South African Express
Strategic objectives and key achievements
The Department’s oversight responsibilities intensified as Transnet ramped up its capital programme from R110 billion to R301 billion through the introduction of the MDS. In line with Government imperatives, the MDS planned capital programme presents Transnet with opportunities to drive job creation, localisation, skills development and economic transformation in the country.
Progress was also made by the Department in the roll out of the NCPM project. Complete system acceptance was achieved and the system can be accessed by selected stakeholders during 2013/14 financial year.
The Department engaged Transnet on the enhanced model for the concessioning of the three identified branch lines. It has been agreed that the branch lines will be assessed on a case-by-case basis. The PFMA Section 54 approval process will be undertaken during the 2013/14 financial year to expedite the three concessions as per Outcome 6 of the delivery agreement.
South African Express Airways (SAX)
The Department moved swiftly to address the deficiencies in corporate governance within the SOC. This included the removal of the board and appointment of new board members, as well as requesting the Auditor-General to take over the audit function for this entity. The expected completion date for the audit of the 2011/12 AFS was moved from 31 March 2013 to 31 May 2013.
Changes to planned targets
The complexity of the process to concession the branch lines to private operators and the absence of an overarching rail policy, required the Department and Transnet to refine the existing model to address some of the challenges that had been identified. Given the absence of fiscal support for private operators, new mechanisms need to be explored to ensure the financial sustainability of the branch lines. The new process will be completed in the 2015/16 financial year.
The scale of the capital expenditure programme will require private sector involvement to augment the SOC balance sheet. In this regard, the Department has started to develop an overarching framework for private sector participation in the current build programme. The first draft will be completed in the 2013/14 financial year (refer to progress under sub-programme: Strategic Partnerships).
In the 2012/13 financial year, the Department had committed to complete the Africa Aviation Strategy. However, the need to review and streamline government assets in the aviation sector and define the strategy for the airlines meant that the Africa Aviation Strategy could not be completed. The objective to link South Africa to other fast growing African states has been incorporated into the LTTS. The LTTS will be completed in the 2013/14 financial year.