Archive | Transport

AARTO traffic offences bill on its way

AARTO licence demerit system studied 

…. In what has been a legislative marathon, the update of the Administrative Adjudication of Road Traffic Offences Act (AARTO) has now reached a stage where Parliament has called for yet further consultation with the public. It requires on report on the situation with the e-Natis system, with provider Tasima and to hear from bus fleet owners.

The first draft of the Bill was tabled before the Portfolio Committee of Transport as far back as 2015. Now a stage has been reached where the principle has been agreed to but whether it is practical or possible within existing structures is now the issue.  The next meeting is May 28

Owners & drivers

At the last round of hearings on the Bill after tabling, it was car hire owners and the South African National Taxi Owners Council (SANTACO) who had the most to say. The car hire association told MPs that developments in the pilot areas had reached a stage where hirers had made several vehicles “unlicenceable” because of a build-up of demerit points.

There followed unpractical administration problems for the owner, which they said was not the intention of the law.
Taxi operators, who will need to make returns on employed drivers, said that already had many problems when they found themselves unknowingly registering drivers with false driving details and addresses and which was culpable, resulting in fines for the owner plus receiving a double penalty of receiving demerit points.

Starting from zero

A Road Traffic Infringement Agency (RTIA) is now to be formed which will implement the AARTO system in the next financial year, each motorist starting with zero points reaching a maximum permissible twelve points when the licence will be suspended for 3 month.

The plan now, therefore, is for the new AARTO system to start in January 2018 on a national basis learning from pilots run in Johannesburg and Tshwane.

There are two systems involved. One, the most commonly used, is for driver/owners, the other is for owners who hire drivers, the latter having a demerit merit system based on regulations regarding the condition of the vehicle and driver registration.

The proposed Bill says its aims are to “Strengthen compliance with road traffic laws and payment of traffic fines.”

Black book

The RTIA will run a national road traffic offences register (on a similar basis to the sexual offences register) centralizing all driver infringements and offences, presumably under the umbrella of the centralised e-Natis system.

The Bill describes the circumstances under which offenders are served with a warrant issued by a magistrate’s court. Now clarified in the most recent portfolio committee meeting is the use of registered mail; the necessity to allow for time for postal services to execute delivery and for rehabilitation programmes for habitual infringers and continuous offenders.

DOT told parliamentarians that they have struck a deal with the SA Post Office whereby the issuing authority, whether local or municipal, will be charged a rate of R7.80 for a registered delivery.

Against

Detractors of the Bill have been the Johannesburg Chamber of Commerce and Industry, who say the demerit system will put many companies out of business and will result in “millions of vehicles” being taken off the roads causing labour issues.

AfriForum has brought an urgent application to the High Court. AfriForum’s legal consultant, Willie Spies, told parliamentarians that in their view it would be unconstitutional for a citizen to have to pay to exercise one’s rights, this being their interpretation of the AARTO system.

Spies stated that in many cases offenders will be punished twice for the same offence, this being by both by the courts and by the demerit system. “Nobody can be guilty twice”, he said and added that nobody should be punished by demerit system “when they have done the right thing by paying.”

Spies also said that the Bill “manages to introduce 2,055 new offences but nobody is being punished for reckless or negligent driving which is the main cause of death on the roads.”

At the coalface

The pilot system undertaken along the AARTO lines in Johannesburg and Tshwane was not apparently too successful, as observed by one metro police officer in making a report to the Portfolio Committee.

He said that offenders, when served with a ticket, seemed little concerned that the result would be that they were to be served with a warrant, since experience told them that the system failed to work and there was no judicial follow up if notices were ignored.

The complaining officer said that this particularly applied in the case of parking infringements.

A survey undertaken by the AA and with assistance from fuel company BP was quoted in detail to parliamentarians a number of times, highlighting that there was a vast difference in outcomes between minor infringements such as parking issues; driving through orange or red robot lights; not obeying yield signs and the more serious infringements of drunken and negligent driving. It was hoped, the report concluded, that the de-merit system would reflect this difference.

Bad culture

The survey results also indicated that 76% of South African drivers commit some sort of traffic offence on a regular or even daily basis indicating a systemic disregard of road traffic laws in SA. AA as a result appealed for early implementation of a demerit system to improve road safety.

The view of many parties to the hearings was that to include parking infringements in terms of the AARTO system would have little effect in improving upon road safety. AARTO, later in question time, qualified this by saying that municipalities and local councils face the costs of enforcement of any system and this had to be underwritten with multiple revenue sources, whether parking infringements or not.

DOT confirmed in the meeting that it had not only signed an agreement with the SA Post Office for all registered mail to be delivered at R7.80 a letter but this would apply to all the approximately 300 local councils and municipalities

They also advised that DOT would supply a AARTO system-training team that would visit all councils and municipalities and it was confirmed that AARTO would adopt both e-mail and text message systems for notification of fines/infringements.

Stationery and ticket books are now to be printed on a six-month lead basis, they said. DOT confirmed that there were still “challenges” on cross-border matters and that the Minister was dealing with such issues.

Down the line

ANC MP Mtikeni Sibande expressed disquiet that local councils might not be able to implement the AARTO system in the near future for any number of reasons leading to the possibility that the system would work in some areas and not in others. The Chair said they could only be concerned with the legislation, not how government did their work.

Finally, it was agreed that the Bill was nearing the point where it could go forward to the National Assembly for voting but MPs agreed that it might be wise to hear from more affected parties such as bus owners, even though hearings were now finalised.

MPs agreed that they would meet further after the recess to hear the results of the High Court case on the subject and the matter of the contract renewal of previous AARTO operating company, Tasima (Pty) Ltd, and whether the e-Natis system was yet fully under the control of DOT.  The meeting is due 28 May.
Previous articles on category subject
E-tolling: OUTA takes it to Parliament – ParlyReportSA
AARTO draft Bill on licence demerits for comment – ParlyReport

Posted in Fuel,oil,renewables, LinkedIn, Security,police,defence, Special Recent Posts, Trade & Industry, Transport0 Comments

Border Management Authority around the corner

SARS role at border posts being clarified ….

In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs agreed with a wording that at all future one-stop border posts, managed and administered by the envisaged agency and reporting to Department of Home Affairs (DHA), were to “facilitate” the collection of customs revenue and fines by SARS staff present.

However, on voting at the time of the meeting, Opposition members would not join in on the adoption of the Bill until the word “facilitate” was more clearly defined and the matter of how SARS would collect and staff a border post was resolved.

Haniff Hoosen, the DA’s Shadow Minister of Economic Development said that whilst they supported the Bill in general and its intentions, they also supported the view of National Treasury that the SARS value chain could not be put at risk until Treasury was satisfied on all points regarding their ability to collect duty on goods and how.

Keeping track

Most customs duty on goods arriving at border controls had already been paid in advance, parliamentarians were told; only 10% being physically collected at SA borders when goods were cleared.

However, with revenue targets very tight under current circumstances both SARS and Treasury have been adamant that it must be a SARS employee who collects any funds at border controls and the same to ensure that advance funds have indeed been paid into the SARS system.

The Bill, which enables the formation of the border authority itself, originally stated that it allowed for the “transfer, assignment and designation of law enforcement functions on the country’s borders and at points of entry to this agency.”

Long road

It was the broad nature of transferring the responsibility customs of collection from SARS to the agency that caused Treasury to block any further progress of the Bill through Parliament, much to the frustration of past Home Affairs Minister, Malusi Gigaba.   It has been two years since the Bill was first published for comment.

DHA have maintained throughout that their objective is to gain tighter control on immigration and improve trading and movement of goods internationally but Treasury has constantly insisted that customs monies and payments fall under their aegis. The relationships between custom duty paid on goods before arrival at a border to Reserve Bank and that which must be paid in passage, or from a bonded warehouse was not a typical DHA task, they said.

Breakthrough

It was eventually agreed by DHA that SARS officials must be taken aboard into the proposed structure and any duties or fines would go direct to SARS and not via the new agency to be created or DHA.

This was considered a major concession on the part of DHA in the light of their 5-year plan to create “one stop” border posts with common warehouses shared by any two countries at control points and run by one single agency. More efficient immigration and better policing at borders with improving passage of goods was their stated aim.

Already one pilot “one stop border post”, or OSBP, has been established by DHA at the main Mozambique border post by mixing SAPS, DHA and SARS functions, as previously reported.

To enable the current Bill, an MOU has been established with SAPS has allowed for the agency to run policing of SA borders in the future but Treasury subsequently baulked at the idea of a similar MOU with SARS regarding collection of customs dues and the ability to levy fines.
Bill adopted

At the last meeting of the relevant committee, Chairperson of the PC Committee on Home Affairs, Lemias Mashile (ANC) noted that in adopting the Bill by majority vote and not by total consensus, this meant the issue could be raised again in the National Council of Provinces when the Bill went for consensus by the NCOP.

Objectives

The Agency’s objectives stated in the Bill include the management of the movement of people crossing South African borders and putting in place “an enabling environment to boost legitimate trade.”

The Agency would also be empowered to co-ordinate activities with other relevant state bodies and will also set up an inter-ministerial committee to handle departmental cross-cutting issues, a border technical committee and an advisory committee, it was said.

Mozambique border

As far as the OSBP established at the Mozambique border was concerned, an original document of intention was signed in September 2007 by both countries. Consensus on all issues was reached between the two covering all the departments affected by cross-border matters.

Parliament was told at the time that the benefit of an OSBP was that goods would be inspected and cleared by the authorities of both countries with only one stop, which would encourage trade. In any country, he explained, there had to be two warehouses established, both bonded and state warehouses.

Bonded and State warehouses

Bonded warehouses which were privately managed and licensed subject to certain conditions, were to allow imported goods to be stored temporarily to defer the payment of customs duties.

Duties and taxes were suspended for an approved period – generally two years but these had to be paid before the goods entered the market or were exported, MPs were told. The licensee bore full responsibility for the duty and taxes payable on the goods.

State warehouses on the other hand, SARS said at the time, were managed by SARS for the safekeeping of uncleared, seized or abandoned goods. They provided a secure environment for the storage of goods in which the State had an interest. Counterfeit and dangerous or hazardous goods were moved to specialised warehouses.

Slow process

MPs noted that it had taken over six years for the Mozambique OSBP to be finalised. SARS said there were many ramifications at international law but added two discussions with Zimbabwe for the same idea had now taken place. It was hoped it would take less time to reach an agreement as lessons had been learnt with the Mozambican experience.

On evasion of and tax, SARS said in answer to a question that losses obviously occurred through customs avoidance and evasion, so it was consequently it was difficult to provide an overall figure on customs duty not being paid, as evasion was evasion. Smuggling of goods such as narcotics, or copper, which could only be quantified based on what had been seized.

The same applied to the Beit Bridge border with Zimbabwe where cigarette smuggling was of serious concern and through Botswana.

In general, it now seems that Home Affairs is to adopt an overall principle of what was referred to as having one set of common warehouses for one-stop declaration, search, VAT payment and vehicle movement with a SARS presence involving one common process for both countries subject to a final wording on the SARS issue before the Bill is submitted for signature.

Previous articles on category subject
Border Authority to get grip on immigration – ParlyReportSA
Mozambique One Stop Border Post almost there – ParlyReportSA

Posted in Finance, economic, Fuel,oil,renewables, Home Page Slider, Justice, constitutional, Mining, beneficiation, Public utilities, Security,police,defence, Trade & Industry, Transport0 Comments

Liquor licensing may have impractible conditions

DTI gets tough with age limits

...sent to clients 17 Oct…..   In what will be a tough ask, Minister of Trade and Industry, Robliqour-store Davies has proposed a number of changes to the National Liquor Act, the most contentious being to raise the legal minimum age for purchasing liquor from 18 to 21 years of age. The call for public comment on the draft National Liquor Amendment Bill as gazetted closed on 30 October.

The Department and Trade and Industry (DTI), who deal with liquor licensing at a national level, state that South Africa has globally the worst figures for alcohol related accidents and anti-social incidents involving liquor abuse.

Drastic steps had to be taken to gain control of alcohol related injuries, illnesses and abusive behaviour that were costing the state some R40bn a year, the Minister said.

Younger age groups

The Bill focuses specifically on youth since DTI maintains that alcohol abuse specifically damages the development of the brain making youth vulnerable. Liquor advertising aimed specifically at young persons will be prohibited under the Act and revised rules set down on broadcast times and content. Advertising billboards aimed at youth will be banned from high density urban areas.

Minister Davies called for “robust public engagement on the issues raised in the Bill” as it dealt with matters “that are of significance to South African society.” He noted that South Africans consume alcohol related products at double the world average rate.

On the question of the age threshold proposed in the draft Bill is a minimum purchasing age, not as has been widely reported a “minimum drinking age”. The onus of establishing age will fall upon the supplier who must take “reasonable steps to establish age” when dealing with a young purchaser.

Pressure point

A civil liability will now fall upon the manufacturers and suppliers as well who knowingly breach the new regulations, Minister Davies said, believing that this was the only way to get the problem understood and the new rules adhered to.

sab-youth-beer-adThe draft Bill states that responsibility will also fall upon the seller not only not to supply liquor to a person visibly under the influence of alcohol but that the seller could be in addition asked to show reason why they should not bear costs for damage incurred as a result of a subsequent accident involving that person who made the purchase.

On the problem of community issues, such as tackling foetal alcohol syndrome which is considerably worse in South Africa than elsewhere in the world and alcohol related crime, the onus of proof will shift not only to a supplier but also to manufacturers to show that reasonable steps were taken to ensure that liquor is not sold to illegal or unlicensed outlets. Which brings up the issue of liquor licences.

Distance from community

Licensing is a provincial matter and there are a number of changes that the amending Bill police-raidwill make to the anchor Act which will have to be abided by. Particularly notable is the proposal that licences cannot be granted to an outlet less than 500 metres from any school, recreation facilities and places of worship.

Provinces are stated as “having an obligation” to be far stricter in granting licences in highly urbanised areas, giving due regard for the need for stricter business hours and for the need to deal with noise pollution in stressful living conditions.

Previous articles on category subject
New health regulations in place soon: DoH – ParlyReportSA
Licensing of Businesses Bill re-emerges – ParlyReportSA
Medicines Bill : focus on foodstuffs – ParlyReportSA

Posted in Justice, constitutional, Security,police,defence, Special Recent Posts, Trade & Industry, Transport0 Comments

NRCS hammered over port delays

NRCS admits failure to meet LOA targets

…..sent to clients 16 Oct…...The National Regulator for Compulsory Specificationsasogan-moodley (NRCS), responsible for the issuance of letters of authority (LRAs) to complete import certification of imports in respect of critical safety regulations, came under intensive fire in Parliament from MPs across all party lines.

This included a warning from Trade and Industry Portfolio Committee Chairperson, Joan Fubbs, that the NRCS failure to meet its annual targets, particularly bearing in mind such targets were set by themselves, was not acceptable.

Chair Fubbs told CEO Asogan Moodley of NRCS his agency was “a blot on the otherwise excellent annual performance of the Department of Trade Industry (DTI)”, NRCS being the only one of the seventeen DTI entities to receive a qualified annual report from the Auditor General’s office for the past year.

Durban is problem area

sars-warehouse-durbNRCS has a mandate to provide LOAs for clearing goods for sale or service in various categories of goods imported into South Africa, with the port of entry of Durban providing most of the problems in supplying the necessary LOAs. Chair Fubbs said that the poor performance already shown in the first quarter of the current financial year did not auger well for any change in the immediate future. This cannot be the case, she warned.

NRCS divides imports into the main categories of automotive including all components; chemicals, materials and mechanicals; electro-technical including IT and electronic appliances and food in the form of fishery products, canned meat and processed meat. NRCS also ensures standards on building supplies and checks calibration and checks of weights and measuring equipment supplies, including gaming equipment.

Massive backlogs

CEO Moodley told parliamentarians that outstanding LOAs over the recognised maximum period of 120 days were, at worst, 191 days – where 179 consignments were involved. In all some 1,500 consignments exceeded 120 days across all imports at various ports of entry, he said. The worst failures to supply import LOAs were in respect of electrical goods, IT appliances, vehicles and automotive parts.

All imports were checked on a “risk-based approach” and dived into low-risk, medium-risk andcargo-vessels-durban high-risk as far as consumers were concerned. Target turnaround time, after inspection and issue of relative LOAs, was respectively 75 calendar days for low-risk, 90 calendar days for medium-risk and 120 calendar days for high-risk.

Asogan Moodley emphasised that a major problem had been that DTI had changed working days into calendar days which had overtime connotations for NRCS with already limited staffing levels.

The whole truth

Chair Fubbs queried the number of days that cargo was outstanding supplied by NRCS in their annual report, stating that she was aware that the situation was far worse that indicated by NRCS in their presentation. In fact, a number of consignments needed by commerce and industry has been sitting in bond for nearly a year, she said. This was not acceptable, she warned.

warehouseCEO Moodley named his problems in clearing goods as being as being a result of short staffing of expert examiners, who were difficult to find – although some personnel were being trained or re-trained to meet technological changes. Compounding the problem, he said, was the necessity to update the entire NRCS IT ability, which was budgeted for but which had not yet been completed.

He also complained that the volumes of incoming imports and the technical advances represented almost monthly in imported goods were not exponentially related to the growth of NRCS, its skills base and the level of monitoring expertise, particularly at major ports.

IT gear just standing

In respect of the electro-technical category, he said that whilst inspections were up 11% transnet-container-terminalagainst target, the processing of LOAs within the financial year stood at 68% lower than the target for 120 days turnaround. In other instances, inspections carried out at source or at retail level were also short on target level but CEO Moodley assured the Committee that the NRCS had embarked upon a process of implementing a new system of automation and modernisation to improve performance.

He said it would take 18 months to complete such a programme at a total cost of R50m.
Major problems encountered were that certificates of origin supplied by importers which differed when the same goods were subsequently imported resulting in the need for fresh LOAs and that all processes at present were manual which increased load.    He called for the regulations to be changed so that more categories were allowed for so that very low risk products could be handled specifically on a quicker turn-around basis.

Opposition members said that they could not see how this would improve the situation since the problem appeared to be an inability to handle any volumes with untrained staff, whether low risk or high risk.    MPs noted that import bottlenecks were a financial threat to businesses and industry who were reliant on such imports and failure by DTI in this regard led to job losses and low growth.

Technical advances not in tune                nrcs-logo                                    

CEO Moodley and his team of departmental heads went to great lengths to explain the technical variations in international goods and imports coming from various countries that were either substandard or which had wrong documentation. He said that the failure to provide standards for treated timber and safety footwear, for example, had caused a backlog and such issues as non or sub-standard tyres on vehicles had slowed things down in the automotive sector.

He complained that the lack of consistency in supplied products and the constant attempts to short-circuit the system by importers accounted for much of the delay in turnaround.

Where it matters

CEO Moodley said that the electro-technical industries represented an area where most product failures occurred.  He added that the introduction of LED technology had compounded the checks for accuracy and reliability and such issues as compatibility of electrical goods, in many cases portable generators and white goods, had a poor record of power specification labeling and consequent safety in South Africa.

This was a growing problem with many countries who worked to different standards, various plugging methods and a different disclosure ethic.

Warning

durban-port-bigIn conclusion, when the debate was wound up, the Committee noted that a complete change of direction in the methods and ability of NRCS to meet its targets had to be found and that future presentations by NRCS reflecting such dismal results would not be tolerated.

As a result of a number of critical comments from MPs across party lines, the backlog of 1,650 LOAs over 120 days would be tackled, regulator Moodley promised, “by October” but stated this as being with the use of “new inspectors”.

Also, in an effort to speed up the search for unsafe or non-compliant products, there would be no need to obtain a new LOA for additional imports of a product where one had been additionally granted, he said. However, NRCS reserved the right to carry out spot checks.

Consequences

From a subsequent follow-up report in Business Day, it was learnt that DTI had confirmed the resignation of CEO Asogan Moodley and that such a move “had been a decision of Mr Moodley himself”. Trade and Industry Minister, Rob Davies, said he had instructed DTI’s DG, Lionel October, “to engage with NRCS to ensure they meet their targets”.

DTI said that Minister Davies “simply expects management and labour of DTI entities to meet their targets”, referring specifically to LOA targets in the case of NRCS.
Previous articles on category subject
Customs Duty Bill cuts out inland ports – ParlyReportSA
Border Authority to get grip on immigration – ParlyReportSA
Tax law changes after mid-year budget – ParlyReportSA
New Customs Duty Bill opposed by BUSA – ParlyReportSA

Posted in LinkedIn, Public utilities, Special Recent Posts, Trade & Industry, Transport0 Comments

E-tolling: OUTA takes it to Parliament

Committee unsympathetic to OUTA…

sent to clients 20 February…. Tough words were used in Parliament when the Opposition to Urban Tolling Alliance (OUTA, now called Organisation Uniting against Tax Abuse) presented its views on e-tolling twayne duvenageo the Parliamentary Portfolio Committee on Transport, particularly of the idea to fund SANRAL of of the fuel levy.  In the end Wayne Duvenage, OUTA Chairperson, was told by the Committee that the only way forward was that OUTA and the SA National Road Agency (SANRAL) get together and negotiate a compromise.

The view of ANC members was perhaps more clearly demonstrated by one MP who stated that the user-pays system had to be retained, since the poor could not afford the costs of freeway development being absorbed into the fuel levy, as was proposed by OUTA.

She explained quite simply that if you could afford a car licence and petrol in the first place, one must pay for e-tolls, otherwise the e-tolling would be added to the price of sugar and soap through the fuel levy because of distribution costs. At the time, members were not aware of the forthcoming fuel levy increase in the Budget.

No either, or…

Whilst ANC members agreed with OUTA that the Gauteng e-toll scheme as currently imposed had not been a great success, it was considered unlikely that Parliament would even consider halting the programme as such and would not encourage a switch to levy funding. A way of making e-tolling a success had to be found, they said.

The main platform of OUTA’s complaints was the issue of poor public engagement and an “arrogant imposition” of the programme which had been badly thought out, they said.    Wayne Duvenage claimed that the argument that an increase in road levies would hurt the poor was hypocritical since government has themselves had increased the fuel levy by 92% over 8 years.

Free ride

OUTA held that e-tolls amounted to extortion and the fact that none of the 46,000 exempt Gauteng taxis had fitted e-tags suggested that the scheme was being shunned, even when free.

nazir alliThey reminded MPs that the High Court had set aside the interdict granted to SANRAL that further discussions had to take place before e-tolling commenced on the basis that SANRAL could start but a door had to be left open for a collateral challenge from society. This was now the case.

OUTA complained also that and that there were no adequate alternatives to easing congestion as required and that the Competition Commission had found the relevant construction companies guilty of collusion.     Yet earlier, SANRAL had claimed that there was nothing untoward about construction costs before the Commission’s findings. MPs said they wanted to know more about this and there would be a follow up by Parliament.

Compliant motorists double penalised

Currently, Duvenage said, compliance stood at about 9%, which was vastly unfair to those paying. (This meeting took place before it was discovered that in all likelihood the remaining 91% had the slate of outstanding fines wiped clean).

Duvenage warned that coupling licence renewals with e-tolling compliance “was an invitation for public resistance” e-toll gantryand not encouraged by OUTA since it would destroy the basis of the AARTO Act and the foundation of road governance.

OUTA called for the e-toll principle be halted in practice overall and that an “exit strategy” be planned for existing contracts.      OUTA was reminded by Chairperson Ramakatla that the Commission of Enquiry into e-tolling had not advised that the user-pay principle be discarded. The response from OUTA to the chair that it was not the right tax mechanism to be used and was also unfair. Users were already paying for road use through fuel levies and taxes.

Talking only route

M de Freitas (DA) said it seemed at the time likely that Gauteng as a Province would oppose e-tolling and to head off the licence fees confrontation, OUTA and SANRAL had to appear at the same meeting and talk of compromise to avoid this happening. Such a confrontation would be disastrous for the country at a difficult time.

OUTA defended themselves by saying that they did not support anarchy and had not stated ever that they were in agreement with e-tolling, their argument being that it was not the right mechanism at all, so it would difficult to find a compromise on e-tolling as a programme.

OUTA said the system used was not a “boom down” system but a straight drive through and “the long-distance model had to be separated from the e-tolling model.”
Wayne Duvenage added he never went as far as Mpumalanga but the e-toll system charged him for freeway building in that part of the world. However, he said, he was already paying for un-tolled Mpumalanga roads through his normal tax, in fact any roads.

Fuel levy out of equation

Chairperson Ramakatla told OUTA that although agreement had been expressed that people had to pay for road use, the OUTA response seemed to be saying something else and their argument that there had to be sole reliance on the fuel levy was not acceptable.

If there was something wrong with the e-tolling system in their view they should make suggestions how to get it right but the fuel levy option was clearly out.

Whilst OUTA had submitted that there was a lack of consultation in 2007, and this was probably true, he said, the lack of consultation was later corrected and that argument no longer applied and this should be borne in mind if a resolution to the problem was to be found by stakeholders.

He said that Parliament would decide on its view on the e-toll issue in further debate.

Previous articles on category subject
Bumpy road for e-tolling Bill continues – ParlyReportSA
Transport Laws Bill on e-tolling amended – ParlyReport
Parliament says Transport Bill on e-tolling will go forward
Transport Laws Bill enabling e-tolling tabled – …

Posted in LinkedIn, Special Recent Posts, Transport0 Comments

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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Overall energy strategy still not there

Feature article………….

DOE energy strategy in need of lead 

From closing parliamentary meeting….sent clients dec 15….   South Africa’s energy strategy problem is as much about connection as it is about the integration of supply resources, said Dr WolseyDr Wolsey Barnard Barnard, acting DG of the Department of Energy (DOE), when briefing the parliamentary select committee on DOE’s annual performance before Parliament closed in 2015

Of all the problems facing South Africa on the energy front, probably the most critical is the lack of engineering resources facing South Africa at municipal and local level, negatively affecting economic development and consumer supply, he told parliamentarians.

He particularly referred in his address to the fact that the main problem being encountered in the energy supply domain was the quality of proposals submitted by municipalities for supply development in their areas.     In many cases, he said, the entities involved totally lacked the technical skills and capacity to execute and manage projects and there was also, in many cases, a lack of accountability with reports not being signed off correctly and in some cases technical issues not resolved before the project started.

Doing the simple things first

Despite all the queries from Opposition members on major issues such as fuel regulation matters; nuclear development and the tendering processes; the independent power producer situation with clean energy connection problems and issues surrounding strategic fuel stocks; again and again (DOE) emphasised that nothing was possible until South Africa developed its skills in the area of energy (electricity) connections.

electricity townshipsThe quality of delivery in this area was “extremely poor”, Dr Barnard said, inferring that without satisfactory delivery of energy the burning issues of supply became somewhat academic. Localised development at the “small end” of the energy chain had to be developed, he said. This lack of skills was exacerbated by the “slow delivery of projects by municipalities and by Eskom in particular”, he said.

Eskom  in areas not covered by local government.

Dr Barnard said that there was a lack of accountability on reports provided; poor expenditure by most municipalities evident from the amount of times roll overs were called for and high vacancy rates in municipalities. Consequently, he said, the overall Integrated National Electrification Programme (INEP) was producing slow delivery of electrification projects requested of both local government and Eskom against the targets shown to MPs.

In probably the last meeting of the present Parliament before its recess, DOE spoke more frankly than has been heard for some time on the subject of its short, medium and long term energy solutions, including a few answers on the problems faced.

Frank answers

DOE explained it had six programmes focus which were outlined as the various areas of nuclear energy; energy efficiency programmes; solar, wind and hydro energy supply; petroleum and fuel energy issues, regulations and development electrification with its supply and demand issues.

DOE specifically mentioned that the Inga Treaty on hydro-power had come into force in the light of theinga fact that conditions to ratify the long term agreement between SA and DRC were satisfied and commercial regulations could begin in order to procure power. This would change the future of energy of solutions. This was a long terms issue but targets for the year on negotiations had been met.

Opposition members were particularly angry that a debate could not take place of nuclear issues and whether South Africa was to procure reactors or not. It was suggested by the Chair that maybe the outcome of COP21 might have given more clarity but MPs maintained that to make a decision DOE, as well as the Cabinet, “must know the numbers involved”.

DOE maintained silence on the issue saying as before that enumerating bid details would destroy the process. It was assumed by the committee at that stage that the then Minister of Finance must be grappling with the issue but MPs wanted an explanation to back up President Zuma’s State of the Nation address on nuclear issues, complaining that nobody in Parliament had seen sight of Energy Minister Joemat-Pettersson nor heard a thing on the issue.

Full team minus nuclear

Present from DOE, in addition to Dr Wolsey Barnard, Deputy DG and Projects and Programmes were Ms Yvonne Chetty, Chief Financial Officer; DG Maqubela, DG of Petroleum Regulations and DG Lloyd Ganta, Governance and Compliance.

On solar energy, DOE said some 92 contracts had been signed in terms of the IPP programmes. Forty of them were now operating producing some 2.2 megawatts of energy at a “cheap rate” when on line and solar germanythe grid being supplied but it became more expensive when not being taken up. Dr Barnard explained that South Africa was not like Germany which was connected to a larger EU “mega” grid in Europe where it both received and supplied electricity.

SA’s system, he said was rather a “one-way supplier”, solar energy being made available only when needed by the grid. But as SA grew economically, things would change.

He commented that the new solar energy station in Upington had not yet been completed but shortly it would not only be supplying energy “when the sun was shining” but, importantly, be able to stored energy for later use. This made sense with the purpose of the IPP programme, he said.

The big failure

On the issue of the PetroSA impairment of R14.5bn, subject raising again the temperature in the meeting, DG Lloyd Ganta of DOE explained that the PetroSA impairment had happened mainly for two reasons.
The first was that PetroSA had made a loss in Ghana to the value of R2.7bn, primarily, he said, due to the fluctuations in the price of oil, the price falling from $110 per barrel to $50 at the time shortly after their entry and at the point of the end of the first quarter.

Project IkwheziThe second reason was due to losses at Project Ikwhezi (offsea to Mossgas) where volumes of gas extracted were far lower than expectation, the venture having started in 2011. At the end of the 2014/5 financial year, only 10% of the expected gas had been realised. When parliamentarians asked what the new direction was therefore to be, the answer received was that engineers were looking at the possibility of fracking at sea to increase the disappointing inputs.

The financial reports from Ms Chetty of DOE confirmed the numbers in financial terms making up the loss,

Dependent on oil price

Acting DG Tseliso Maqubela then stressed that nothing could not change the fact that South Africa was an oil importing country but the country was attempting to follow the direction of and promises made on cleaner fuels and it had been decided to continue with the East coast extraction.

In terms of the NDP, DOE said that South Africa clearly needed another refinery for liquid fuels but

refinery

engen durban refinery

whilst an estimated figure of R53bn had been attached to the issue some time ago for the financing of such, the issue of upgrading existing plant had not been resolved with stakeholders.

Oil companies, he commented, had said that if the government were not to pay for this in part, especially in the light of fuel specification requirements also required to meet cleaner fuel targets set by international agreements signed by SA, the motorist would have to foot the bill as the country could not import clean fuel as such to meet all demand.

More refining capacity

“A balance has to be found with industry and a deal struck”, he said, the problem being that the motorist was at the end of the fuel chain and such a call would affect the economy. He said that possibly the refinery issue could be approached in a phased manner and at perhaps a lower cost.

In the meanwhile, cleaner fuels were a reality and already some traders had applied to the DoE for licenses to construct import facilities, one in Durban and one in Cape Town.

If traders were to bring in large quantities of clean fuels, he said, this would represent a complete change in the petroleum sector and an energy task team, made up of government and main stakeholders was at present putting together a full report on cleaner fuels and a strategy for the future.

LPG a problem

lpgThe Liquid Petroleum Gas (LPG) situation was different, he said, since in this area there was not enough production and import storage facilities and it was a question of short supply therefore to the market – a problem especially in winter.

Both propane and butane, the main constituents of LPG are used in the refining process in the far more complicated process of straight petroleum fuel production and with the economies of scale that have to apply to South Africa, this resulted in a high market gate price and insufficient quantities, he said.

Unfortunately, LPG was becoming very much the energy source of preference with householders,especially poorer homes, hence the pressure on government to find some way of introducing LPG on an a far larger scale and at a lesser price. The impression was given that LPG “got the short straw” in terms of production output numbers.

Nuclear non-starter

Again when the subject came round to nuclear matters, no officials present from DOE were in a position to answer MPs questions on why eight nuclear power stations should be necessary, if nuclear was indeed a necessity at all, and whether the affordability had been looked at properly – the chairman again suggesting that the matter be put off until reappearance of the Minister of Energy in the New Year.

Gas on back-burner, as usual

Finally, on questions of gas and fracking, DG Tseliso Maqubela said that government “was takingmozambique pipeline a conservative approach” inasmuch that any pipeline from Northern Mozambique to South Africa was not under consideration but that plans were afoot to expand existing pipelines from that territory in the South.

On fracking, as most knew he said, a strategic environmental assessment had been commissioned, basic regulations published and also the question of waterless fracking was a possibility, now being investigated.
Previous articles on category subject
MPs attack DPE on energy communications – ParlyReportSA
Eskom goes to the brink with energy – ParlyReportSA
South Africa at energy crossroads: DOE speaks out – ParlyReport
Gas undoubtedly on energy back burner – ParlyReportSA
SA aware of over-dependence on Middle East, says DOE – ParlyReportSA

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SA’s COP21 climate change paper debated

sent to clients 13 October….

All on climate change but not cost…

cop21 logoAlmost always ignored at the recent parliamentary public hearings on the SA COP21 climate change submission was the issue of finances, probably the essential ingredient that should have been debated as part of South Africa’s position in the forthcoming  conference in Paris on intended targets for reduction of greenhouse gases.

After two full days of submissions, with no time for committee member questions from MPs in the light of time restraints and the re-presentation of papers in Xhosa, an impression was gained that there remained the same sharp divide between the providers of statistics that clearly showed what a future world would look like if South Africa and other countries continued on existing paths and those who called for reality in the light of the fact that South Africa is a coal-based economy and will remain so well into the mid-century.

State developmental call only

Surprisingly costs to the tax payer and to business and industry featured little in the proposed department of environmental affairs (DEA) COP22 submission, other than by emphasing the point by investing sooner was a more advantageous position to be in than later, when the cost of “catch up” would be far greater.

The submission is to be South Africa’s call on implementing their portion of 2015 COP agreement from its Green Climate Fund and which reserve fund is supposed to be capable of mobilising $100bn from 2020 onwards.  Also to be resolved is the issue of the immediate sources of funds and to capitalize into reality for use what already exists in the fund.

Maverick viewpoint

The one person who did approach the issue of funds but who fell into the category of a “denialist”Phillip lloyd according to environmental observers, was Prof. Phillip Lloyd of the Energy Institute, Cape Peninsular Institute of Technology, a known detractor of climate change. 

He claimed that in fact climate change issues represented a massive multi-billion industry with a potential turnover of R1,174bn. It was staffed by thousands of NGOs around the world, he said, employees of sensitive international companies, whole government departments and enormous amount of diverted funds that could be put to better use.

He claimed that the current warnings on climate change and “doomsday scenarios” were largely based on unsubstantiated statistics, or at the very least, exaggerated claims. Such funds should be diverted to development, not wasted on pointless conferences, he stated, and technologies that could not hope to meet the demands of growing populations.

Fact or fiction

He showed a graph of rainfall records for England and Wales going back to AD 1750 which indicated a mere 4% rise over the entire period and whilst indeed CO2 emissions , according to him, had increased alarmingly affecting health this was in no way connected to climate change because temperatures had only increased 1%, part of a long process of global warming that went back to the globe’s emergence from the last Ice Age.

Similarly, he noted, rising sea levels had been going on for “thousands of years” but the current level of annual sea rise was dropping in terms of archaeological and geological studies conducted, again over the centuries. He said that the current spend globally on the whole so-called climate change awareness programmes and infrastructure spend amounted to some R15,500 per person globally and “sooner or later this hype had to come to an end”, he concluded.

The chairperson thanked Prof. Lloyd with a sense of amusement.

Developmental help

gridsAnother issue raised regularly regarding the DEA COP 21 submission hearings was the call for capacity building to handle new clean energy resources, a major problem in many developing countries. Financial and technology mechanisms had to be shared and adapted wherever possible, particularly in countries where forced change would stunt economic growth, the paper before them stated.

Most submissions focused on the fact that the two issues had to be in harmony but few could expand how this could be achieved successfully, some submissions just taking the “green at all costs” approach. Nevertheless, in broad terms, all submission except the one acknowledged the urgent need for some sort of structured approach to the agreed need for climate change programmes.

Most submissions also made reference to the activities of Eskom or Sasol in one way or another, referring to such in one case as “the primary polluters in the South African context”.  Subjects brought up varied from fracking to small enterprise farming and renewable energy supplies to carbon capture.

In the one corner….

Greenpeace maintained that listing nuclear energy as “low-carbon” option was disingenuous in that Greenpeacenuclear life cycle in itself was carbon intensive and should not be referred as an energy component for clean renewable alternatives and preferably removed altogether.  

Other predictable submissions came from such bodies as Earthlife Africa and the World Wildlife Fund, who specifically named fossil fuels as the major problem, one of the few times vehicle fuel emissions were mentioned in the two days.

COSATU complained that the use of nuclear energy did not create jobs and would not help the economy in any way but did raise the issue that the effect of global warming was a fact and would be ”devastating as far as employment was concerned”.

The legal view

The Centre for Environmental Rights (CER) stated that South Africa’s negotiating position at COP 21 should succeed in giving effect to section 24 of the Constitution regarding the right to health but they complained that DEA’s long term plans, which included accommodating coal-fired power generation and its highly water-intensive processes had no hope of meeting constitutional requirements unless urgent changes were made.

They pointed out that aside from Medupi and Kusile, the Minister of Energy’s plan to procure an additionalmedupi 2500MW of coal fired power included seven further coal-fired plants yet to be built and which were in the planning stage, mostly in Limpopo and Mpumalanga. Both these provinces, CER said, were highly water stressed areas and had zones already declared as health priority areas due to poor air quality.

Even the right of access to drinking water was threatened in these areas, they pointed out, both issues, air pollution and lack of drinking water in their view representing potential breaches of constitutional privilege.

Top down problems

A number of interesting submissions were made on the problem of local government implementation of climate change mitigation plans.    A particularly important submission came from SA Local Government Association (SALGA), who pointed to the fact that whilst climate change was a national issue and called for a national approach, this did not change the fact that implementation and controls, regulations and planning mostly had to be done by cities and municipalities.

SALGA said there seemed to be no cohesion either in funding or in policy between national government and to some extent provincial government, but certainly not with local governmental authorities. They called for an “enabling framework” that could be adopted in key localised areas and so that “the voice of local government could be heard” by those paying for it.

Methane and fracking

A scientific paper known as the Howarth Report, emanating from Cornell University, was presented by a private individual, Marilyn Lilley, which focused on hydraulic fracturing and the greenhouse gas footprint left by this fracking drilling, the Howarth Report specifically focusing of fracking in the United States of America. Ms Lilley related these findings in her presentation with that of the 200,000sq km area released for fracking ventures in the Karoo.

A quick read of the Howarth Report indicates that in the US during the life cycle of an average shale-gas well 3.6 to 7.9% of the total production of the well is emitted as methane gas. This is at least 30% more and twice the harmful effect as gas extracted from conventional oil wells, the report says.

Also there is a 1.4% leakage of methane during storage and transmission of shale gas. This is the far the most dangerous component of greenhouse gases, the average black smoke emitted from a factory containing on the whole mainly harmless soot, the report concludes. Ms Lilley said that methane was “enemy number one”, adding again that methane had a far greater effect on global warming than any amount of coal fired energy generation.

Methane spouts

Fracking_GraphicShe also said that during the hydraulic fracturing stage of a drilling, which would go to at least 3-4kms vertically to a shale layer and then for approximately 2kms horizontally along the seam, fracturing then takes place with explosives and some 20 million litres of water with silica sand and chemicals pumped in to cause the methane gas to return to the surface with the then toxic water.

She said well pads are usually built 3-4 kms apart in a grid formation and each pad can have up to 30 wells, each being capable of being fracked a number times and each frack taking about 20 million litres of water.

She concluded that fracking whilst be making an unpleasant major contribution to greenhouse gas emissions, the process rather contributed more to global warming which was the actual root problem. She called for fracking and consequent methane gas emissions to be accounted for in South Africa’s COP 21 submission as a subject in itself and for a moratorium to be declared on fracking exploration and subsequent gas extraction.

She also pointed to the fact that disposing of the then toxic water extracted, in some cases needing irradiation, would become an immense and unmanageable waste problem and the light of the distances involved in the South African scenario.

Agri-plans and consequent food processing development

farmingA considerable number of submissions focused on the importance of establishing viable small farming units and a completely self-sustaining mini-agricultural food industry in specially located zones. The proposers suggested suitable cropping of vegetables and staple foods in order preserve the food chain for poorer communities under climate change conditions, the zones themselves contributing to healthier emissions with normal synthesis.

Carbon capture investigation

The South African National Energy Institute (SANEDI), reporting to the Central Energy Fund, gave a report- back on their work in the South Eastern Cape where a pilot drilling project, carried out on-shore for reasons of cost, was exploring the possibility of large-scale carbon storage at sea.    Prof. AD sanedi carbon capSurridge described carbon emissions capture as part of the “weaning off process necessary” whilst the country moved slowly from a fossil fuel based economy to a renewables/nuclear mix.

This pilot storage plant should be running by 2016, SANEDI said, and “commercial rollout possibilities concluded by 2020”.

Marathon run

In closing, Jackson Mthembu, chairperson of the Environmental Affairs Parliamentary Committee, said that “in South Africa, we are known for differing with respect”. This had been the purpose of the hearings, he pointed out.

He concluded by saying that climate change, as an issue, cut across all facets of government and consequently the parliamentary submissions collective summation would be shared across the desks of all Ministries involved.

Other articles in this category or as background

Environmental pace hots up – ParlyReportSA

Tougher rules ahead with new evironmental Bill – ParlyReport

Electric cars part of climate change response – ParlyReport

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Green Paper on rail transport published

sent to clients 12 October…..

National rail policy mapped out…..

metrorailA Green Paper on South Africa’s National Rail Policy has been published for comment naming the country’s challenges in rail transportation, recommending policy direction and containing broad proposals for the way forward to develop the current rail network.

Gazetted recently, the Green Paper represents work commenced in 2010 and says the document “Seeks to revitalise the local railway industry by means of strategic policy interventions”.   Not only is freight rail included in the proposals but long-distance rail passenger and localised commuter services.

Road dominates at a cost

Minister Peters said in a media statement at the time that railways in South Africa had operated for almost more than a century without a proper overarching policy framework to guide development.   “The railway line and its railway stations have played a pivotal role in the day-to-day lives of communities, especially those in the rural areas, but as far as freight is concerned, 89% of freight is still transported by road and the future of commuter rail conducted on an ad hoc basis”.

roadsThe emphasis of road transport is costing the country millions of rands annually in road maintenance, money that could have been well spent on developing freight rail, she said.

The process

Cabinet last month approved the release of the Green Paper for public consultation. When all is finished, a final White Paper on National Rail Policy will be released to guide and direct development of infrastructure and develop more modern commuter systems. A National Rail Act will be the final result of the White Paper.

These interventions, according to Minister Peters, will reposition both passenger and freight rail for inherent competitiveness by “exploiting rail’s genetic technologies to increase axle load, speed, and train length.“

Lining things up

railway lineWider-gauge technologies are on the cards.   The government has said it is converting 20 000km of track to standard gauge from the narrower Cape gauge. This would bring the network in line with an African Union resolution on the subject and at the same time would boost capacity of goods carried, with longer trains and a reduction in transportation costs.

With both passenger and freight rail falling within its scope, part of the envisaged national transport policy includes involvement by the department of transport (DOT) in the local government sphere to create capabilities to move more passengers by rail with infrastructure, more rail line and technical assistance.

Creating local commuter rail

Secondly, once the localised capacity is in place, DOT says it will be able to appropriate subsidies for urban commuter rail, the management of the mini-systems then being devolved to municipalities themselves.

The Green Paper talks of investment and funding, private sector participation, inter-connection with the sub-Continent, skills planning, investment strategies and the start of a regulatory system.     Part of the master plan at operations level would include a branch line strategy with the private sector involved to improve connection between cities with towns and industrial areas.

Other articles in this category or as background

Transnet improves on road to rail switch – ParlyReportSA

South Africa remains without rail plan – ParlyReportSA

Minister comments on taxi and rail plans – ParlyReportSA

PRASA gets its rail commuter plan started – ParlyReport

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Strategic fuel stock supply has problems

Foggy picture on fuel supplies…

Ageing refineries and failure to finalise financial planning with National Treasury on levies for strategic fuel stocks held in much-needed fuel storage facilities, are part of the problem faced by planners in the fuel industry and government, according to recent parliamentary meetings.

A confused picture emerged from a recent portfolio committee on energy during a meeting between Thembisile Majolacommittee and the Department of Energy (DOE) on behalf of the Strategic Fuel Fund (SFF).

Deputy Minister of Energy, Thembisile Majola, was present for the entire meeting as a participant in the debate, following the presentation on the strategic fuel stocks position by both DOE’s Deputy Director-General, Tseliso Maqubela, and Muzi Mkhize, Chief Director, Hydrocarbons Policy, at DOE.

CEO missing

In fact, not only was the outcome of the meeting unclear but occurred as an unscheduled event until the day in question.    It was also advised that that nobody in DOE knew the whereabouts of the SFF’s CEO, whose office had been found locked, whereabouts of the CEO himself unknown. He was suspected of being on the lookout for a new post, an apologetic member of SFF said.

Neither was the chairperson of SFF present or the main elected board, there being only one of six SFF board members at the meeting. The portfolio chairperson, Fikile Majola, confirmed that there had been major misunderstandings with parliamentary invitations but that did not explain the apparent disinterest by the SFF board itself in reporting to Parliament. The presentations were therefore purely by the Ministry and senior officials of the DOE.

Parliamentarians were told by DOE that strategic fuel stocks were defined as both crude oil and refined products and held by government and/or oil companies to cater for catastrophes or severe fuel supply disruptions.

The price of failure

Products to be kept as strategic stock included diesel, petrol, jet fuel and liquid petroleum gas (LPG).   As far back as 2006 it had been estimated that a “no stock” fuel crisis situation could result in a loss to GDP in South Africa of R1bn a day. This fact caused the Deputy Minister to remark that such a situation in 2015 “would make the current Eskom crisis seem like a walk in the park”.

Muzi Mkhize of DOE said strategic stocks would be released only upon declaration of a state of emergency by the Minister of Energy and were like an insurance policy. The SFF was responsible for the procurement, maintenance and management of strategic stocks held by government and oil companies likewise were responsible for the strategic stocks they held according to arrangements with the state.

The cost of storage

With regard to the financing of strategic stocks, a draft policy document was still being debated with National Treasury on the basis of a suggested levy of six cents per litre on petrol, diesel and jet fuel to finance procurement of stocks and the construction of storage facilities for refined products with operational expenses.

Tesliso MaqubelaTseliso Maqubela of DoE said the management by DOE of liquid fuels in the country was split into two divisions, policy and planning under one branch of  DoE and implementation, after approval by Cabinet, as another division. In that sense all members were present at the portfolio committee briefing, Maqubela assured parliamentarians, including Dr. Chris Cooper of Central Energy Fund under whom SFF used to fall and who was particularly acquainted with all issues. Present also was the CFO of SFF and the Chief Operations Officer.

Less in the cupboard

DDG Maqubela explained that it was originally required that South Africa keep 90 days of net imports but on an analysis of the current situation, it was proposed that the country keep a total of 60 days of strategic stocks and oil companies would be obligated to keep 14 days of refined products defined as strategic.

Africa now included

South Africa was a net importer of crude oil and refined petroleum products, he said, and currently over 50% of the country’s imported crude oil was from Middle Eastern countries whilst before it nearly all came from the Middle East. However, the country also now received 12% of its crude oil from Angola and 31% from Nigeria, which had changed the picture particularly as far as lead times and transportation were concerned.

Maqubela said there was no crisis in strategic stocks, “although there were emerging risks”. He reassured members, saying that on a day-to-day basis, he personally interacted with all the companies in the industry and there was certainly no crisis but the country did not have sufficient storage capacity for LPG.  This had to be resolved quickly and this was an immediate problem, he said.

“If the Chevron refinery went down for example, as it recently did, there would be more serious problemschevron tank in supplying the Western Cape with LPG. Therefore there needed to be an alternative for Chevron, which was why the DoE supported the granting of any foreign group such as Burgan Cape with a terminal licences for the construction of an import terminal and who had satisfactory BEE partnerships. The country could not rely on one facility for any products in any one area, he said.

Oil companies to keep refined product

The other issue, Maqubela said, was that the country was experiencing a lot of unplanned refinery shutdowns, primarily because of their age and the country needed a new refinery. The National Development Plan (NDP) stated that by 2017 a decision needed to be taken on refining, he remarked.

When one of the refineries at the coast had a problem, the country ran into “challenges” and one of the proposals which would be made at policy division level was that the strategic stocks policy needed to ensure that oil companies kept enough buffer stock at their own cost. The DoE believed, he said, given recent experiences that the country needed storage facilities to be built in key cities across the country, particularly in places such as Kimberley and East London.

chevron2Generated cash flows were used to maintain the infrastructure of keeping stocks and to fund all SFF’s operational expenditure. In 2014, the entity had generated R197 million from leasing its tanks for crude oil. Excess funds were transferred into cash reserves. The SFF received no allocation from government. In real terms, the R2.6bn revenue generated by the SFF in 1995 was more than ten times higher than the R198m revenue generated in 2015. SFF was a non-profit Section 21 company.

SFF’s operating costs between 2013 and 2015 had therefore been below budget. In the 2014/15 financial year, SFF’s revenue had been around R198m, as stated — a significant increase from the R93m in 2013/14.

In reserve

Mfano Nkutha, Chief Operations Officer, SFF, said SFF had two storage facilities at Saldanha and Milnerton, both in the Western Cape. Saldanha currently had six underground tanks holding 7.5m barrels each. Milnerton had 39 smaller tanks, holding 200 000 barrels above ground. There were no strategic stocks at the facilities. The SFF had an asset base where it accumulated interest on cash reserves and leased out storage space to crude oil trading companies.

Some of the new locations under consideration were Island View (Durban), Richards Bay port, East London, Cape Town port and Jameson-Park precinct. However, the basic matters still remained which were the finalisation of stock level requirements; some sort of agreement on funding and levies with National Treasury and feasibility studies for any proposed storage sites.

Southern African implications

In answer to the many questions from MPs, Maquebela said that in the broader context of energymapafrica&sa supplies, indeed the strategic fuel stocks policy framework had yet to be finalised but “all the time things were constantly changing in the global space and within the Southern African Development Community (SADC) region. These changes needed to be included in the policy framework”, he said.

“Botswana had been building huge storage tanks since 2010 as well and other private sector investments were in Coega and in Richards Bay. These had changed the scenario for the strategic stock framework.”      The multi-product pipeline had changed much, DDG Maqubela said, and historically disadvantaged South Africans (HDSAs) now operated in the fuel storage and fuel industry space but a policy was needed to look into a more integrated approach.

No one has shut shop.

Answering more questions, he said, “There needed to be a seamless release of stocks when the situation arose”. He commented on media reports and said that no refinery had been closed, and those which were currently not operating were on maintenance shutdowns. Chevron had not been closed — they were on a planned maintenance shutdown, he said, presumably referring to the verbal spat revealed in Parliament between Chevron, Burgan and DOE over the new Burgan terminal.

Every year, DDG Maquebela said, the DoE received a schedule of planned shutdowns from the oil companies, because shutdowns were required by law. The DoE’s role was to ensure that there were no overlapping shutdowns. The problem arose when the refineries did not stick to their schedules because of unforeseen circumstances, primarily those relating to the ageing infrastructure. Another problem which the country needed to explore was that the availability and reliability of rotating maintenance crews.

Overview of supplies

He said Chevron was currently operating at 30% capacity and Shell and BP had been experiencing some difficulties. Engen had recently undergone a planned maintenance shutdown, but it had come back on line satisfactorily, while Sasol Secunda was still dealing with a planned maintenance shutdown. PetroSA was operating at 50% capacity.

PetroSA logoIn answer to MPs questions on what had happened to DOE’s Coega refinery plan, Project Mthombo, Maquebela of DOE ducked the question by saying the NDP indicated that a decision needed to have been taken by 2017.   He added the DoE was not waiting until 2017 to make a decision, however. The building of the Mthombo refinery, which had been stopped, was being “reconfigured but there were some challenges in this regard.”

Priorities order of the day

Deputy Minister Majola said of the delay on the part of National Treasury was the splitting of the Department of Energy from environmental affairs and the fact that “electricity had become the main issue and Eskom’s challenges had taken priority in the energy space.”

She maintained much so many of the “challenges in DOE policy were concentrated under one branch it was therefore not humanly possible to manage all the work.” This was something which was impeding the progress of the DoE regarding policy, she said. There was also a misalignment between those who developed policy and those who implemented policy on a day-to-day basis. The DoE needed time to make a re-assessment of itself.
Other articles in this category or as background
Chevron loses with Nersa on oil storage – ParlyReportSA
Fuel price controlled by seasonal US supply – ParlyReportSA
PetroSA has high hopes with the Chinese – ParlyReportSA
SA aware of over-dependence on Middle East, says DOE – ParlyReportSA

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Transnet improves on road to rail switch

Transnet tries new formats…..

Troad railerransnet is piloting an innovative rail wagon termed a “road railer” which can use both rail track and the road system, all in further efforts to recover its loss of haulage to the private road sector, enter new markets and to improve turnaround times.   Addressing the Portfolio Committee on Public Enterprises on Transnet’s third quarter performance, Ravi Nair, Marketing and Operations Manager, said that this was one of the innovative pilot programmes in Transnet’s engineering facilities, which included also a flat rail wagon onto which private investors could invest with their own wagon specifications to meet tailored products hauled by Transnet rail. The meeting was specifically held to study Transnet’s road to rail strategy and progress.  Matters regarding Passenger Rail Agency (PRASA) were not involved.

Automotive industry important

Transnet, Ravi Nair said, were also introducing specialised wagons to meet the greater traffic needs of the automotive industry because of the introduction of SUVs and other wider bodied road vehicles, Ravi Nair said. The improvement of siding facilities for customers with necessary off loading equipment was also being undertaken as part of the general view taken of a strategy to improve the road to rail switch. It was noted that rail traffic with the automotive industry had greatly increased at the expense of road haulage. Nair said that on the whole there had been a 28% improvement in turnaround on the Durban/Gauteng line with an improvement in Duran harbour with new crane installations and container handling facilities.  An average turnaround time of 23hrs had been reduced to 18hrs for the trip.

Gauteng terminal reducing blockage

high-density-container-terminal-picture-credit-getty-imagesRaisile Letibe of Transnet said that the City Deep terminal in Johannesburg was due for further investment in sidings, warehousing and equipment. Throughout Transnet, a principle had been adopted that where maintaining line and signalling that had gone way beyond its age and maintenance was a waste of money, all line, signalling and switching gear was being replaced if maintenance was deemed necessary. Approximately 450 new locomotives were starting to pass through Transnet’s new plant at Kodooesberg, Pretoria, this being GE and South China Railway (CSR) locomotives of which some 100 CSR type had already emerged. Only 10 were built by CSR in China during the training period.

Hauling more

In mining terms, these locos will be able to improve a haul of 75 wagons up to 150 for magnetite, up to 200 wagons for manganese and probably double whatever was required with chrome, all possible according to the different class of locomotive used in the new range. The balance of Bombardier and China North locomotives will be built in Transnet’s Durban engineeringbombardier train works, taking the total number for Transnet freight haulage locos to well over 1,000. Transnet took advantage of a R50bn loan from China to conclude these contracts with the main operators and their BEE constituents, Transnet said. However, as things stood at present there was a general increase of 19% turnabout in mining haulage with increases for steel and cement, agriculture and bulk liquids and a major improvement in automotive products haulage and general manufacturing all recorded.

Freight and commuters

A daily meeting was now held with the Passenger Railway Agency (PRASA) on frequency of needs for commuters and the need for haulage of goods on the same track and the system was working well. There was a common understanding on signalling use and track needs at certain hours in cities and to industrial areas. PRASA were also engaged on their  massive development of commuter locomotives and carriages, or “trains” and the integration of both the needs of Transnet and PRASA were being satisfactorily co-ordinated, Transnet commented. rail sidings Raisile Letibe said that R300m had been invested in branch lines to attempt to keep them in shape for concessionaires when the plan to privatise branch lines was finalised. He said that the matter of branch lines brought Transnet with into contact with many other bodies involved in developmental matters including agricultural development, SEZ planning and rural development generally.

Private investment: branch lines

It was hoped to get the issue of the development of branch lines underway as soon as possible. Opposition members complained that this proposal was five or six years old. Under questioning, Transnet admitted that major “challenges” at the moment were breakdown of locomotives, all of which were now aged and parts had to be especially engineered a bought. Wagon availability was also a problem but both these “challenges” should be addressed by new rail stock. Industrial action and economic conditions contributed to the problems facing Transnet but to a lesser degree.

Rural outreach

Parliamentarians continued to be intrigued with the idea of a “road railer” which served the double purpose to become an off-rail road transport trailer. Nair, in answer to questions on this, said probably the private sector would be called in on road haulage issues to rural destinations and the system was used in many other parts of the world. A prototype was being constructed at the Transnet engineering workshops. Nair said that a number of bi-lateral meetings were being held with SADC countries, DRC, Mozambique and Namibia all with the purpose of improving volumes of haulage, particularly in Zambia where copper could be moved despite that country’s plans to open a rail link to the West Coast. However, the general purpose also was to strengthen economic growth through rail in the Southern Region. MPs all agreed that it was good news that at least one state utility in their portfolio was improving. Other articles in this category or as background Transnet says freight rail operations coming right Operation Phakisa to develop merchant shipping – ParlyReportSA Transnet doing better but resists carving up its assets South Africa remains without rail plan – ParlyReportSA Minister comments on taxi and rail plans – ParlyReportSA

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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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Fuel price controlled by seasonal US supply

US refinery shut downs affect fuel price…..

US refineryThe current spike in the price of petrol is due of a number of international issues  compounding together but the primary cause is that at this time of year in the United States, a number of major US refineries close down for maintenance in order to prepare for the US summer surge in fuel sales.

This was said by Dr Wolsey Barnard, acting DG of the department of energy (DoE), when he introduced a briefing to the portfolio committee on energy on its strategy for the coming year.

In actual fact, the meeting had been called to debate the promised “5-point energy plan” from the cabinet’s “war room” which did not eventualise, the minister of energy also being absent for the presentation as scheduled. It appeared that the DoE presentation had been hastily put together.

“Price swingers” make perfect storm

Dr Wolsey BarnardDr Barnard said that it could be expected that the price of fuel would be extremely volatile in the coming months due in main “geo-political events” affecting the price of oil, local pricing issues of fuel products and possibly even sea lane interruptions. Price would always be based on import parity and current events in Mexico, Venezuela and the Middle East would always be “price swingers”, he said.

On electricity matters, his speciality, he avoided any reference to past lack of investment in infrastructure, but said that he called for caution in the media, by government officials and the committee on the use of the two expressions “blackouts” and “load shedding”.

Same old story

“Over the next two years”, he said, “until sufficient infrastructure was in place, there would have to be planned maintenance in South Africa” and referred to the situation in the US as far as maintenance of refinery plant was concerned. He said that also “unexpected isolated problems” could also arise with ageing generation installations, during which planned “load shedding” would have to take place.

He said he could not imagine there being a “blackout”.

Opposition members complained that the whole electricity crisis could be solved if some companies would cease importing raw minerals, using South African electricity at discounted prices well below the general consuming manufacturing industry paid, and re-exporting smelted aluminium back to the same customer. They accused DoE of trying to “normalise what was a totally abnormal position for a country to be in.”

Billiton back in contention

One MP said, “Industry was in some cases just using cheap South African electricity to make a profit”. Suchaluminium smelter practices went against South Africa’s own beneficiation programme, he said, in the light of the raw material being imported and the finished product re-exported. “It would be cheaper to shut down company and pay the fines”, the DA opposition member added, naming BH Billiton as the offender in his view.

Dr Barnard said DoE could not discuss Eskom’s special pricing agreements which were outside DoE’s control  and “which were a thing of the past and a matter which we seem to be stuck with for the moment.”

High solar installation costs

Dr Barnard also said that DoE had established that the department had to be “cautious on the implementation of solar energy plan” as a substitute energy resource in poorer, rural areas and even some of the lower income municipal areas.  DoE, he said, “had to find a different funding model”, since the cost of installation and maintenance were beyond the purse of most low income groups.

In general, he promised more financial oversight on DoE state owned enterprises and better communications.   There were plenty of good news stories, he said, but South Africa was hypnotising itself into a position of “bad news” on so many issues, including energy matters. He refused to discuss any matters regarding PetroSA, saying this was not the correct forum nor was it on the agenda.

Still out there checking

On petroleum and products regulation, the DG of that department, Tseliso Maquebela, said that non-compliance in the sale of products still remained a major issue. “We have detected a few cases of fraudulent fuel mixes”, he said, “but we plan to double up on inspectors in the coming months, especially in the rural areas, putting pressure on those who exploit the consumer.” The objective, he said was reach a target of a 90% crackdown on such cases with enforcement notices.

Maquebela added that on BEE factors, 40% of licence applications with that had 50% BEE compliance was now the target.

Competition would be good

On local fuel pricing regulations, Maquebela said “he would dearly like to move towards a more open and competitive pricing policy introducing more competition and less regulations.”

fuel tanker engenOn complaints that the new fuel pipeline between Gauteng and Durban was still not in full production after much waiting, Maquebela said the pipeline was operating well but it was taking longer than expected to bring about the complicated issue of pumping through so many different types of fuel down through the same pipeline. “But we are experts at it and it will happen”, he said.

Fracking hits the paper work

On gas, particularly fracking, DoE said that the regulations “were going to take some time in view of all the stakeholder issues”.

On clean energy and “renewables” from IPP sources, DoE stated that the “REIPP” was still “on track” but an announcement was awaited from the minister who presumably was consulting with other cabinet portfolios regarding implementation of the fourth round of applications from independent producers.

Opposition totally unimpressed

In conclusion, DA member and shadow minister of energy, Gordon McKay, said that the DoEgordon mackay DA presentation was the most “underwhelming” he had ever listened to on energy.   Even the ANC chair, Fikile Majola, sided with the opposition and said that DoE  “can do better than this.”

He asked how Parliament could possibly exercise oversight with this paucity of information.   DoE representatives looked uncomfortable during most of the presentations and under questioning it was quite clear that communications between cabinet and the DoE were poor.

When asked by members who the new director general of the department of energy would be and why was the minister taking so long to make any announcement on this, Dr Wolsey Barnard, as acting DG, evaded the question by answering that “all would be answered in good time”.

Other articles in this category or as background
Energy gets war room status – ParlyReportSA
Medupi is key to short term energy crisis – ParlyReportSA
Integrated energy plan (IEP) around the corner – ParlyReportSAenergy legislation is lined up for two years – ParlyReportSA

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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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Air traffic control Bill changes “permissions”

OR tamboBill  penalises false air traffic data…..

The department of transport (DoT) has published the Air Traffic and Navigation Services Company Amendment Draft Bill, calling at the same time for public comment.

Air Traffic and Navigation Services (ATNS) is the company responsible to the minister of transport as a profit-making government venture which has the mandate to control the management of South Africa’s airspace, air traffic control and organise the management systems necessary to operate such national facilities.

The Bill in question seeks to amend the Air Traffic and M-Navigation Services Company Act so as to “insert new definitions; substitute certain expressions; provide for appeals against the decision of the Committee; and provide for offences.”

Airport facility definitions changed

It is understood that income to run ATNS primarily comes from “permissions” or pre-agreed rates for aircraft to descend and land; use runways; airport facilities aside from charges levied by ACSA; park aircraft; take off; what height to fly and to accept flight plans for data dissemination.

The main subject re-defined by the Bill is the wording of the expression “permissions” i.e. at what rate these are charged, which mainly depend on frequency of use, size of fleet, routes chosen and the amount of input from air traffic control staff needed.

The Bill also deals with penalties that may be imposed, it being an offence to supply false information on intended flight routes, lodge false flight plans and supply any false information which may affect the flow of data needed to control airspace and aircraft movements.

Permission to land

How appeals against rulings on the cost and application of “permissions” is also dealt with. The Bill also seeks to give legal status to an application for a “permission” called an “approach document”, in which ATNS provides guidelines on the information needed from operators when a “permission” is sought.

SA world class

DoT reported to Parliament in its annual budget statement that the budget appropriation for ATNS and its operating profit, though not excessive, had resulted in the use of “state-of-the-art equipment and world-class technology being used and a principle of mid-life updating of the air traffic management system to meet the highest of international standards being applied.”

DoT also reported that VHF radio systems with the latest voice and data capabilities and the installation of the high quality VHF directional finders had been acquired.

The department claimed that ATNS was well known for efficiently managing South Africa’s airspace and had successfully, throughout the years, maintained a record of a zero commercial aircraft accident rate.
Other articles in this category or as background
http://parlyreportsa.co.za/public-utilities/saa-turnaround-plan-involves-flight-changes/
http://parlyreportsa.co.za/uncategorized/search-and-rescue-bill-to-set-up-search-centres/

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road accident bill South Africa

Road Accident Benefit Bill changes everything

Road Accident victims paid out regardless of fault…

A draft Road Accident Fund Scheme Bill was recently published for comment by the department of transport (DoT) as part of the new “no fault” scheme of benefits, the Bill establishing an office of an administrator to implement and subsequently administer the scheme of injury and death benefits.

The idea of a no-fault approach to compensation, says DoT, is in part to respond to the problems identified with the current fault-based approach, and also to improve and simplify claims procedures so that claims are more speedily dealt with.

This is distinct from the present “insurance-based” procedure where the question and quantum of liability can drag on for years in the courts, the department says in its background document.

Social security first

The Bill seeks to provide for a social security scheme for the victims of road accidents for bodily injury or death and will exclude liability of certain persons otherwise liable for damages in terms of the common law.

DoT says the proposals state that “no civil action for damages in respect of bodily injury or death”, in the case of a road accident, be pursued against any owner’s vehicle involved, drivers or employers of drivers.  Rather, payment is made in terms of the defined benefits of the new scheme regardless of who caused the accident.

DoT says the new Bill forms part of an initiative to replace the third party compensation method with a system that is “reasonable, equitable, affordable and sustainable”.

Public comment was open on the new draft Bill until early September and considerable debate will probably ensue in parliamentary hearings on the question of the extent of the benefits schedule and quantum.

 

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Road and Rail South Africa

Minister comments on taxi and rail plans

Taxi recap slows, rail plans behind….

Transport 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.

Taxi industry must change

The need to modernise the taxi industry still remained as an urgent issue, she continued, and also there was a need to further deploy 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.

E-toll dispensations

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.

How it works

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.

Metrorail must improve

On 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.

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 transport 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.

Focus must be on freight

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.

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.

Where is the merchant navy

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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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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