Address by Minister of Transport Jeff Radebe on the Transport Budget Vote to the National Council of Provinces (NCOP), Cape Town

Chairperson and Honourable Members

Let me take this opportunity and express my deepest sympathy and condolences to the bereaved families and friends of the 28 people who were killed in a bus accident between Cedarville and Matatiele in the Eastern Cape yesterday morning. I also want to complement the hard work by the emergency services, Metro Police and the South African Police Services for their diligent work at the scene of the accident. This accident once again illustrates the need for motorists to exercise extreme caution at all times. This matter points to the urgency of our implementation of the Road Safety Strategy which aims to prioritise law enforcement in public transport, with the Road Traffic Management Corporation (RTMC) at the helm of that initiative, focusing on roadworthiness of vehicles. Chairperson, can I propose that the house stand for a moment of silence in memory of the deceased.

Last week I had the opportunity to address the Budget Vote for Transport in the National Assembly and the copies of that speech have been distributed to members of the National Council of Provinces (NCOP) for your convenience. In summary, my address gave a comprehensive progress report on three specific priorities that we set ourselves after the third Democratic Elections in 2004, which was also reaffirmed by the African National Congress National Conference in Polokwane, giving effect and clarity to both our political and electoral mandate as the ruling party.

Firstly, we set as our priority the improvement of our public transport system to benefit the rural and urban poor. Secondly, to accelerate the infrastructure development, both as an instrument of growth and as an employment driver. Finally, the improvement of safety and security within the transport sector. However, as you may have noticed, the theme throughout my address was our state of readiness in preparation for the 2010 FIFA World Cup but also the lasting legacy this will have on improving our transport systems and infrastructure.

I need not remind this house that transport holds the key to economic growth in the country, or any country for that matter, because without the means and capacity to move people and goods efficiently, economic growth can only be a dream. On the other hand, our social role is to provide for the transport needs of our people on an affordable basis, whilst we also address the gross distortions inherited from the apartheid government with regards to disproportionate development. Therefore, we continue to be of the firm view that transport is indeed the heartbeat of our economy.

My intention this afternoon is not to traverse these topics in the same detail as last week, but rather seek to highlight a few pertinent activities and challenges of the transport sector that require the direct attention of provincial, metro and local governments. Put frankly, the Constitution defined certain aspects of transport as a responsibility that cuts across all spheres of government, which places the responsibility of integrated, efficient and reliable transport system squarely on all of us.

Honourable members, today I will confine my input to most critical areas of our work, namely, the 2010 transport preparations, public transport, road and aviation infrastructure, rural transport and freight logistics.

Honourable members, I am pleased to report that the majority of the 2010 related projects are on track and will be concluded before or on time for the 2010 Soccer World Cup. All Host Cities have already started with their work and the investment for the 2010 projects through the Public Transport Infrastructure Fund (PTIF) has also increased from R9,2 billion to R13,6 billion from the 2005/06 to the current Medium Term Expenditure Framework (MTEF) ending in March 2011, which is in line with our objectives of achieving a lasting legacy to improve the socio-economic conditions of our people.

We have also undertaken major initiatives in all spheres of government in preparation for the 2010 FIFA World Cup - as guided by the Public Transport Strategy and Action Plan towards the realisation of a mass rapid and efficient public transport network. For instance, construction is far advanced with regards to the:

* Johannesburg Phase 1 BRT that links Soweto, Nasrec, CBD, Ellis Park, Sandton and Alexandra.
* Nelson Mandela Bay BRT system that links Motherwell and New Brighton with the CBD and the suburbs.
* Cape Town project which provides rapid transit services within the Inner City and to the Airport and also to the West Coast. Thus providing badly needed public transport connections to communities such as Atlantis, Du Noon, and Joe Slovo.

Honourable members, the aviation sector is also critical, particularly in our ability to host the 2010 FIFA World Cup. Construction at our airports, particularly those that will be directly affected by world cup soccer activities, is progressing well. Passenger traffic across Airports Company of South Africa's (ACSA) network of 10 airports continues to surge and is estimated to rise from the current 32,8 million in 2006/07 to reach over 43 million passengers per annum by 2010. Meeting this growth in passenger demand has necessitated enormous investment in airport infrastructure. On the back of strong economic performance, passenger demand has largely been driven by the entry of low-cost carriers into a market where a growing portion of the population can now afford air travel.

At O.R. Tambo International Airport, the central terminal building has a budget of R2, 2 billion; upgrade of the international departures terminal R105 million; second multi-storey parkade R486 million; remote aircraft aprons (R840 million); the International Pier (R533 million). The central terminal building linking the current domestic and international terminals at OR Tambo as well as the reconfiguration and upgrade of the international arrival and departure areas is currently under construction.

The central terminal building project is scheduled for final completion by the end of 2009, six months before the 2010 Soccer World Cup. The central terminal building will also be connected to the Gautrain Rapid Rail Link for easy access to train transportation to Johannesburg, Sandton and Pretoria.

At Cape Town International Airport, we have two main projects, the central terminal building with a budget of R1,5 billion and the second Multi-Storey Parkade with a budget of R394 million. Work on the central terminal building is progressing rapidly. The construction of a second multi-storey car park which will be located directly opposite the current International Terminal is also in progress. The parkade will have 4 000 bays which is almost double the current capacity.

ACSA is also developing the new green-field international airport at La Mercy at a cost of R6, 7 billion. We are also busy with runway and terminal refurbishment at Bloemfontein Airport at R121 million and R49 million respectively. There is also terminal upgrade at East London at R98 million and runway refurbishment at Port Elizabeth of R68 million.

All these efforts are aimed at enhancing the value of public transport and therefore help reduce traffic congestion on our roads. The escalating price of fuel also means we have a duty to lighten the heavy burden this has on the income of our people by providing them with efficient public transport. We have no doubt that our approach of an integrated intermodal transport system will ensure this, with the taxi industry playing an important role.

Let me also reiterate that the scrapping of old taxi vehicles is well on track and the outlook per province indicates that in the Eastern Cape 2 502 old taxis have been scrapped, 1 503 in Free State, 1 435 in Gauteng province, 1 559 in KwaZulu-Natal, 2 301 in Limpopo province, 223 in Northern Cape, 1 262 in Mpumalanga, 2 398 in North West and 350 in Western Cape. This brings the total to 13 533 old taxis already scrapped. The amount of R676 million has also been paid to taxi operators as a scrapping allowance. Currently, we are also processing more than 25 679 applications for scrapping purposes. Let me also mention that the provincial operating licensing boards have approved more than 86 000 operating licenses for taxi operators and we have concluded the turnaround strategy for Operating Licence Boards which will improve service delivery.

Regarding the Passenger Rail Service, I am pleased to announce that both the South African Rail Commuter Corporation (SARCC) / Metrorail are being merged with Shosholoza Meyl as a way of reorganising our commuter service. We are far advanced with the process of bringing Shosholoza Meyl into SARCC with the finalisation of the sale of business agreement with Transnet. The new entity will rationalise institutional operational arrangements and administrative structures primarily to deliver its core mandate more clearly, with no confusion about where responsibility lies for the provision of passenger rail service.

A number of upgrading works on stations, rail track, signalling and rolling stock is proceeding in all SARCC areas of responsibility. As government we have also increased funding for passenger rail services to the tune of R18 billion over the MTEF period.

This funding is vital for the turnaround strategy being implemented by the SARCC aimed at immediate and significant improvements through the upgrading of the current rolling stock fleet as well as the upgrading of the signalling infrastructure.

I am aware that our metros and provinces have raised concerns in the past that there were no plans to upgrade the railway system. I wish to allay their fears and state that government has given clear instructions to the SARCC to upgrade and strengthen the capacity of our rail system. Out of the 700 coaches to be upgraded this financial year, I am satisfied that there is a fair balance in increasing the capacity of Metrorail in all the metropolitan areas.

The allocation for the Western Cape is 165 coaches at a cost of R400 million, which amounts to an additional 14 train sets to the 122 coaches or 10 sets introduced last year. For the Wits region (Southern Gauteng), the allocation is 264 coaches at a cost of R460 million, which will mean an additional 20 train sets to the 194 coaches or 14 train sets re-introduced in the last financial year. The allocated coaches for Tshwane is 115, which amounts to an additional eight train sets at a cost of R230 million compared to the 81 coaches or six train sets reintroduced last year. The Eastern Cape, which remains the smallest operation of Metrorail is allocated 24 coaches, which is an additional three train sets to the eight coaches. The SARCC experienced huge backlogs in its Durban Metrorail operation in terms of the upgrade and general overhaul of coaches. The allocation for Durban this year is 108 coaches, an additional eight train sets at a cost of R365 million to last year's 87 coaches or seven train sets.

Personal safety continues to be treated as a priority to ensure that rail regains its market share in the public transport sector. Our co-operation agreement with the South African Police Service (SAPS) has seen the rollout of more than 2 000 railway police officers in various provinces which has produced more than 15 contact points throughout the country, and has contributed to the reduction of security incidents as well as index of crime by 37,5%. Our plan is to ensure that 5 000 police personnel are deployed in our trains by 2010.

The Department has also made an impressive progress on the implementation of the Priority Rail Corridor Strategy for commuter rail performance. Our aim is to focus our rail resources on those corridors, where rail transport has a clear comparative advantage, with high volume movement coinciding with corridors of preferred future development in line with long term Spatial Development Framework.

Two major projects in this category are the extension of the Khayelitsha Rail Line currently in progress, to be completed in February 2009 and the Moloto Rail Corridor Development to be implemented jointly with the Mpumalanga government. The Moloto Rail Corridor Development was approved by Cabinet in March this year, following a feasibility study completed in 2007. The project transverses three provinces, namely Mpumalanga, Limpopo and Gauteng and nine districts, metropolitan and local municipalities.

My Department is in the process of establishing a Project Management Office to implement this project which will entail the construction of approximately 100 kilometres of rail line from Mpumalanga into Tshwane in Gauteng, at a cost of approximately R8,9 billion. I'm also pleased to report that 2008/09 financial year will see the period of the most intensive activity on the Gautrain project, with construction work taking place over the full length of the project and at all 10 stations. In addition, the first consignment of rolling stock will be received in November this year.

Cabinet has also identified the integration of the Gautrain project into the urban fabric and the surrounding public and private transport systems as an essential requirement for the project to fully realise its developmental and transport related goals. This includes the integration of Gautrain with the Bus Rapid Transit Systems in both Tshwane and Johannesburg. As a result, I have requested my counterpart in the Gauteng Department of Public Transport, Roads and Works, MEC Ignatius Jacobs, to establish a Gautrain Public Transport Integration Committee comprising of the three metros (Tshwane, Johannesburg and Ekurhuleni), as well as my Department and the South African Rail Commuter Corporation, with the primary task of developing a Gautrain Integration Implementation Plan.

Honourable members, in addition to rail, the issue of road infrastructure in our country remain a critical area of our transport system. It is a well known fact that provinces are facing serious challenges in dealing with road maintenance and rehabilitation backlogs due to fluctuations in budget allocations. However, there seems to be a clear gradual increase in budget allocations for roads infrastructure across all spheres of government.

According to the budget review by the National Treasury, the provinces increased their spending on road infrastructure by 15,1% annually between 2003/04 and 2006/07, and the spending is set to increase by 13,6% annually from 2007/08 to reach 13,4 billion by 2009/10. In addition, an amount of R3, 5 billion in the Expanded Public Works Programme (EPWP) has been allocated to provinces through the Provincial Infrastructure Grant. Provinces received in total R588 million in the 2007/08 financial year with R805 million allocated for the current financial year and R1,6 billion in 2009/10. This has also resulted in a marked turnaround in spending on roads and the Provinces account for the most spending.

At the national level, our three concession contracts, the N3, N4 Platinum Corridor and the N4 Maputo Development Corridor, continue to facilitate improved trade, tourism and regional inter-governmental relations; thus providing faster, safer and more reliable transport, as well as building the economy of our country. South African National Roads Agency Limited (SANRAL) will continue with its Public Private Partnership concession programme. It is currently developing the N2 Wild Coast Toll Highway worth R3 billion, N1/N2 Winelands Toll Highway worth R3,5 billion, R300 Cape Town Ring Toll Highway worth R2,5 billion and the Gauteng Freeway Scheme worth R23 billion.

The challenge remains our ability to fund the continuity of maintenance of our road infrastructure and the shortage of skills at the provincial and local levels. Part of the solution is our continued engagement of the private sector to source necessary funding as well as the development of retention strategies for our skilled labour.

Not withstanding these budgetary constraints, most provinces were able to achieve commendable results with the development of community access roads through labour intensive construction particularly through the Expanded Public Works Programme (EPWP). The R3,5 billion allocated for EPWP has played an important role in employment creation within provinces. The implementation of Zibambele (KZN), Siyatentela (MP), and Zivuseni (GP) which are labour based construction programmes, are examples of key successes of community based road programmes under the EPWP. Progress in implementation of the EPWP in 2007/08 highlighted some challenges where labour intensity of the projects is low thus minimising the potential for job creation through EPWP projects. This is an area that needs to be closely monitored for improvement so that the EPWP achieves government's objective of providing infrastructure and creating job opportunities.

Honourable members, the impact of transport in the deep rural areas isolated from major road and rail routes is also paramount. We are of the firm belief that our Rural Transport Strategy, approved by Cabinet in December last year, is central in the promotion of mobility in these areas. We have targeted a number of rural areas such as the Sekhukhune, OR Tambo and Chris Hani districts for a number of non-motorised transport initiatives, including the infrastructure as well as the freight logistics.

We are already conducting a rural transport development mapping project with an intention to demonstrate through information maps the co-ordination of service delivery within nodal points and economic hubs. This is already assisting us in the district-wide planning, implementation and investment of infrastructure intermodal public transport facility in Chris Hani district; the pedestrian and bicycle bridge underway in Thabo Mofutsanyane in the Free State; the rural transport brokerage system in OR Tambo district; and a Taxi Rank in Jozini (Umkhanyakude) and access road maintenance in Sekhukhune and Bophirima.

The Shova Kalula Bicycle project is also making a substantial progress. We have already appointed a company to distribute 26 100 bicycles in all provinces. And the specification for the rural bicycle has also been completed. The first batch of bicycles will be delivered to schools by August 2008 and our target is 46 100 bicycles by March 2009. We therefore believe that these initiatives will ensure the mobility and access to economic opportunities by our people in the rural communities.

In conclusion, as you are well aware we are currently implementing the National Freight Logistics Strategy in order to integrate first and second economies, as well as support the integration of marginalised local economies with the main logistics corridors. The question we are trying to answer is how do we improve the efficiency of our corridors and rail capacity for an improved performance of economies. Through our strategy, we have begun to ensure an increase in traffic, volumes and changes in the nature of rail freight cargo particularly with huge improvements to the rail infrastructure and rolling stock.

We have, for instance, invested millions of rands in the branch lines such as the Kei Rail in the Eastern Cape, Nkwalini in KZN and Douglas Belmont in the Northern Cape as a way of investing in the rural and second economy interventions as well as the integration of first and second economy transport networks.

Honourable Members, I have touched on a few issues in a complex and rapidly dynamic portfolio. The challenges posed by transport issues essentially underpins the challenges faced by our economy at large, hence their resolution will have immediate impact on our overall economic development. I look forward to the debate and will respond accordingly to other issues in my closing remarks.

I thank you.

Issued by: Department of Transport
28 May 2008