Tag Archive | SANRAL

Minister Brown wants utility shareholder management 

Shareholder Management Bill could kill cosy jobs…. 

sent  to clients 20 Dec…..Public Enterprises Minister, Lynne Brown, reports that she is to introduce, as aLynne Browndraft, the Shareholder Management Bill as part of a plan to introduce more leadership ability and some form of continuity for the state owned enterprises (SOCs) under her control. This includes Eskom, Transnet, Denel, SA Express, Alexkor and Safcol.

Maybe start of something big.

Whilst troubled SAA is now an independent, falling under National Treasury for the moment. Providing President Zuma makes no more changes, Minister Pravin Gordhan is set to sort out National Treasury itself and challenge the management style of his old stomping ground, SARS.. How much come out of the Cabinet Lekgotla is critical.

The problem children

PetroSA logoMeanwhile, PetroSA is in real deep water, the entity falling under Central Energy Fund (CEF) and which reports itself to Department and Energy (DOE). But at least the PetroSA problem is now in the open with somebody obviously having to take over the reins and sort the mess out, probably CEF itself.

Oddly enough there are people in CEF who know exactly what the problem is but once again politicians pushed experts in the wrong direction, it appears.

In addition, the Passenger Rail Association (PRASA) is very much on the slippery slope and, together with SANRAL, both present highly contentious transport issues, are now in the hands of to untangle

Public Enterprises comes to the party.

Minister of Public Enterprises, Lynne Brown appears to be getting the senior management of her portfolio undereskom control and whilst there could possibly be power supply problems at Eskom she says, because “machines can break down unexpectedly”, the leadership is there, as is the case with Denel.

Minister Brown recently reported at an AmCham meeting in Cape Town that there are around seven hundred SOCs, an extraordinary fact, but bearing in mind the fact that South Africa is reputed to have the largest head count in public service per population count, this would appear quite probable.

On the road again

With Deputy President Cyril Ramaphosa chairing an Integrated Marketing Committee, which will hopefully designate which entities should remain SOCs and those which should be absorbed back into their relevant departments, there appears some hope with regard to containing the ballooning public service machine which has characterised President Zuma’s presidency.

Hands off appointments

An essential element of Minister Lynne Brown’s plan is to remove the appointment to the boards of the entities under her domain away from Ministers, including herself, to a shareholder management team that creates a leadership operational plan for all SOCs and appoints, through due process, a tightly run appointment system.
A brave proposition indeed but it does indicate that Minister Brown is her own person.

Whilst the proposals might look like state control, in fact it is a clear signal that government may have heard the message that the current system of Ministers appointing board members is not working and is one of the reasons leading to what the auditor general calls “useless and wasteful expenditure”.

On the drawing board

The Shareholder Management Bill, Minister Brown said subsequently in Johannesburg, will first need a concept paper (perhaps she means a White Paper) and such could be released after the Cabinet Lekgotla in February, with an intention of introducing such as system by the end of 2016.

Minister Brown said that she herself as a Minister would therefore be excluded from making appointments in her own SOCs for a start. Perhaps this system can be applied to all forty-seven government departments and agencies, suggested a questioner bu the Minister would not be drawn into matters outside of her brief.

Leadership needed

During the same address, she added that Eskom was “not out of the woods” yet and there was still not sufficientlyne brown 2 electricity to facilitate economic growth but this would change. Minister Brown said none of the entities under her control “would be approaching the National Treasury with begging bowls.”

One small step

No doubt, as far as confirmation of an appointment is concerned, the Minister involved will still have to “approve” any selection decision by the independent team of specialists but it is worth watching the outcome of the debate on the shortly-to-be tabled Broadcasting Bill, if only to see if the appointment of inept senior appointments can be halted or reversed.

What has come out of the Eskom, PRASA and PetroSA issues is that a person who has no right to be in a position of leadership, or worse one who has supplied fraudulent qualifications, leads to frustration and anger by those with genuine skills and high academic qualifications lower down the ladder and at the coalface.

This is in the space of government service where technical skills are located and badly needed and it is hoped that Minister Lynne Brown has more of these “eureka” moments.

Previous articles on category subject
PetroSA on the rocks for R14.5bn – ParlyReportSA
Central Energy Fund slowly gets its house in order – ParlyReport
Shedding light on Eskom – ParlyReportSA

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The big SA cabinet crunch

Editorial….

Cabinet hopes are Brown, Ramaphosa, Gordhan…..

Public Enterprises Minister, Lynne Brown, reports that she is to introduce as a cabinet draft, the Lynne BrownShareholder Management Bill as part of a plan to introduce leadership ability and some form of continuity for the state owned enterprises (SOCs) under her control.   This includes Eskom, Transnet, Denel, SA Express, Alexkor and Safcol.

We hope this is the start of something big.

The last few weeks have been an exercise in disaster, so let’s try and take a positive spin on things from a parliamentary viewpoint. Whilst troubled SAA is now an independent, falling under National Treasury and if President Zuma minds his own business, Minister Pravin Gordhan is to sort out National Treasury itself and also the troubled SARS, which he re-designed in the first place and which became such a success working with Trevor Manuel.

More problem children

Meanwhile, PetroSA is in real deep water falling, the entity falling under Central Energy Fund (CEF) reporting to Department and Energy (DOE). With Minister Joemat-Pettersson not back from COP21 or wherever, the country still faces some serious energy issues. But at least the PetroSA problem is now all in the open, with somebody obviously having to take over the reins and the mess, probably CEF itself.
Oddly enough there are people in CEF who know exactly what the problem is but once again politicians pushed experts in the wrong direction, it appears.

In addition, the Passenger Rail Association (PRASA) is very much on the slippery slope and, together with SANRAL, both present highly contentious transport issues which are now in the hands of Minister Cyril Ramaphosa to untangle. Troubling times indeed.

Public Enterprises comes to the party

lyne brown 2Now Minister Lynne Brown appears to be getting the senior management of her portfolio under control and whilst we could still have shutdowns at Eskom she says, because “machines can break down unexpectedly”, the leadership is there she says, as is the case with her Denel.
Lynne Brown recently reported that there are around 700 SOCs, an extraordinary fact, but bearing in mind the fact that South Africa is reputed to have the largest head count in public service per population count, this would appear quite possible.

On the road again

With Deputy President Cyril Ramaphosa chairing an Integrated Marketing Committee, which will hopefullyramaphosa designate which entities should remain SOCs and those which should be absorbed back into their relevant departments, there appears some hope with regard to containing the ballooning public service machine which has characterised President Zuma’s presidency.

Hands off appointments

An essential element of Minister Lynne Brown’s plan is to remove the appointment to the boards of the entities under her domain away from cabinet and Ministers, including herself, to a shareholder management team that creates a leadership operational plan for all SOCs and appoints, through due process, a tightly run appointment book.

A brave proposition indeed but it does indicate that Minister Brown is her own person.

Whilst the proposals might look like state control, in fact it is a clear signal that government may have heard the message that the current system of Ministers appointing board members is not working, is open to abuse and what is worse, the consequent “jobs for the boys” system results in taxpayer’s money being thrown away through bad management, corruption and what the auditor general calls “useless and wasteful expenditure”.

On the drawing board

The Shareholder Management Bill, Minister Brown said in Johannesburg, will first need a concept paper (perhaps she means a White Paper) and such could be released after the February Cabinet Lekgotla in February, with an intention of introducing such as system by the end of 2016.

Whilst it is pretty obvious who should not be on such an appointment team, the plan begs the question of will be chosen to occupy such critical posts but it is far too early to cogitate on this one. With Ministers changing their portfolios as if it was a game of musical chairs, there is reason to congratulate Minister Brown on the statement that she herself as a Minister would be excluded from making appointments in her own SOCs.

Leadership needed

During the same address, she added that Eskom was “not out of the woods” yet and there was still not sufficient electricity to facilitate economic growth, but the leadership issue was being addressed satisfactorily with the right people being appointed. Brown said none of the entities under her control “would be approaching the National Treasury with begging bowls”.

Perhaps this is the principle being adopted behind the scenes with the SABC, which whilst not affecting business and industry other than travel costs, unlike trade and investment hurdles and industrial strategic changes, SABC is threatened by the possibility of being returned to its parent government department which at first glance appeared to be a move by President Zuma to gain control of state financed media, Mugabe style.

However, in a broad sense it seems to be Minister Brown’s idea that appointments to the top echelons running the country should be as a result of finding those qualified to do so rather than being handled by totally unqualified persons, some with solicitous intent, and others trying to retain power with dubious appointments such as having friends, in the case of the SABC, to broadcast “the truth” to specific rural audiences.

Unprincipled governance remains the one of the biggest problems facing South Africa, intrinsically coupled to (and in some cases causing} lack of growth and lack of jobs.

Croneyism

Bad appointments by Ministers and of Ministers has been the cornerstone of control by patronage, the route for corruption and the reason for sheer bad management, a practice now openly exposed but not yet controlled by any means. From a parliamentary viewpoint, let us leave it there. The rest is being said by the media but most MPs when they return to Parliament in late January 2016 will have realized that sheer stupidity can ruin their own futures and their pensions.

But if Minister Lynne Brown, in her practical and down to earth manner, can come up with the remarkable idea of Cabinet Ministers, hopefully including the Presidency as well, not interfering in who does what as far as expertise is concerned, then perhaps this can be applied to all 47 government departments and agencies.

One small step

No doubt as far as confirmation of an appointment, the Minister involved may still have to “approve” such a decision but it is worth watching the outcome of the debate on the shortly-to-be tabled Broadcasting Bill, if only to see if the appointment of inept senior appointments can be halted or reversed.

What has come out of the Eskom, PRASA and PetroSA issues is that a bad leader with no qualification or right to be in a position of leadership, or worse led by one who has supplied fraudulent qualifications, leads to frustration and anger by those with genuine skills and high academic qualifications lower down the ladder at the coalface. This is in the space of government service where technical skills are located and badly needed.

We hope Minister Lynne Brown has more of these “eureka” moments.

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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/

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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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Bumpy road for e-tolling Bill continues

E-tolling finally makes it through Parliament…

Discontent was expressed once again regarding the Transport and Related Matters Bill regarding e-tolling when opposition members complained that the Bill had been classified as Section 75 for national competence only, therefore denying the National Council of Provinces the process under section 76 of the Constitution whereby the Bill and its contents could be debated and approved at provincial level.

Johannes Makgatho, department of transport, told parliamentarians of the select  committee on transport, NCOP, that when the South African National Roads Agency Limited (SANRAL) Act was promulgated, electronic toll collection (ETC) was not envisaged in its current form. The development of the Gauteng Freeway Improvement Project (GFIP) had necessitated ETC and the Bill was necessary.

Sanral goes big on bonds

road tollsThe Bill was described by DoT as being of vital importance for the collection of tolls, the lack of which would have a negative impact on the ability of government to raise capital for their infrastructure projects. SANRAL had issued bonds to the tune of R24bn and the inability to collect tolls to repay the bonds would imperil the state guarantee provided to SANRAL, Makgatho said.

Ms Suraya Williams, Principal Law Advisor from the Office of the State Law Advisors, told the committee that that the regular ‘substantial measure’ test was applied to the question of whether the Bill should be tagged under section 76 for provincial debate but according to this established constitutional process, the Bill had been found to be a Section 75 Bill.

Who has heard of Cross Border Agency?

The Democratic Alliance said that it did not object to e-tolling in principle but considered there was a lack of public participation on the project and the process of e-tolling as a whole and this was unacceptable. Also all funds were to be collected by a body known  as the Cross-Border Road Transport Agency, which they said was a relatively unknown entity and were deeply concerned that this body was competent.

The DA added that this state entity had already been found unable to handle its own finances and got into difficulties handling just cross-border taxi industry matters. Mr Alex van Niekerk, Manager of the Gauteng Freeway Project for SANRAL, said the Cross-Border Agency had indeed experienced much difficulty initially with vehicles entering the country and travelling on roads which had not been tolled, but they had now built up experience with e-tolling and were ready for GFIP and national e-tolling as it built up.

Like cellphones

Mr van Niekerk explained that e-tolling would replace conventional toll plazas and that tolls would be recorded electronically in reference to barcodes which recorded the type and status of the vehicle in the same manner as prepaid airtime on cell phones. Existing toll plazas would remain but rather than manual payments, the plaza would read the tag and give access if there was credit on the account.

He said the principle of tolling did not change at all, only the mechanism of tolling changed and “non-compliance at the time of travel could therefore be remedied after the fact.” No profit, he added, would be made by SANRAL in the collection of toll revenue and he added that technology for the GFIP was considered “cutting edge”.

The Bill has now achieved NCOP concurrence and has gone forward for final reading. It then goes to President Zuma for assent.
The following articles are archived on this subject:

 http://parlyreportsa.co.za//finance-economic/transport-laws-bill-on-e-tolling-amended/
http://parlyreportsa.co.za//cabinetpresidential/outa-goes-to-supreme-court-of-appeal-against-bill/

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e-tolling Transport Bill held over

Changes made after parliamentary hearings.

Department of transport spokesperson Tiyani Rikhotso told a media briefing on e-tolling ecently that the portfolio transport committee was to completed two days of public hearings on e-tolling and the Transport Laws and Related Matters Amendment Bill in Parliament.   As  a result Parliament has given notice for the matter to be brought before National Assembly with certain further changes scheduled.

In hearings that took place within the portfolio committee on transport under Adv Johnny de Lange as chair the Bill was adopted in debate, although opposition members abstained from voting in favour since caucus support on what was considered by them as possible and reasonable  could not be approved in the light of time restraints, this being the reason given.

The Bill, subject therefore subject to final approval by Parliament still stands, as does the issue of e-tolling on a national basis.

“The matter has been postponed for for further discussion”, Rikhotso said, referring to the fact that the NA had yet to agree or not to the withdrawal of the Bill or whether more changes were to be accepted brought forward by the portfolio committee as a result of public hearings which took place and further possible debate.

SALGA agreeable in part

Issues at the public hearings with regard to e-tolling mainly involved the practical application and whether SANRAL was exceeding its mandate. Only two oral presentations were heard although some ten papers or submissions were circulated, including one from Business Unity SA.     What is clear, however, is that despite all the argument and debate, the actual process of e-tolling will be hard if not impossible to undo.

The oral hearings included a South African Local Government Association (SALGA) submission presented by Mthobeli Kolisa, executive director of municipal infrastructure services, South African Local Government Association (SALGA) and also from Ms Jane Bennett, affiliate support coordinator, COSATU. No oral submissions were received from OUTA, although it was unclear if written submissions were made.

SALGA said its association of 278 municipalities was primarily trying to achieve the objective of ensuring that the legislation would provide for studies on the impact of the diversion of traffic from proposed urban tolled roads into local roads. These studies must address the likely congestion and resultant costs of road maintenance and traffic management, and access to opportunities for life on the part of affected communities.

The studies, they said, must form the basis for decision making regarding whether or not to toll a road, and to determine what mitigating measures were needed to address the negative impacts if the tolling was to go ahead.

Whilst SALGA supported the proposed bill it wanted to see additional clauses that also affected the mandate of the South African National Roads Agency Limited (SANRAL) and National Roads Act which called for the minister’s approval for any declaration in partnership with affected municipalities.

These had to include in their view studies on the likely impact of the contemplated road tolling on communities’ access to livelihood opportunities; local roads in terms of diversion and related maintenance and traffic management costs and for such studies to be used as a basis for public consultations and such conditions had to be written into the proposals, SALGA said.

Bennett of COSATU was of the opinion that without the Bill, the e-toll would not be able to proceed and suggested strongly to parliamentarians to take the decision to reject the Bill. She said the issue of a Bill to make e-tolling possible had been rushed through as an afterthought, just to make the matter legal and that it ran counter to a number of basic principles of law, not the least the National Credit Act.

COSATU maintained there had been “little sincerity in the consultation” and tolls like the Gauteng Highway Project and others in the country, no doubt to follow, would add a huge burden to the already impoverished poor. There was also a suggestion of profiteering, she said. However the overall feeling of the portfolio committee was that the COSATU suggestions were insufficiently persuasive to halt national road development on a user pays basis.

COSATU raised issues surrounding the application of the provisions of the Cross- Border Transport Road Agency and the lack of restrictions on how tariff increases would be applied in future. COSATU strongly objected to the parliamentary procedure involved and which had excluded input from the provinces, meaning that the Bill had been tabled as a section 75 Bill which does not call for provincial hearings and mandates through the NCOP.

At the hearings, both the South African National Roads Agency Limited (SANRAL) and the Department of Transport (DOT) questioned the amendments sought by SALGA. They stated that the SANRAL Act already required SANRAL to inform all affected municipalities about the tolling of a section of national roads, and that this already catered for SALGA’s request.

From parliamentary papers it appears that the Transport Laws and Related Matters Amendment Bill could have been withdrawn from the National Assembly order paper at the last minute before the discussions but despite this fact, subsequent debate did in fact take place place and approval by the portfolio committee on the Bill was obtained by a majority vote. This means  that whilst the legislation may be amended, e-tolling itself as a process will probably roll on providing concurrence of the National Council of Provinces is agreed in early 2013.

Parliament’s deliberations on the bill in the NA will continue in the New Year it is presumed  after Parliament reconvenes on February 10, and the future of the legislation as it stands then debated further. In the meanwhile the debate will no doubt rage on at community level.

The difficulty could well be that the amendments sought by SALGA and perhaps by the portfolio committee after deliberations could affect the anchor legislation itself and more than one piece of law.

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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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Cabinet decides that e-tolling will proceed

In a cabinet statement this week cabinet made it clear by  approving the Transport Laws and Related Matters Amendment Bill for tabling in Parliament that the e-tolling development generally and particularly on the project known as the Gauteng Freeway Improvement Project (GFIP), was going ahead.

The heart of the matter remains the electronic toll collection system and the new Bill will give the South African National Roads Agency Limited (SANRAL) the full enforcement powers it needs to ensure payment of tolls.     Between the new Bill, SANRALS’s own founding legislation and National Roads Act, all put together, allowed Ben Martins, minister of transport to consider that SANRAL will eventually be in  sufficient compliance to both enforce and administer e-tolling.

In a meeting a few weeks ago, the Urban Tolling Alliance (OUTA) and the newly formed Inter-Ministerial Committee (IMC) on the Gauteng Freeway Improvement Project (GFIP), OUTA all agreed that the national fuel levy continue to be used to fund freeway improvements since this was the established and fair procedure for road development.

The OUTA delegation included the South African Vehicle Rental and Lease Association, the Automobile Association, the South African National Consumer Union, Investment Solutions and the Retail Motor Industry, led by Wayne Duvenage.

Nobody disagreed on the need for users to pay for road improvements; the need to decongest the country’s roads; and the need for more efficient public transport but focus again fell on the method of funding use, i.e cameras on e-toll gantries whether e-tolling as a procedure would solve congestion.

OUTA welcomed the GFIP it said at the time and commended the South African National Roads Agency Limited (Sanral) was a well-managed road building entity but argued that e-tolling was not efficient or effective as a funding mechanism in itself. Where OUTA disagreed was that the existing national fuel levy be used to fund freeway improvements in view of the current use of the levy to build and maintain roads countrywide.

Government has always stressed the need that whatever happens, users had to pay and and it appears that the ministry was far too far down the e-tolling contractual development of building to wish to alter its course, aside from any policy decisions on the matter.

Posted in Cabinet,Presidential, Finance, economic, Fuel,oil,renewables, Public utilities, Trade & Industry, Transport, Uncategorized0 Comments

E-tolling becomes a financial mess

With the department of transport gazetting draft regulations for public comment dealing with exemptions from toll fees on Gauteng toll roads, the recent Gauteng regional court decision to put tolling on hold has caused a legal and financial  implosion of considerable complexity.

 Written comment was invited until 9 May, 2012, the Gauteng Freeway Improvement Project having expected to be started on 30 April. The cancellation of the process sets an unfortunate precedent for e-tolling on highways around the country.

The gazetted notices were published in terms of the South African National Roads Agency Limited (SANRAL) and National Roads Act of 1998, together with a notice making known the places at which tolls can be paid.

On exemptions, commuter vehicle concerns were addressed inasmuch that taxis and buses, together with emergency vehicles, were exempted from paying toll fees. Exempted vehicles are to be issued with an e-tag for identification purposes when they pass through the tolling gantries.

The notices explain how non-registered e-tag users and non-registered vehicle licence number users are to make payment. SANRAL is to have mobile pay stations located alongside the toll roads to enable motorists to make payments.

Meanwhile Jeremy Cronin, deputy minister of transport, addressed the National Assembly a few days before the Gauteng regional court decision, answering criticism from opposition members parliamentarians.

He had said earlier in Pretoria that e-tolling in Gauteng was the only viable way to pay for the R20 billion spent on improving the province’s freeways. Opposition MPs were requesting rather to implement a small fuel levy to cover the cost of the SANRAL 20bn project.

Ian Ollis, shadow MP for transport, had complained it would cost over R1bn a year just to collect the fees and described it as “the world’s most expensive toll collection system”. He noted that the R20bn was being spent on a highway project that only involved about 180km of road.

Cronin agreed that “the particular tolling option that had gone forward was very expensive” but added that any national  levy, such as the one proposed on fuel, would be unfair to people living in other parts of the country who would be paying as a result for infrastructure in Gauteng.

Cronin acknowledged that there was “great unhappiness” over the introduction of e-tolling and any further spending on the project had ” been put on hold”, he said, adding that paying off the project debt by increasing the fuel levy was not an option.

Opening the debate in the National Assembly, Transport Minister Sibusiso Ndebele said South Africa had a responsibility to service the debt incurred when the project to improve the road network in the province was implemented.

“It is now public knowledge that South Africa has a financial obligation of R20bn to this effect, escalating to R32-billion with interest over the next couple of years.”Failure to honour this obligation will adversely affect our country’s credit rating.”

Minister Ndebele said he was “encouraged” by the fact that, to date, a total of 501 245 e-tags had been sold. At the time he was responding to the national budget where department of transport, received an overall R39-billion budget allocation for this financial year, which will rise to R48-billion by 2014/15. About R18bn of this is earmarked for roads.

Returning to the point raised by Cronin that all spending was on hold, earlier in the week the ANC had issued its own statement on the matter welcoming the delay the implementation of the e-tolling system by a month indicating that they too were in doubt about the system.

In a separate statement the DA’s Jack Bloom commented that in his view “the best thing for the government to do was to forget about e-tolling and move on to another funding method”, noting that damages would have to be paid in cancelling any contract but he repeated his colleague’s point that this might be cheaper than carrying on with a toll collection system that was as expensive as the road being built.

Quite clearly the next move will have to come from the minister of transport or, perhaps, even President Zuma himself or his deputy. An appeal against the regional court’s decision is reported to be a lengthy process.

 

Posted in Cabinet,Presidential, Finance, economic, Justice, constitutional, Public utilities, Trade & Industry, Transport, Uncategorized0 Comments

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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