Palmer Development Group on research into implementation of the NLTTA: briefing; Road Accident Fund Amendment Bill: briefing

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14 August 2002
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Meeting Summary

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Meeting report


14 August 2002

Chairperson: Mr J Cronin (ANC)

Documents Handed Out:

Presentation on research by Palmer Development Group
Key Issues Emerging from the Research by the Palmer Report
Road Accident Fund Amendment Bill [B27-2002]
Briefing on Road Accident Fund Amendment Bill

The Palmer Development Group were asked by the Portfolio Committee to conduct a study on the implementation of the National Land Transport Transition Act. The study focused on three case-study areas: Cape Town, eThekwini and Amatole District. The key issues noted by the Group were lack of funding, lack of capacity and lack of integration of all competencies involved in the transport industry. The study resulted in recommendations on addressing these key problematic areas.

The study revealed a general lack of capacity at the level of operators, transport authorities and municipalities. It also revealed that municipalities were unable to fund road transport planning. Furthermore, there was a lack of funding for capital infrastructure to support the transport industry at municipal level. The study recommended an internal funding regime to build capacity and support the current capacity at municipalities.

The Group argued that a combination of all these factors has resulted in the retardation of progress in the implementation of the Act.

The Committee also considered the proposed amendment to the Road Accident Fund Act. The key issues emerging were the reduction in the number of members of the RAF's Board. Secondly, the fast tracking of the process of appointment of board members to fill vacancies as and when they arise. Lastly what constitutes a quorum with regard to decisions taken by the Board.

Presentation by Palmer Development Group
Overview of findings
Mr Les Recontre introduced his colleague, Ms Gillian Sykes, a consultant at the aforesaid group. Mr Recontre explained that the study focused on three case-study areas of City of Cape Town, City of eThekwini and Amatole District. The study revealed that municipalities were unable to fund road transport planning. Furthermore, there was a lack of funding for capital infrastructure to support the transport industry at municipal level. The study recommended an internal funding regime to build capacity and support the current capacity at municipalities.

He also highlighted lack of capacity in municipalities as well as in the industry itself. He argued that a combination of all these factors has resulted in the retardation of progress in the implementation of the Act. Therefore the study aims at proposing possible amendments to the Act. However, he assured Members that the possible changes to the Act will not conflict with the current work undertaken by the Department. On the contrary, the study seeks to complement the work of the Department.

He explained that the approach of the study was based on interviews conducted with all stakeholders in the three case-study areas. For instance, it was found that rail transport provided the backbone of public transport in Cape Town and eThekwini. However in the city of Buffalo, taxis provided the bulk of public transport. In this regard, the study showed that there is a lack of sufficient enforcement mechanisms. The municipalities were found wanting for lack of capacity to enforce legislation.

This situation emanates from the lack of integrated information systems between all spheres of government. The slow progress in the appointment of registrars impacts negatively on the implementation of the Act. In addition there are inconsistencies regarding the issuing of operating licenses and permits. This resulted from the lack of co-ordination between the registrar and permit boards. Mr Recontre stated that clarity needed to be given on the conferring of ownership rights in cases of death or insolvency of licence holders.

The study also focused on the transportation of farmworkers and found safety standards lacking. Therefore the study suggested minimum safety standards for farmworkers' transportation. Dedicated funding has been proposed for municipalities to ensure adequate funding for implementation of the Act.

Transport Authorities (TA's)
The study showed a massive lack of capacity in transport authorities. Subsequently, it has been recommended that the relevant section in the Act be discretionary rather than mandatory in this regard. In addition, there were problems regarding whether to establish external or internal authorities. Questions were raised as to feasibility of creating these authorities at municipal level. The general view was that a conflict might arise between committees of councillors and the ones at provinces. However, it is necessary to reduce the possible financial burden for authorities based at municipal level. It is also shown that there is fragmentation in terms of transport planning and access to funding. This situation persists due to different financial support programs between the municipalities and the provinces. In conclusion the study revealed a general lack of capacity at the level of operators, transport authorities and municipalities.

In general, there is poor integration between various modes of transport, including at government level. At municipal level there is no integration and co-ordination for land use planning and road transport. There is also limited co-operation between different role players within the industry. Cape Town was singled out as an area with the problem of institutional hostility. This was attributed to poor communication between public forums and transport authorities. The study recommends an industry that is demand driven rather than supply driven one. Therefore there is a need for legislative reform to encourage integrated development planning.

For the full findings and outline of the research, please refer to the attached documents.

A Member asked if rudimentary contracts are ever legal and necessary within the current legislative framework. In addition, he wanted clarity on the progress with implementing the Act based on the observations emerging from the report.

Mr Recontre replied that the former Transkei government issued such contracts, and the question of their legality is uncertain. Therefore existing loopholes allowed buses to operate outside the framework of current legislation. The reasons being that certain clauses of previous legislation are still in operation and this has to change. Progress has been slowed down by lack of funding and limited capacity.

Mr R Ainslie (ANC) asked what problems there were around establishing internal and external transport authorities. He further enquired about capacity building since he alleged that there is massive capacity existing in Cape Town and Durban.

Mr Recontre responded that there could be conflict when transport authorities are comprised of councillors and metropolitan councils respectively. Regarding the existence of massive capacity, he asserted Members to heed call for building of capacity.

Mr N Magubane (ANC) held the view that the taxi violence in KZN must be viewed as a dangerous situation. He lamented over the lack of action by SATACO to eradicate violence in that region, which has claimed many lives. Was there anything being done to address this unfortunate situation? He alleged that killings resulted from the protection of lucrative routes by operators.

Ms Gillian Sykes replied that there is an interim Bus and Taxi Act currently in place to address this issue. She indicated that a commission of inquiry was established to investigate the problem and will make recommendations to the provincial permit board. Mr Rencontre added that there are inconsistencies around the issuing of route-based licenses and permits. He cited the less profitable and lucrative routes as the source of the violence and suggested a regulatory mechanism in that regard.

He also cited lack of co-ordination and problems of linkages and integration. Currently the tender process is being handled without consultation with the municipalities. Therefore the need for liasing between land-use planning and external transport authorities becomes even greater. The study further recommended that public transport be regulated by a single institution.

Briefing by Department of Transport
The presentation by Ms Nomsa Maeko (Department of Transport) highlighted some of problem areas encountered by the Road Accident Fund's Board in taking decisions. The proposed amendment is an attempt to assist the Board in executing its business. He further pointed out the problem that the Board of Road Accident Fund could not utilise the current management fee as it is still awaiting the approval of the Department of Transport.

Ms Maeko indicated that Section 10(1)(a) of the Road Accident Fund of 1996 requires an amendment. The proposed amendment will authorise the Director General to delegate a representative of the Department to be part of the board meetings. The continued absence of the Director General from meetings only serves to hamstring the business of the Fund. It is hoped that this will change the current situation. In general these amendments are an attempt to fill-in vacancies as and when they arise within the Board.

The second amendment seeks to reduce members of the Board from eleven to eight. Currently Section (10)(1)(9) provides for appointment of at least eleven members and no more than twelve. The rationale for the proposal was to enable the Board to transact its business, asserted Prof Rwelamira, Acting Director General in the Department. Therefore practical considerations were taken into account. Ms Maeko stated that there is currently nine members and soon two members will be appointed.

Mr Niemmann (NNP) questioned the wisdom of reducing members of the board to eight and was supported by Mr Slabbert (IFP). Mr Cronin, Chairperson, also requested clarity on what constitutes a quorum of Board meetings. In accordance with the Companies Act, the quorum is formed by fifty percent of members present in a meeting. The DG added that quorum will five members if the board members is reduced to eight.

The Chairperson suggested that the Minister fill vacancies from the shortlist of candidates who were not selected. The DG observed that it might be a useful suggestion but needs careful attention.

The Chair noted that the amendments to the Bill would be formally considered the following Tuesday.

The meeting was adjourned.


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