South Africa does not have clearly defined policy on the funding and financing of public transport infrastructure and operations, Gauteng Roads and Transport MEC Ismail Vadi told delegates at the Transport Forum, in Pretoria, on Thursday.
He commented that insufficient progress has been made with finalising the draft Economic Regulation of Transport Bill, which was published for comment in the Government Gazette in February.
Given that the Bill sought, among other things, to address some of the gaps in policy relating to transport funding and financial management, the lack of movement was worrying, he said.
However, he stressed that even if an appropriate policy were in place, a lack of understanding of, or buy-in to, that policy would hinder its implementation. “Look at the e-tolls . . . there’s a policy behind it, but when people are unhappy with policy, the instrument becomes blunt.”
He added that, in terms of transport-related service delivery, funding, financing, financial management and oversight were interlinked and that, if one of those elements failed, the “system starts wobbling and we’ve seen significant failures over the last few years”.
He further stressed that government could not decide on how best to allocate revenue for transport as a result of the questions around policy. Added to this is a lack of effective oversight and seemingly rampant corruption.
“The evidence of corruption is very conclusive. In a number of State-owned entities in the transport sector, very serious breakdowns have taken place and the phenomenal failure of oversight by the oversight bodies is evident – it took civil society and the media to raise the red flag.”
He noted that corporate governance issues facing the transport sector and State-owned entities operating in the sector have had debilitating effects on “sound effective management and financial management because internal issues remain unresolved”.
Vadi referenced the “huge” losses that arose from corruption, stating that it would take a long time to recover those losses, especially because of the country’s economic situation. “It is much more difficult to find money for transport.”
Touching on the PWV15 highway, he noted that it would cost roughly R7-billion to build, questioning where those funds would come from. Vadi commented that even if the project were funded by investors – as in the case with the e-tolls – “how do we repay them?”
He stated that some financial modelling for the project had begun and that, based on current models, it would take “five governments 25 years to repay a loan. Am I ready to commit the next five administrations to fixed repayment?”
Other challenges relate to the prudent, effective and efficient use of financial resources, including issues around duplication of services, a lack of integrity from both the public and private sector in terms of the use and allocation of public finances, unpredictable urban migration and a lack of integration between the three spheres of government.
In calling for a more realistic assessment of the state of the transport sector and the associated policies and supply chains, Vadi also again advocated for a regional transport authority.
“We are clear that we need a legally established authority to play a coordinating role, setting the standard and establishing institutional authority between the provincial government and the municipalities.”