SANTACO Western Cape & National Taxi Alliance on its readiness for 2010 World Cup

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22 April 2010
Chairperson: Ms N Bhengu (ANC)
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Meeting Summary

The taxi industry in the Western Cape had formed a Consortium. It was fully prepared to play a leading role in satisfying both the transport requirement of Cape Town as a host city for the World Cup and in assisting with conveying passengers to and from the Eastern Cape where accommodation was limited. It had established various systems and logistic plans. However, it had been excluded from playing any meaningful role. Interaction with provincial and local government had been limited. It felt that there was a lack of transparency and information was not being passed on. Contracts had been awarded without a proper tender process to two operators. While it did not wish to inconvenience the public through protest action it would do so if required by its members. It would stand by its obligations to provide its normal transport services during the World Cup.

Members were astonished at the lack of consultation. The presentation contradicted information supplied by the City of Cape Town and the Western Cape province during previous visits. It was agreed that an urgent meeting was needed involving all parties to clarify the situation. While representatives of the taxi industry also raised concerns over the National Land Transport Act and the introduction of the bus rapid transport and integrated rapid transport systems, it was proposed that these discussions be held over for a later date.
Members praised the industry for the role it played in getting South Africans to work, both literally and as a result of direct and indirect job creation and stimulation of the economy. The industry was the prime example of broad-based black economic empowerment.

Meeting report

The Chairperson said that the meeting stemmed from the Committee's oversight role and was in line with ensuring that the guarantee given to FIFA would be delivered. The Committee had visited the Western Cape and had decided that it was desirable to meet with the taxi associations. The plan for Cape Town's transport had been shared and it was clear that the taxi industry was a major stakeholder.

Western Cape Provincial Transport Consortium presentation
Mr Vernon Billet, Chairperson, Western Cape Provincial Transport Consortium (WCPTC), said that the National Taxi Association was not represented in the Western Cape. The initial process had been stalled and as a result the WCPTC had been created. The biggest stumbling block in negotiations with the Western Cape provincial government had been the lack of budget for a transport service. Discussion around the integrated rapid transit system (IRT) had also clouded the issue. The implementation of the IRT was a bone of contention.

Mr Billet said there was a lack of consultation. Only three of the 153 associations which were members of WCPTC had been consulted. There was a lack of transparency. City officials were not forthcoming and the proceedings of meetings were captured inaccurately in the minutes.

Mr Billet said that the Consortium represented both minibus taxi operators and the metered taxi operators. It also represented independent bus companies. The Consortium's plan was to upgrade the capability and capacity of the fleet at their disposal. A business plan and model had been compiled.

Mr Billet said that when Minister Radebe had been present at the beginning of construction of the Cape Town stadium he had said that the World Cup must leave a legacy. Mr Billlet said that the provincial government had issued the tender without proper process. The taxi industry no longer knew which way to turn. Government had no regard for the industry and yet this industry conveyed the majority of workers to and from their places of employment.

Mr Billet said that the fleet available to the Consortium could provide any type of transportation service over any range of distance. Training was important. They were ready for any type of service. They had various sizes and types of bus available, and were prepared to acquire more vehicles if necessary. At present the partners possessed 400 buses, 3 000 minibuses and 500 sedan taxis. More could be used at off-peak hours. The full fleet would be available between the hours of 19h00 and 05h00. There were capacity constraints in terms of vehicles being fit for the purpose and operating licences.

Mr Billet said that a service was needed between the Eastern Cape and the Western Cape. There was not enough accommodation in Port Elizabeth and fans would have to be transported. Government at local and provincial level was telling the industry that there was no budget. In the short and medium term member bodies had been preparing to operate to and from the park and ride sites and for tourism. Non-scheduled service, metered taxis and local mini-buses would be available. Park and ride transportation would depend on contingency and the operation of the so-called “fan jols”.

Mr Billet said that the industry had contemplated a system for ticketing. This would reduce the need to handle cash and the attendant risk of crime. This system was now available for use. Booking engine and other systems had been delivered. The industry was ready to work with the Western Cape government on regulations. Funding was the problem as this was needed for driver training, signage, accreditation and temporary accommodation for drivers. All of these arrangements had been planned with precision. The Consortium's services would be integrated with other forms of transport, and all logistic issues were considered in the plan.

Mr Billet said that the business model was sound. Profits would be shared based on the rewards for the operators. Provision would be made for future operations as the industry moved towards a fully fledged public transport service. A financial model had been created to establish the Consortium. Bridging finance was needed but the WCPTC had been let down badly.

Mr Billet listed some of the obstacles facing the Consortium. One was defining the identity of the Consortium. No funds were available. Tender processes were part of any Government procurement. Mixed signals had caused a budget review. There was a lack of information. The operators wanted control over their own services. There had to be a guarantee of value to the operators. There was a question over market-related revenue for contracted service as to whether this would be a daily rate or by agreement. Profit-sharing had to be determined. There had to be opportunities for every operator. Services had to be delivered without fail. The taxi industry needed to be able to discipline those operators who did not comply with the regulations. Contracts had to be underwritten.

Mr Billet said that the Government bodies were prepared to speak to the industry but were not prepared to make any commitments. This is why the taxi industry had taken to the streets in protest, and would do so again if instructed to do so by its members.

Mr Billet said that another problem for the industry was the National Land Transport Act (NLTA). This Act would disempower the taxi industry. It gave powers to bus operators and Government agencies while taking away most of the rights of the taxi operators. There was an impact from law enforcement and the IRT. The fare for the IRT route between Cape Town and the airport had been set at R50 while some of the members charged up to R200 for the same route.

Mr Billet said that of the 153 member associations, 151 had been excluded from the World Cup process. There was a risk of turf wars. Critical areas were the collection of fares with minimal use of cash, control of prices, the reduction of administrative payments and the introduction of good service level agreements.

Mr Billet said that the industry had been left with nothing just 49 days before the start of the tournament. There had been many discussions but no formal arrangements had been made. There had been no talks for the previous six weeks.  He hoped the Committee could assist in bringing the parties together. When the Consortium had realised that the City of Cape Town (CoCT) had fundamental challenges with the financing of the IRT, the WCPTC had made an unsolicited approach to assist. They would buy the buses needed to supply transport for 2010. The Consortium would provide the funding if CoCT would give them the contract. The Consortium also wanted the right to operate the IRT routes.

Mr Billet said that clarity was needed on the NLTA as it affected operators. He asked if all operators were not affected. The whole system had changed. There was some engagement with CoCT. They had met with the Mayor but there was a lack of clarity and information. Minutes of meetings were inaccurate and there was no progress. The City was paying lip service to the negotiation process. The contract for World Cup transport had gone to two associations, namely the Peninsula Taxi Association (PTA) and the Central Unity Taxi Association (CUTA).

Mr Billet said that the rationale given by CoCT was that the operations of the World Cup fell within the areas of these two groups. They could not answer as to whether the licences granted to the groups were event specific or part of the seven or twelve year periods defined in the NLTA. The same arguments had been used in a meeting earlier that week to explain the decision. The CoCT had never been honest with the industry. There was no truth in the City's assertion that there had been full consultation. The Consortium had made its own approach when it realised that the majority of operators had been left out. They wanted to know what they would be allowed to do.

Mr Billet said they wanted to know if they could operate to and from the public viewing areas (PVAs). The industry had wanted to participate from the onset in all three aspects, namely inner city routes, World Cup routes and airport shuttles. Within the stadium precinct no operator held a licence. The award of the contracts to PTA and CUTA was flawed. WCPTC had consulted with the legal clinic at the University of Cape Town (UCT) with a view to requesting an interdict against the implementation of the CoCT decision.

Mr Billet was at pains to point out that they did not want to bring the country or the city into disrepute. They did not want to have to resort to protest action. The implication of the NLTA was still a grey area. The City was saying that they could issue contracts without a tender process. The Consortium disagreed but thought the city had no right to issue event-specific licences. There was a lack of clarity. The City had not been transparent. There had been no press release to announce the decision taken by CoCT. He did not know how they could do this. The Consortium had applied for copies of the contract under four different names but had only been supplied with the cover letter and not the contract itself. There was a serious change of shareholders. Some had applied to be registered as non-member organisations.

Mr Billet cited parliamentary privilege to name two City officials who stood to benefit.

Mr Billet said that all the Consortium was left with was the servicing of the PVAs and the last mile home market. This represented the crumbs. The operators would not be able to increase their fares. The often already ran at a loss. Even the City Manager had acknowledged that waiting at stations for fans to return from matches at 03h00 was not a viable option. Mr Billet asked if it was worth it to continue trying to get something out of the World Cup. It felt like the proverbial family silverware had already been sold. He asked if the industry as a whole should profit from this opportunity or just a selected few. The Consortium had asked to be part of a work group.

Ms D Dlakude (ANC) said that the taxi industry knew its story well. There was the first time that such a quality presentation had been made. The operators were always seen to be fighting with each other but it seemed that they had now thought out a solution. It was very disappointing that their pleas were falling on deaf ears. The Committee had met with the different host cities and all had said that the taxi industry was involved in their transport planning. The industry had a large following and transported people from all corners of the country. Operators had started their businesses from their own pockets without subsidies. It was disappointing to see them being sidelined. The country did not need bad publicity. There was not much time to resolve the issue. She asked how many meetings had been held with CoCT and the Western Cape Government and what they had said. She asked why the Consortium was no longer involved.

Mr M de Freitas (DA) said there was a need to separate issues. Mr Billet had raised the matters of the IRT, NLTA and 2010. The two former issues should be dealt with at some other time. For the meantime the Committee should concentrate on 2010. The presentation contradicted what the City was saying. He suggested that there should be a joint meeting with CoCT and the Western Cape to sort out matters. It seemed from the presentation that there had been no taxi involvement at all. He asked what was stopping the taxi operators from operating on their normal routes during the World Cup. There was a gap between the provincial and local authorities on the one hand and the taxi industry on the other hand. This had to be resolved before the World Cup.

Mr H Maluleka (ANC) said that there might need a meeting between the SANTACO and CoCT. He saw that there was an action plan. He asked if there was absolutely no contact between the two parties.

Mr Billet replied that the Consortium had met eight times with the Western Cape government since October 2009. There had been seven or eight meetings with CoCT since 2009. The taxi industry had been told by the City that it made sense for the City to continue with its own course of action. The Consortium had warned them that it would convince a judge that CoCT was wrong by exposing the facts.

Mr Billet said that there was no involvement for the taxi industry. They had first heard on 01 April 2010 of the opportunities available to the industry. They would continue to operate on their normal routes as promulgated by the Minister and were obliged to continue to offer these services. This was why they felt so strongly over the matter. Services for the World Cup must not infringe on the normal transport services on offer to the community. Communication with the province had ceased as they had no money to offer. The Consortium had met with the CoCT on the previous Monday and another meeting was scheduled for 27 April. However, these meetings had been a “circus” and a waste of time.

Mr Billet said that the National Joint Work Group (NJWG) had been formed on 11 June 2009. He chuckled at the thought. They had met for the first time in February only due to budget constraints.

Mr S Farrow (DA) said that clear parameters for the commuter association had been discussed more than a year previously. A particular forum had been created but that seemed to have fallen away. A key issue was responsibility and the respective responsibilities of the nine host cities and provincial authorities were clear cut. There was a statement on the award of a contract without a tender process. There were restrictions at provincial and local level. These procedures had to be transparent. Follow-up was needed. The process had to be public.

Mr Farrow noted that R91 million had been paid to consultants. He was aware of the agreement with an American consortium. He was still shocked that their advice had to be called on. He referred to a case had been dismissed but reinstated after a court interdict. Money had been wasted in the process which should have benefited the taxi industry as a whole. All benefits came from the national budget. Budget considerations should have been part and parcel of negotiations in April 2009. As part of fiscal control, plans had been in process for a year. Parliament was no busy with the 2011/12 budget. He asked if the required figure of R31 million had ever been discussed at national level.

Mr Billet said that the consultants referred to were the same ones referred to in his presentation. The taxi industry wanted to see tourists to return to the country whereas consultants wanted to elevate their own status. He was not happy with this situation. The R31 million had never been discussed. The excuse was always that there was no money. The basis of the Consortium's interaction with Government was that it had to accept that there was no money available. He believed that the operators would make a profit and there would be a return on investment.

Mr E Lucas (IFP) said that cool heads were needed. The issue was serious. The taxi industry had come into being when it was most needed. It had served its purpose well. The industry had a bad name. There were many complaints about the standard of driving and the vehicles as well as in-fighting between operators, but the industry must be given its due credit. He was terribly surprised that CoCT could not sit down and discuss the matter. This should not have had to be brought to Parliament. The Committee had heard one side of the story during the meetings held in September. An urgent meeting was needed to save the situation.

Mr Billet said that it was the practices of Government at all levels that caused the industry to take the actions which gave it a bad name. Drivers and operators could not afford to maintain their vehicles. They could not compete against subsidised services. The community had to be assisted with fares. They could not afford to pay market related fares. He had laid charges against the Golden Arrow bus company in 2003 on the grounds that they had defrauded Government by manipulating clip card purchases. Although Golden Arrow was found guilty their punishment was a mere slap on the wrist.

A member of the SANTACO delegation said that the NJWG had had one general meeting since it was formed and one executive meeting.

Ms Dlakude asked how the body had been involved during the Confederations Cup in 2009. She asked what local government had expected would have happened. Only two of over 150 taxi associations had been involved and contracts were awarded without tenders. The Committee was prepared to assist WCPTC. An urgent meeting was needed with the city and the province so that the Committee could hear the other side. It was a very serious matter. Only one operator serviced all the airports in the province. All operators had to benefit from the World Cup.

Mr Billet said that they had not been involved with the Confederations Cup as the matches had been played mainly in Gauteng and Bloemfontein.

Mr Farrow said that the most important thing was that there should be a legacy aspect of a sustainable taxi industry. This was the position of national Government. Government recognised the taxi industry. If this was not the case then they would not have been involved at high levels. He was disturbed to hear that the there had been so few meetings. Similar sentiments were being expressed in other host cities. There were other operators outside of SANTACO. These were the people at the coal face. They would be affected by public transport projects such as the Bus Rapid Transit (BRT) system and the IRT. Taxis would be affected. In one city it was estimated that the introduction of IRT would see 550 taxis being taken off the road, and 240 in another. The affected operators might be part of the consortium managing IRT. These were facts. Operators would go out of business or would have to be part of the IRT process. He asked if PTA and CUTA had a negotiating mandate from WCPTC. He asked if SANTACO spoke to its affiliates.

Mr H Williams (General Secretary, SANTACO Western Cape) said that the talks had been about 2010 and not BRT. The deals with CoCT had been hidden to benefit the two associations. They were part of the IRT discussions. The Mayor had been told to involve all 158 associations.

Mr Billet said the mandate for discussion on the BRT was completely different. Taxi operators would still have to render their normal service. They would be in violation of their licence agreement if they did not do so. 2010 was a specific event.

Mr Lucas said that the Committee must see if it could arrange a joint meeting. This was the shortest way to achieve a solution.

Mr Maluleka agreed.

The Chairperson said that the information provided by CoCT and the Western Cape had been different. Members needed a common understanding to determine what was correct. When the 2010 World Cup had been awarded to South Africa, the President had said that it was a time for Africa to be a showcase. The event would benefit all. The Chairperson said that the most prominent sector in public transport was the taxi industry even though drivers often resorted to violence and showed no respect for the communities they served. Even so they provided a valuable service.

The goal of the transformation process was to narrow the gap between rich and poor. Those who had not enjoyed the opportunities in the past had to be given a chance to enter the economic mainstream. Another consideration was broad-based black economic empowerment (BBBEE). This was very important for the taxi industry. The Committee was clear that the taxi industry was the BBBEE component of the transport sector. They were omnipresent albeit mainly in the black areas

There was no common understanding between national, provincial and local Government. It was important for the spheres to find each other. The taxi industry must not be suppressed nor must their share be taken away. She was not saying that the BRT was a bad project, but Government must see how the taxi industry could benefit.

2010 was a great opportunity for South Africa and Africa in general. It was a question of how the host cities involved the taxi industry in their development of their transport plans, and how the industry could benefit. She did not believe things should be done for the people, but rather with the people. Government had long emphasised the policy of public participation.

The Chairperson wanted to engage the city and the province to get the common information. She thanked members of the taxi industry for providing a highly needed service despite the scant recognition they received. A number of jobs had been provided. Some of these were directly employed such as the drivers and rank managers while others were indirect, for example the food vendors at the taxi ranks. The industry also sustained other, well-established businesses such as the fuel industry, financial services, tyres and insurance. She wished to see the taxi industry as a formal business which could invest in all modes of transport and which could diversify itself. This was the only industry which could really be described as BBBEE. She promised that the Committee would revisit the issues raised. It meant business. The Minister was serious, as he had made clear in his budget speech, and the President was equally serious.

The meeting was adjourned.


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