Response by Transport Minister Jeff Radebe - Mg - Mail & Guardian

More documents

Recommendations

Info

A business case for the recapitalisation of SARCC has been developed in consultation with all stakeholders, in line with the national priorities identified by the government of South Africa. 7. The M&G has reliable information that the Metrorail recapitalisation program was never managed in the SARCC, but “somewhere else”. What is your comment to this? All the relevant stakeholders are involved in the recapitalisation of SARCC. 8. The timing of their removal from the SARCC board suggests that the criticism by Nomvete and Tshombe of the recapitalisation process was directly linked to your decision to terminate their contracts. Is this so? Did their correspondence with Mr Montana two weeks prior to their removal influence your decision? This inference is incorrect. Please refer to my comments under point 1. Response from SARCC CEO Lucky Montana 1. Why were the contracts of board members Zukile Nomvete (chair) and Nonku Tshombe (chair of procurement committee) terminated in September 2008? The decision to appoint and remove board members of the SARCC rests and is the responsibility of the minister of transport. The board appointments were made by the minister with the concurrence of Cabinet. 2. Did Mr Montana have any role to play in the removal of these two board members? Please elaborate. No, the CEO is not involved in the appointment of board members. The CEO raised on various occasions to the board and the shareholder (minister of transport) concerns about board effectiveness/leadership and poor governance practices in some instances. The board also set up a governance committee to address these challenges. The CEO hoped that the governance challenges that the board was aware of would be resolved by the new board. 3. Was Mr Montana in support of the removal of these two board members from the SARCC board? If so, why? The CEO accepted the decision of the shareholder [Radebe] to reconstitute the board, obviously it being the prerogative of the shareholder. Also refer to the above response (question 2). 4. The M&G is in possession of correspondence between Mr Nomvete, Adv Tshombe and Mr Montana preceding the termination of their contracts. In it Mr Nomvete queries the approval of the fleet recapitalisation program by the board. In her response, Adv Tshombe confirms that the procurement committee never discussed or approved a decision on fleet recapitalisation. Why did the SARCC develop a business case for the recapitalisation of the Metrorail fleet – that was presented to Cabinet by the minister – without board approval?
On 9 February 2007 the president of South Africa in his state of the nation address stated, our program in the social sector for this year will also include (among other things): Speeding up the implementation of the taxi recapitalisation project, implementing detailed plans for passenger rail and road transport including the Bus Rapid Transit System in the Metros and recapitalisation of Metrorail. In part this pronouncement was based on a National Rail Plan accepted by Cabinet on 7 December 2007. Following a Cabinet meeting on 7 December 2007, the meeting received a report on the Interim National Passenger Rail Plan, which identifies priority corridors, rail recovery initiatives and so on. The essence of the plan was approved, and work is meant to start soon on regional business plans, including transport needs outside of the congested areas. In a quarterly report by the CEO submitted to the board for the 30 July 2008 meeting and discussed on 31 August 2008 it was stated: “The SARCC is assisting the department of transport put together a comprehensive business case for the acquisition of a new generation of rolling stock fleet for submission to Cabinet. The chief executive officer of the SARCC had extensive discussions with the Directors General of the department of transport, national treasury and the department of trade and industry, as is required by government and Cabinet processes in particular, in the period of the compilation of the Cabinet Memorandum. Part of the recommendations were that an intergovernmental team be formed, chaired by the department of transport to implement a fleet acquisition strategy for Metrorail (with SARCC represented in the team). On page 27 of the SARCC business plan approved by the board in February 2008 it was stated: “An analysis of the age profile of the current fleet indicates that the refurbishment and upgrading of the fleet could address the current problem of train set availability. As indicated in 2007/08, the refurbishment of coaches does not hold the future prospect for the company. “The shortage of rolling stock is already undermining the delivery of efficient and reliable passenger services. The SARCC will therefore embark on the initiative to recapitalise its fleet in order to meet current and future demands. It is important that a long-term perspective is adopted which begin to address challenges on how the company will meet its obligations under the Legal Succession Act and adequately meet future passenger demands. “Projections that take into account population growth, economic growth, government’s transport policy objectives aimed at promoting public transport over private car use, the costs associated with congestion and emergence of new residential settlements as well as new demands for public transport and rail services indicate that future demands for rail services would increase significantly. “Technical and operational specifications for the new rolling stock fleet were finalised and a tender for the new fleet developed during the 2007/08 financial year. Procurement processes for the acquisition of new rolling stock fleet tend to be most intense and the corporation will invite bidders early in the financial year to submit proposals for the manufacture and supply of new generation Rolling Stock. “Whilst the SARCC, in consultation with the DOT, is finalising private finance options of rail infrastructure, the strategic nature of rail requires that government plays the leading role in financing of Rolling Stock and rail infrastructure.”
Page 1: Response from Transport Minister Je

Response by Transport Minister Jeff Radebe - Mg - Mail & Guardian

Create successful ePaper yourself

Delete template?

Save as template?