Good morning ladies and gentlemen,

In front of you is my ministry’s report of some of our major achievements from May 1994 to today. Today I would like to refer to some of the significant markers in that report:

Private-Public Partnerships is one area in which the DoT has been particularly innovative. Through PPPs we are financing almost R8 billion of national road infrastructure (Maputo, N3 and Platinum roads).

They have chartered a way in which we could address the fundamental problem of resources. The debate around PPPs has developed a clear perception in our minds of where risk should be placed: that is the financial risk must be placed within the financial sector and the political risk with the politicians; ie where the risk can best be shouldered.

In the construction of the national roads we have been successful is transferring the financial cost and risk to the private sector. In the past government underwrote the construction of roll roads, but with the tender for the N4 to Maputo that provision was removed and in the case of the tender on the N3, the state’s debt on the road was written into the contract. This means that the state owns the infrastructure but the costs of building and maintaining it is with the private sector.

Where public-private partnerships have not been possible, we have introduced commercial "user charges" or competitive practices to ensure that government gets value for its money.

In one of the two parastatals I am the shareholding Minister of, the South African Rail Commuter Corporation, we are now finalising years of negotiation to fundamentally change the way in which government subsidises rail commuter transport.

This year we hope to finally sign the agreement with MetroRail that will move us away from deficit financing to a more performance-orientated contract that will not only give value for money but also improve efficiency and service, which is the cornerstone to developing a reliable and safe public transport system in our country.

This contract will be the first step towards the concessioning of the rail commuter network to the private sector.

Where full private sector involvement or concessioning is not possible, we have used outsourcing, for example, for the provision of government motor transport.

We have developed three major contracts in the area of government motor vehicles that are worth more than R6 billion over the next six years. They are:

• A three-year tendered contract with a turnover value of R750 million per year for the maintenance of the government’s large vehicle fleet (including SAPS) has been awarded to WesBank First Auto last year.
• WesBank also won a two-year tender this year to provide R750-million worth of vehicle finance to national and provincial government employees who qualify for car allowances as part of their remuneration packages.
• In the largest contract, I expect that next month we will reach financial closure with Imperial on a multi-billion rand contact to outsource the transport requirements of five national government departments.

The significance of all three contracts is that we have shifted the risk in providing and financing government motor vehicles from the public to the private sector which will save government millions every year lost through theft, corruption and abuse in the current system. The private sector welcomed the challenge to provide this service because they understood government’s position that they are best position to shoulder and manage the risks involved.

The success of PPPs is the partnership ie a win-win solution for all parties. This is the delicate balance on which they can be successfully used because PPPs are not (in our experience) an easy, catch-all solution to the problems of public sector financing.

One of the major tasks done in the Department has been the restructuring and reconceptualising of the DoT. It started with our White Paper process when I took office, when we asked the fundamental question of what is the role of transport in our country and more specifically, what is the role of government in transport.

We critically looked at what was assumed to be the role of the state and found that many areas of activities could be more effectively done if there was a direct relationship between the providers and the users.

From this came the four agencies that we established last year: civil aviation, cross-border transport, roads and shipping.

All four agencies are fully operational and I am confident that their services and performance levels will continue to grow.

This restructuring meant that the DoT reduced in size for an organisation of more than 1,400 people when I became Minister to less than 250 today.

The savings to the taxpayer are significant: R70 million alone in the annual salary bill and more than R50 million in the informal subsidisation of services that are now provided on a user pays principle.

Where does this leave the DoT?: The DoT today is a small group of professionals whose focus is on policy, implementation and regulation.

The changes and appointments that we have made in the past six months will be released when we unveil our Business Plan for 1999/2000 in March.

With the Business Plan is our performance contracts (starting with the DG’s contract with me). This is the third year that we have worked within Business Plans and Performance contracts as we believe that government, like the private sector, should work in a performance-orientated environment with clear goals and measurable results.

Central to the Department’s work in the coming years will be the findings of the Moving South Africa project which has laid out clear strategic goals for an integrated transport system over the next 20 years.

In the four years I have been in government I have learnt that you can have all the policy documents in the world but without the hard data to drive the strategic choices you need to make in implementing them, you will not achieve your goals.

As a data-driven research project, Moving South Africa has clearly put on the table the choices and debates that we must have in order to make sound transport choices and trade-offs for our social and economic development.

Through critically taking on the inheritance of the past, I believe that Transport has in the past four years created a platform for us to do the work: ie an efficient and effective integrated transport system that is geared to customer needs and not minority interests.

Our first principle about the role of government in transport has been that where possible we must rely on the private sector, exclusively or in partnership with government.

The other parastatal I am shareholding minister of is the Airports Company South Africa, which completed its first phase of privatisation when Aeroporti de Roma paid R819 million for their 20 percent stake in the company. This was followed by the Black Economic Empowerment aspect of the deal and the sale of shares to ACSA’s employees.

This deal, which won Privatisation International’s award for the best privatisation deal in Africa last year, underscores the successful corporatisation of a parastatal which has turned in healthy dividends for the past two years.

But more than the R1,2 billion that this phase has raised towards debt repayment, we have on board investors who bring international experience and expertise to our operations as well as speed up training and human resource development.

In conclusion I thought that I would end with a challenge that we are currently grappling with our colleagues on all three tiers of government: that is our attempt to restructure the institutional arrangements of road traffic management in this country.

In my term as Minister we have run three ARRIVE ALIVE campaigns that have all exceeding their strategic goals of a five percent reduction in road deaths in each campaign.

But against the carnage on our roads, this is not enough and is not sustainable as we don’t have an effective and integrated system of road traffic management in place 24 hours a day, seven days a week, 365 days a year.

That is why we have brought the Road Traffic Management Bill to Parliament this session and after exhaustive consultation within all three tiers of government.

The Transport Mincom set up an intergovernment, interprovincial task team to review the current system last year. Their report makes clear the extent of the problems and why the current system cannot be allowed to continue:

• Traffic law enforcement alone is running at a big loss: R1,409 billion.
• In the approximately 70 authorities we studied (from large to small) driver and vehicle licencing were financially viable, but all authorities lost money on vehicle testing (which is a critical area in road safety). We approximate that all three areas currently raise approximately R322 million but the provision of these services costs R354 million, ie. before the provinces and local authorities have paid over a portion to their agents they are making a loss. This means that there is no money for them to reinvest in road traffic management in the employment of traffic personnel, training or the up-to-date equipment available to improve enforcement.
• The successful prosecution rate for serious road offences is below 35%, which further erodes revenue. We estimate that the cost of law enforcement is R1,968 million while income is only R590 million.
• There is no co-ordination of activities as 7000 officers are employed by 500 authorities, very few of whom provide a 24-hour service.
• Law enforcement is not targeted at critical offences, areas where there are the highest crash rates or even at the time when most crashes occur.
• Almost half of the public vehicle and driver testing stations are below standards and operate at a loss.
• Fraud and corruption are rife.

This is a system that clearly requires change. The model of the RTMC that we have proposed is a statutory body that has the Minister of Transport, the nine MECs of Transport and representatives of Salga as shareholders under which a system of agencies are established as dedicated units in different functional areas of road traffic management.

For example, driver and vehicle licencing and testing will be undertaken on an agency basis by local government, provinces or the private sector with performance contracts and on-going monitoring to comply with statutory requirements. It will be on a user pays basis so that the cost of providing the service is covered by the charge for it.

In the other crucial area: law enforcement, activities will be undertaken within a National Traffic Law Enforcement Code funded from the RTMC’s revenue from the collection of notices from the Administrative Adjudication of Road Traffic Offences.

Enforcement shall be conducted with an annual plan that targets critical offences.

Those are just two of the 10 functional units we will set up.

By establishing clear functional units with income streams we hope to make traffic management less dependent on public funding and that any surplus funds are ploughed back, especially into the employment of professional, qualified traffic personnel.

CONCLUSION:

All that we have done in Transport has been done by systematically reading off our positions from the government’s macroeconomic strategy of reshaping our economy with a focus on exporting high-value goods within a competitive world environment and a clear eye on development, job creation and empowerment of the people of this country.

We have learnt a lot of lessons over the past four to five years. In some areas we have been perhaps a bit too ambitious about the extent to which we could introduce reform and change. One thing I have learnt is that institutional change us a very slow process if you want to take all your roleplayers along with you.

But I am confident that in Transport we have addressed the legacy of the past and have put in place a platform to build a transport system that will indeed serve the needs of our people and our country.