Department of Transport Annual Report Presentation 201516 08

Department of Transport Annual Report Presentation 2015/16 08 November 2016 1 1

Contents • • • Background Do. T Overall Performance per Programme Human Resource Management Human Resource Development Do. T Equity Statistics Governance Areas for Improvement Identified Best Practices Financial Statements 2015/16 2

Key Focus Areas for the Report • Performance of the Department of Transport (Do. T); – Non-financial and financial results; • Do. T Organisational Health and Capability to deliver on policy objectives. 3

Background • Report focuses on the progress made with the implementation of programmes & projects in 2015/16 • Focus was on optimal performance of deliverables in terms of the MTSF & MTEF • Targets were guided by the outcomes-based approach (Outcome 4, 6, 7 & 10) 4

Overview of the Transport Sector for the 2015/16 Financial Year • NDP emphasizes necessity of sound economic infrastructure as a pre-condition for economic growth; • The APP 2015/16 highlights the Do. T’s commitment to address major social and economic challenges facing the sector through interventions aimed at accelerating service delivery, increasing job opportunities, rural development and skills development; • This report emphasizes the Do. T’s continued restatement of the need for increased investments in public transport infrastructure, restructuring of current subsidies to promote integrated settlements and transport infrastructure projects to improve access to opportunities for the urban and rural poor. 5

Department Of Transport (Overall) • Total Number of targets - 50 • Targets Achieved - 45 targets • Targets Not Achieved - 5 targets Overall % Achievement – 90% 6

Do. T Comparative Analysis: Performance per programme per Quarter PROGRAMME QUARTER 1 QUARTER 2 QUARTER 3 QUARTER 4 1. Administration 86% 88% 63% 88% 2. Integrated Transport Planning 77% 100% 78% 3. Rail Transport 40% 100% 80% 100% 4. Road Transport 100% 5. Civil Aviation 75% 100% 88% 100% 6. Maritime Transport 50% 38% 25% 88% 7. Public Transport 100% 88% 75% 100% 8. Dept. of Transport 76% 86% 70% 92% 7

Performance Trend Analysis Q 1 – Q 4: Do. T Overall 8

Do. T Annual Performance PROGRAMME Total Number of Targets Achieved Number of Percentage Targets Not Performance Achieved 1. Administration 8 7 1 88% 2. Integrated Transport Planning 9 7 2 78% 3. Rail Transport 5 5 0 100% 4. Road Transport 4 4 0 100% 5. Civil Aviation 8 8 0 100% 6. Maritime Transport 8 6 2 75% 7. Public Transport 8 8 0 100% 8. Dept. of Transport 50 45 5 90% 9

Department Of Transport (Summary of performance per programme) Programme Total no of targets Achieved 2015/16 Year-to-Year Achieved Targets % % Achieved 2014/15 ADMINISTRATION (ODG, CFO, COO, TIS) ITP 8 7 88% 72% 9 7 78% 67% RAIL 5 5 100% ROAD 4 4 100% 90% CIVIL AVIATION 8 8 100% 75% MARITIME 8 6 75% 22% PUBLIC TRANSPORT 8 8 100% 90% DOT (OVERALL) 50 45 90% 73% Improved or Dropped 10

Key Achievements Programme 1: Administration • 53 interns were appointed and placed with effect from April 2016 translating in 7. 6% of staff establishment. • Health and Wellness campaings conducted; 256 electronic news updated and circulated; Do. T Language Policy reviewed; Engagement with Government Communication and Information System (GCIS) conducted on the Do. T Corporate Identity Manual; 98% of Presidential Hotline cases resolved as at the end of Q 4 • International Relations Strategy approved • Departmental Intranet site finalised and rolled out • Implementation of action plans to address audit findings monitored on a quarterly basis; and action plans for strategic risks monitored on a quarterly basis 11

Key Achievements Programme 2: Integrated Transport Planning • Drafts of the frameworks for Infrastructure Funding and Transport Funding were completed and submitted for approval as targeted • The Road Freight Strategy was also completed and submitted for approval • The Single Transport Economic Regulator (STER) Bill was submitted to Cabinet and consultations on subsidiary regulations conducted with the Ports Regulator • The Private Sector Participation (PSP) Framework was successfully developed and is being transferred to the National Treasury for inclusion (as a chapter) in the overarching PSP currently being developed by the National Treasury • The draft of the Green Transport Strategy has been successfully 12 developed as targeted during the period under review.

Key Achievements Programme 3: Rail Transport • The draft White Paper on National Rail Transport Policy has been finalised • Guidelines for submission of rail economic regulatory information were completed and approved during the period under review • The Branchline Strategy has been finalised and will be presented at the next sitting of the Economic Sectors, Employment and Infrastructure Development (ESEID) Cluster • The Draft National Railway Safety Regulator Bill has been successfully developed during the period under review • The draft National Railway Safety Stratey has been completed and consultations on the draft strategy conducted with Passenger Rail Agency of South Africa (PRASA) and Rail Safety Regulator (RSR) 13 during the period under review

Key Achievements Programme 4: Road Transport • The draft Green Paper on the Roads Policy has been completed and submission to Cabinet has been approved • All approved Provincial Road Maintenance Grant (PRMG) projects have been monitored in line with the budget. An Annual Monitoring Report has also been compiled as submitted for quality assurance • The Status Quo Analysis Report for the development of the Access Road Development Plan has been completed and submitted for quality assurance • The Administrative Adjudication of Road Traffic Offences (AARTO) Amendment Bill was submitted and approved by Cabinet during the period under review. The Bill will be submitted to Parliament in the new financial year. 14

Key Achievements Programme 5: Civil Aviation • The National Civil Aviation Policy (NCAP) and the National Airports Development Plan (NADP) have been completed and submission to Cabinet has been approved • Air service agreements were reviewed with Egypt, Guinea -Bissau, Mauritius, Curacao, Namibia, Turkey, Australia, Israel, Austria, Serbia and Sierra Leone during period under review • A draft Civil Aviation Amendment Bill was completed during Quarter 4 and submitted for quality assurance • A monitoring report on the upgrade of Mthatha Airport was completed and recommendations on the transfer of the asset to the Eastern Cape Provincial Government were duly approved. 15

Key Achievements Programme 6: Maritime Transport • Drafts of the Cabotage Strategy and Cabotage Bill were completed and submitted for quality assurance • The African Maritime Charter was approved by Cabinet in May 2015 and by Parliament in February 2016 16

Key Achievements Programme 7: Public Transport • The Reviewed Rural Transport Strategy has been completed and submission to Cabinet has been approved • The National Learner Transport Policy was approved by Cabinet and subsequently published for implementation as targeted during the period under review • A total of 3 226 old taxi vehicles were scrapped during the period under review due to the increase in demand by operators; and the Taxi Recapitalisation Programme (TRP) Review Document was developed and submission of the report to Cabinet has been approved • Final draft of the Integrated Public Transport Turnaround Plan was completed and submitted for quality assurance 17

Notable Challenges to be Prioritised for Remedial Action Programme 1: Administration • Only 63 vacant posts (against a targeted 115) were filled during the period under review. The underperformance was due to budget cut on compensation of employees and a moratorium placed by the National Treasury on the filling of vacant posts – Corrective measures: Do. T will continue to engage the National Treasury to ensure that a solution is reached to enable the Department to fill critical vacant positions 18

Notable Challenges to be Prioritised for Remedial Action Programme 2: Integrated Transport Planning • NATMAP 2050 was not re-submitted to Cabinet due to nonconclusion of the Presidential Infrastructure Coordinating Committee (PICC) consultation process – Corrective Measure: Consultations with the PICC secretariat have commenced and the NATMAP will be prioritised at the next PICC Management Committee (MANCO) engagement. • The development of the Harrismith Hub Framework was not completed. – Corrective Measure: Option Analyis and Value Assessment reports were completed in collaboration with the Free State Department of Roads, Police and Transport. These reports will be tabled as the basis of the overarching Harrismith Hub Framework. 19

Notable Challenges to be Prioritised for Remedial Action Programme 6: Maritime Transport • The Green Paper on the National Maritime Transport Policy was presented to the International Cooperation, Trade and Security (ICTS) Cluster in March 2016. Submission of the Green Paper to Cabinet was not approved by the Do. T Executive Authority. - Corrective Measure: Do. T will prioritise the Green Paper in the new financial to ensure all outstanding issues are addressed to enable submission to Cabinet. • The Cabotage Policy has been completed and included as a chapter in the Green Paper on the National Maritime Transport Policy that was presented to ICTS Cluster in March 2016. However, as with the Green Paper on the National Maritime Transport Policy, submission to Cabinet was not approved by the Do. T Executive Authority. – Corrective Measure: The process to develop the National Maritime Transport Policy process has been re-arranged to consider the Cabotage Policy. 20

Human Resource Management Vacancy Rate • 53 positions filled during 2015/16 (target for the financial year was to fill 80 positions); • Vacancy rate decreased from 22, 16% to 19. 61% • Under-performance due to budgetary constraints 21

Human Resource Development Initiatives • 68 interns were recruited and placed across Departmental branches • 9 junior employees completed Project Management Learnership at NQF Level 4 • 152 bursaries managed during the period under review • 454 employees trained across 1 052 training interventions 22

Employment Equity Statistics Race • African – 92% (target – 79. 5%) • Coloured – 1. 29% (target – 9%) • Indian – 1. 88% (target – 2. 5%) • White – 4. 76% (target – 9%) Gender • Male – 304 (44%) target = 54. 20% • Female – 389 (56%) target = 45. 80% 23

Employment Equity Statistics SMS • Male – 68 (61%) • Female – 44 (39%) (Target = 50% female representation in SMS) Disability • Male – 3 • Female – 10 • Do. T Disability Status – 1. 88% (Target = 2%) 24

GOVERNANCE 25

Risk Management • Do. T Risk Management Policy and Strategic Framework reviewed to inform the Department’s future endeavour of risk identification, assessment and monitoring; • Risk Management Plan (key controls and mitigation strategies) developed and implemented; and risk assessments conducted quarterly; • Progress on the implementation of risk mitigation plans monitored and reported quarterly to EXCO and Audit Committee; • Do. T Risk Profile updated accordingly. 26

Labour Relations • Misconduct and Disciplinary Hearings – Total of three (3) hearings (2 final written warnings and 1 not guilty) • Grievances – Total of 21 lodged (16 resolved and 5 not resolved) • Disputes – Total of 6 lodged (1 upheld and 5 dismissed) • Strike Actions - No persons working days lost • Precautionary Suspensions – Two (2) people suspended 27

Minimising Conflict of Interest • Financial Disclosure Framework – All SMS members sensitized to disclose financial interest so as to identify conflict of interest – 100% compliance with SMS Disclosure Framework • Declaration of interest for all procurement as a measure to minimise conflict of interest in SCM (SBD 4 Form and SBD 9 Form) 28

Code of Conduct • 100% of new appointees were inducted on the Code of Conduct • SMS training on disciplinary matters related to violation of Code of Conduct 29

Internal Control • Action plans to address audit findings for 2014/15 financial year developed and monitored on a quarterly basis; • Progress reports on the implementation of action plans monitored on a quarterly basis and presented to Audit Committee meetings; • Compliance reviews conducted on: – – – PFMA, Treasury Regulations, Do. RA, Financial Policies, SCM Prescripts. 30

Internal Audit and Audit Committees • Ten (10) Audit Committee meetings were held during period under review. • Audit Committee complied with its responsibilities - Section 38 (1) (a) (ii) of the PFMA and Treasury Regulation 3. 1. 13 • Audit Committee has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with the Charter and has discharged all its responsibilities as contained therein. • Among the responsibilities of the AC, the following were done during the period under review: – Review of the effectiveness of Internal Control systems – Review of effectiveness of internal audit function – Review of risk areas of the Department 31

Areas of Improvement Identified • Enhance a structured and coordinated inter-sectoral planning and reporting mechanism – Oversight of Entities and Provincial Departments • Strengthen performance evaluation in line the DPME National Evaluation Framework 32

Best Practices • Regular and vigorous EXCO deliberations on performance information – Carry-over deliverables and red flags • Adherence to Technical Indicator Descriptions and predetermination of evidence for quality reporting and performance analysis • Regular interactions between the CD: SP&CC and Branches to discuss planning, monitoring and reporting issues affecting performance in the Do. T – Reports, evidence and audit issues 33

Department of Transport Annual Financial Statements 2015/16 34

Contents • Report of the Auditor-General • Report of the Accounting Officer • • • Overview of financial results • Unauthorised, Fruitless and Wasteful and Irregular Expenditure • Sponsorships / Gifts and Donations received • Events after the reporting date • Other Statement of Financial Performance Expenditure breakdown for 2015/16 Expenditure per Project Statement of Financial Position Notes to the Annual Financial Statements 35

Report of the Auditor-General Audit Report Actions taken Actions to be taken Basis for qualified opinion: The Auditor-General was unable to obtain sufficient appropriate audit evidence whether movable tangible capital assets and intangible capital assets were properly accounted for: • Complete and accurate asset registers could not be provided. . • The Auditor-General did not get access to certain premises where the assets were located. The above was due to the ensuing litigation against the Department, which was explained in more detail in the Report of the Accounting Officer. The e. Na. TIS tangible and intangible assets were disclosed as assets under investigation. After the final court judgment: The Department will conduct a due diligence on the e. Na. TIS assets for The Department is in purposes of taking the process of over and for the obtaining a court possible transfer to order to compel the RTMC should this Department and the still be the preferred e. Na. TIS service option as resolved by provider to obtain the RTMC’s and provide Shareholder’s information on Committee. assets. 36

Report of the Auditor-General (continued) Audit Report Actions taken Actions to be taken Predetermined objectives: N/a No material findings were identified on the usefulness and reliability of performance information for three selected Programmes. N/a Annual Financial Statements: Material misstatements in accruals and capital assets were identified. Misstatements in accruals were corrected. Obtain complete asset registers for the e. Na. TIS assets. Asset management: Proper control systems to safeguard and maintain assets were not implemented. The e. Na. TIS assets were disclosed as assets under investigation Expenditure management: Effective steps were not taken to prevent irregular and fruitless and wasteful expenditure. Cases investigated where applicable. Disciplinary steps taken and underway. Finalise disciplinary steps. Recover / condone or write off. 37

Report of the Accounting Officer Overview of financial results – Departmental revenue: Departmental receipts 2015/2016 Estimate Actual Amount Collected R’ 000 Tax Receipts - Motor vehicle licenses Sale of goods and services 619 556 other than capital assets Fines, penalties and forfeits 70 Interest, dividends and rent 150 205, 644 on land Financial transactions in 80, 000 3, 735 assets and liabilities Total 80, 839 209, 935 Over/ (Under) Collection 2014/2015 Estimate Actual Over/ (Under) Collection Amount Collected R’ 000 260, 000 - (260, 000) (63) 546 611 65 (70) 205, 494 70 150 230, 734 (70) 230, 584 (76, 265) 8, 000 90, 762 82, 762 129, 096 268, 766 322, 107 53, 341 The department did not expect to receive dividends of R 205. 6 million, and expected revenue from unspent conditional grants of R 80 million for the year. 38

Report of the Accounting Officer (continued) Overview of financial results – Programme expenditure: Programme Administration Integrated Transport Planning Rail Transport Road Transport Civil Aviation Maritime Transport Public Transport Total 2015/16 Final (Over) / Final Appropria. Under Appropria. Actual tion expendi-ture expenditure tion R'000 422, 169 420, 824 1, 345 390, 889 88, 764 88, 762 2 74, 974 2014/15 Actual (Over) / expendi. Under ture expenditure R'000 377, 489 13, 400 74, 974 - 18, 310, 610 23, 164, 889 18, 305, 274 22, 889, 198 5, 336 275, 691 15, 035, 507 21, 810, 020 15, 035, 507 22, 202, 862 (392, 842) 150, 383 143, 674 145, 284 142, 674 5, 099 800 160, 966 101, 742 160, 966 99, 623 2, 119 11, 334, 588 11, 328, 571 6, 017 11, 196, 571 11, 195, 677 894 53, 615, 077 53, 320, 787 294, 290 48, 770, 669 49, 147, 098 (376, 429) 39

Report of the Accounting Officer (continued) Overview of financial results – Programme expenditure (cont. ): Administration under spent R 1. 34 million after funds were shifted across programmes to cover expenditure on transport provided for State funerals. An amount of R 1. 3 million was under spent on the Road Accident Benefit scheme, which was requested as a rollover. Integrated Transport Planning spent its budget for the year and there were no material variances in expenditure. Rail Transport under spent on a number of projects: White Paper on Rail Transport, Establishment of a Rail Economic Regulator, National Rail Safety Amendment Bill, National Rail Safety Strategy, Branchline Strategy Review and Moloto Development Corridor. 40

Report of the Accounting Officer (continued) Overview of financial results – Programme expenditure (cont. ): Road Transport over spent on the Electronic National Traffic Information System ( e. Na. TIS) by R 121. 4 million; over spent on operational expenditure mainly due to traveling and over spent on the S'Hamba Sonke project. Funds were shifted across programmes to cover the over expenditure. After funds were shifted, the programme under spent by R 275, 691, 000, which was withheld from the Provincial Road Maintenance Grant for Kwa. Zulu Natal, and was requested as a rollover. Civil Aviation under spent on a number of projects and over spent on operational expenditure mainly due to traveling. The project "Watchkeeping Services" was under spent by R 7. 8 million, and R 4. 1 million was paid for the management of the Mthatha Airport project, which was covered by under expenditure on other projects. 41

Report of the Accounting Officer (continued) Overview of financial results – Programme expenditure (cont. ): Maritime Transport over spent its budget mainly due to R 36. 6 million paid to the International Oil Pollution Fund, and under spent on a number of projects, mainly the Feasibility Study on Tug Boat Services (R 6. 8 million). The shortfall was covered by shifting funds across programmes. Public Transport under spent on a number of projects, mainly the Review of the Taxi Recapitalisation Model (R 55 million) and the Implementation of Integrated Public Transport Network Plans in District Municipalities (R 28. 8 million). The programme also under spent R 82. 6 million on the scrapping of taxis. A total of R 184. 3 million was shifted to other programmes to cover expenditure on State funerals, e. Na. TIS and the International Oil Pollution Fund. 42

Report of the Accounting Officer (continued) Overview of financial results – Virements: Programme Administration Integrated Transport Planning Rail Transport Road Transport Civil Aviation Maritime Transport Public Transport Total Compensation of employees - Goods and services Machinery Foreign & Equip. Governments Households Total 32, 800 5, 511 401 38, 712 573 - 54 54 681 (754) 857 122, 192 - - (754) 122, 192 857 (1, 384) (12, 667) - 36, 636 - 22, 585 389 (319) (102, 640) 39, 685 5, 565 36, 636 (82, 022) (184, 273) (81, 567) - 43

Report of the Accounting Officer (continued) Overview of financial results – Virements (continued): Compensation of employees: Programmes experienced relatively low over and under expenditure on compensation of employees, which was shifted across programmes to compensate for the shortfalls. Goods and services was over spent in Administration due to the cost of State funerals, and in Road Transport due to the cost of e. Na. TIS, both of which were not budgeted for. Funds were shifted from Maritime Transport and Public Transport to cover the shortfalls. Machinery and equipment was over spent because leases for photocopy machines are classified as capital expenditure while the expenditure was budgeted as goods and services, mainly in Administration. The over expenditure was covered by shifting funds within and across programmes. 44

Report of the Accounting Officer (continued) Overview of financial results – Virements (continued): Foreign governments was over spent due to R 36. 6 million paid to the International Oil Pollution Fund, which was not budgeted for. Funds were shifted across programmes to cover the cost. Households was under spent because less taxis were scrapped than budgeted for and funds were shifted to other programmes to cover costs. 45

Report of the Accounting Officer (continued) Overview of financial results – Rollovers requested: Programme R'000 Programme 1: Administration: Road Accident Benefit Scheme Programme 4: Road Transport: Provincial Road Maintenance Grant withheld from Kwa-Zulu Natal Province Total 1, 300 275, 691 276, 991 The rollover of R 275. 7 million for the Provincial Road Maintenance Grant withheld from Kwa-Zulu Natal Province was approved on the Adjusted Budget for 2016/17. 46

Report of the Accounting Officer (continued) Unauthorised, Fruitless and Wasteful and Irregular Expenditure: Unauthorised expenditure amounted to R 2, 368, 571, 000 at 31 March 2016: • Unauthorised expenditure incurred during 2008/09 and 2009/10 as a result of over expenditure on bus subsidies R 1, 207, 374, 000. The Standing Committee on Public Accounts recommended the approval of the amount as a direct charge against the National Revenue Fund. • Over spending of Road Transport in 2013/14 and 2014/15 because e. Na. TIS is unfunded R 1, 161, 197, 000. No further unauthorised expenditure was incurred in 2015/16 because the over expenditure on e. Na. TIS could be covered by the shifting of funds across programmes and because the Road Traffic Management Corporation (RTMC) carried the cost of e. Na. TIS from May 2015 onwards. 47

Report of the Accounting Officer (continued) Unauthorised, Fruitless and Wasteful and Irregular Expenditure (continued): Fruitless and wasteful expenditure that was declared and not yet transferred to receivables, amounting to a total of R 1. 436 million is made up as follows: • Services paid for but not delivered for which litigation is underway R 546, 945. • An overseas trip that was undertaken that exceeded the authorization by R 639, 725, which is under investigation. • Other fruitless and wasteful expenditure under investigation R 61, 253. • To be written off R 87, 708. • To be recovered R 100, 230. 48

Report of the Accounting Officer (continued) Unauthorised, Fruitless and Wasteful and Irregular Expenditure (continued): Irregular expenditure: A total of R 123, 044, 000 was declared as irregular expenditure in 2015/16: • Relating to prior years: Contract extended for a period of five years without following procurement procedures R 121, 429, 000. The case was investigated and is still under investigation by the Special Investigating Unit. • Relating to prior years: Advertisement placed without following procedures R 55. 803. The responsible employee is no longer in the employ of the Department and the responsible component was requested to make representations to the Bid Adjudication Committee. . • Relating to the current year: Five cases were declared as irregular totalling R 1, 559, 231 because the scope of two contracts and the period of three contracts were extended without approval. Disciplinary steps were taken in two cases and were requested for three cases. 49

Report of the Accounting Officer (continued) Sponsorships / Gifts and Donations received – Financial Statements Note 28 and Annexure 1 G: In kind goods and services provided/ received from related parties - Note 28 to the financial statements The Road Traffic Management Corporation provided promotional items for the Transport Annual Awards. The Railway Safety Regulator provided video and photography for the Transport Annual Awards. The Air Traffic and Navigation Services Company Ltd. provided gift vouchers for the Transport Annual Awards. The Road Accident Fund provided promotional items for the Transport Annual Awards. The Cross Border Road Transport Agency provided marketing & promotional material for the Women in Transport (WIT) Summit. The Road Traffic Management Corporation provided branding, conference & marketing material for the WIT Summit. The South African Maritime Safety Authority provided exhibition & entertainment ( stage & PR systems) for the WIT Summit. The Passenger Rail Agency of South Africa - Autopax provided 4 x 60 Seater buses for the WIT Summit. The Airports Company of South Africa Ltd. provided air transport for 20 women for the WIT Summit. The Air Traffic and Navigation Services Company Ltd. provided air transport for 40 women for the WIT Summit. The Railway Safety Regulator provided Ministers and speakers gifts for the WIT Summit. The Road Traffic Infringements Agency sponsored the conference venue and gala diner for the WIT Summit. Total received from related parties In kind sponsorships received from non-related parties Total of gifts. donations and sponsorships received in kind R’ 000 20 70 30 108 230 500 1, 200 265 60 157 20 1, 200 3, 860 4, 214 8, 074 50

Report of the Accounting Officer (continued) Events after the reporting date: An agreement that the department would pay an amount of R 104. 2 million to the Electronic National Traffic Information System (e. Na. TIS) service provider was made an order of court on 9 May 2016. Although an agreement was reached that the Road Traffic Management Corporation (RTMC) would carry the cost of e. Na. TIS from May 2015 onwards, the RTMC was unable to pay the amount, and the department paid the amount on 9 June 2016. Other: The cost of developing the e. Na. TIS system from 2002/03 to 2007/08, amounting to R 404. 9 million was added to movable tangible assets (R 174. 9 million) and movable intangible assets (R 230 million). A total of R 114. 5 million was also added to movable tangible assets as e. Na. TIS assets that were procured and deployed to provinces, bringing the total to R 519. 4 million. 51

Report of the Accounting Officer (continued) Other (Continued): The Office of the Auditor-General indicated via an audit finding that the department should disclose e. Na. TIS assets in its financial statements in accordance with the provisions of the Modified Cash Standard. Numerous court orders interdicts the department from interfering with the business of the e. Na. TIS service provider A dispute was raised with the Office of the Accountant-General regarding the disclosure of the assets in the financial statements. The Accountant-General indicated that a departure on the disclosure on e. Na. TIS assets would impact on the fair presentation criteria for the tangible and intangible assets disclosure notes, and the department disclosed the assets in the financial statements. Because the department could not obtain detailed lists of all the assets, the e. Na. TIS assets have been disclosed as assets under investigation in the financial statements. 52

Statement of Financial Performance Note REVENUE Annual appropriation Departmental revenue TOTAL REVENUE 2015/16 R'000 2014/15 R'000 1 2 53, 615, 077 209, 935 53, 825, 012 48, 770, 669 322, 107 49, 092, 776 3 4 382, 866 701, 351 1, 084, 217 345, 900 1, 059, 155 1, 405, 055 Transfers and subsidies 6 52, 219, 379 47, 706, 799 Expenditure for capital assets Tangible assets Intangible assets Total expenditure for capital assets 7 7 10, 512 3, 354 13, 866 34, 984 Payments for financial assets 5 3, 325 260 53, 320, 787 49, 147, 098 504, 225 (54, 322) 294, 290 209, 935 504, 225 (376, 429) 322, 107 (54, 322) EXPENDITURE Current expenditure Compensation of employees Goods and services Total current expenditure TOTAL EXPENDITURE SURPLUS/(DEFICIT) FOR THE YEAR Reconciliation of Net Surplus/(Deficit) for the year Voted Funds – Annual Appropriation Departmental revenue and NRF Receipts SURPLUS/(DEFICIT) FOR THE YEAR 14 53

Expenditure Breakdown for 2015/16 Transfer Payments R’ 000 20, 000 18, 000 16, 000 14, 000 12, 000 10, 000 8, 000 6, 000 4, 000 2, 000 0 PRASA SANRAL Provincial Roads Maintenance Grant Public Transport Network Grant Public Transport Operations Grant Other transfers (next slide) 18, 222, 047 12, 843, 488 9, 531, 744 5, 953, 090 4, 939, 448 729, 562 54

Expenditure Breakdown for 2015/16 (continued) Transfer Payments (continued) R’ 000 250, 000 Other Transfers 200, 000 150, 000 100, 000 50, 000 0 Taxi recapitalisation 248, 402 Rural Road Asset Management Grant 96, 842 Foreign organisations 46, 824 Non Profit Institutions 21, 669 Bursaries and Households 10, 908 Total of Transfer Payments (97. 9% of expenditure) 52, 219, 379 55

Expenditure Breakdown for 2015/16 (continued) R’ 000 Other expenditure 800, 000 700, 000 600, 000 500, 000 400, 000 300, 000 200, 000 100, 000 0 Goods and Services Compensation of Employees Machinery & Equipment Payments for Financial Assets 701, 351 382, 866 13, 866 3, 325 56

Expenditure per Project for 2015/16 Administration R’ 000 Communications 19, 380 Corporate Services 100, 934 Management 14, 521 Ministry 26, 510 Office Accomodation 64, 284 Administration Total 225, 629 57

Expenditure per Project for 2015/16 (continued) Integrated Transport Planning No Projects / Administration Regional, Multilkateral & Bilateral relations Regional Corridor Strategy National Freight Corridor Framework National Transport Planning Databank Review National Freight Strategy Multi modal Transport Planning & Coordination Act National Transport Master Plan 2050 Review Develop Transport Greenhouse Gas Inventory Review & update White Paper on Transport Policy BEE Charter Council Freight Transport Model S. A. National Women in Transport BEE Communication, Marketing & Awareness BEE Verification Transport Sector Economic Regulator National Trp Planning Forum Other smaller projects Total R'000 15, 583 1, 000 1, 185 1, 837 8, 599 1, 344 1, 475 1, 909 629 2, 238 2, 079 2, 037 1, 201 743 479 750 319 1, 094 44, 501 58

Expenditure per Project for 2015/16 (continued) Rail Transport R'000 No Projects / Administration 4, 308 Draft White Paper on Rail Transport 1, 220 National Rail Safety Strategy 326 Rail Safety Gap Analysis 1, 421 Branch Line Strategy Review 2, 354 Total 9, 629 59

Expenditure per Project for 2015/16 (continued) Road Transport No Projects / Administration Decade Of Action For Road Safety ENATIS Develop Road Engineering Standards Programme Development for S'Hamba Sonke Road Infrastructure Policy Total R'000 19, 674 3, 337 121, 179 549 26, 965 445 172, 149 60

Expenditure per Project for 2015/16 (continued) Civil Aviation No Projects / Administration R'000 16, 196 Refurbishment Of Mthatha Airport 4, 136 National Airports Development Plan 1, 509 White on Paper Civil Aviation Implementation 1, 180 Correction Factor: ACSA & ATNS 1, 259 Watchkeeping Services Other smaller projects Total 45, 034 294 69, 608 61

Expenditure per Project for 2015/16 (continued) Maritime Transport No Projects / Administration Review of the Merchant Shipping Bill World Maritime Day Marine Court Of Enq King Fischer R'000 10, 686 135 1, 244 56 Oil Pollution Prevention 44, 922 Total 57, 043 62

Expenditure per Project for 2015/16 (continued) Public Transport R'000 No Projects / Administration 9, 881 National Land Transport Act Amendment 983 Board Members 339 Train & Place Interns In District Municipalities 401 Shova Kalula Bicycle Programme 676 Implement IPTN's in District Municipalities 139 Taxi Scrapping Administrator Transformation Plan: Review Road Based Public Transport Other smaller projects 107, 857 1, 710 806 Total 122, 792 Total of Goods and Services 701, 351 63

Statement of Financial Position Note 2015/16 R'000 2014/15 R'000 ASSETS Current Assets Unauthorised expenditure Cash and cash equivalents Prepayments and advances Receivables Non-Current Assets Investments 2, 446, 028 2, 368, 571 31 46, 286 31, 140 6, 089, 441 2, 446, 667 2, 368, 571 2, 833 42, 359 32, 904 6, 089, 441 TOTAL ASSETS 8, 535, 469 8, 536, 108 LIABILITIES Current Liabilities Voted funds to be surrendered to the Revenue Fund 2, 445, 488 2, 446, 205 13 294, 290 16, 413 14 15 16 136 2, 148, 564 2, 498 128 2, 427, 064 2, 600 17 49 29 TOTAL LIABILITIES 2, 445, 537 2, 446, 234 NET ASSETS Represented by: Capitalisation reserve Recoverable revenue TOTAL 6, 089, 932 6, 089, 874 6, 089, 441 491 6, 089, 932 6, 089, 441 433 6, 089, 874 Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund Bank overdraft Payables Non-Current Liabilities Payables 8 9 10 11 12 64

Statement of Financial Position (continued) No further unauthorised expenditure was incurred. Prepayments and advances include R 38. 3 million paid in advance for the scrapping of taxis. Receivables include R 22. 2 million owing by the South African Maritime Safety Authority and R 6. 8 million owing by the Road Traffic Management Corporation. The bank overdraft decreased by R 278. 5 million due to under expenditure against the budget, mainly the amount of R 275. 7 million that was withheld from the Provincial road Maintenance Grant for Kwa-Zulu Natal. 65

Notes to the Annual Financial Statements Major deviations in expenditure on goods and services compared to 2014/15 (R’ 000): 2015/16 2014/15 Advertising 23, 871 34, 418 Communication 54, 439 60, 471 Communications spent R 12 million less than in 2014/15 Computer services 13, 069 7, 937 Increased software licenses and renewal of software licenses Consultants, business and advisory services 354, 329 743, 473 Expenditure on e. Na. TIS was less by R 369. 9 million, oil pollution prevention services was less by R 6. 5 million, and watchkeeping services was less by R 3. 3 million. 66

Notes to the Annual Financial Statements (continued) Major deviations in expenditure on goods and services compared to 2014/15 (R’ 000): Operating leases 2015/16 2014/15 67, 045 55, 123 Property payments increased by R 14 million. Transport provided 39, 127 45, 356 Less expenditure on State funerals in 2015/16 Travel and subsistence 82, 251 67, 031 Expenditure increased, mainly in Administration (R 10 million). Other operating expenditure 5, 505 21, 973 In 2014/15 expenditure of R 17 million was incurred on aircraft charters, which was not repeated in 2015/16. 67

Notes to the Annual Financial Statements (continued) Other notes: Note 5. 2 Debts written off include R 2. 75 million for unsubstantiated claims on the RTMC for the cost of a task team. Note 12. 1 Impairment of investments amount to R 3. 9 billion because the net asset value of the Passenger Rail Agency of South Africa (PRASA) is less than the cost of the investment. Note 22. 1 Accruals include a claim for the payment of outstanding cost for e. Na. TIS (R 104. 2 million). Note 20. 1 / Annexure 3 B Contingent liabilities include a claim for extra works on Mthatha airport (R 46. 7 million). 68

Thank you 69