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					Department of Transport


  Joint Budget Committee




                    1 November 2007
Department
of Transport   Contents of presentation

                •   Expenditure trends for 2006/07
                •   Audit outcomes for 2006/07
                •   Mandates
                •   Medium term policy priorities
                •   Significant MTEF allocations:
                     • Planning assumptions
                     • Risk assessments
                •   Personnel, skills development and training
                     • Personnel establishment and vacancy ratio’s
                     • Skills development and training programmes
                •   Infrastructure and maintenance budgets
                •   Transfer and grant management
                •   Monitoring and evaluation systems

                                                                     2
Department
of Transport   Expenditure trends for
               2006/07
                • Adjusted budget
                • Reprioritisation
                • Under expenditure




                                        3
Department
of Transport
                       Expenditure trends for 2006/07:
                       Adjusted Budget
      Details                                                                                      R’000
      Original budget per 2006 ENE                                                               12 870 458
      Adjusted Budget:
      Funds rolled over from the previous year:                                                    211 500
         Capacity development - academic institutions                                                 3 000
         Late invoice for oil pollution prevention services                                           3 300
         Integrated rural mobility access project                                                     1 200
         Service providers assisting with the taxi recapitalisation programme, and provinces        54 000
         assisting with the permit conversion process
         Scrapping of old taxi vehicles                                                            150 000
      Unforeseen and unavoidable expenditure:                                                       45 100
         Additional bus subsidies - increases in the fuel price                                     45 100
      Other adjustments:                                                                           619 732
         Operational costs for the S.A. Rail Commuter Corporation (SARCC) for liabilities for      439 732
         employees transferring from other passenger rail entities
         Operational shortfall of the SARCC following a due diligence report                       180 000
      Total of Adjusted Budget                                                                     876 332
      Final budget for 2006/07                                                                  13 746 790    4
Department
of Transport
                  Expenditure trends for 2006/07:
                  Reprioritisation
      Details                                                        R’000
      Shifted from savings in Compensation of Employees across       14 000
      Programmes for promoting October Transport Month
      Reduced Transfers and increased Goods and Services to          68 000
      assist Provinces with the taxi recapitalisation process
      Shifted R7 million across Programmes and R7 million within     14 000
      Programme 1 for further October Transport Month projects
      (renaming of OR Tambo, taxi communications, Remembrance
      Day)
      Additional funds made available across Programmes for Arrive    9 000
      Alive communications
      Shifted funds across Programmes for Capacity Development        2 400
      Shifted funds across Programmes for:
      • Corporate Support                                             1 000
      • Human Resource Management                                       800
      • Government Fleet Services                                       800
                                                                              5
Department
of Transport
                    Expenditure trends for 2006/07:
                    Under expenditure
      Details of major amounts under spent                                     R’000
      Scrapping of old taxis                                                   252 500
      Taxi recapitalisation projects                                            30 400
      Rural Mobility and Access projects                                        28 000
      Special investigations into Driver and Vehicle Testing Centres            18 500
      Restructuring of the Road Accident Fund                                   14 000
      Vacant posts that could not be filled                                     14 700
      Policy development projects                                                7 000
      Delays in establishment of Rail Economic Regulator and development of      7 000
      legislation for Maritime Security
      Development of the NLTTA and National Transport Master Plan                7 800
      Infrastructure and systems for 2010 Soccer World Cup                       1 900
      Freight Logistics projects                                                 2 700
      Other                                                                      1 900
      Total                                                                   386 400
                                                                                         6
Department
of Transport   Audit outcomes for 2006/07

               • Emphasis of matter
               • Other matters:
                  • Non-compliance with legislation
                  • Matters of governance
                  • Corrections made to financial statements
                  • Value-for-money matters
                  • Internal control




                                                               7
Department
of Transport
                     Audit outcomes for 2006/07:
                     Emphasis of matter
 AUDIT REPORT                      ACTIONS TAKEN                      ACTIONS TO BE TAKEN
 Previous qualification:           • Financial statements compiled     • Operationalise the Trading
 Treasury indicated that the       • Audit being finalised up to 2006    Account
 contract for the production of    • Approval obtained to create a     • Transfer the contract to the
 credit card format driver’s         trading Account                     RTMC
 licences should be treated as a   • In process of appointing
 Trading Account                     contractors to operationalise the
                                     Trading Account and to ensure              Matter will not
                                     compliance                                 recur




                                                                                                        8
Department
of Transport
                       Audit outcomes for 2006/07:
                       Other matters
 AUDIT REPORT                          ACTIONS TAKEN                     ACTIONS TO BE TAKEN
 Non-compliance with                   • Risk assessment completed       Follow up audit reports will be
 legislation:                          • Audit Committee approved the    tabled at Audit Committee meeting
 Internal audit plan and three year      Internal audit plan and three   on 22/11/2007
 rolling plan not reviewed and no        year rolling plan on 26/9/07                          Resolved
 follow up audits done                 • Follow up audits in process
 The fraud prevention plan and         The plan and policy were          Implementation plan was
 risk management policy were not       approved after year-end and       presented to Risk Management
 officially approved                   accepted by Audit Committee       Committee on 29/10/2007
                                                                                               Resolved
 Salary reports and payroll            • Signed off for 2006/07          Delegated to Budget Controllers
 certificates not signed off in time   • Being followed up monthly       to fast track. Progress will be
                                                                         tabled at EXCO
 Irregular and fruitless and           Process to deal with such cases   Cases identified will be reported
 wasteful expenditure not reported     developed and circular issued                       Will not recur
 Monthly reports in terms of           • Now receiving confirmations
 DORA not submitted                      that reports were submitted                            Resolved
                                                                                                       9
Department
of Transport
                     Audit outcomes for 2006/07:
                     Other matters
 AUDIT REPORT                       ACTIONS TAKEN                       ACTIONS TO BE TAKEN
 Non-compliance with               Internal Audit are in consultation   Co-ordination plan to be
 legislation:                      with Internal Auditors of Gautrain   implemented
 No co-ordination between internal
 audit divisions of DOT and
 Gauteng w.r.t. Gautrain                                                Will not recur

 Non-compliance with National       Inspection reports                  Legislation in the process of
 Road Traffic Act by Driving                                            being reviewed to enable DOT
 License Testing Centres                                                to suspend Testing Centres


 Matters of governance:             • Irrecoverable levies due by
 Not all SCOPA resolutions were       DLTC’s were written off           Resolved
 implemented                        • Processes were put in place to
                                      fast track filling of vacancies
 Audit committee not functioning    New fully functional Audit
 effectively                        Committee appointed                 Resolved
                                                                                                   10
Department
of Transport
                Audit outcomes for 2006/07:
                Other matters
 AUDIT REPORT           ACTIONS TAKEN                         ACTIONS TO BE TAKEN
 Material corrections   • Corrections were made to the
 made to financial        financial statements emanating
 statements:              from audit findings
                        • Processes were put in place to
                          deal with irregular and fruitless
                          and wasteful expenditure
                        • Classification of certain           Processes were put in
                          expenditure was resolved with       place to ensure that
                          Treasury                            similar corrections will not
                                                              be repeated
                        • Bank reconciliation process was
                          reviewed
                        • Misallocations were corrected
                        • Disclosures were corrected and
                          processes were pt in place to
                          ensure correct disclosure

                                                                                        11
Department
of Transport
                       Audit outcomes for 2006/07:
                       Other matters
 AUDIT REPORT                      ACTIONS TAKEN                      ACTIONS TO BE TAKEN
 Value for money matters:          In process of appointing a
 Tenders awarded and               consultant to oversee the
 management of contracts were      management of contracts in DOT
 not always done effectively
 The number of vacancies           Processes were put in place to
 remained at a high level          fast track filling of vacancies.
                                   The vacancy rate did not decline
                                   due to the high number of
                                   resignations in 2006/07
 Internal control:                 Auditors were engaged to           The post implementation audit
 eNaTIS audits were completed      commence with the post             started and the report will be
 during the preproduction /        implementation audit               separately tabled in Parliament
 development stage of the system
 There was an absence of           Several policies and strategies    Draft policies and procedures will
 officially approved policies      were approved after year-end       be tabled at EXCO for approval
                                                                      Will not recur                 12
Department
of Transport
                      Audit outcomes for 2006/07:
                      Other matters
 AUDIT REPORT                        ACTIONS TAKEN                      ACTIONS TO BE TAKEN
 Risk assessment: There was a        • The risk assessment was          Fraud prevention plan must be
 lack of sound practices for fraud     completed and the Internal       fully implemented. Will be
 prevention and for ensuring           Audit Plan was based on the      presented to Risk Management
 compliance with legislation           risk assessment.                 Committee on 29/10/2007
                                     • The reviewed fraud prevention
                                       plan was accepted by the Audit
                                       Committee                        Resolved
 Monitoring of controls:             • Internal checking procedures
 Review of reconciliation’s,           were developed and
 confirmations from external           implemented
 parties and internal audit          • Reconciliation’s of suspense
 processes were not effective          accounts are done monthly, and Resolved
                                       the bank reconciliation process
                                       was reviewed
                                     • Internal audit started to function
                                       effectively
                                                                                                    13
Department
of Transport   Mandates

               • Transport Policy, Research and Economic Analysis
               • Transport Regulation and Accident and Incident
                 Investigation
               • Integrated Planning and Inter-sphere Co-ordination
               • Freight Logistics and Corridor Development
               • Public Transport
               • Public Entity Oversight and Economic Regulation




                                                                      14
Department
of Transport
                 Mandates

               Transport Policy, Research and Economic Analysis:

               • Effectively manage a national innovative research and
                 development programme, develop and analyse strategic policies,
                 develop appropriate legislation, and provide economic advice and
                 analysis for all modes of transport

               Transport Regulation and Accident and Incident Investigation:

               • Create an enabling regulatory environment in the areas of safety,
                 security and environmental compliance, and manage accident and
                 incident investigations in all modes of transport

               Integrated Planning and Inter-sphere Co-ordination:

               • Manage and facilitate integrated planning and inter-sphere co-
                 ordination for transport infrastructure and operations.

                                                                                     15
Department
of Transport
                 Mandates (continued)

               Freight Logistics and Corridor Development:

               • Manage the implementation of the transport logistics strategy and
                 the development of freight movement corridors

               Public Transport:

               • Develop practices and norms that will increase access to
                 appropriate and quality public transport that meets the needs of
                 both rural and urban passengers.

               Public Entity Oversight and Economic Regulation:

               • Develop appropriate mandates and monitoring mechanisms for
                 public entities. Develop and oversee transport economic
                 regulation in line with broad economic and transport policies


                                                                                     16
Department
of Transport   Medium term policy
               priorities
               • Transport Policy, Research and Economic Analysis
               • Transport Regulation and Accident and Incident
                 Investigation
               • Integrated Planning and Inter-sphere Co-ordination
               • Freight Logistics and Corridor Development
               • Public Transport
               • Public Entity Oversight and Economic Regulation




                                                                      17
                 Medium term policy priorities:
Department
of Transport
                 Transport Policy, Research and
                 Economic Analysis
               Performance indicator data framework:                        Sept 2008
                • Continue to establish uniformity between local and
                   international concept definitions
                • Incorporate other performance indicators
                • Annual database updates
               Review the White Paper on Transport Policy                   Nov 2008
               Develop a policy on the transportation of hazardous          March
               substances                                                   2008
               Develop a scholar transportation policy                      July 2008
               Obtain Cabinet approval of the Integrated Transport BEE      Over
               Charter and implement the Charter                            MTEF
               Complete baseline studies on the economic performance of     Sept 2008
               the Transport Sector
               Implement the legislative programme: Transport Agencies      Annually
               General Laws Amendment Bill, Cross Border Road Transport
               Amendment Bill, etc.
               Implement the transport innovation and technology research   2009/10
               strategy, Implement a new National Household Travel Survey
                                                                                       18
                 Medium term policy priorities:
Department
of Transport
                 Transport Regulation and Accident
                 and Incident Investigation

               Complete migration of eNaTIS to the State                      Dec 2008
               Airlift strategy implemented: Air services negotiations with   March
               10 states                                                      2008
               Set up independent Ports Regulator, and Port                   Sept 2007
               Consultative Committee in each commercial port                 & over
                                                                              MTEF
               Redefine port limits                                           June 2008
               Marine environment protection                                  Apr 2009
               Maritime Transport security legislation                        2007/08
               Introduction of periodic vehicle testing                       Dec 2008
               Implementation of security improvement process at              March
               vehicle stations and drivers license testing stations          2009
               Develop Regional Integrated Search and Rescue Strategy 2008/09
               for approval by Cabinet

                                                                                         19
                 Medium term policy priorities:
Department
of Transport
                 Integrated Planning and Inter-sphere
                 Co-ordination

               Develop the final Land Transport Bill and supporting     Dec 2008
               Regulations
               Finalise Rural Transport Strategy                        Dec 2007
               Establish Integrated Rural Transport Development         March 2008
               Programme with geographical information system
               mapping
               Finalise road network reclassification                   Dec 2008
               Calendar for non motorised transport marketing and       March 2008
               communication plan
               Complete best practices study on Transport Authorities   March 2008
               Road Infrastructure Strategic Framework road quality     Dec 2008
               assessment
               Develop National Overload Control Strategy               March 2008
               Continue with infrastructure rollout monitoring and Ongoing
               evaluation
                                                                                   20
                 Medium term policy priorities:
Department
of Transport
                 Integrated Planning and Inter-sphere
                 Co-ordination (continued)

               Finalise 2010 transport operational planning framework    Oct 2007
               Monitor and report on municipal progress regarding        Monthly
               infrastructure
               ITS programme presently being rolled out to Durban and    Dec 2008
               Cape Town
               Second round of Transport Plans - based on new            Dec 2008
               Requirements
               Pilot programme to address the lack of transport          March 2008
               capacity, to plan and execute, at the level of District
               Municipalities
               Develop a National Transport Master Plan                  Dec 2008
                • Phase 1 (Status Quo report) has been completed
                • Phase 2 (analysis underway)



                                                                                    21
                   Medium term policy priorities:
Department
of Transport
                   Freight Logistics and Corridor
                   Development – objectives

               Freight Business Intelligence:                                   2009/10

               • Integration all freight information systems & create one data centre
                 that could include other areas of transport
               • Provide government with transport operations intelligence on all
                 modes
               • Resolve gaps between forecast demand & planned capacity
               • Provide government with the ability to integrate SARS system with
                 DOT systems in order to know what moves through our borders by
                 tracking supplier manifests as declared with SARS
               National Freight Databank:                                       2008/09

               •   Collect and consolidate all freight statistics in one central
               •   Provide infrastructure utilisation
               •   What moves where, how & in what quantities
               •   Provision of Origin-Destination pairs
               •   Provision of least cost routing
               •   Provision of transit & turnaround times of various supply chains

                                                                                      22
                 Medium term policy priorities:
Department
of Transport
                 Freight Logistics and Corridor
                 Development – objectives (continued)

               Freight Monitoring Framework:                          2008/09

               • Track movement of containers, wagons & locomotives
                 & general freight
               • Deal with overloading
               • Force filling at source
               • Identification of hot spots
               • Compliance with Container Safety Initiative &
                 International Shipping & Ports Security code




                                                                                23
                 Medium term policy priorities:
Department
of Transport
                 Freight Logistics and Corridor
                 Development – priorities

               National freight databanks:                                       2008/09
               • Finalise Eastern Cape
               • Undertake national update
               National Freight information system:                              2008/09
               • Develop freight information platform
               • Design business intelligence framework
               • Develop legislative framework for freight information filling
               Sub Sectoral strategy:                                   2009/10
               • Develop Rail Economic Regulator legislative framework.
               • Finalise rail industry architecture
               • Develop draft branch line and network management
                 strategy
               • Finalise MOU with Spoornet
               Corridor mapping:                                      2009/10
               • Design and develop 2014 scenario
               • Integrate freight platform with monitoring framework
                 outputs and develop corridor performance tools
                                                                                       24
                 Medium term policy priorities:
Department
of Transport
                 Freight Logistics and Corridor
                 Development – priorities (continued)

               Modeling of customs and other processes on key corridor 2007/08
               movement of cargo:
                • Finalise and integrate freight business intelligence
                  framework with freight platform and superimpose
                  information GIS platform
               Support the design and integration of Dube Trade Port:      2007/08
               • Finalise and approve design plans for the construction of
                 Dube Trade Port and King Shaka international airport
               Report on system inefficiency in movement of goods and 2009/10
                 passengers in all ports of entry:
               • Alignment of freight business intelligence framework, and
                 freight platform with SARS statistics collection
               • One stop border post developed and constructed
               Operational improvement in public entities responsible for Over
                 cross border movement:                                   MTEF
               • Integrated freight information systems between DOT,
                 CBRTA and SARS
                                                                                 25
                 Medium term policy priorities:
Department
of Transport
                 Public Transport


               Facilitate the implementation of public transport strategy
               and development of phase 1 operational plan for the
               Integrated Rapid Public Transport Network in 12 cities
               aligning with 2010 plans:
                • Network operational plans completed in up to 12             Dec 2008
                  cities and 6 districts (subject to availability of R3m to
                  R5m to assist)
                • Implementation processes commence                           Dec 2007
                • Phase 1 Integrated Rapid Public Transport Networks          From
                  operational in up to 12 cities and 6 districts              2009/10




                                                                                         26
                 Medium term policy priorities:
Department
of Transport
                 Public Transport (continued)


               Monitor the progress in TRP scrapping based on the Ongoing
               80% target by 2010
               Support the taxi recapitalisation programme by:
                • Finalising a skills strategy for the taxi industry and Sept 2008
                  start implement programme
                • Facilitate the availability of New Taxi Vehicles (NTV)   Ongoing
                  that fully comply with safety requirements and colour
                  coding specifications
               Transformation of bus subsidies into public transport       Timelines
               subsidies to include taxis (public transport strategy)      are
               Develop an Investment Strategy for passenger rail           detailed in
                                                                           the next 5
               Focus on the turnaround strategy for SARCC/Metrorail        slides

               Shosholoza Meyl consolidation into SARCC/Metrorail


                                                                                     27
                                   Medium term policy priorities:
         Department
                                   Transformation of bus subsidies into public
         of Transport
                                   transport subsidies to include taxis

                                Project Plan - Design of Operational Plans
                         Milestone                                               2007/08                                                                       2008/09
                                                       Se p t   Oc t    Nov      Dec                          Jan   Fe b   Mar      Ap r    Ma y     Jun       J ul    A ug    Sep         Oc t   Nov

     1   Appointment of Service Providers              S ta tus o f 7 P ro v inc e s

         Undertake Road Based Passenger census
     2
         (Bus & Taxi)                                 Mus t b e a wa re D e c e mb e r/ J a nua ry p ro b le ma tic

     3   Analysis of census information

         Brief of Province/Metro's on integrated
     4
         design




                                                                                          Chris t mas Break
     5   Finalisation of Design & Operating Plan
                                                                                                                                  S ta tus o f 2 Me tro ' s

         Submission of designs & operating plan for
     6
         DOT approval
         Provincial/Metro Tender Authorities
     7
         approval/advert                                                                                                   E xte ns iv e N e g o tia tio n will b e re q uire d


     8   Preparation of Bids by Operators


     9   Evaluation and Appointment
                                                                                                                                                   R e q uire S p e c ia lis e d T e a m

     10 Commencement of Operations                                                                                                     S ub je c t to p ro c ure me nt o f a s s e ts
28
                               Medium term policy priorities:
     Department
                               Development of an Investment Strategy for
     of Transport
                               passenger rail

                                                         Project Plan
                                                             2007/08                                                  2008/09
                                            Sept Oc t   Nov Dec                           Jan   Feb Mar Apr May Jun   Jul   Aug Sep Oc t     Nov

     1   Appointment of Service Providers


     2   Interim Report
                                            Must be aware Dec ember/ January
                                            problematic




                                                                   C hr i s tmas Br eak
     3   Workshop


     4   Draft Final Report


     5   Workshop


     6   Approved Final Report


     7   Commence Implementation
                                                                                                               Maximum period of 18 months
29
                 Medium term policy priorities:
Department
                 Focus on the turnaround strategy for
of Transport
                 SARCC / Metrorail

               The Turn Around Strategy is phase 1 of the Rail Plan and focus on
               the following: This phase is a 3 year phase that commenced in
               2007/08

                • Accelerated Rolling Stock Strategy
                   • 500 coaches – 2007/08
                   • 700 coaches – 2008/09
                   • 700 coaches – 2009/10

                • Upgrading of Signaling & Telecommunications
                   • 50% of A&B priority corridors

                • Improved Train punctuality
                   • 95% related to constrains of operating environment




                                                                                   30
                 Medium term policy priorities:
Department
                 Focus on the turnaround strategy for
of Transport
                 SARCC / Metrorail (continued)

               Phase 2 – Sustain Business

               Phase 3 – Grow Business

               Phases 2 & 3 are not mutually exclusive and may unfold
               simultaneously depending on the outcome of the investment strategy
               i.e. Private Sector participation or the availability of funds over the
               MTEF




                                                                                         31
                       Medium term policy priorities:
Department
                       Shosholoza Meyl consolidation with
of Transport
                       SARCC / Metrorail

  Milestone                                                             Timeframe

                                                               Start                 End


  1. Amendments to the Legal Successions Act                   Jan 07           March 08
  2. Appointment Transaction Advisors:                         Feb 07            Aug 07


    •   Review and Update Due diligence                        Aug 07               Jan 08
    •   Merger Integration Plan                                Feb 07               Jul 07
    •   Business Plan and actuarial valuation                  Jun 07               Nov 07


  3. Agreement with Organised Labour

  4. Secure additional funding:

    •   Preparation of Cabinet Treasury Committee memorandum   Jul 07               Sep 07
    •   MTEF motivation                                        Jul 07               Sep 07

  5. Legal Team - Sale of business agreement                   Sep 07               Feb 08




                                                                                             32
                 Medium term policy priorities:
Department
of Transport
                 Public Entity Oversight and
                 Economic Regulation

               Finalisation of new performance agreements between      Feb 2008
               government and public entity boards for 2008/09

               Continue with financial and non financial oversight –   Quarterly
               compliance and evaluation reporting

               Implement a new benefit scheme for victims of road      March 2008
               accidents

               Implement the framework of the economic regularity Nov 2007
               requirements for reformed rail sector, including access to
               new operators (Nov 2007):
                • Develop governance model for the Rail Economic
                  Regulator
                • Complete the framework to guide the drafting of
                  legislation for the Rail Economic Regulator



                                                                                   33
Department
of Transport   Significant MTEF allocations

                •   Major budgets
                •   Breakdown of other budgets (2008/09)
                •   Planning assumptions
                •   Risk assessments




                                                           34
 Department
 of Transport
                  Significant MTEF allocations:
                  Major budgets
Details                  R’000    2007/08      2008/09       2009/10      2010/11

Rail subsidies (SA Rail            3,955,197    4,752,717    6,167,794    6,537,862
Commuter Corporation Ltd.)
Bus subsidies                      2,535,997    2,789,596    2,998,815    3,178,744

Roads (S.A. National Roads         3,391,929    4,059,964    5,504,911    5,835,206
Agency Ltd.)
Taxi                                328,460      361,473      387,654      410,913

Public Transport Infrastructure    1,780,000    3,480,000    2,975,000    2,464,500
Fund (2010 Soccer World Cup)
Gautrain Rapid Rail Link           3,029,411    3,265,993    2,507,211    2,657,644
Other                               836,929      866,621      913,173      809,501
Total                             15,857,923   19,576,364   21,454,558   21,894,370
% Growth                              18,7%        23,5%         9,6%         2,1%


                                                                                35
Department
of Transport
                        Significant MTEF allocations:
                        Major budgets
    7,000,000
                                 Actual                               Budget
    6,000,000
    5,000,000

    4,000,000
    3,000,000

    2,000,000
    1,000,000

               0
                     2004/05      2005/06      2006/07      2007/08
                                                            200708        2008/09     2009/10      2010/11
       Rail         2,498,550    2,844,677    3,780,872     3,955,197
                                                           3,955,197     4,752,717   6,167,794    6,537,862
       Bus          2,172,740    2,297,753    2,460,335     2,535,997
                                                           2,535,997     2,789,596   2,998,815    3,178,744
       Roads        1,440,789    1,752,720    2,292,075     3,391,929
                                                           3,391,929     4,059,964   5,504,911    5,835,206
       PTIF             0         241,710      698,020      1,780,000
                                                           1,780,000     3,480,000   2,975,000    2,464,500
       Gautrain         0            0        3,241,000     3,029,411
                                                           3,029,411     3,265,993   2,507,211    2,657,644

        •     Allocations for rail operations and capital remain the largest single budget item.
        •     The budget for road infrastructure overtakes that of bus subsidies from 2007/08 onwards.
        •     Allocations for infrastructure from the Public Transport Infrastructure and Systems Grant was
              introduced in 2005/06.
        •     The National contribution to the Gautrain Rapid Rail Link was introduced in 2006/07.
                                                                                                              36
Department
of Transport
                         Significant MTEF allocations:
                         Major budgets - Growth
Major budgets (R'000):       2004/05      2005/06      2006/07      2007/08      2008/09      2009/10      2010/11
Rail subsidies               2,498,550    2,844,677    3,780,872    3,955,197    4,752,717    6,167,794    6,537,862
Bus subsidies                2,172,740    2,297,753    2,460,335    2,535,997    2,789,596    2,998,815    3,178,744
Roads                        1,440,789    1,752,720    2,292,075    3,391,929    4,059,964    5,504,911    5,835,206
Taxi process                    10,000       27,396      243,970      328,460      361,473      387,654      410,913
Public Transport
Inf rastructure & Sy stems           0      241,710      698,020    1,780,000    3,480,000    2,975,000    2,464,500
Road Accident Fund                   0    2,700,000            0            0            0            0            0
Gautrain                             0            0    3,241,000    3,029,411    3,265,993    2,507,211    2,657,644
Other                          557,789      545,636      644,170      836,929      866,621      913,173      809,501
Total                        6,679,868   10,409,892   13,360,442   15,857,923   19,576,364   21,454,558   21,894,370

Growth year-on-year:         2004/05      2005/06      2006/07      2007/08      2008/09      2009/10      2010/11
Rail subsidies                  5.86%       13.85%       32.91%        4.61%       20.16%       29.77%        6.00%
Bus subsidies                   5.04%        5.75%        7.08%        3.08%       10.00%        7.50%        6.00%
Roads                          11.64%       21.65%       30.77%       47.99%       19.69%       35.59%        6.00%
Taxi process                    1.03%      173.96%      790.53%       34.63%       10.05%        7.24%        6.00%
Public Transport
Inf rastructure & Sy stems                               188.78%     155.01%        95.51%      -14.51%      -17.16%
Road Accident Fund                                      -100.00%
Gautrain                                                               -6.53%        7.81%      -23.23%        6.00%
Other                          10.80%       -2.18%        18.06%       29.92%        3.55%        5.37%      -11.35%
Total                           7.18%       55.84%        28.34%       18.69%       23.45%        9.59%        2.05%

                                                                                                                 37
 Department
 of Transport
                       Significant MTEF allocations:
                       Breakdown of other budgets
Details                                                       R’000   2008/09     2009/10     2010/11
Compensation of Employees                                               190,001     199,375     195,120
Road Traffic Management Corporation (incl. NaTIS and Arrive Alive)      168,643     166,178      71,005
Road infrastructure planning and Sani Pass (KZN DOT)                     86,400      94,790     100,478
Oil Pollution prevention services and Watch Keeping services             70,543      77,157      81,786
RSR, SAMSA, SACAA, MRCC, MSCC, NSRI, Ports, Memberships                  66,464      69,528      63,099
Administration                                                           66,957      70,417      74,642
Inspectorates, Road, Rail, Maritime and Aviation regulation              46,300      50,641      53,679
Rural transport projects                                                 39,023      42,812      45,381
Transport planning and infrastructure projects                           40,026      43,916      46,551
Public Transport, including systems to devolve bus subsidies             12,557      11,468      12,156
Monitoring and evaluation – Soccer World Cup                             20,000      25,000          0
Special Investigating Unit                                               19,733      21,583      22,878
Transport Policy                                                         16,843      18,864      19,996
Freight Logistics projects and research                                   9,649       7,507       7,957
Overloading Control                                                       8,796       9,649      10,228
Public Entity Oversight & Economic Regulation                             4,686       4,288       4,545

Total                                                                 866,621     913,173     809,501
                                                                                                    38
Department
of Transport
                 Significant MTEF allocations:
                 Planning assumptions
               INTEGRATED PLANNING AND INTER-SPHERE COORDINATION:

               • Preparations for the support of the 2010 FIFA World Cup are
                 progressing well and will continue
               • The Initial National Transport Operational Plan for 2010 will guide
                 Host Cities’ Transport Operational Plans
               • Most of the SANRAL projects that have seen a considerable
                 increase on the Roads budget are at a pre-implementation stage
                 inferring therefore that designs have been finalised.

               FREIGHT LOGISTICS AND CORRIDOR DEVELOPMENT:

               • Setting up of the infrastructure agency and wagon lease pool
                 agency to manage the identified lines once they are transferred to
                 DOT.
               • A framework for the agency/utility would be developed to clearly
                 articulate the mandate, functions and structure. The cost
                 implications for such an exercise is expected to be higher in the
                 first three years, e.g R20m yearly, and to stabilise thereafter    39
  Department
  of Transport
                   Significant MTEF allocations:
                   Planning assumptions
                 FREIGHT LOGISTICS AND CORRIDOR DEVELOPMENT (Cont.):
Description      2007/8   2008/9     2009/10     2010/11    Planned targets
                 R‘000    R‘000       R‘000       R‘000
Rail Economic     6 500     11,500      40 000      60 000 Develop institutional &
Regulator                                                  regulatory frameworks
National          3 000     10 000       5 000       7 000 Finalise EC databank,
Freight                                                    undertake national update
Databank                                                   & maintain system
Freight               0     50 000    150 000     170 000 Develop framework, pilot
Monitoring                                                @ Durban-Gauteng
Framework                                                 corridor & rollout to key
                                                          corridors
Freight          23 000     47 000      13 000      17 000 Develop hard & software,
Business                                                   maintenance & upgrade
Intelligence
Note: The above amounts were not allocated on the budget
                                                                                     40
Department
of Transport
                    Significant MTEF allocations:
                    Planning assumptions
               PUBLIC TRANSPORT:

               Operational plans for Integrated Rapid Public Transport
               Network in 12 cities:

                • Scoping plans for all cities and operational plans will be aligned
                  with the subsidised public transport service designs
                • Portions for implementation will be funded via PTIS

               Transformation of road based public transport subsidies:

                •   Service designs will include entire city in an integrated manner
                •   Improved access and coverage
                •   subsidy will benefit all public transport users including taxi users
                •   service levels will increase beyond peak services




                                                                                           41
Department
of Transport
                 Significant MTEF allocations:
                 Planning assumptions
               PUBLIC TRANSPORT (continued):

               Development of Investment Strategy for passenger rail:

                • Will consider private sector participation in passenger rail
                  environment

               Shosholoza Meyl merger:

                • Turnaround of long distance passenger rail will be initiated once
                  merger completed

               Taxi Recapitalisation:

                • increase in the number of vehicles scrapped to achieve the 80%
                  target by 2010
                • New compliant vehicle supply will increase from 2008 when
                  latest safety regulations come into effect from Jan 2008
                                                                                      42
Department
of Transport
                 Significant MTEF allocations:
                 Risk assessments
               FREIGHT LOGISTICS AND CORRIDOR DEVELOPMENT:

               Rail Economic Regulator:

               • Resistance from state-owned enterprises with the proposed rail
                 industry architecture.
               • Differing perspectives across government departments on sub-
                 components of strategies.

               National Freight Databank:

               • Resistance from private sector to provide information might lead to
                 improper planning for infrastructure & operations
               • Absence of information will not enable to development of 2014
                 freight scenarios




                                                                                       43
Department
of Transport
                 Significant MTEF allocations:
                 Risk assessments
               FREIGHT LOGISTICS AND CORRIDOR DEVELOPMENT (Cont.):

               Freight Monitoring Framework:

               • Absence of framework will not enable government to know what
                 moves on infrastructure for planning capacity purposes
               • Movement of bulk freight not meant for secondary network

               Freight Business Intelligence:

               • Lack of alignment with other systems will lead to duplication &
                 incompatible planning tools
               • Disintegrated decision-making




                                                                                   44
Department
of Transport
                 Significant MTEF allocations:
                 Risk assessments
               PUBLIC TRANSPORT:

               Operational plans for Integrated Rapid Public Transport
               Network in 12 cities:

                • Poor cooperation and coordination between some provinces and
                  cities
                • Lack of network planning and management capacity at local and
                  provincial spheres
                • PTIS only cover part of the funding for planning and
                  implementations

               Transformation of road based public transport subsidies:

                • Budget allocations do not address 12% annual growth in
                  subsidised passenger services and excludes taxi users
                • current baseline allocations insufficient to cover operational costs
                  as well
                                                                                         45
Department
of Transport
                 Significant MTEF allocations:
                 Risk assessments
               PUBLIC TRANSPORT (continued):

               Shosholoza Meyl merger:

                • Funding not available to cover liabilities that will be assumed by
                  SARCC/Metrorail delays

               Taxi Recapitalisation:

                • Funding for scrapping may not be in line with the targets for 2010
                • Vehicle supply may not be aligned to demand




                                                                                       46
Department
of Transport   Personnel, skills
               development and training
               •   Personnel establishment
               •   Vacancy ratio’s
               •   Employment equity
               •   Skills development and training programmes




                                                                47
Department
of Transport
                 Personnel establishment

               Financial Year: 2004 - 2005
               The organizational structure expanded from 4 Branches comprising
               of 482 posts to 6 Branches with 557 posts

               Financial Year: 2005 - 2006
               The organizational structure remained unchanged

               Financial Year: 2006 – 2007
               The organizational structure expanded from 6 Branches comprising
               of 557 posts to 7 Branches comprising of 1023 posts of which 674
               were activated
                 1200                                                    1023
                                                                  973
                 1000                                    848
                  800                    674      674
                          557     557
                  600
                  400
                  200
                    0
                        2004/05         2006/07         2008/09         2010/11
                                                                                  48
Department
of Transport
                 Vacancy ratio’s

               Vacancy ratio for the past three years

               Financial Year 2005 – 2006:   557:        32%
               Financial Year 2006 – 2007:   621:        41%
               Financial Year 2007 – 2008:   674:        38%

                          80

                          60

                          40

                          20

                             0
                                 2005/06        2006/07        2007/08

                  % Filled          68              59           62
                  % Vacant          32              41           38

                                                                         49
Department
of Transport
                 Vacancy ratio’s

               Details               Posts       Vacant     Filled   % Vacant    % Filled
               2005/06                     557       178       379       32%         68%
               Posts added                 64         64
               Appointments                          (66)       66
               Resignations                           79      (79)
               2006/07                     621       255       366       41%         59%
               Posts added                 53         53
               Appointments                          (88)       88
               Resignations                           36      (36)
               2007/08 latest              674       256       418       38%         62%


               Current vacancy ratio’s would have been if no posts were added:
               In 2007/08                                                33%         67%
               In 2006/07 and in 2007/08                                 25%         75%

                                                                                        50
Department
of Transport
                 Employment equity

               Current Employment Equity Status: 30 September 2007
               Category                                              DPSA       Current
                                                                     Targets    status
               Black people at senior management level                 75%       88,16%
               Women at senior management level                        30%       34,21%
               People with disabilities at all levels                  2%           1,3%

               National             African      Coloured         Asian          White
               demographics            79%            8,9%           2,5%           9,6%
               Male / Female       M         F    M          F   M          F   M          F
               Posts filled         80,43%         3,14%          3,62%          12,81%
               I.r.o. race           (333)          (13)           (15)           (53)
               Posts filled       48%    52%     54%     46%     47%    53%     38%    62%
               I.r.o. gender      159    174      7       6       7      8       20     33


                                                                                               51
Department
of Transport
                    Skills development and training
                    programmes
    CAPACITY DEVELOPMENT FUNDING PROJECTIONS

    Budget                                              2007/08      2008/09      2009/10
    Training (conferenc es / w orkshops / courses/
    seminars )                                          1,854,260    1,965,515    2,083,446
    Learnerships/ internships                             473,000      501,380      531,462
    Bursaries                                             325,000      344,500      365,170
    Centres of Development
     - Budget                                           7,439,000    7,796,000    8,178,000
     - Anticipated ex penditure                        10,241,043   10,855,505   11,506,835
    Capacity projectsOther sectoral projects
    (FET, Sc arc e and critical skills , educational
    outreach etc )                                      3,550,000    3,763,000    3,988,780
    Total                                              16,443,303   17,429,900   18,475,693




                                                                                         52
Department
of Transport   Infrastructure and
               maintenance budgets
               •   Capital budgets and growth
               •   Public Transport Infrastructure and Systems Grant
               •   Roads
               •   Rail




                                                                       53
Department
of Transport
               Infrastructure and maintenance
               budgets
               Capital budgets (R’000) and year-on-year growth
               14,000,000


               12,000,000


               10,000,000

                8,000,000


                6,000,000

                4,000,000


                2,000,000


                         0
                             2004/05   2005/06   2006/07     2007/08     2008/09     2009/10     2010/11
                 Gautrain       0         0      3,241,000   3,029,411   3,265,993   2,507,211   2,657,644
                 PTIS           0      241,710   698,020     1,780,000   3,480,000   2,975,000   2,464,500
                 Roads       504,276   565,333   797,952     1,429,350   1,806,944   2,731,982   2,895,901
                 Rail        655,000   688,300   1,029,598   1,696,078   2,267,686   3,484,144   3,693,193

                Gautrain                            100%        -6,5%        7,8%      -23,2%        6,0%
                PTIS                     100%      188,8%      155,0%       95,5%      -14,5%      -17,2%
                Roads           8,5%     12,1%      41,2%       79,1%       26,4%       51,2%        6,0%
                Rail           -1,5%      5,1%      49,6%       64,7%       33,7%       53,6%        6,0%
                                                                                                             54
  Department
  of Transport
                                Public transport infrastructure
                                and systems

                   PTIS Budgets (Rm)                                          Allocated per Category (Rm)
                                                                      2,760
                                  3,500.0
                                              3,000.0
                                                          2,464.5
                                                                              1,316
                      1,800.0                                                         826
                                                                                             630 509
                                                                                                     430
                                                                                                              181 117          84
           700.0
241.7
                                                                         PT Infrastructure    Rail            Bus Rapid Transit
                                                                         Stadium Link         ITS/TDM         National Roads
 2005/06    2006/07     2007/08     2008/09     2009/10     2010/11      Airport              Non Motorised   Planning


  Total budget R11,7 bn over 6 years                                    Total allocated R6,853 bn
                                                                                                                                    55
Department
of Transport
                   Public transport infrastructure
                   and systems
                  Allocated per City / Entity (Rm)
        1,320 1,316


                        851
                              766
                                    694
                                          520
                                                430
                                                      298
                                                             211 199 179
                                                                              69



             Johannesburg     SARCC              Ethekwini        Cape Town
             Tshwane          Nelson Mandela     SANRAL           Mangaung
             Mbombela         Non Host Cities    Polokwane        Rustenburg

                                                                                   56
Department
of Transport
               Capital expenditure on roads
               (Non-toll roads 2006/07)


  Description            Number of        Length   Cost
                         projects         (km)     R’000
  Strengthening               23            381     503 336

  Improvements                21            123     291 293

  New Facilities              13            233     110 975

  Total                       57            737     905 604
  2005/06                     59            417     436 404

                                                              57
Department
of Transport
               Operating expenditure on roads
               (Non-toll roads 2006/07)


    Description      Number        Length       Cost
                     of            (km)         R’000
                     projects
    Routine              90          13 600       693 988
    Maintenance
    Periodic              44          1 206       503 228
    Maintenance
    Special               22              126     151 024
    Maintenance
    Total                156         14 932      1 348 240
    2005/06              133         15 056      1 209 240
                                                             58
Department
of Transport
                 Capital expenditure on rail

               Capital budget allocation:

               • 80% to Rolling Stock
               • 20% to infrastructure and other projects, including Signaling,
                 Perway and Structures, Telecommunications and Electrical
                 refurbishment

               Rolling Stock refurbishment in 2006/07:

                                      General          Upgrades     Total
                                      Overhaul
               Motor coaches                     57          30             87
               Trailer coaches                   126         97          223
                                                                         310



                                                                                  59
Department
of Transport
                 Infrastructure and maintenance
                 budgets
               COMMUTER RAIL:

               Rolling Stock Maintenance:
               The maintenance budgets are misaligned, results in deferred
               maintenance and a limited ability to repair train sets

               General Overhaul / Refurbishment:
               To stabilise and sustain the current levels of service, which are far
               from the required level of service, will require 700 coaches to be
               General Overhauled or Refurbished in each year of the MTEF

               Signaling:
               Signaling is currently the most critical infrastructure asset in relation
               to safety. The SARCC needs to:
                 • Replace all signaling more than 50 years old to support the 5
                   minutes headways corridors
                 • Provide Centralised Train Control centres in each region in order
                   to increase and sustain the safety level of train movement.
                                                                                           60
      Department
      of Transport
                                Infrastructure and maintenance
                                budgets                                       R'000       R'000        R'000        R'000
 Additional fund requests: mega rail projects                                 Total
                                                                             project     2008/09      2009/10      2010/11
Project             Description                                                cost
                                                                                        ADDITIONAL REQUESTS OVER MTEF
                    Connec tion of Mphumalanga to employment
Moloto Rail
                    destinations in Tshwane. 1st Phase (Gauteng -           9,500,000     500,000    1,000,000    1,500,000
Corridor
                    Siyabuswa) 113km.

                    Part of Inanda, Ntuzuma, KwaMashu redevelopment.
Bridge City         3km rail extension, c apac ity improvements and new       350,000       1,000       83,400      125,000
                    station

Cape Town           Rail link between Cape Town International Airport
International       and Cape Town CBD as part of ACSA Cape Town               565,000       8,000      120,000      200,000
Airport Link        Airport Master Plan.


                    "Zone of Choic e" by Tshwane City Development
Hammanskraal        Strategy. Re-introduc tion also a requirement of the      300,000       2,000       74,000          80,000
                    Moloto rail c orridor. Costs exc lude Rolling Stoc k


Motherwell Rail     This loop will enhanc e rail option towards the
                                                                              600,000       6,000       54,000      206,000
Extension           medium term. 4 Stations and 7,5km rail extensions

                   Doubling of the 5,5km line between Eerste Fabrieke
Mamelodi Capac ity
                   & Greenview to alleviate c apac ity limitations of the     128,000       2,000      126,000
enhanc ements
                   trac k.

Gauteng -           Re-introduc tion of interc ity rail servic es to
Rustenburg -        Rustenburg and investigation of spec ial trains to        261,000      40,000      121,000      100,000
SunCity             Sun City


TOTAL COST PER ANNUM                                                                      559,000    1,578,400    2,211,000


  Note: The above amounts were requested, but not allocated on the budget                                                61
Department
of Transport   Transfer and grant
               management
                Bus subsidies
                Taxi recapitalisation
                Commuter rail and roads
                Public Transport Infrastructure and Systems Grant




                                                                    62
Department
of Transport
                 Transfer and grant management

               Bus subsidies:

               • Transfer payments based on actual services rendered
               • Interim Contract based on ticket sales-therefore difficult to control
                 demand
               • Subsidy Management System (SUMS) in place to monitor and
                 verify and independent monitoring takes place at provincial level
                 and on an ad hoc basis from National
               • Monthly operator audits carried out by external auditors to certify
                 claims

               Taxi Recapitalisation:

               • Scrapping allowances are transfer payments
               • The Operating Licences Administration System (OLAS) and the
                 NATIS are used to verify information before transfers can be
                 effected

                                                                                         63
Department
of Transport
                   Transfer and grant management

               Commuter Rail and Roads:

               •   Based on operational and capital budgets that are transferred
               •   Strategic Plans are approved by the Minister
               •   Memoranda of Agreement are entered into
               •   Quarterly reports are reviewed
               •   Representation on Boards

               Public Transport Infrastructure and Systems Grant:

               • Funds are transferred in terms of Division of Revenue Act
               • A monitoring and management contract is in place
               • Utilisation of funds and cash flows are managed through
                 Memoranda of Agreement with municipalities
               • Monthly and quarterly reports are reviewed




                                                                                   64
Department
of Transport   Monitoring and evaluation
               systems
                Public Entity Oversight:

                • Functional analysis
                • Shareholder relationships
                • Systems, planning and implementation

                Credit card license contract
                NaTIS maintenance and development




                                                         65
Department
of Transport
                 Monitoring and evaluation
                 systems: Functional analysis
               Programme

               • Develops appropriate monitoring mechanisms and ensures
                 effective corporate governance. It establishes and oversees
                 transport regulation in line with broad economic and transport
                 policies

               Public Entity Oversight

               • Compliance with government policy in relation to their strategies,
                 business plans, governance, financial management and
                 operational plans, through monitoring and evaluation process

               Border Control

               • Implement and oversee policy, legislation, regulation, processes,
                 systems, structures and long term oversight regarding border
                 control
                                                                                      66
 Department
 of Transport
                Monitoring and evaluation
                systems: Shareholder relationships
                             Shareholders
                             policy direction

                                 Board
                            strategic direction

National strategic   Public entities - implementation   Economic and
and policy           arm of government                  socio economic
frameworks                                              impact


                        Stakeholder expectation
                                                                    67
Department
of Transport
                 Monitoring and evaluation: Systems,
                 planning & implementation

               Frameworks

               • Shareholders Compact:

                  • Fostering accountability to the Shareholder
                  • Mandate determination for the public entity

               • Performance Agreement

                  • Determines clear target setting for each sector
                  • Identifies and quantifies project determination
                  • Economic and social development projects

               • Business Projects

                  • Social responsibility e.g. EPWP
                  • Community development and poverty alleviation projects

                                                                             68
Department
of Transport
                 Monitoring and evaluation: Systems,
                 planning & implementation

               Frameworks (continued)

               • Strategic and corporate plans

                  • Detailed planning aligned to the MTEF and the MTSF

               • Legislative compliance / PFMA

                  •   Board constitution
                  •   Compliance to the quarterly reporting requirements
                  •   Financial management and planning
                  •   Shareholder and public accountability




                                                                           69
Department
of Transport
                   Monitoring and evaluation: Systems,
                   planning & implementation

               Planning to reflect the key strategic imperatives

               •   Planning – to map out the strategy
               •   Budgeting – to reflect the strategy and funding
               •   Targeting – to respond to key objectives
               •   Approval of strategic plan – Executive Authority

               Implementation

               • Reporting on progress

                   • Quality reports
                   • Relevance of information
                   • Timeous reports

               • Strong oversight role by Boards

                   • Quarterly and annual reports
                                                                      70
Department
of Transport
                 Monitoring and evaluation:
                 Credit card license contract
               • 400 Driving License Testing Centres (DLTC’s) pay R46,50 into the
                 bank accounts for each driving license order processed

               • The eNaTIS team provides the contractor with a monthly data
                 extract of card orders received (captured on eNaTIS)

               • The contractor performs a monthly reconciliation of revenue
                 received versus card orders received from the eNaTIS information

               • Monthly statements are sent to DLTC’s and outstanding payments
                 are followed up in writing

               • The contractor prepares a payment certificate on a monthly basis
                 for cards produced (the price per card is according to contractual
                 bandwidths)

               • Payment certificates are approved by the Chief Director or the
                 eNaTIS project manager with reference to reconciliation’s with
                 information from eNaTIS

               • Note: DOT is in the process of appointing a contractor to
                 operationalise and manage the Trading Entity
                                                                                      71
Department
of Transport
                 Monitoring and evaluation:
                 NaTIS maintenance and development

               • All enhancements to the system are agreed upon between the
                 Department of Transport, the Road Traffic Management
                 Corporation (RTMC) and the nine provinces

               • Agreed enhancements are reported to the            Road   Traffic
                 Management Coordinating Committee (RTMCC)

               • The project manager signs off payment certificates after checking
                 that the work was completed

               • The process of transferring the eNaTIS services from the
                 contractor to the State in terms of a transfer management plan
                 has commenced with the assistance of the State Information
                 Technology Agency (SITA)




                                                                                     72
Department
of Transport




               Thank you



                           73

				
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