National Land Transport Transition Amendment Bill: briefing and hearing

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
17 October 2001
NATIONAL LAND TRANSPORT TRANSITION AMENDMENT BILL: BRIEFING AND HEARING

Chairperson: Mr JP Cronin

Documents handed out:
National Land Transport Transition Amendment Bill [B 39B – 2001]
NCOP Amendments to National Land Transport Transition Amendment Bill (Appendix 1)
SABOA submission on Bill (Appendix 2)

SUMMARY
The Department briefed the Committee on the National Land Transport Transition Amendment Bill. Concern was raised around two issues: planning, and the appointment of the operating licence board members.

SABOA do not support the proposed amendment of Section 134 of the National Land Transport Transition Bill. They asked the Department to look at Section 18, to involve different role players, and to be transparent in the manner in which they do so.

The Department is in favour of dealing with these concerns through regulations although Members were cautious about this proposal.

MINUTES
The NLTT Amendment Bill was passed by the National Council of Provinces the previous day and was now with the Portfolio Committee.

The Chair explained that there had been nine provincial hearings around the amendments conducted by members of the Select Committee on Public Services. SABOA were not given a chance to make a presentation to the Select Committee, which is why they would brief the Portfolio Committee.

Department of Transport
Ms A Nothnagel briefed the Committee on the Select Committee amendments and the changes that would result. The National Land Transport Transition Act was promulgated in June 2000 and brought into effect on 1 December 2000. Certain sections of the Act were not brought into effect because the government was not ready to proceed with the planning section of the Act. But the restructuring of minibus taxis processes needed to proceed urgently.

Reason for amendment
The planning provisions of the Act were not operational, which has an effect on operating licences, bus contracts and the conversion of permits to operating licenses. The Department needs to allow the bus subsidies functions to proceed without planning being in place.

Provision had to be made for the extension of interim and current tender contracts and there were amendments to the operating licensing boards the reason for that being in a number of provinces there was lack of provincial legislation. The Act was also silent on the remuneration of the board members and the issue of a quorum, which the Department has now addressed.

There was no provision made in the Act for people without operating licenses and such operators should also be given a chance to register.

The definition of bus
There is a difference in the definition of a bus between the National Road Traffic Act (NRTA) and the NLTTA and at the end of the NLTTA there is provision to amend the definition in the NRTA and to bring it into line with each other. But after discussions with the South African Bureau of Standards and the Department of Trade and Industry it was realised that the definition could not be changed. The reason being that the amalgamation of the new vehicle prices and the necessary requirements for the amalgamation in terms of the Standards Act are not in place yet. It would be premature if that definition was changed.

Transitional provision
This is necessary to proceed with various processes. That is, tendering of services, the conversion of permits for operating licences etc without planning being in place. Also, to allow for the current public transport records (CPTRs), under the Interim Transport Arrangement Act, 1998, to be deemed as one of the plans of this legislation.

The Act also provides that planning can be staggered because of different capacity and funding available in various spheres of government and within local government there are differences between urban and rural areas. Therefore the Act allows the Minister to give power to different MECs to stagger the dates for planning to be finalised.

The Act provides that in provinces where operating licencing boards (OLBs) have not been established, the old Local Roads Transportation Boards with the permit boards can then operate as if they are OLBs in terms of this Act.

Definitions
"Contracting authority": various definitions to be brought in line.
"Long distance service": refers to road transportation and have included rail.
"Planning authority": a definition for that had to be inserted because the current definition refers to part seven which has not been brought into effect and therefore had to be put in the definition of the Act otherwise it is not valid.
"Registered manufacturer": the Department had to address that issue in order to bring its definition into line with the National Roads Traffic Act (NRTA).

Content of the Bill
Section 47 (1) - certain provisions had to be made in to ensure that there were no disruption of subsidised services and would allow the Department to proceed with new tenant contracts without planning being in place and also to take into account the CPTRs. They would also be in a position to extend current interim tender contracts until such time the new contracts are in place.

Section 49 (3) - would allow the Department to make payments to parastatals and municipality operators, which are providing services on negotiated contract basis.

Section 77 – would allow the MEC to provide for the remunerations of OLB members. The current NRTA states that the MEC can appoint the board. The NCOP felt that the MEC could also appoint the chair of the board and that the procedure should be prescribed. The MEC should call for nominations for that board through some of the local newspapers. These amendments have been incorporated in the amendment Bill.

Section 78 – "powers" has been added in that section and the Department has provided that the Permit Boards operate as OLBs in terms of the Road Transportation Act (RTA) or when the provincial laws are not clear.

Some of the Procedures of the Board under this Section in the Act were silent and the amendments addressed those procedures. With regard to temporary permits there was vacuum in the Act, the boards felt that in provinces where the RTA were withdrawn there were no mechanism for issuing of temporary permits and temporary permits are issued for special events like funerals or sport events. The current Act only stated that the board or an appointed official could issue such a temporary permit. The NCOP felt that the board should rectify the issuing of such permits especially if an individual did the issuing and an amendment was made.

Section 112 – the registration of new members of taxi associations – the Act refers to operators of operating licences to be registered the reason being the Department thought the provinces would be through by now with the process of conversion. Unfortunately that is not the case and the Department would make provision for operators not in possession of permits to apply for registration.

Section 113 – the principal act referred to members and non-members of the taxi association and the procedures to be followed which means that non-members with permits would also be able to register.

Section 130 – printing error which the Department has rectified

Sections 131 and 132 – deals with the definition of "bus".

Section 134 – This section deals with Transitional Provisions which aim to minimize potential disruption in services and that the plans are not in place. The issue of the CPTRs would be deemed as one of the plans this Act. They would therefore be taken into account whenever services are put out to tender. Also the Minister and the MECs can agree on different dates when planning should be ready and transitional arrangements for provinces which do not have OLBs in place so that the Permit Boards can proceed with various actions.

The Minister of Transport confirmed his commitment with regard to planning and as soon as the Department is ready with the planning regulations they will be published by February next year for comment and they hope to bring that section of the Act into effect by 1 April 2002.

The Department is lagging behind in putting up services for tender due to the fact that this amendment has to be brought into effect first. As soon that is promulgated the conversion of the old bus service tenders would ensue and they could then proceed with the taxi process.

Financial Implications
These amendments do not have any financial implications and there are no additional burdens.

Discussion
Mr JH Slabbert (IFP) asked whether the Department has accepted all the amendments from the NCOP?

Ms A Nothnagel responded that the Department has after having been discussed at provincial workshops and NCOP select committee meetings.

Mr SB Farrow (DP) observed that there were contradictions in the definition of "bus". This had to be delayed until such time that specifications came from DTI. Sections 131 and 132 are repealed but could they clarify what is meant by the line "until the RTA comes out".

With respect to financial implications, Mr Farrow said he did not understand the fact that there were no additional burdens. The process, which would result in the remuneration of the board and various other people, was brought forward. This has financial implications but would the the local and provincial authorities have funds to do exactly that?

Ms Nothnagel responded that there are two definitions, one being to bring the registered manufacturer in place and the other is in Section 131 of the principle act, amending the RTA. The Department was withdrawing their amendment and the definition in the RTA would stay and simply change the issue of registered manufacturer.

On financial implications, all provinces have boards in place and are paying members but the problem is that in a number of provinces where such legislation has been repealed, meaning there is no legislation allowing them to pay those boards.

Dr Odendaal (NNP) asked what was meant by staggered transport plans. He was worried that the whole concept of negotiated permits was a licence for fraud. Why should people not go through tender processes? Would the appointments of members to the OLBs including the chairperson, be transparent or would the MEC do it on his own?

Ms Nothnagel said that with respect to the staggered plan they want to allow for instance the unicities, which are much more advanced than the rural areas, to proceed with their plans without rural areas holding them back. The Department was worried that in some rural areas the plans in the NLTTA might not be realised due to lack of capacity and funding to plan. That was why the Department of Provincial and Local Government were looking at the problem.

On negotiated contracts she referred the Committee to Section 47 (3) which dealt with the issue of negotiated contracts. This was not a new issue and the amendment was merely sorting out the payment issue.

Mr SB Farrow (DP) asked what happens if the MEC is busy and members of the OLB need to be appointed?

The State Law Advisor said the appointment of the board was not done on a regular basis and the MECs would be faced with a situation of making decisions occasionally. In case the MEC is absent there are acting MECs who are assigned with the same responsibilities.

Mr AR Ainslie (ANC) reminded the Department in the last meeting with the Committee Members expressed some concern that Part 7 has not been operationalised. What was the hold-up? When Part 7 was in operation, would some of the amendments fall away? How would the Department respond to the criticism that allowing the authorities to go ahead with the tendering process without abiding by the formalities of Section 47 would be unconstitutional?

Ms A Nothnagel answered that the issue of Part 7 was due to a combination of issues. At the beginning of last year the Department started with guidelines for planning and these documents are quite substantial. It took the Department a number of months to workshop those guidelines.

Secondly, those guidelines are presently being written into regulations and it is envisaged that they will be ready for public comments by February.

She was not sure about the issue of constitutionality because the legislation was clear that all these contracts are based on planning.

The State Law Advisor added that the Department has good intentions in terms of effecting integrated transport within the country as raised within the White Paper and extended in the Moving South Africa Action Plan. The challenge faced is when the Department will roll out what is being planned by the Department. Last year the Department allocated R9 million to provinces to begin to set up plans and by so doing the Department is trying to equate the imbalances that are there.

Ms ND Ngcengwane (ANC) asked for clarification on Section 77(1)(b) as to whether the Department has made any guidelines on the equity of the remuneration of board members.

In terms of the jurisdictions of the boards as it relates to provinces one would understand that the provinces are not of the same size such as the population of the taxis and buses – in that respect one would not expect the remunerations to be the same. Secondly, the responsibility of determining the remuneration levels lies with the Treasury.

Mr SB Farrow (DP) asked the Department to indicate whether the amendments effected in terms of submissions were satisfactory to the people who made those submissions?

Ms Nothnagel said the amendments could be divided into three groups. First, wrongly phrased oversights, but there were very few submissions on that. Secondly gaps identified by the Department on board appointments and the remunerations thereof and the payment of contracts etc on which comments were numerous and positive, and thirdly, the whole planning issue.

Ms Nothnagel said the big issue was planning and they were faced with two options. First, if the President were to be asked to sign the act into effect today the Department would not have the regulations ready and nothing would happen because the regulations are not there. Secondly, even if the regulations are ready by January it would take a long time for areas to respond including urban areas. For a number of years there would be certain sections not ready for planning. Most of the submissions voiced concerns over planning.

Mr JH Slabbert (IFP) suggested that those taxi drivers that kill other taxi drivers in the taxi industry should have their permits cancelled.

The State Law Advisor responded that there have been efforts to democratise the taxi industry. They are a step ahead because it has never been done in SA before. The Department acknowledged that there would be exceptional situations where people continue to kill each other. With time the Department is hopeful that this would contained.

Ms MP Coetsee-Kasper (ANC) said if one looks at the intergovernmental fiscal review, subsidisation of busses is allocated where the money and jobs already are, yet the Department talks about integration. What about rural areas where poverty is rampant?

The State Law Adviser responded that the effort of the negotiated contracts was to focus on realigning parastatals, which were predominantly in rural provinces so that they become competitive on public transportation.

In the Free State it is said that transport should accommodate small business within the black communities and making sure that the bus service is sustainable.

The Department is committed to ensuring that people in the rural areas are served at the same level as those in urban areas. The Department has gone a step further to say there was nothing like a "rural transport" which implies giving "them a lower standards".

Ms ND Ngcengwane (ANC) observed that in the Northern province the parastatal buses are serving the people better than private buses. How can government help these private buses?

Ms Nothnagel referred to Section 47, which states that within two years after the contract has been signed the majority of shares have to be owned by a historically disadvantaged operator. In the case of Great North (in the Northern Province) that is exactly the situation which would assist their buses to be in the same standard as the parastatals.

Mr AR Ainslie (ANC) referred to a submission suggesting that the Department defines what is meant in Section 47(3)(f) by ‘being a party to’. If you are in a joint venture are you party to a contract? If you are a shareholder to a company are you party to that? "What do you mean by being party to?"

Ms Nothnagel said that this issue of "party to" has been discussed with the legal advisors and her understanding was that anybody who are either in a joint venture or part of the equity would be seen as party to.

The Chair observed that their concerns seen to cluster around two issues, the first being the planning issue. Another area of concern was the appointment process of the OLBs. Would it be transparent, would it happen on time? Already concerns about conflict of interest and corruption have been raised.

Given that they share these concerns are there things that they can improve by way of amendments in the legislation or do they become oversight issues for this Committee and the NCOP?

Mr SB Farrow (DP) asked how the ‘Be Legal Campaign’ fits into this process especially looking at those persons who do not want to affiliate but want to get a permit, would they be accommodated in terms of these amendments.

Ms Nothnagel responded that the principal act makes provision for members and non-members of the association. The act is also very clear that only in certain circumstances where non-members would be allowed because the Department would like to bring as many people as possible to the formal environment. But in terms of the Constitution one could allow people not to belong.

Dr Odendaal (NNP) asked who qualifies to be appointed as a board member?

Ms Nothnagel responded that the MEC would make an application to the Minister and in terms of that application there are regulations published where the operator through the MEC’s office must provide the Department with the business plan and cash flow to be considered. It is not an ad hoc decision it is a process involving the equity plan and how to bring historically disadvantaged operators into the equity.

Who qualifies? Initially only parastatal operators qualify but there is currently a need to look at a broader spectrum and currently the Department was looking at that. The Department has received applications from private operators through the MECs and is not through with the process yet to make recommendations but so far the Minister has agreed to a parastatal from the North West.

Submission by South African Bus Operators Association (SABOA)
Professor Jackie Walters, Strategic Advisor to SABOA, read from the document that SABOA submitted. He started with general comments under the point 1.1 where it says: "In principle, SABOA does not support the proposed amendment of Section 134 of the NLTTA to provide for authorities to continue with their activities despite the fact that transport plans have not yet been finalised."

Discussion
Dr Odendaal (NNP) on the issue of negotiated contracts asked whether the Professor had any proposals or proposed amendments to remedy the problem or the possible problem that he was referring to?

Professor Walters responded that when the policy was conceptualized it was envisaged that every operator had to tender for services and in their view it was still the best way of going forward. In the interim it is clear that many provincial bus companies have a huge problem in recapitalising their fleets and are not ready to tender against private sector operator for service. In the last two years the Department proposed that services be negotiated with such operators as an interim phase to the full tender system.

Their concern was that the previous system of negotiated subsidies led to a lot of inequalities amongst bus operators. They want an open system, a transparent system where anybody could tender for services based on a service specification.

In accepting negotiating contracts and being pragmatic about an interim phase of such operators SABOA proposes a few conditions for such interim contracts. One is when an operator has negotiated a contract with authorities, that operator would not be allowed to tender for other services for a five-year period.

The Chair asked the Professor to elaborate more on SABOA’s way forward.

The Professor responded that they want to be pragmatic, they want to move forward because people have to retain the services they enjoy without being halted. What they would like to see is some guarantee that the principles of planning are taken cognisance of in designing these things. The Department must examine Section 18 and involve difference role players and be transparent in their view so that more people can comment on these plans.

The Chair asked the Department whether would that be the way to go forward as suggested by SABOA?

The State Law Advisor responded that the Department has a platform where they interact on issues of common interest with SABOA and organised labour, taking into account that they have "advanced some strides to derive some understanding of what they want to achieve together."

In these discussions they have agreed to visit the provinces and have discussions with tender boards. Only few provinces give problems, he said, and need a commitment from SABOA and organised labour to go visit these provinces.

The Gauteng tender board has decided to take their own route, which was not in line with what the Department wants to achieve and in most cases their discussions have been about Gauteng.

Stakeholders should be comfortable that regulations are the easiest to accommodate because they can be changed anytime. They should also feel comfortable that they have a system whereby the Department consults with them to change those regulations.

Subsidised public transport lies on the domain of national transport. The Department transfers these funds to both second and third sphere of government and has a memorandum of agreement in terms of what measures they are suppose to meet. Internally, what this says to the Department is that it needs to factor this further. Out of the discussions with SABOA the Department needs to engage itself in these deliberations as to how much they need to be assured that they would be consulted at provincial sphere of government.

Professor Walters said the Department had put its finger on the problem they are experiencing as an industry although he doubted whether the Department would manage to get to grips with all these problems.

SABOA would like to see, maybe through amendments of the regulations, some requirements for transport authorities at least in an interim phase. Their biggest concern is consultation on the design of tenders; there is general lack of consultation in their view.

They have done some studies on the effects of the tender system on labour and found it to be quite disastrous.

The Chair summarised for clarity: what SABOA was saying was that they wanted the Department to underline that consultation was broader; that range of role-players, labour and so forth, are very important not excluding operators as well. He asked the Committee, the Department and SABOA whether could pass regulations without having to amend these amendments again and were they confident that using regulations would work?

The State Law Advisor answered that this could be one of the best options. Regulations have served them in many ways in terms of clarity.

Dr Odendaal (NNP) asked whether the meeting was trying to avoid the issue of further amendments

The Chair responded that there were problems encountered because the Committee was caught between an amendment bill and the un-amended act, which requires plans in order to proceed with contracts.

The Committee can try to amend the amendments that have come from the NCOP but meanwhile the problems on the ground are going to continue because the amendment process would be completed only by the middle of next year.

Dr Odendaal (NNP) wondered whether the regulation route could accommodate the concerns of the Committee about transparency in the appointments of board members.

The State Law Advisor replied that they were proposing the extension of Section 77 to the amendments to say, "as would be prescribed within the regulations". Then they could clarify it much better in the regulations especially the concern raised by the Department, which says, "having the MECs look into the nominations".

Mr Slabbert (IFP) said he was concerned about overcoming a weakness in the act through regulations, which can be "chopped and changed from breakfast to lunch".

Professor Walters commented that the transformation of the industry started in 1996 long before this act was on table and all the time everything was by agreement. Perhaps there should be an agreement in these regulations and the government should then be held to that. Agreements have worked well between the Department and the bus industry.

The Chair commented that he was inclined towards that direction as well but the Committee would have to discuss that, probably next Wednesday. No later than the middle of next year the Committee would have special hearings involving among others SABOA, the Department, SALGA, labour and communities, to see how all of this is working out in practice and to see whether are there any further changes required.

The meeting was adjourned.

Appendix 1:
AMENDMENTS AGREED TO: NATIONAL LAND TRANSPORT TRANSITION AMENDMENT BILL [B 39A-2001]

CLAUSE 2
1. On page 4, in line 29, after "amended" to insert:

(a) by the substitution in subsection (3) for the words preceding paragraph (a) of the following words:
"(3) The functions of a board are to receive, consider and decide on or otherwise dispose of, in accordance with this Act and relevant provincial laws, subject to sections 90 and 94-"; and

CLAUSE 4
1. On page 6, in line 8, after the second "contract" to insert:)
or a negotiated contract contemplated in section 47(3)

CLAUSE 5
1. On page 6, from line 12, to omit subsection (1A) and to substitute:

"(1A) The MEC must appoint such members and determine their conditions of service.
(lB) Such members receive the remuneration determined by the MEC with the agreement of the member of the executive council responsible for finance in the province.
(1C) The MEC must appoint a chairperson for the board.
(1D) The MEC must, before appointing an"' member to the board, publish a notice of intention to do so, and invite applications for membership in at least one newspaper circulating in the province.

CLAUSE 6
1. On page 6, in line 29, after 'laws" to insert:

if, in the case of such an official, that official places a record of actions taken by him or her in terms of this paragraph before the board at its next meeting for the board's ratification

CLAUSE 11
1. On page 8, from line 44, to omit "in terms of the corresponding section of this Act".

Appendix 2:
SABOA SUBMISSION TO THE PORTFOLIO COMMITTEE ON TRANSPORT
COMMENTS ON NATIONAL LAND TRANSPORT TRANSITION AMENDMENT BILL, 2001

GENERAL COMMENTS
Before commenting on the proposed amendments to specific sections in the National Land Transport Transition Act in more detail, SABOA would like to comment, in general, on the proposal to have the requirement for transport plans removed from the National Land Transport Transition Act.

- In principle, SABOA does not support the proposed amendment of section 134 of the National Land Transport Transition Act, 2000 (Act 22 of 2000) to provide for authorities to continue with their activities despite the fact that transport plans have not yet been finalised.

- SABOA acknowledges the fact that a number of tendered contracts have been concluded with operators without the existence of transport plans. However, this is seen as interim or ad hoc arrangements as the services which have been put out to tender thus far are mostly "stand alone" services which did not require a high level of planning. Furthermore, the majority of these services are also "origin to destination" type of services which could be dealt with without having transport plans.

- The services which are now in line for the tender process include a number of metropolitan services which require a much higher level of planning. These services differ in nature from the services which have thus far been put out to tender in that they are not mere origin to destination services but have several picking up and setting down points on a route as well as some feeder services to a common distribution point. Many of these services operate as an integrated network approach.

- A further point of importance is the fact that there are normally a number of operators in metropolitan areas and without transport plans in place it is virtually impossible to rationalise these services in a cost effective and structured manner.

- The danger of putting services in metropolitan areas out to tender without a well-designed transport plan in place, is the fact that routes could be viewed in isolation, resulting in services being cut due to the perception that certain routes are not being utilised sufficiently. This, in turn, could result in the reduction of services to the detriment of the public at large.

- A further problem associated with an ad hoc approach (without transport plans) is the fact that it is not possible to provide for an integrated approach in terms of involving other modes of transport in the process. This will result in a delay of a further 4 or 5 years before such an approach can be followed.

- The proposed amendments go against the spirit of the Tripartite Heads of Agreement. As is generally known, when the Agreement was being negotiated, assurances were given by government that tenders would only be awarded subject to approved transport plans. Indeed, this was fundamental to the formulation of the Agreement. The transport plans would protect the interests of both existing operators and bus users by ensuring that there would be an objective basis for identifying the routes or route networks to be put out to tender. Moreover, the planned service levels would determine the manpower requirements on which the 75% requirement guarantee would be based.

The proposed amendments effectively remove the need for transport plans and enable the tenders to be determined on a completely arbitrary basis. In other words, should the proposed amendments become law, the very spirit of the Tripartite Agreement will have been breached and the interests of the industry and the workforce will have been compromised.

SPECIFIC COMMENTS
SECTION 1(d): DEFINITION OF "PLANNING AUTHORITY"
The proposed changes to the definition of planning authority remove any reference to the approval of transport plans for the area of jurisdiction of the planning authority. This is problematic as indicated above in "general comments", since transport planning is a core component of the overall planning function. Removing this specific responsibility would effectively reinstate the "traditional" planning focus on roads and infrastructure, with the implication that land use planning and the movement of people may be ignored.

In widening the definition to include virtually any official structure that might be in place at present or in the future, it can be argued that the proposed change to the definition cannot be made without changing Section 19(1)(e), that specifies that the Act requires public transport plans and integrated transport plans respectively (as provided for in sections 26 and 27). It can further be argued that if the definition was to be changed, it puts the responsibility for drawing up public transport plans and integrated transport plans onto authorities that, at present might lack the capacity and the technical competence needed to draw up the plans as specified in sections 26 and 27.

SECTION 11 (4)
This sub-section empowers the Minister or MEC to determine a date by which transport plans must be prepared and that such dates may be extended. SABOA would like to see that there is a commitment that this sub-section does not become an open-ended mandate for the preparation of transport plans and that such plans are forever extended. This is especially important in the urban areas where integrated transport plans are necessary for the proper functioning of future public transport.

SABOA would also like to see that the proposed extensions would not be allowed beyond the first five year contract period following the interim contracts in a specific operating area.

It is also important that the three spheres of government will do all in their power to ensure that integrated transport plans are developed as soon as possible.

SECTION 47(3)(f): SUBSIDISED SERVICE CONTRACTS
Clarity is needed on the meaning of the phrase "party to". Is the public transport operator concerned considered to be "party to" if, for instance, he is involved in a joint venture or a shareholder in a company that is involved in a subsidised service contract, or a subsidiary of a company that is involved in a subsidised service contract?

SABOA is in agreement that an operator that has been granted a negotiated contract must not be allowed to participate in any other process to obtain a subsidised service contract. As a negotiated contract is a far less transparent process than a tendered contract, the possibility exists that an operator may cross-fund between a negotiated contract with relatively high kilometre rates and a tendered contract. This can be construed as unfair competition against operators that have to compete in the open market for their contract services. This principle was also one of the conditions under which SABOA accepted the negotiated contracts. This principle should also apply in instances where such company (that has been granted a negotiated contract) is in any way involved in a joint venture partnership, or is a shareholder in a company that is involved in such a process, or a subsidiary of a company that is involved in such a process.

SECTION 78(5): POWERS AND DUTIES OF THE BOARD
This permits a licensing authority to consider and deal with issues under the Transition Act by the application of powers under the Road Transportation Act, even allowing for individuals, who are officials of the old LRTB’s to consider such applications. This is in complete conflict with the intention of the legislature regarding the manner in which transportation boards are to consider applications under the new Transition Act. Although the amendment does refer to the powers under the old Road Transportation Act having to be adjusted as "required by the context", this is left to the discretion of the LRTB (or an individual official) considering the applications. This can be challenged in that it effectively gives legislative power to officials.

SECTION 131 AND 132: REPEAL OF THESE SECTIONS
In terms of the National Land Transport Transition Act (Act 22 of 2000) and the National Road Traffic Act (Act 93 of 1996) a bus is defined as follows:

NLTTA
"bus" means a motor vehicle designed, or lawfully adapted, by a registered manufacturer in compliance with the Road Traffic Act, 1989 (Act No 29 of 1989), to carry more than 35 persons, excluding the driver, subject to section 31.

NRTA
"bus" means a motor vehicle designed or adapted for the conveyance of more than 16 persons (including the driver, if any)

It is evident that Sections 131 and 132 of the National Land Transport Transition Act intend to bring the definition of a bus as stipulated in the National Road Traffic Act in line with the definition of a bus as outlined in the National Land Transport Transition Act.

The repealing of sections 131 and 132 of the National Land Transport Transition
Act as provided for in the Amendment Bill is not supported. It is confusing to have two different definitions for the same vehicle in two separate Acts and it is proposed that sections 131 and 132 be retained in the National Land Transport Transition Act.

It is also not clear why the National Land Transport Transition Act does not address the definition of minibus in the National Road Traffic Regulations as it should also be brought in line with the definition of minibus in the National Land Transport Transition Act.

SECTION 134: PROPOSED ADDITION OF SUBSECTION (2) AND (5)
By removing the need for a transport plan, the Bill provides for a piece-meal, unplanned approach to the tendered process that, in the short to medium term is likely to be seriously disruptive to the process of transforming the public transport system. In the long term it is likely to lead to chaos.

· Experience with the tenders in the Western Cape clearly demonstrated that a piece-meal approach, not based on an integrated plan, will almost certainly result in:

- Total disruption of existing travel patterns, to the extent that existing bus users will no longer be able to get to work by bus because their existing service connections between origin and destination points will be destroyed and not replaced with an acceptable alternative.

- The automatic creation of fertile new opportunities for illegal taxi operations to flourish because of this situation.

- Major impacts on the ability of workers to get to their jobs on time, with concomitant effects on commercial and manufacturing productivity and on the economy.

- The technical impossibility of ensuring that any route or routes put out to tender actually meet requirements of existing passengers.

- The technical impossibility of ever ensuring integration of the first services put out to tender with such services as might be put out to tender in the future.

· There also appears to be a strong possibility that allowing authorities to initiate the tender process for routes without any of the formalities prescribed in Section 47 having been complied with could well pose a constitutional difficulty for the legislature. Moreover, the effect of that section is to allow the MEC for Transport, in consultation with the National Minister of Transport, to permit a municipality, board, contracting authority, transport authority or core city to proceed with any matter despite the absence of a completed, approved or published transport plan.

The obvious objective is to allow the municipality to put out subsidised service contracts for tender before the preparation of a public transport plan. However, the proposed amendment cuts so broadly into the existing statute and its principles, aims and policies, that it essentially renders the existing Act nonsensical. Whereas the previous Road Transportation Act, allowed for an incoherent and uncoordinated approach to the issue of public transport, Act 22 of 2000 was specifically designed to establish a holistic public transport policy to ensure that the end users (the public) have access to a properly coordinated and functioning transport system. The MEC is effectively given the power (with the National Minister) to exempt a board or municipality from the national legislation. In particular, reference is made to the guiding principles set out in Section 4 of Act 22 of 2000, which emphasises coordination, efficiency and planning. These objectives and all of the provisions of the Act which are designed to achieve these objectives, cannot simply be set aside. Moreover, there is no time limit for the exemption and indeed, there are no guiding conditions set out for the exercise of the discretion of the MEC.

· A second issue of concern is that on a proper interpretation of the draft proposed legislation, the Bill excludes the possibility of consultation by the MEC and Minister with any other third party regarding a decision to exempt compliance with the provisions of the Act. No provision is made for persons with existing vested rights or legitimate expectations or for that matter prospective tenderers. This probably means that even if such a grant of power by the legislator to the MEC was valid, the requirement of the Promotion of Administrative Justice Act as read with the provisions of Section 33 of the Constitution, requires at the very least, a consultative process with all affected parties.

· The third ground upon which this could possibly be challenged is the rationality/legality principle.

The purpose of the Transition Act is clearly spelt out in its preamble and one need only have regard to the legislative history of that Act to ascertain the guiding principles which led to the final promulgation of that Act. The proposed measures do not appear to be rationally connected to the achievement of the purpose of the Statute. In other words, if the proposed amendments come into law they will almost certainly subvert the principles upon which the Act was founded and will perpetuate the defective system which existed in the past and which the government claims to want to eradicate.

· It is evident that Section 134(5) has been included to cover situations such as that prevailing in the Western Cape where, although the Transport Board has been created, it is not adequately staffed. However, allowing the Local Road Transportation Boards (or officials in their employ) to consider licensing applications appears to present a constitutional challenge to the Act in its present form. The Act contemplates the establishment of a board with specific skills and characteristics which are listed quite specifically in Section 30 of Act 22 of 2000. If the legislature at that time considered the existing Local Road Transportation Boards to meet those requirements, they would simply have cloaked these Boards with the authority under the new Act. It therefore seems that Section 134(5) is inconsistent with the requirements of Section 30 of Act 22 of 2000.

THE WAY FORWARD
SABOA is aware of the ramifications and disruptions that will be caused should the proposed amendments, and especially the amendment of section 134 of the Act, not be accepted. It would, in effect, halt the transformation of the industry and the implementation of the tender for contract system. We therefore propose that clear and specific provision be made in the Act for the acceptance of interim transport plans until such time that transport authorities can design comprehensive transport plans for their areas. These interim transport plans should also be updated on a regular basis. The details of such interim transport plans should be discussed with the relevant role-players in public transport in each area concerned.

As a minimum SABOA would like to have a guarantee that in the design of tenders cognisance has been taken of existing inter-modal arrangements, inter-modal competitive forces and, where such tenders form part of a large network of services, that integration of such services is taken account of in the wider network. This would result in better integrated services and enhance optimal planning in an urban area.

The industry would also like to have a guarantee that when services are put out on tender the transport authority has applied its mind with regard to seamless, integrated, inter-modal services in, especially, the metropolitan areas. In particular, such tenders must guarantee that existing public transport users are not prejudiced by the imposition of services of a lower level of reliability, destination accessibility and affordability than those they enjoy at present. This will have to be demonstrated by the transport authority to the relevant role-players in a formal public transport forum representative of the affected community, business, organized labour and operators in a given operating area.

In summary, SABOA believes that no public transport tender design should in its design, diminish the requirements of Section 18 of the Land Transport Transition Act (Act 22 of 2000)