Budget speech 2009/2010: Department of Transport and Public Works (Vote 10) | Western Cape Government


Budget speech 2009/2010: Department of Transport and Public Works (Vote 10)

24 June 2009
Premier Helen Zille
Cabinet colleagues
Honourable Speaker
Honourable Members of the Legislature
Friends and family

Members of this house know that transport is my passion. That nothing shapes our cities more profoundly than public transport. This is even more true of the apartheid cities we have inherited

Safe, affordable and accessible public transport carries millions to their work. It takes the children safely to school. It gets Grannies to clinics. It enables us to visit our friends. It allows the people of Bonteheuwel to picnic by the sea. And transport, in its widest form, carries the fruit of our labours to their market destinations so that we may all prosper.

Public transport offers choice and opportunity. It drives the economy. It shrinks the city. It softens the scars of apartheid. It is an inescapable component of our personal freedom and opportunity.

A Department in Crisis.

I have for seven years watched from the opposition benches as this department limped from one controversy to another. From one bad decision to another. In that time I saw the dream of viable public transport system recede each year.

I was shocked to see the department squandering its budget on questionable projects, usually led by very expensive consultants, whilst service delivery took a backseat. More than R1.5 billion has been spent on consultants in the past three years. There have been other bizarre and sometimes corrupt actions.

It was during this time that a despairing Ms Ntombizodwa Mali carried her granddaughter from one understaffed clinic to another until the child died. That image of despair and death will haunt me for the rest of my life.

We are all culpable for the death of the little girl. The thieves; the wastrels; the idle; the crooked politicians and those that collaborated with them; the corrupt businessmen, as well as the honest politicians who didn’t expose them and get rid of them quickly enough.

The wasted and stolen money in my department could have saved the life of Unabantu and many others. It could have put more staff in clinics; built more schools and houses. Instead it leaked into the pockets of already rich and deeply cynical people. We must root this evil out of our affairs, or see our country reduced to dust.

Actions Taken By The Anc Administration Under Former Premier Brown.

Until the departure of Rasool, no action whatsoever was taken by the ANC administration to deal with these matters. However, the new ANC administration under Premier Brown did not cast a blind eye. They knew the Department was in deep trouble.

They instituted numerous investigations, forensic and otherwise. The Treasury began to isolate the main areas of concern. The Auditor General was called in. Some corrupt practices were stopped. The department’s poor record of school building was investigated, and a report called for immediate disciplinary action against very senior managers.

The depressing scale of the financial imprudence of the Department is best captured by the report of the Standing Committee on Finance and Economic Development.

The Committee, under ANC chairmanship, noted in May 2008 that there was “considerable room for improvement with respect to an examination of unnecessary and imprudent expenditure in some departments, notably Transport and Public Works’. The Committee further expressed its reservations about the appointment of consultants to head up Supply Chain Management process. The department’s unjustifiable over-reliance on exorbitant consultants is an illustration of its skewed financial priorities.

The former ANC Finance Minister, Mr. Garth Strachan, stated in the Legislature on 2 June this year “There are problems, and it was when we were in government that we initiated investigations. If there is any more corruption or maladministration, we will support the Executive (i.e. the DA cabinet) no matter who is involved in that corruption”.

Again under the ANC, Treasury withdrew R462.112 million from the department’s budget allocation for the Medium Term Expenditure Framework (MTEF) and withheld R80 million from the Public Works maintenance budget.

Every single report, every single investigation cried out for brave decisions, tough actions and decisive leadership. They cried out for action against the guilty.

Unfortunately Premier Brown’s team did not take that action. But I must and I will.

The Head of Department has been suspended pending the framing of disciplinary charges. Other actions will swiftly follow. Let me make it clear that it gives me no pleasure to discipline officials whilst the political masters and corrupt businessmen go free.

Let me share some of the facts:-


- Nineteen forensic investigations have taken place in the Department since the 2005/06 financial year. The scale of forensic investigations paints a bleak picture of financial abuse made possible by weak internal controls.

- A major Treasury investigation into the R1.5 billion spent on consultants.

-The Mettler report into losses incurred in the building of schools.

- A massive and wide spread investigation by the Auditor General’s office.

Excessive Spending On Consultants.

As I have indicated, the department has spent R1.5 billion on non-technical consultants over the last 3 years. A high proportion of this was spent on four providers: Hip Hop, BrandTalk, GTSS and SAHA International Ltd.

In many cases, consultancies were irregularly acquired and poorly managed.

The department has allocated R90million on consultants for 2010, thereby exhausting its entire budget for this critically important event. It now has no money for acquiring transport for its areas of responsibility in 2010. In some cases we acquired products we could not use because we lacked the capacity to do so. In others, management fees were duplicated, and some invoices were duplicated.

Expenditure Trends.

The business of this department is to deliver and maintain schools; hospitals; clinics; departmental accommodation; roads; bridges and public transport.

Despite backlogs in all these areas, the percentage of budget spent on them over the last 5 years has steadily declined, whilst the cost of a host of auxiliary departments has steadily risen, and the excessive use of consultants has driven it through the roof.

Whilst we have more than enough people to organize events and parties we are desperately short of engineers and other scarce technical skills to build and maintain our roads and buildings. At the same time, administration costs have doubled over the same period

For the past seven years, I have witnessed the department’s compensation on employees grow exponentially from R159 million in March 2006 to R288 million this year.

In addition, the physical condition of government owned buildings have deteriorated. The greatest challenge facing the department is to maintain our buildings and roads properly. We have a huge maintenance backlog but our ability to deal with it has declined every year.

Roads Infrastructure.

The physical condition of the provincial road network, particularly our gravel roads is a matter for concern. Roads are usually designed for a normal lifespan of 25 years. However, about 75% of our roads are already older than this. This has severe implications on road safety and the sustainability of our roads. The road maintenance backlog is currently in excess of R1 billion. On the other hand, the road maintenance budget reflects a declining trend over the medium term. Additional maintenance funds supplied to us by Treasury will run out over the MTEF. The average allocation over the MTEF is less than half of what the department needs to eradicate the current backlog.

The disparity between the budget for road maintenance and the backlog reveals that the backlog will increase exponentially unless current budgetary allocations for road infrastructure are reviewed. This situation is exacerbated by the shortage of engineers and technical skills. The department’s Road Infrastructure Directorate currently has a 40% vacancy rate. Together with the limited funding for road infrastructure, this poses serious challenges on the capacity of the department to maintain our roads according to required standards.

Property Management.

The physical condition of provincial government buildings is also unsatisfactory. The department’s building stock is deteriorating at a worrying rate. Only 65% of our assets are in fair condition whilst almost 20% of government owned buildings in the province are in poor condition in terms of generally acceptable construction standards. In addition, the immovable asset portfolio maintenance backlog amounts to R2.8 billion.

The backlog is increasing at a rate of approximately 2% per annum which requires immediate intervention to ensure that it does not grow to unmanageable proportions. This calls for a fresh approach to the management of the provincial assets to create and maximize new cash flows, not only to fund proper maintenance of our buildings, but also to provide much needed revenue across the administration.

Epwp and Related Activities.

In these recessionary times, the Expanded Public Works Programme (EPWP) is an intervention that could improve the lives of many. The additional costs of the EPWP to our public works and roads projects is not known in hard numbers, but it is as high as 25% in certain roads projects. We need to recognize that the true cost of the EPWP is fewer schools, fewer clinics and less maintenance.

The department launched the Umsebenzi job portal two years ago to link job seekers with potential employers by registering unemployed individuals and allowing employers to advertise vacancies on the site. Whilst the portal may have a real potential to contribute towards reducing unemployment in the province, it was disconcerting to discover that the last job to be posted on the site was in August 2008. The portal is apparently managed by a consultant. I have since given the department specific instructions to update the portal regularly to pursue ways of enhancing the efficiency of the portal to be of greater use to job-seekers.

The flagship training project, Learnership 1000, does not reflect well on the department. It has been characterized by poor planning and execution, and is the subject of a forensic audit. A raft of consultancies have been involved in its implementation, and the cost per learner thus far is R50 602.

The department can ill-afford to under-utilize resources that are designed to help reduce unemployment, especially during times like this where jobs are shed daily.

The Masakha Sizwe project aimed at the graduate and near graduate sector, is on the other hand, very successful and modestly financed.

Budget Overview.

This budget speech will differ from others given the extremely limited budget available, which in turn, is exacerbated by the distorting effects of totally disproportionate spending on consultants.

Thus the goals and projects which I will be detailing will be financed by own revenue, savings and switching funds from less productive undertakings.

I will therefore deal briefly with the votes as follows:-

Programme 1 – Administration:-

This vote has grown from R65m in 2005/06 to R212m in the budget year. In addition to the normal activities under this vote, its funds will finance a number of the projects to be described later.

Programme 2 – Public Works.

R642m is provided for Public Works, in addition to the funds budgeted under Health and Education for meeting their needs.

Sub-programme support has grown from R87m in 2005/06 to R175m in 2009/10 financial year. Spending in this area will be subject to judicious review. On the other hand, sub-programmes 2 and 3, construction and maintenance in Public Works for the 2009/10 financial year are R3 million less than the 2005/06 figures at R70m and R38m respectively.

Maintenance is of particular concern, and additional funds will have to be found from elsewhere in the department to augment this entirely inadequate amount – down 46% from the previous year.

Sub-programme 5 – Property management – is 23% less than the previous year at R359m. I am by no means satisfied that we obtain enough bang for our buck in this area, which is addressed later in the speech.

Programme 3 – Roads Infrastructure.

The apparent large increase in this area is largely occasioned by the 2010 legacy projects on the N1 and N2, all of which, bar one, will be completed timeously.

Again, the R558m voted for maintenance is a matter of concern.

Programme 4 – Public Freight and Transport.

The total amount voted of R690m is distorted by the new Provincial Transport Grant of R594m, all of which will be paid in subsidies. Thus the effective budget is R96m, approximately R73m less than in the previous year. The reduction is largely occasioned by Treasury withholding funds in an area where there previously was very heavy spending on consultants.

Programme 5 – Traffic Management.

This vote is adequately financed at R221m, and is responsible for an excellent job in harvesting license revenue. It also contains the highly efficient Government Motor Transport Trading Entity.

Programme 6 – Community Based Programmes.

The vote is funded at R54m and will be hard pressed to achieve the National EPWP targets. Training will become an increasing priority as the department leverages support from the built environment and roads communities to replenish our steadily diminishing pool of skills.

A New Beginning.

My first order of business is to ensure that the department operates openly and honestly. That its staff are effective; hardworking; and given every opportunity to serve both their community and to develop themselves. It is appropriate at this point to introduce the acting Head of Department Mr. Johan Fourie. Mr Fourie has served the administration with distinction since 1973 starting out in the old CPA and, notably, leading the formation of the Provincial Treasury in 1994.

Working together with management and staff, our task will be to develop the department into a fully functional unit that avoids unnecessary expenditure, upholds the principles of good governance, and delivers quality, tangible services. To do this, we must analyze and eradicate the dysfunctionalities of the past.

That’s why I have ordered independent investigations into allegations of irregularities with regard to the appointment of consultants in the department; leasing irregularities as well as other matters of concern. My department will be working very closely with both the Office of the Auditor-General and Forensic Investigative Unit in the Premier’s Office.

All these decisions are informed by what Dr. Martin Luther King called the ‘fierce urgency of now’.

1. Building a Lean and Clean Department.

Thus the first of my five key priorities is to build a lean and clean department; manageable and free of controversy. To achieve this, there will be a renewed spirit of accountability at both administrative and executive level.

The current macro structure of the department has led to the creation of a burdensome, top-heavy department. This has the potential for administrative functions to overshadow the core business of the department. There is no value in expanding the size of the department without eradicating existing backlogs or conducting essential maintenance works of government owned buildings.

There will be no slash and burn offensive on the department. I have personally met most of the people who work with me and I am impressed by their attitudes, their passion and their determination to deliver. What I am advocating is a re-shaping of the Department, using existing skills, so as to make this Department an instrument of delivery.

We will instill a culture of prudent financial management. First things first, I will dramatically reduce the department’s unreasonable reliance on consultants. Instead, money will be spent on recruiting engineers and technical skills on a full-time basis to strengthen the department’s capacity for proper infrastructural maintenance.

I am also reviewing the department’s spending trends on marketing and advertising with the aim of cutting down on unnecessary and wasteful expenditure. There will be no squandering of financial resources. Every cent spent must be accounted for. This reigning in will enable the department to save R300 million – at the very least - on administrative activities and consultants

Supply chain management will be restructured to address the deficiencies of the past. This is the first step towards obtaining an unqualified audit report. Finance will be strengthened and centralized.

2. The New Partnerships - A Seamless Co-Ordination.

The key to success in all matters affecting my department is co-operative governance at every level. We will master the skills of working effectively with a multitude of National departments, municipalities and other provinces. Partnership at every level will be our driving imperative, and will include the private sector; the trades unions; the transport operators; the NGO`s and the people of the province. The province and the City of Cape Town will bury old differences, eliminate duplication and work together in a host of endeavours that will transform our landscape.

Within the next year for example, responsibilities for public transport will, in terms of the National Land Transport Act, increasingly switch from the province to the City and other municipalities capable of managing the function. The Province will ensure that it is able to smoothly transfer public transport functions in excellent working order, and then lend support to the new transport authorities.

3. Public Transport For All.

The DA will deliver within 5 years the platform of an integrated public transport system whose operating elements are increasingly harmonized, regulated, formalized and complementary rather than competitive.

Our objective is to provide excellent public transport; reduce congestion on our roads and in our ports; maintain and improve all our roads; significantly improve road safety; cater for passengers with special needs and ease the movement of freight, so that all of these objectives, working together, ensure economic growth and provide meaningful opportunities, choice and a better life for all the people.

The characteristics of public transport will be affordability; accessibility; reliability; safety and sustainability.

3.1. The Minibus Taxi Industry.

This industry is, despite its imperfections, a dazzling example of what can be achieved by previously disadvantaged entrepreneurs without BEE handouts or subsidies in the face of myriad difficulties. The DA is totally committed to preserving the well being of the industry and all its stakeholders.

We will continue to ensure that no fundamental changes are introduced without negotiation and consensus, and that such changes are always beneficial to the owners and operators. We will guarantee mobility via the taxi/bus lanes; improve the efficiency and efficacy of the regulating authorities and seek, with the industry, for solutions to their most pressing problems. In return, we expect the industry’s fullest co-operation in our safety and regulatory campaigns, as well as a significant improvement in service to their customers.

3.2. Bus Rapid Transport.

The Province will collaborate seamlessly with the City of Cape Town to ensure that the first three BRT systems are fully operational for 2010.BRT will revolutionize public transport in the Peninsula commuter belt, which includes the City, Swartland; Drakenstein and Stellenbosch. The first routes will serve as a working laboratory to point the way forward.

I stand shoulder to shoulder with both our President and our Premier in my commitment to BRT.

3.3 2010 – The Best Will Be In The West.

The City of Cape Town is the host city contracted to FIFA. As such, they have the greatest responsibility for the success of this seminal event, including public transport. The City’s Mike Marsden will champion the entire project, including the important legacy aspects. In the spirit of co-operation and real coordination, all provincial staff working on 2010 will report directly to Mr. Marsden.The Province is already working in partnership with the City, and has already transferred a number of consultants to them. We are confident that 2010 will exceed expectations.

4. Safely Home.

Every day 5 people on average die on our roads. We dare not accept the cost and tragedy of 2000 fatal accidents on our Provincial roads as normal or inevitable. Accordingly, it is my aim to halve the fatalities on our roads by 2014.

To achieve this, a partnership will be formed with the City and other municipalities; the Provincial Departments of Community Safety and Health; SAPS and SANRAL to plan and execute a safety and regulatory campaign across the Western Cape.

This is not just an empty promise of better coordination. We have already made the first of the key appointments that will drive this project. I am very pleased to announce that Mr. Horst Kleinschmidt will be a key player in these plans by working with the City of Cape Town and the Province to ensure that all regulatory bodies operate at peak efficiency, and that they are prepared for the changes that National Road Transport Act will bring about.

Mr. Kleinschmidt has a distinguished record in the liberation struggle and has occupied high offices in national government. He has carried out important assignments for both the City and the Province.

The Safely Home campaign will be all pervasive. The campaign will focus primarily on the twin evils of speeding and drunken driving, which together account for 80% of deaths on our roads.

It is an anathema to me that health services know exactly where and when the most fatal road accidents take place and that our enforcement officers pay scant attention to this or worse, simply don’t know that this information is available. We will use, manage and coordinate every single piece of available intelligence to properly target all accident black spots at the times when they are most dangerous. We will enforce regulation, greatly increase the visibility of law enforcement on the roads and make the fullest use of cameras.

We will negotiate with the National Justice Department for a number of special courts to speedily process charges. To this end, I have written to Minister Jeff Radebe requesting a meeting to discuss this. I need to tell the people of the Province that the law will be rigorously applied to every road user, without fear or favour. A major reduction in Health costs will more than offset the costs of this campaign.

Drivers and pedestrians will be invited to publicly associate themselves with a road courtesy campaign. We will be inviting the media to play an essential role in supporting and sustaining this campaign.

5. Fast Forwarding Cape Town.

The CBD properties of the Provincial government are the jewel in our crown – valued today at many billions of rands. Integrated and managed as a single asset, they can drive a social transformation programme which will provide points of contact between rich and poor; provide space for efficient government; leverage up the Metro’s capacity to become one of the great cities of the world and continually re-invigorate provincial government’s income stream for decades, if not centuries. To this end, Cabinet has agreed to seek a partnership with the City, National government and other stakeholders. Central to this project is rationalizing the province’s accommodation. This will be based on 5 principles fitness for purpose, greening, energy efficiency, what we need and nothing more and user pays.

I will be in a position to provide more details on this exciting project shortly.

The department has to accept great and difficult challenges. If they are met, they will transform the City and the Province. Isaiah commands us to ‘undo the heavy burdens and let the oppressed go free”, and in providing decent public transport, in reducing deaths on the road and in re-energizing the city we do open new paths to freedom.

I am satisfied that I have the staff who will not only take up these challenges, but will rejoice in them. As for me, I am in my last 5 years of service to my country and to Africa which has given me life; home and so much delight and wonder. In my long stewardship I have always been impelled by the words of Emerson – ‘work and you chain the wheel of fate.’ So has it always been. So it will be here.

Thank you.

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