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TRANSPORT PORTFOLIO COMMITTEE
13 August 2004
SOUTH AFRICAN NATIONAL TAXI COUNCIL’S CONCERNS ABOUT TAXI RECAPITALISATION PROJECT
Chairperson: Mr JP Cronin (ANC)
Documents handed out:
Taxi Recapitalisation: SANTACO concerns and solutions
South African National Taxi Council (Santaco) highlighted concerns of the Council and the taxi industry about the Taxi Recapitalisation Project as many of the specifications for the new proposed taxi are too costly and not appropriate for local conditions. The Council said that if the specifications are not changed, the Project will not work.
Santaco’s Business Manager, Reggie Mutsi, briefed the Committee on the concerns of the Council and the taxi industry about the Taxi Recapitalisation Project which was introduced five years ago in order to change the face of the industry in an effort to put the industry in the mainstream of the South African economy.
He stated that the project still has not kicked off, which has had serious consequences to the taxi industry and operators. The Council was under pressure from taxi operators about the outcome of the project.
The project had been structured so that the industry would move at a very rapid pace from a Third World to the First World situation. However government specifications had made it difficult for the manufacturers to cope because the specifications aimed at producing a completely new vehicle in the world, not only in South Africa. The main problem was affordability. The government should have focussed more on safety specifications.
He referred to the diesel engine specification, the electric door and the provision for wheelchairs with every taxi. He noted that paraplegics constituted 3% of the market yet had to be taken into account. The Maintenance Plan requirement would be an added cost. It would require a taxi operator to take it for servicing after it had run for 10 000 km. It could mean losing a day’s production every month.
He listed several other specifications that added to the price.
Bidders could not adhere to the specifications because they were difficult to meet. There was a need to renegotiate substantial changes.
SANTACO proposed renegotiating the specifications to suit the market and to overcome the issue of affordability. The process must be open for any other manufacturer to get involved.
The Government’s Scrapping Allowance of 30% and the 20% Subsidy would help overcome the issues of affordability. If the average price of a vehicle is R250 000, the 50% would make a difference. Some of the prices could come around a price tag of R100 000.
The Council concluded that if the specifications are not changed, the project will not work.
Mr Roy Ainslie (ANC) asked for clarity on the type of vehicles whose cost could be reduced to R135 000 with the scrapping allowance and subsidy. Were the figures based on certain features being included or excluded? Were the suggestions communicated to the Project Team and what was their response?
Mr Mutsi responded that the figures were given only as estimations or examples excluded prices based on specifications. There was not really a response because communication with the Project Team was not as effective as it should be. The prices targeted 18-seaters.
Ms Refilwe Mashigo (ANC) asked why it would be a problem taking taxis for a service. How genuinely had SANTACO accepted the Taxi Recapitalisation process.
The Chairperson suggested that the Council try and come up with workable solutions. In Third World situations, the infrastructure was provided to improve access for disabled and for the people in general. Maintenance of vehicles had to be good, effective and empowered.
Mr Mutsi said the Council was not against the maintenance of vehicles but about the possible loss of income. The Council’s commitment and relationship with the Government was unquestionable.
Mr Louis Green (ACDP) suggested that government should give specifics to qualifying companies, allow them to compete and make the best vehicle at the cheapest price. That would speed up the bidding process.
Mr Ofentse Mogale (ANC) enquired about the preparation of the bid document. There was some misrepresentation by SANTACO to the bidding companies.
Mr Mutsi welcomed comments about how the tender was put together. He suggested they revisit the specifications and let the market decide.
The meeting was adjourned.
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