Budget Vote Speech by Donald Grant, Minister of Transport and Public Works 2017

Speaker, Deputy Speaker, Premier, Chairperson and other members of the Standing Committee, Honourable Members, Special Guests, Head of Department, Ms Jacqui Gooch, and senior officials, Visitors, In tabling his 2017/18 budget on 7 March in this House, my colleague the Minister of Finance described the budget as:

• a budget for growth,
• a budget for people, and
• a budget for prosperity. 

He went on to say that there is consensus in this Government and in this Cabinet that nothing is more important than growing the economy and creating jobs. Given this lead, I would like to start this budget debate by talking briefly about people, skills and jobs. I will return to the budget numbers in a short while. Speaker, one of the great conundrums for most governments is how to achieve the Holy Grail of growing the economy and creating lasting jobs.   The announcements coming out of Transnet and Dairy Belle at the moment are only the most recent signs of loss of employment opportunities in South Africa for 1000s of people in the face of deteriorating business environments even though Transnet is offering voluntary severance packages. The reality is that many people with dependents will lose their jobs.  

The Western Cape Government recognises that there is not only one route to follow with job creation. Sometimes it is structured and formal and totally dependent upon accredited qualifications. Sometimes it is informal and people learn on the job or improve on their skills while working. The Western Cape Government’s Skills Game Changer is an obvious confirmation of this with its emphasis on ensuring that young people have the necessary skills for jobs. In the DTPW, too, considerable time, energy and resources are devoted to a number of programmes aimed at empowering citizens to qualify and compete for meaningful work as well as to share in the projects on offer particularly in the infrastructure sector of the economy. 

This House is familiar with the Masakh'iSizwe Bursary Scheme and I do not wish to repeat information concerning the excellent work done through this scheme. I would, however, like to spend a few minutes on two other initiatives which enhance the employability of our people.

Firstly, the Western Cape Contractor Development Programme which provides support to emerging contractors through empowerment interventions aimed at improving both professional development and their Construction Industry Development Board grading. The programmes offered include:

• Basic and Advanced Training giving access to improved gradings which allow contractors to compete for more complex and bigger budget projects.
• Mentoring in business skills, tendering and marketing.  

During 2016/17 this scheme trained 478 contractors of whom 156 are women. Only 30 of the 478 were not previously disadvantaged people. Secondly, the Western Cape Skills Development Programme which assists unemployed youth across the Province to gain the occupational skills and experience necessary to participate in the economy. The occupations offered by the DTPW include:

•  Plumbing
• Masonry
• Road Works

In order to encourage access and to support the participants in this development programme the Department funds all training fees, prescribed material, transport costs and gives an accommodation allowance to rural students.

During 2016/17 this scheme trained 420 unemployed youth, 43 % of whom are females. Less than 0.5% of the 420 were not previously disadvantaged young people. 

And so job creation does not have to be the result of grand plans and large corporate structures. These two relatively straight-forward programmes produce real skills for their participants and the confidence to compete for work opportunities.  

Against this background, Speaker, it gives me great pleasure to welcome as special guests in this Parliament four graduates of these two programmes.  Firstly, please join me in congratulating June February [Director – Owner of Forfebs Construction] and Quinton February the General Manager. As a result of the mentoring and training through which they went with the DTPW they were able to compete for and be awarded a contract in an open tender process to construct an ECD Centre in Grabouw. They employ more than 20 members of the local community and are well on the way to further enhancing their CIDB grading and thereby qualifying to compete for more complex projects. 

Secondly, Liteboho Sethobane and Isabel de Koker are here this afternoon as fully qualified and employed plumbers. Both started out with different career paths in mind but had their original ambitions frustrated by, amongst others, lack of bursaries. They are full of praise for the training they received and derive great job satisfaction from their skilled work. 

Speaker, these fine people are examples of what a government committed to creating jobs and enabling access to these jobs can do. 

My thanks go to all four of them for having the confidence in the Western Cape Government to participate in these programmes, for becoming part of a growing economy and for giving of their time to be with us today.

I want now to turn to the overall Vote 10 budget for 2017/18. In one way, I do so with a heavy heart because precisely a year ago – also on 30 March – I prefaced my budget speech by pointing out that, and I quote: “No country can afford to play fast and loose with key anchor Cabinet positions such as that of the national Minister of Finance without its paying a massive price”. Close quote. 

And so, Speaker, apparently no lessons are learned at national level and investor confidence continues to waiver.

The total amount to be appropriated for Vote 10 – Transport and Public Works – is R7.4bn. The increase of R333.9m on the previous budget is below inflation and of the total budget, R1.49bn consists of own revenue. Approximately a quarter of the budget amount is linked to conditional grants.  The DTPW – in line with other Provincial Departments – operates on the basis of various programmes. The allocations to the 6 programmes within the Department are as follows for the 2017/18 financial year:

• Administration – R188.13 million
• PW Infrastructure – R1.917 billion
• Transport Infrastructure – R3.391 billion
• Transport Operations – R1.159 billion
• Transport Regulation – R715.26 million
• Community – Based Programmes – R55.44 million 

As the DTPW is the implementing agent for both Education and Health infrastructure in the Western Cape, the DTPW is scheduled in the financial year under discussion to spend on behalf of these crucial delivery departments the following amounts:

• Education –  R1.239 billion
• Health – R514.54 million

Both these amounts include funds for capital works and scheduled maintenance. The strategic decisions about these education and health infrastructure projects remain with those departments. Given the difficult economic climate, all three departments have an interest in making their Rands go as far as possible without sacrificing quality and safety standards and are co-operating with this in mind.   

Speaker, in the previous paragraph I referred fleetingly to scheduled maintenance. Allow me to expand briefly on this. During challenging economic times, or indeed in times of crisis, infrastructure and the quality thereof can be an important mitigating factor, and catalyst for opportunity.  The proper development and maintenance of infrastructure needs to be understood as critical in leveraging the potential of a country and in securing effective, efficient and fit for purpose service delivery.  While new assets are obviously required to support growth, considerable resources must be invested in maintaining the existing infrastructure portfolio and renewing it where necessary.   

My department has over a number of years applied this economic view particularly to the maintenance of our road network and more particularly to that part of the network which carries the overwhelming flow of traffic. This approach has paid dividends time and again. The cost of having to replace any infrastructure instead of maintaining it to lengthen its useful life is simply short-sighted economics. Where new investment is made in the road network it is usually where it best supports economic growth.

The 2017/18 budget seeks to create this important balance between the creation of new provincial infrastructure and the maintenance of the existing portfolio to maximise the benefit of these assets over their life cycles. The additional provisions made by Minister Meyer to facilitate targeted maintenance is a sound long-term view. 

Apart from the cost of maintenance, I would be remiss if I did not raise the increasingly onerous cost of property rates on our provincial immovable asset base. Over a number of years these rates increased at a manageable pace. For obvious reasons, this situation has changed dramatically over the last two years resulting in an increase in excess of 30%. In Rand terms this has meant an increase of R120 million to R529 million. My Department has taken all steps possible to have increased rates adjusted where there is justification for doing so. While this approach has met with a degree of success, it has limitations and we have to look critically at the size and nature of our asset holding. There can be no denying that in the present economic environment the responsible strategic disposal of identified properties both to reduce property rates and to generate revenue is a legitimate imperative. The asset base of the Province is large enough and diverse enough to achieve these goals as well as the social objectives and responsibilities of the Western Cape Government.  

Before I leave the subject of provincial properties it is appropriate that I touch briefly on two matters of importance to all of us – water and energy. 

Several provincially owned office buildings in the CBD use exclusively water - cooled air conditioning systems. In the last quarter of the 2016/2017 financial year, the chemical treatment systems in these ACs were shut down thereby realising an immediate saving of an average of 4000L per day per cooling tower. In addition, the set points for the chillers have been adjusted from 6-8 degrees to 10-12 degrees. The combined impact of these actions is significant. We will also be re-commissioning the ground water systems for use in water-cooled chillers and toilet flushing systems. Additional water saving measures in provincially owned buildings are also being assessed.

Amongst new buildings, the Karl Bremer office building due for completion in mid-May 2017 shows the WCG’s commitment to sustainable development with its Green Star SA rating. It has been designed with an on-site blackwater treatment plant. Treated blackwater is recycled to cooling towers and will provide 76% of the total water demand for cooling (thereby saving about 1.1 million litres of mains potable water per annum). No potable water will be used for flushing and 100% of all water (waste water and stormwater) will either be re-used onsite or returned as ground water.

With regards to energy, the DTPW has commenced installing rooftop solar photovoltaic systems at several provincial buildings in and around Cape Town. These solar PV systems will be grid-tied systems and will reduce the purchase of grid electricity from the electricity supply authority. The savings from reduced electricity purchases will provide the financial returns necessary to justify additional capital and operating costs of the systems. Rooftop solar PV installations at 9 Dorp Street, 27 Wale Street and the Vangate Shared Services Centre in Athlone have been completed and are awaiting COCT approval for switch-on.

Speaker, allow me now to touch on a number of aspects of road safety. The irony of the association of road carnage with road safety in South Africa is surely not lost on us. The cost in human and economic terms is simply intolerable. While we continue to do whatever we can to increase the number of Traffic Officers on the roads for which we are responsible we are painfully aware that this on its own is not the solution. We have introduced a number of technologically driven solutions to expand the reach of our officers and we remain the only province in this country which provides a 24/7 traffic officer presence. 

I am delighted that the department in partnership with the National Prosecuting Authority has successfully reintroduced Evidentiary Breath Alcohol Testing in our Shadow Centre in Athlone. This footprint will be expanded during the course of this year to other parts of the province. This along with our Speed Over Distance Cameras is significantly expanding our impact as is the introduction of our newly developed District Safety Plans. Unfortunately, there is still too little effective follow through from components of the Justice System and sanctions are too often avoided.

Our Easter 2017 Operational Plan is already in its Pre-Easter phase and will be fully operational once schools close. This 24/7 operation has a focus on a number of high-risk areas and includes the deployment of mobile vehicle testing units. Unroadworthy vehicles will be suspended on site. Unfortunately, unlawful and often intoxicated pedestrian use of our roads, as well as the irresponsible attitude of too many drivers, remain a threat to safety.

Speaker, two critical matters which fall under the direct control of the national government cannot go unaddressed in this presentation – one impacts on the lives of over 600 000 commuters in the greater Cape Town area on a daily basis – one could result in unimaginable confusion if it is not resolved at national level. I refer of course to the unsafe and unreliable Metrorail service on one hand and the possibility of the complete breakdown of the eNatis system which is the repository of all vehicle and licence data across the country. 

Politically, both of these systems are the responsibility of Minister Peters and the national Department of Transport. 

The commuter rail system in the Western Cape is part of PRASA which exists as a state-owned entity run by a Board appointed by Minister Peters. Members will be aware that Minister Peters dismissed the Board recently and appointed an Interim Board. Everyone is now litigating around this process. There are accusations and reports of large-scale contract corruption and millions have been spent on related investigations concerning, amongst others, the purchase and manufacture of new train sets. Acting CEOs and CEOs proper have come and gone at an amazing pace. And so I can continue.

The end result, Speaker, is that our commuters are short-changed on a daily basis when they try to use a chronically under-funded and out of date system. My Department has assisted where possible with security, safety on trains and related matters. Other bigger offers from the Province and from private sector partners have effectively been rebuffed at a national level. 

Although public transport is a concurrent power of the National and the Provincial Government the creation of a company structure in the form of a state-owned entity makes accessing the governance, assets, systems and management of PRASA complicated. The soon to be introduced Western Cape Public Transport Bill is intended to provide me and my Department with leverage in this regard.

The eNatis system has been the subject of extensive litigation involving the DOT, the Road Traffic Management Corporation and Tasima the service provider contracted to maintain the system. Any number of legal battles have been fought claiming that the contract was unlawful – battles which have been lost and won on both sides. Eventually, the ConCourt ruled in November 2016 that Tasima had to hand back the running of the system to the RTMC. It has not happened as Tasima is disputing the actual terms of the handover. Today the matter is back in the Gauteng High Court. Payment to Telkom to continue to provide the data required to run the system has been made only up today, pending the outcome of the present court action. Yet another nationally run system is in danger of collapsing. There are suggestions of the social grants debacle here again.

My Department is monitoring the outcome very closely and will assist with emergency measures should they be necessary. 

Speaker, I started this speech by referring to newly-skilled people starting out on careers. I conclude by taking leave of two outstanding government employees who together represent over 90 years of devoted public service. Mr Cedric Ismay retires at the end of May as the CFO of the department. He has once again ensured a clean audit with a budget of over R7 bn of which almost 60% is spent through supply chain management. 47 years of experience will be hard to replace. Mr Johan Koegelenberg retires tomorrow after 46 years of service, the last 16 as Head of GMT. Many of us have experienced the excellence of the service delivered by GMT. He started as an Administrative Assistant in 1971. Both highly respected officials leave with our grateful thanks for their lifetime of service in the interest of others. We wish them well.

Speaker, in closing, I should like to thank the Premier, my other Cabinet colleagues, the members of the Standing Committee, the members of this House and the outstanding HOD of my Department and her staff, some of whom are here today. 

I thank you.

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Media Enquiries: 

Siphesihle Dube Spokesperson for the Minister of Transport and Public Works, Donald Grant Cell: 084 233 3811 Tel: 021 483 8954 Fax: 021 483 2217 E-mail: Siphesihle.Dube@westerncape.gov.za