of Transport to the South African Maritime and Aeronautical Search and Rescue office-bearers and department officials.”

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Roads fingered as top culprit in infrastructure “under-spend”

Many will remember last year’s April launch by the South African National Roads Agency Limited (SANRAL) of the S’hamba Sonke (Moving Together) R22bn provincial and municipal roads campaign, due to run for the three years – 2011 to 2014.

Transport Minister Sibusiso Ndebele, in a briefing to the media of the infrastructure development cluster in Cape Town, had to acknowledge recently that at present only R1.7bn had been spent on projects since the programme’s launch leaving over 90% of funds so far unspent, meaning that R6.4bn is still unspent for the 2011/12 fiscal period.

Minister of finance, Pravin Gordhan, had earlier estimated in Parliament after presenting his budget and in his response to the debate, that only 68%, or R178bn, of the R260bn set aside for infrastructure in 2010/11, was actually spent as planned owing to weaknesses in government infrastructure capacity. This theme crosscut all departments, he said

However, it is clear that SANRAL has one of the largest back logs; minister Ndebele estimating that the various levels and contractors had to spend R169bn if SANRAL was to catch up – about the equivalent of 500 000 kms of road.

Minister Ndebele added, in answer to questions from the media, that that the worst-affected areas were typically those outside of the urban nodes of Johannesburg, Pretoria, Durban and Cape Town.

The forthcoming infrastructure summit would look at various models to get the job done, including the ‘user-pays’ model to address the backlog.

Whilst the problem appeared to be the fact that the work was simply not being done, the minister focused on issues surrounding financing the infrastructure, particularly the issue of tolling. He said, “As South Africans we need a dialogue on how we will pay for this infrastructure development,” he said, referring to the fact that SANRAL had received R5.8bn to reduce debt as a result of its inability to install e-tolling on the Gauteng Freeway Improvement Project (GFIP).

The proposed tariff had been reduced to 30c/km, capped at R550 a month, for motorists, as a result of public outcry but Minister Ndebele said that government could not listen again to such calls. His department was now focusing on ways to pay for more phases of not only the GFIP but highway projects in Cape Town as well.

The minister said lessons had been learned, but South Africa still needed to reach consensus on how it would pay for the second phase of the GFIP, as well as other urban highway projects. All possible law enforcement loopholes that could prevent the implementation of e-tolling on April 30 this year had to be studied and legislation to allow for road tolling as a permanent feature to assist in funding highways was on its way shortly to Parliament.

At this stage no clear cabinet statement has been issued as a result of the COSATU marches to protest against tolling – a march somewhat confused by labour broking issues, but at the time of the infrastructure development cluster briefing last week, Minister Ndebele seemed unmoved by the possibility of labour backlash against tolling.

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