Tag Archive | Road transport

SANRAL gets more out of transport budget

SANRAL part of much bigger picture…..

roadsPrior to Deputy President Ramaphosa’s defence in the National Assembly of the-tolling system with its decreased tariffs , Minister of Transport, Dipuo Peters, told Parliament earlier in her budget vote speech that her department had a budget of R53.7bn for 2015/16, of which 12.5bn would go to South Africa Roads National Agency (SANRAL) – the total budget of R53.7bn being 6% more than last year’s budget.

Speaking at a media briefing prior to her budget vote, the Minister said that the projects administered by the department of transport (DoT) are run through thirteen different transport entities, to where 96.7% of the budget was appropriated and which included mainly provinces and municipalities.

Taxis moving major bulk of commuters 

dipou petersMinister Peters said, “Taxis remain moving 68% of the country’s 5.4 million passengers on a daily basis and contribute immensely to our economy, the taxi remaining the most important part of the public transport system.” Consequently it was her intention, she said, to review the taxi recapitalisation programme to bring about more affordability.

The Minister further stated that with the increase of vehicle transport on roads, DoT was altering its programme of expansion of the road network, doubling the capital available for the upgrade and expansion of provincial and local roads. In fact, the number of vehicles on South Africa’s roads had increased from 5-million in 1994 to over 11-million in 2014.

Nothing much since 1986

It was to be noted, the minister said, that the R1.1bn Moloto road to the north of Pretoria was a priority in view of the number of fatal accidents. “Hardly any significant new highways have been built since 1986, except for those that were constructed as part of the toll projects,” she said.

The additional funding for SANRAL was in respect of roads being added to the SANRAL network, especially in the provinces, which had to be upgraded if tolling was to be introduced. “All this work cannot be funded from the fiscus alone in the form of increased appropriations”.

Minister Peters said that more goods had to be transported by rail rather than by road and the number of vehicle accidents in the country brought down. “This move will equally unlock more economic potential and job creation. It will also help decrease congestion by road freight and with them transporting so much in the way of dangerous and heavy goods.”

Good money after bad?

Opposition shadow transport minister, Manny de Freitas, in reply, pointed out that SANRAL was well short of the R250m a month it said it needed in its original targeting – in fact he had heard that SANRAL had only reached R120m per month income, probably resulted from an estimated 23% of users resisting or not paying collections, in Gauteng.

He queried, as had the High Court he said, SANRAL’s tolling model and hoped the R12.5bn was not a subsidy to make up for the Gauteng impasse, especially as SANRAL seem determined to toll part of the Winelands route in Western Province.

Other articles in this category or as background
http://parlyreportsa.co.za/finance-economic/minister-comments-taxis-e-tolls-road-rail/
http://parlyreportsa.co.za/trade-industry/national-road-traffic-bill-passed-legally/
http://parlyreportsa.co.za/cabinetpresidential/e-tolling-transport-laws-bill-held-over/
http://parlyreportsa.co.za/uncategorized/e-tolling-becomes-a-financial-mess/

Posted in LinkedIn, Trade & Industry, Transport0 Comments

South Africa remains without rail plan

 Feature article….

Minister Peters fails on rail policy…

dipou Peters2In a written reply to Parliament on the whereabouts of the promised Green Paper on rail policy, transport minister Dipuo Peters told her questioners that such a document which has the intention of outlining South Africa’s rail policy was to be presented to cabinet in November. GCIS statements for cabinet meetings for November and the final cabinet statement in December 2014 made no reference to any such submission having been made – alternatively, the minister might have failed to have it put on the agenda. The country therefore went into Christmas recess once again without an established government policy on both freight and passenger rail transport matters, worrying both industrialists, investors and, not the least, built environment planners.

Just talking together

A draft Green Paper was first submitted to cabinet a year ago but cabinet instructed that more consultation on the proposals was necessary, particularly interchange between the transport and public enterprises departments. The portfolio committee on transport stated that policy on freight rail upgrading and infrastructure development was unclear, plans for commuter and long-distance passenger services confused and no clear picture had emerged on Transnet’s promised policy of structural re-organisation. Subsequent to this, the department set up a national rail policy steering committee to oversee the consultation process and introduce the required changes to policy. It has also divested itself of a number of non-core assets but no clear picture has emerged in statements on the promised policy of giving direction on the privatisation of branch lines.

Since time began…

According to the minister at the time, cabinet’s concerns had also involved the adoption of a standard gauge, private sector participation and economic regulation.  Subsequently, DoT indicated that standard gauge has been selected as the most suitable gauge for the South African rail network and as a result a final revised Green Paper was tabled before the steering committee in October 2014. Nothing has emerged. In the absence of any agreed policy, particularly to meet the proposed idea of rail freight re-assuming its dominant role over road transport in the light of the deteriorating national road picture, a number of developments have indeed taken place with regard to the purchase of diesel and electric train stock, signal systems upgrades and station re-building and passenger coach rolling stock manufacture. Nevertheless, no clear picture has emerged on the road ahead with regard to the freight/road picture, branch line privatisation, commencement dates for full long distance passenger services nor satisfactory plans and targets expressed on domestic commuter rail services.

All said before

Jeremy Cronin, when deputy transport minister, told Parliament in April 2011 that by establishing a local manufacturing base for the new rolling stock, benefits would ensue by creating a substantial number of local jobs. He added that as a result of the redevelopment of rail engineering capacity, skills that have been lost over decades of underinvestment in the local rail engineering industry would be recovered. The then deputy minister also said, “We are currently (2011) in the Green Paper phase with the primary objective of preparing the way for effective stake holder engagement. We are poised to reverse the decline in our critical rail sector that began in the mid-1970s and gathered pace in the late 1980’s.” In April 2015 therefore the country will be the fourth year of waiting for South Africa to outline its rail policy, “a system critically in decline” according to minister Cronin.

Recent update from Maties

A few months ago, a most important paper on rail transport, now in the in the hands of DoT, was published and out into the public domain by Dr Jan Havenga, director: centre for supply chain management, department of logistics, Stellenbosch University, who led a team of transport logistics experts to complete this erudite and informed report. The report is entitled “South Africa’s freight rail reform: a demand-driven perspective” and opens with a definition of government’s responsibilities in rail transport matters. “The role of the government is, primarily, to facilitate the development of a long-term logistics strategy that optimally equilibrates demand and supply through ‘anticipation’ of the market character.” “The definition of a national network of road and rail infrastructure and their intermodal connections will flow from this, presupposing neutrality across modes by taking full account of all relevant social, environmental, economic and land-use factors.” “This ensures that the mix of transport modes reflects their intrinsic efficiency, rather than government policies and regulations that favour one mode over another. The strategy is subsequently enabled by a clearly defined freight policy, a single funding regime for the national network and, lastly, the establishment of appropriate regulatory framework.”

Volume of freight critical

The report notes that “the American Trucking Association (2013) forecasts that intermodal rail will continue to be the fastest-growing freight mode in the next decade. Only the very busiest railway networks, which can exploit the density potential of volume growth, are likely to generate sufficiently high financial returns to attract substantial risk capital in long-term railway infrastructure.” “The Association of American Railroads as well in 2013 also highlights the impact of density on efficiency, revenue and, ultimately, the ability to reinvest.”

Lacking in market intelligence

Dr Havenga says, “The failure of South Africa’s freight railway to capture this market is attributable to a lack of policy direction regarding the role of the two modes (road and rail) in the surface freight transport industry and according to the Development Bank of Southern Africa, caused by the absence of sufficient market intelligence to inform policy.” He goes on to confirm that “one of the key requirements for an efficient national freight transport system is better national coordination based on market-driven approaches.”

Pressing need

“To avoid the ad hoc policy responses of the previous century, which led to sub-optimisation, increasing complexity and decreasing end-user quality, the pressing reform issue for South Africa, therefore, is agreement on the design of an optimal freight logistics network based on a market-driven long-term strategy that holistically addresses the country’s surface freight transport requirements.” Dr. Havenga’s final comment in the report, only a few weeks old, states that South Africa’s freight task is expected to treble over the next 30 years, with further concentration on the long-distance corridors. He points out that the country desperately needs a profit-driven market related core rail network to serve industry and manufacturing, as well as a developmental-driven branch line network to serve rural development. Other articles in this category or as background http://parlyreportsa.co.za/transport/minister-comments-taxis-e-tolls-road-rail/ http://parlyreportsa.co.za/finance-economic/prasa-gets-its-rail-commuter-plan-started/ http://parlyreportsa.co.za/uncategorized/transnet-says-freight-rail-operations-coming-right/ http://parlyreportsa.co.za/uncategorized/rail-is-departments-main-focus-in-year-ahead/

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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.

Breakdown

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.

Other articles in this category or as background
http://parlyreportsa.co.za//finance-economic/prasa-says-upgrade-of-rail-transport-will-involve-local-industry/
http://parlyreportsa.co.za//finance-economic/bumpy-road-for-e-tolling-bill-continues/
http://parlyreportsa.co.za//uncategorized/transnet-says-freight-rail-operations-coming-right/
http://parlyreportsa.co.za//energy/transport-subsidies-to-business-are-wrong-says-parliament/

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New Customs Duty Bill opposed by BUSA

SARS customs duty bill to close inland ports…

portsharboursThe newly tabled  Customs Duty Bill, with its two enabling Bills, were the subject of  vehement objections from Johannesburg Chamber of Commerce (JCCI) and Business Unity SA (BUSA), who both led the charge against the SARS proposals tabled by National Treasury.

This was in the  in the form of the vehement objections to the Customs Duty Bill, the Customs and Excise Amendment Bill and the Customs Control Bill, which propose that the principle of inland ports be scrapped and all clearances for imported goods be conducted at SA coastal locations.

Nevertheless, the Bills were eventually passed before the present government ended after an extended session of the NCOP to provide concurrence.

JCCI said that this would not only upset SADC and sub-Saharan  importers but also cause unintended consequences such as the “death of such inland ports as City Deep in Johannesburg” aside from inconveniencing local importers generally.

They said that many importers having now to be responsible for the movement of goods up the Durban/Johannesburg corridor would switch from rail to road freight to complete the import journey, thus placing further strain on Durban /Johannesburg road systems.

Transnet to become nonviable

Such unintended consequences , it was felt by JCCI, whilst of no consequence to SARS who were obviously only interested in the current losses of tax revenues by evasion, illegal imports  and corruption would result in serious strain for existing importers and make Transnet targets impossible.

Also, they said in their submission, the moves would cause further congestions at coastal ports and that the SARS proposals were in conflict with normal practices allowed for by the WTO.

Currently, JCCI told parliamentarians, only 20% of imports were being received through the Durban/Johannesburg corridor destined for movement by Transnet, who were in the process of spending enormous sums of money on infrastructure and rolling stock to change this imbalance. Now was not the time to encourage more road freight, they said.

BUSA weighs in

BUSA said that such radical changes of insisting that the three day customs clearance required by importers at port of entry, if construed as coastal only, was an unacceptable arrangement and although two alternative options were offered by SARS, neither had been found to be acceptable.

It was the wrong time to make such changes, said BUSA, and SARS should re-consider its approach and new ways found to reduce their losses of revenue in duty.

Also BUSA complained of the high penalties proposed for late clearances of goods if the proposed three day notice was not met and that new approaches should be considered generally that incorporated and embraced the concepts declared by the minister of trade and industry who has stated he wants to increase South Africa’s sub-Saharan business.

The concept of removing City Deep as a customs clearance point was akin to changing a practice that had existed for 37 years, JCCI noted.

SARS unmoved by the arguments presented.

(SARS responses to these submissions is in a later story on this website)

Earlier articles on this subject:
http://parlyreportsa.co.za//energy/fueloilrenewables/illegal-diesel-coming-in-from-mozambique/
http://parlyreportsa.co.za//finance-economic/one-stop-border-post-with-mozambique-almost-there/

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Bitumen shortage question goes round in circles

Replying in writing to a question asked of the minister of energy Ms Dipuo Peter as to whether there was any comprehensive government business plan on South Africa’s bitumen requirements, the minister side stepped on the issue and told the House that had “reviewed its mandate” and advised the departments of transport and trade and industry should answer. The department of transport is also under pressure regard parliamentary enquiries on bitumen.

The questioner, a DA MP, also asked what the storage arrangements there were in the country, where these were situated and whether there was sufficient bitumen available as reserve to meet the requirements of the National Build Programme.

In a separate meeting of the portfolio committee of transport, Ian Ollis, DA, asked James Mlawu, acting DDG of the road transport branch of the department of transport during a discussion on the state of rural roads, what the situation was with regard to bitumen supplies nationally.

Mlawu said there was no major problem other than the fact that there were never reserves and a sort of ad hoc situation existed for all parties to draw on. He said that bitumen was not held as a national strategic stock and bitumen tended to be made, since it was a by-product, as and when required on an as required basis by both councils and private sector. If no planning and co-ordination was undertaken with the suppliers, then shortages could apply simply because arrangements had not been made on a major scale.

MPs asked how the New Growth Plan could be exercised if no plans were made on this kind of subject since the absence of any proper road system in the rural areas was reaching the level of a possible human rights abuse where a child might die if the mother could not get to a clinic. MPs said the state of rural roads were shocking.

Mlawu in his reply said there was plenty of national planning on rural roads but little in the way of execution at lower level by either rural authorities or public works. Such gravel roads as there are were being destroyed by heavy haulage, he said. Whether a light cover of paving on the gravel would solve the problem was doubtful, he added, and a proper assessment of the whole issue at national level was needed.

Mlawu said the need for bitumen on a national scale, if it was decided to pave such roads in broad principle, would be part of a financial plan put to treasury or the World Bank if such a proper plan was to be executed at a national level although no World Bank official approaches had been made on the subject of roads, other than talks.

But that point had not been reached or even considered by cabinet, he said.

Posted in Cabinet,Presidential, Energy, Fuel,oil,renewables, Land,Agriculture, Mining, beneficiation, Trade & Industry, Transport0 Comments

Rail is department’s main focus in year ahead

George Mahlalela, director general, department of transport (DOT), told the portfolio committee on transport recently during the department’s strategic plan for 2012/13 that plans included a Passenger Rail Agency of South Africa (PRASA) upgrade to expand what was described as “the seven priority commuter rail corridors.”

He said DOT would be establishing a Rail Economic Regulator in terms of a draft Rail Act now being drawn up once the stakeholders in South Africa’s new rail structures could be more clearly established.

A Green Paper formulating the future of rail transport was shortly to be made public.

This would involve the subject of where public participation could be injected into the new structures, Mahlalela said.    PRASA had recently announced a multi-million rand re-capitalisation programme to invest in new coach rolling stock, he noted.

On road transport, the DG noted that the finalised Administrative Adjudication of Road Traffic Offences Act (AARTO) would be “rolled out” and much in the way of traffic legislation would be made subject to review.

He acknowledged that much attention was needed on road maintenance generally throughout South Africa and attempts were being made to catch-up on the back-log.  He said “Ironing out the difficulties from the combining of road maintenance where disaster relief was directed” had been a problem.

On air freight services a new civil aviation strategy was be drawn up with amendments to legislation planned and a Green Paper on maritime transport was to appear by May 2012.

There were also plans to finalise the National Land Transport Amendment Act in 2012. He promised also that the Ports Act of 2005 would be looked at very shortly.

Posted in Cabinet,Presidential, Finance, economic, Land,Agriculture, Mining, beneficiation, Trade & Industry, Transport, Uncategorized0 Comments


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