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Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

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Page 1: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Annual Report Briefing to the Portfolio Committee on Transport

(PCOT)

15 October 2014by Sipho G. Khumalo

Page 2: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Presentation Outline

• Vision and Mission• Mandate and Strategic Imperatives• Cross border environment• Review of Organisational Performance• Progress on Strategic Projects• Strategic Partnerships• Development & Empowerment Programmes• Employment Equity• Financial Information• Audit Outcomes 2013/14 • Looking into the future• Key Challenges and Intervention Areas• Concluding Remarks

Page 3: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Vision and Mission Vision

To be the leading cross-border road transport Agency within the region

Mission

To spearhead social and economic development within the SADC region through facilitating unimpeded cross border road transport

Strategic Outcome Oriented Goals

Enhance organizational Performance

Facilitate Unimpeded flow of Cross Border Transport

Promote Regional integration

Promote safe and reliable cross-border transport; and

Strategic positioning to enhance organizational Sustainability

Page 4: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Mandate & Strategic Imperatives• To eliminate impediments in the flow of passengers and freight by road

across regional borders

• To introduce regulated competition in cross-border passenger transport

• To liberalise market access in the cross-border freight transport

• To reduce operational constraints for the cross-border road transport

industry

• To enhance and strengthen the capacity of public sector; and

• To build industry partnership and to empower the cross-border road

transport industry.

Established in terms of Act No. 4 of of 1998

Page 5: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

iCross border environment

Page 6: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

ORGANIZATIONAL PERFORMANCE2013/14

Page 7: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Review of Organisational Performance

PERFORMANCE TARGETS

NUMBER OF

INDICATORS

% OBTAINED

65% of the targets set were achieved, representing an overall performance improvement of 17% from the previous financial year

Performance targets fully achieved (100%) 40 100% and above

There was significant progress on many other indicators during the financial year. Recovery plans were put in place in some areas.

Page 8: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Review of Organisational Performance

Key achievements:Increase in industry development programmes implemented to support cross-border operators.Completed 8 route surveys in Zimbabwe, Zambia, Malawi, Botswana, Mozambique, Swaziland, Lesotho and Namibia – this will form basis for scientific tool improvement to regulate the cross-border market. (To assist decision on split between taxis and buses – to inform on number of permits to be issued per corridor.Launched Cross-Alive Road Safety campaigns in support of the UN Decade of Action for Road Safety.Entered into partnerships with key strategic stakeholders who play a critical role in the cross-border industry: (Department of Trade and Industry, Department of Tourism, Department of International Relations and Cooperation, Department of Home Affairs, Department of Environmental Affairs, South African Revenue Service.Formalised relationships with other stakeholders.

Page 9: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Review of Organisational Performance -Law Enforcement

WORK ACTIVITY 2012/13 2013/14 DIFFERENCE % MOVEMENT

YEAR-ON-YEAR

MOVEMENT

Vehicle Inspections 132,372 211,798 79,426 60%

Prosecutions 15,384 29,411 14,027 91.2%

Compliance Rate 88.79% 81% (7.79%) (8.77%)

Page 10: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Review of Organisational Performance -Permits Issued

WORK ACTIVITY 2012/13 2013/14 % MOVEMENT

YEAR-ON-YEAR MOVEMENT

Total Permits issued 75 000 80 034 6.7%

PERMITS ISSUED PER CATEGORY

Passenger transport - Taxi 10 539 11 095 5.30%

Passenger Transport - Buses 3 144 2 781

Freight transport 55 053 63 935 16.10%

Tourist transport 1 682 2 213 31.50%

Page 11: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Permits Issued for Passenger Transport (Taxi)

Permits issued per country during 2013/14Permits issued in 2012/13 and 2013/14

Country 2012/13 2013/14 %Movement

Botswana 339 437 28.90%

D.R. of Congo 0 4 400%

Lesotho 2,968 2,718 (8.40%)

Malawi 2 20 900%

Mozambique 4,332 4,390 1,30%

Namibia 79 154 94.90%

Swaziland 453 422 (6.80%)

Zambia 40 35 (12.50%)

Zimbabwe 2,312 2,882 24,60%

Cabotage 14 33 135%

Total 10,539 11,095 5.30%

Page 12: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Country 2012/13 2013/14 %Movement

Botswana 100 484 384%

D. R. of Congo 23 14 (39%)

Lesotho 595 506 (14.90%)

Malawi 127 167 23.90%

Mozambique 631 542 (14.10%)

Namibia 110 53 (51.80%)

Swaziland 182 73 (59.80%)

Zambia 77 65 (15.60%)

Zimbabwe 1,299 877 (32.50)

Permits Issued for Passenger Transport (Buses)

Permits issued in 2012/13 and 2013/14 Permits issued per country during 2013/14

.

Page 13: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Country 2012/13 2013/14 %Movement

Botswana 7,769 8,180 5.30%

D.R. of Congo 4,950 3,328 (32.70%)

Lesotho 4,315 4,026 (6.70%)

Malawi 1,322 1,814 27.10%

Mozambique 8,463 10,625 25,50%

Namibia 5,800 6,234 7.50%

Swaziland 5,357 5,281 (1.40%)

Zambia 8,574 13,721 60%

Zimbabwe 8,432 10,666 26.50%

Cabotage 71 60 (15.50%)

Permits Issued for Freight Transport

Permits issued in 2012/13 and 2013/14 Permits issued per country in 2013/14

Page 14: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Permits Issued for Tourist Transport

2012/2013 2013/2014%

Movement

Regional 1,682 2,213 31.50%

Page 15: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

CHANGING GEARS

STRATEGIC PROJECT

PROJECT OBJECTIVE

PROGRESS TO DATE FUTURE PLANS

Strategic

Value

Proposition

Plan

To outline the

future strategic

value of the

Agency within

the transport

industry

• Situational analysis

completed

• Industry

environmental

scanning and

stakeholder

engagements on-

going; and

• Integration of all

strategic projects.

• Present a plan to DoT and the

Minister of Transport (Shareholder

with defined roles and strategic

value propositions for the Agency in

the cross border industry;

• Support the DoT in drafting

legislation that may be required to

change the mandate of the C-BRTA;

• Progressive implementation of the

Strategic Value Proposition Plan in

the cross border industry.

Progress on Strategic Projects (1)

Page 16: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

CHANGING GEARS

STRATEGIC PROJECT

PROJECT OBJECTIVE

PROGRESS TO DATE FUTURE PLANS

Operator

Compliance

Accreditation

Scheme (OCAS)

Accreditation of

cross-border

operators based

on their risk

profiles to reduce

transit delays.

• Identifying the key OCAS

system requirements;

• On-going technical

stakeholder engagements;

• Benchmarking and tailoring

completed;

• Draft Design Framework of

OCAS governance approved

by Regulatory Committee;

and

• Development of business

rules.

• Strategic stakeholder

engagements with the

regional stakeholders to

formally adopt OCAS at a

regional level;

• Piloting – 2016.

Progress on Strategic Projects (2)

Page 17: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

CHANGING GEARS

STRATEGIC

PROJECT

PROJECT

OBJECTIVE

PROGRESS TO DATE FUTURE PLANS

Market Access

Regulation

(MAR)

Scientific

determination

of supply and

demand within

cross-border

corridors.

• Draft Market Access

Regulation Model finalised;

• The MAR Model has been

expanded to cater for six (6)

major cross border routes

and is scheduled has been

completed.

• Pilot and refine the MAR

model in 2014/15; and

• Fully implement the MAR

tool from 2015 onwards.

25

Progress on Strategic Projects (3)

Page 18: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

CHANGING GEARS

STRATEGIC

PROJECT

PROJECT

OBJECTIVE

PROGRESS

TO DATE

FUTURE PLANS

Business Case

for corridor and

cross- border

management

reforms

To define the

role of the C-

BRTA in border

management

and corridor

management

reforms.

Project

Completed

• Engage cross border industry stakeholders

on proposed corridor and border

management reforms and impact, 2014/15;

• Feasibility study on the recommended

corridor and border management reforms.

• Share findings and recommendations with

key stakeholders

• Development of implementation plans

Progress on Strategic Projects (4)

Page 19: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

CHANGING GEARS

STRATEGIC

PROJECT

PROJECT

OBJECTIVE

PROGRESS

TO DATE

FUTURE PLANS

Industry

Partnership

Development

Plan (IPDP)

To create

mutually

beneficial

partnerships

with industry

stakeholders

Stakeholder

mapping

Completed

C-BRT

stakeholder

forum

launched

• Build strong stakeholder relationships and

partnerships in the cross border industry

aimed at reducing operational constraints; and

• Drive initiatives on the development of

SMMEs and empowerment of the historically

disadvantaged individuals.

Progress on Strategic Projects (5)

Page 20: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

REGIONAL: SADC Secretariat, Joint Committees, Joint Route Management Groups (JRMGs);

NATIONAL: Participation in Border Control Operational Coordinating Committee (BCOCC), Inter-Agency Clearing Forum (IACF), Department of Home Affairs (DHA), South African Revenue Service (SARS); National Intelligence Coordinating Committee (NICOC), National Joint Operational and Intelligence Structure (NATJOINTS);

PROVINCIAL: Transport MECs, HODs (Provincial Transport Departments);

LOCAL LEVEL: Metros and Municipalities;

Strategic partnerships (1)

Page 21: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

INTERNAL: Route Committees, Operator Forums, Stakeholder Forums, Joint law Enforcement Initiatives, SMME development initiatives

Strategic partnerships (2)

Page 22: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Development of a Women-In-Transport programme aimed at introducing women operators to cross-border road transport.

On-Going SMME Development Programmes for aspiring Cross-Border Operators.

Training of inspectors on the C-BRT Act, Administrative Adjudication of Road Traffic Offices (AARTO, National Land Transport Act (NLTA), Professional conduct and law enforcement.

A significant number of senior management (8) within the Agency attended and successfully completed a Senior Management Development Programme.

Development & Empowerment Programmes

Page 23: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

HUMAN RESOURCES

Page 24: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Employment Equity

RACE GENDER

Page 25: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

FINANCIAL OVERVIEW

Page 26: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Financial Performance 2013/142012/13 2013/2014

REVENUE

Permit Income R165,93m R96,46m

Penalty Income R20m R35,05m

Other Income R2,40m R 3,33m

Interest Received R4,92m R 5,98m

EXPENSES

Employee Costs R101m R118m

Operating Expenses

R57,58m R69,01m

SURPLUS / (DEFICIT)

R34,50m (R46,52m)

Page 27: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Financial Position 2013/14

ASSETS LIABILITIES

2012/13 2013/14

CURRENT ASSETS

Receivables R3,81m R3,91m

Cash and Cash Equivalents

R125,46m R120,31m

NON-CURRENT ASSETS

Property, Plant and Equipment

R8,27m R7,97m

Intangible Assets R1,15m R1,67m

TOTAL ASSETS R138,68m R133,86m

2012/13 2013/14

CURRENT LIABILITIES

Lease obligations R0,68m R0,52

Payables R18,20m R55,46m

Provision R9,06m R13,75m

NON-CURRENT LIABILITIES

Retirement benefit obligations

R1,65m R1,56m

TOTAL LIABILITIES R29,59m R71,28m

ACCUMULATED SURPLUS

R109,10m R62,58m

Page 28: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Irregular, Fruitless & Wasteful Expenditure

2011/12 2012/13 2013/14

Fruitless and Wasteful Expenditure

R456, 823 R11, 689 R2,224

Irregular Expenditure R14, 265, 818 R920, 010 R827, 753

Fruitless & wasteful expenditure relate to interest paid to Telkom on overdue accounts.

Irregular expenditure relate payment on month to month contracts entered into for regional office accommodation and security in the previous financial years .

Page 29: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

AUDIT OUTCOMES

Page 30: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Audit Outcomes - 2014 Outcomes

Audit Opinion Unqualified audit opinion No material audit adjustments to the annual financial

statements

Emphasis of matter

Funding of Operations – Court action was instituted by cross-border hauliers, challenging the new fees for cross-border road transport permits, which was effective from 01 April 2011. The outcome of this court action might have an impact on C-BRTA’s ability to generate the budgeted revenue levels.

Conclusion on pre-determined objectives

Usefulness of reported performance information: - 50% of Strategic Support targets and indicators were not

verifiable Reliability of reported performance information

- Significant targets within Road Transport Inspectorate and Strategic support were not reliable when compared with reported information.

Page 31: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Audit Outcomes – 2014 - continue

Outcomes

Compliance with legislation

Contract management ineffective resulting in irregular expenditure

Page 32: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

2014/15 & BEYOND

Page 33: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Looking into the Future (1)

Introduction of the Operator Compliance Accreditation Scheme within S.A. and the SADC region

Implementation of Operator Value-Orientated Strategy. Need for protection of S.A. domestic operators in regard to

conditions obtaining in our neighbouring countries – need for review of Bilateral Agreements & implementation of the SADC Protocol.

Harmonization of Regulatory Systems between the C-BRTS & OLAS. Need to focus on the funding model as it is evident that the current

model is not sustainable.

Page 34: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Looking into the Future (2)

Need to develop the capability and competency for addressing the question of un-roadworthy cross-border vehicles and the review of SADC vehicle standards.

Strengthening Partnerships with the South African Revenue Service (SARS) and other Border Authorities.

Appreciating the changing dynamics in border towns and the need to respond to provincial imperatives (on-going engagements with Provinces).

Refining the work of the Profiling unit to provide intelligence to support the cross-border transport industry.

Achieve a clean audit opinion (clean administration)

Page 35: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

KEY CHALLENGES

Page 36: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Key Challenges & Intervention Areas

Resolution of the Lesotho/Free State Cross Border passenger transport issue.

Provision for dealing with overloaded cross-border vehicles (below 3.5 tons) and use of bus trailers for the transportation of goods.

On-going litigation on the increased permit tariffs in 2011 and the newly increased tariffs in 2014.

Page 37: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

Concluding Remarks

The Agency is poised to support the National Development Plan by championing objectives articulated in Chapter 3 (Gaining Global Market Share & S.A. as an integral part of regional growth); Chapter 4 (Regulation and Transport); and Chapter 7 (Positioning S.A. in the globalising world) of the NDP.

Going forward, the C-BRTA is gearing towards developing and implementing an “Operator Value -Orientated Strategy”

The C-BRTA is geared to demonstrate its commitment to adding public value through its strategic interventions.

All future plans are aligned to the Medium Term Strategic Framework (MTSF) 2014-2019 objectives.

Page 38: Annual Report Briefing to the Portfolio Committee on Transport (PCOT) 15 October 2014 by Sipho G. Khumalo

i thank you