Minister Grant addresses the National Council of Provinces (NCOP)

• Honourable Chairperson of the National Council of Provinces
• Honourable Members and Office Bearers
• Delegates from the Provinces
• Honourable Minister of Transport
• Distinguished Guests
• Ladies and Gentlemen

It is an honour for me as the Western Cape Minister of Transport and Public Works to represent the Western Cape Provincial Parliament today in the National Council of Provinces during Budget Vote 35: Transport.

We note the budget tabled by the Honourable Minister. In particular, we note and fully support the Honourable Minister’s core pillars underpinning the budget:

1. transforming and improving the lives of our people,
2. improving transport systems and operations by finalising outstanding policies, strategies and legislation,
3. creating jobs through transport operations and capital investments,
4. continually improving transport safety and security, and
5. the strong commitment to quality public transport infrastructure and services.

The Western Cape Government acknowledges the Honourable Minister’s continued focus on and commitment to the Integrated Public Transport Network approach, primarily funded by National Government through the Public Transport Network Grant (PTNG).

Like the Honourable Minister, we believe that the ability to provide public transport that is accessible, affordable, safe, reliable and convenient requires an Integrated Public Transport Network approach that invests in public transport infrastructure and that provides sufficient subsidy support to operations to enable the service to be truly accessible to all users, particularly the poor and marginalised. We look forward to seeing the national Department’s Public Transport Subsidy Policy in this regard.

We also support the continued focus on and development of integrated transport planning. We emphasise  that such integrated planning must consider reforms in the urban landscape and changes to our infrastructure planning approaches to support the development of quality public transport over the use of private vehicles.

We wish to thank the Honourable Minister for singling out the IPTN operational cities. We are proud that both cities receiving PTNG funding  in the Western Cape (Cape Town and George) are operational and together provide close on 90 000 of the total 125 000 average daily passenger trips currently provided by the operating cities.

The Western Cape Government reaffirms its commitment to continuing to use the national grant funding to maximum effect and we will continue to lead the way in providing high quality and sustainable public transport services.

We also note the commitment by the Honourable Minister that six additional cities will be operational in the current financial year. Given this, we highlight two areas of concern: 

1. the need for greater predictability and security in the funding provided by the PTNG, noting the long-term nature of public transport investment programmes and operations, and
2. the National Cabinet approved reduction in the Grant envelope and the resultant impact on the scale and speed of rollout of infrastructure and service. 

We recognise the limitations that the Honourable Minister is operating under but request that mechanisms be provided to ensure that greater certainty be provided to Cities within the MTEF period and beyond.  Efficient long-term planning for public transport investment requires funding linked to a secure income stream that extends beyond the MTEF. 

We also remain concerned about the level of funding that is devoted to public transport and are very disturbed by the shrinking funding envelope, already ravaged by inflation.

Like the Honourable Minister, we recognise the important gap that the minibus taxi industry fills in the existing public transport network. This approach has been acknowledged in our IPTN interventions in Cape Town and George.

In fact, in George, the operating company is composed 100% of former minibus taxi operators. The Western Cape’s Department of Transport and Public Works is providing the operating support to the services provided in George from its baseline budget. We are therefore significantly subsidising the commuter through this baseline allocation.

It is worth noting that a recent Financial and Fiscal Commission report highlighted that in South Africa approximately R54 billion is spent annually on public transport operations and that over R30 billion of this amount comes from fare revenues paid by public transport users. This profiles the challenge that our commuters face, where up to 40% of household income is being spent on public transport by some of the poorest commuters. 

This statistic is the inverse of the international benchmark which sees international government operating subsidies of around 60%. In South Africa the government operational subsidy is around 30 - 40%. To achieve the international benchmarks for public transport subsidisation will require a doubling in the national subsidy provided to road-based public transport and rail operations.  While we are aware of the economic circumstances which result in the opposite trend within the budget currently tabled by the Honourable Minister we remain very critical of many of the underlying reasons for the current slump in the country’s economy. It is virtually impossible to achieve appropriate service budgets within a badly managed economy where international confidence is plummeting as a result of poor political decisions.

The economy of the Western Cape is also negatively influenced by poor or inefficient service flowing from the overall responsibilities of the Minister’s department. Allow me to take the opportunity to highlight two examples.

Firstly: The importance of tourism to the Western Cape economy is widely recognised. In order to access tourist attractions visitors have to travel around the Province and many need to be transported by tourism operators. Quite rightly for reasons of quality and safety these operators have to be accredited and licensed. These processes have worked efficiently over many years on a provincial basis but since August 2016 have been taken up – as the law allows for – by the NPTR in Pretoria. Unfortunately, the quality of the service provided by the NPTR has been spectacularly bad. Return times are ignored [often by more than 100%], documents are lost and have to be resubmitted, calls and e mails go unanswered. In some cases operators have lost their businesses as a result. Were it not for the ongoing intervention of my Department, many more operators would, in fact, have done so.

My appeal to the Honourable Minister is to ensure that the NPTR has the required capacity and commitment to carry out its statutory duties. Alternatively we should explore the delegation of this function to the Western Cape. Economic activity needs to be encouraged, not hampered in this way.  

Secondly: We note the Honourable Minister’s commitment to rail improvement, through investments in rail infrastructure and rolling stock but are appalled at the extent to which these commitments are caught up in allegations of massive fraud and managerial inefficiencies. We reiterate our urgent need for new passenger rolling stock and rail infrastructure in the Western Cape. While we do not believe we are the only Province in this position there is a deep concern about the state of rail in the Western Cape. All indications are that the commuter rail service is in a state of collapse and the impact on the commuters, on roads and traffic congestion, and on the alternative services (bus and minibus) is extreme. While rail should be the cornerstone of public transport in the City of Cape Town and the broader region we are seeing that cornerstone being undermined and nearing total collapse.

Accordingly, Honourable Members, we urge the Honourable Minister to address the significant challenges faced in the commuter rail sector - from safety and security to improved operations, infrastructure and systems. This includes the revitalisation of the institutional structures – Metrorail, Prasa and the Prasa Board. My Department has provided assistance to Metrorail wherever possible. The return in improved service for the more than 600 000 dependent commuters has been insignificant  given the years of neglect and the lack of direction and commitment from national government. The Honourable minister is aware that this lack of commitment cannot continue during his watch.  

I thank you.