National Land Transport Transition Act: hearings

Meeting report

TRANSPORT PORTFOLIO COMMITTEE; PUBLIC SERVICES SELECT COMMITTEE: JOINT MEETING
21 August 2002
NATIONAL LAND TRANSPORT TRANSITION ACT: PUBLIC HEARINGS

Chairperson: Mr. J Cronin

Documents Handed Out:
Presentation by Department of Transport
Presentation by South African Bus Operators Association (SABOA) [Appendix 1]
Presentation by South African Commuters Organization (SACO) [Appendix 2]

SUMMARY
The Committee afforded the Department of Transport the opportunity to respond to the study conducted by the Palmer Development Group (PDG). The study, commissioned by the Portfolio Committee, was intended to assess progress made with regard to the implementation of the National Land Transport Transitional Act (NLTTA). The Department noted their agreement with some issues raised in the study. Further, he noted that the DoT is committed to the progressive implementation of the NLTTA. He contended that the NLTTA is transitional act, which requires broad consultation of stakeholders.

Then SABOA highlighted areas of concern in provision of bus services within the ambit of the NLTTA. Its major concern was the tendering process and the effect of black economic empowerment on growth and efficiency of the bus industry.

MINUTES
Presentation by Department of Transport
Mr Jerry Makokoane: General Manager, Department of Transport, thanked the Committee for the opportunity to react to study by Palmer group. The Department held the view that the research was biased and certain provinces had been omitted. Notably Gauteng province, which was not included in the studystudy on implementing the NLLTA. Gauteng is a nucleus for a number of other provinces and have specific challenges with regard to inter-provincial transport and boundaries for the establishment of transport authorities.

Operating Licenses and Registration
The NLTTA does not clarify mandate with regard to the role and function of the licensing board vis a vis that of the province. The lack of clarity may result in conflict between the Board and Province. Furthermore, clarity is required on the transfer of ownership rights in respect of operating licenses. The Department pointed out that vehicle fitness; competency, previous offenses and conflict of interest should serve as the criteria for the transfer of operating licenses. This is an attempt to address the transfer of operating licenses in cases of insolvency, death and any eventuality. In addition, applicants for operating licenses must certify to the permit boards that they are registered taxpayers.

The Department believes that the board should advertise the allocation of routes-based permits as and when they arise. The measure is aimed at doing away with the issuing of permits on an ad hoc basis. Therefore the Department agreed with issues raised in the study.

Transportation of workers
The Department shared the concern of the board on transportation of farm workers. Mr Makokoane stated that the NLTTA sets out circumstances in which operating licenses may be granted for transporting staff services. He referred members to regulations of the National Road Traffic Act, 1999. The statute regulates the convergence of persons in goods vehicles. In regard to farm workers services, the convergence in goods vehicle must be above the height of 350mm from the surface upon which the person is seated. Any convergence of farm workers contrary to the regulation in question is prohibited. He noted that during the past year, twenty lives were lost due to overloading in the transportation of farmer workers in Mpumalanga alone. The Department proposes further investigation on this issue.

Minibus taxis and tour Operators
Mr Makokoane alluded to the issue of minibus taxis and tour operators as the NLTTA does provide guidance. The provincial authorities need to fast tract regulation of the minibus taxis and tour operators within the context of NLTTA. He submitted that his Department views the NLTTA as a transitional regulating mechanism. However he also admitted that the NLTTA is a very complex piece of legislation. It was noted that there is a lack of capacity to monitor and enforce compliance. The Department is hoping to develop a planning programme and plans to hold public hearing. The NLTTA provides for public participation in the implementation process. The Department has consulted broadly with provincial and local authorities in the previous week. The purpose of this consultation was to foster cooperation in the process of implementing the NLTTA.
He highlighted the tendering contracts as the most difficult to monitor.

He told the Committee that the DoT is currently upgrading its IT system and admitted that there have been problems in keeping records. He denied that the compatibility of the system is a problem as alleged in the Palmer Group study. The allegation cannot be reconciled to the fact that the DoT has a similar system. He assured Members that developing the IT system does not mean that DoT is absolving provinces and permit board from keeping records manually.

Legalisation and Registration
Mr Makokoane referred Members to the chart-flow that illustrates the difficulties and challenges in implementing the NLTTA. The NLTTA requires that buses be registered, but only Gauteng is currently involved in the registration of buses. The chart-flow reflects steps to be followed in ensuring there is no ambiguity arising.

Planning Frequency
The NLTTA outlines the planning and budgeting process to be followed. The Dot accepts that the planning targets set are too short. But the Department has already instructed provinces to meet adjusted target dates. He argued that planning and budgeting are intertwined; hence the Australian model is instructive in this regard. The local municipalities and provinces must take cognisance of funding challenges. Lack of coordination at provincial and local level creates problems and needs to be looked at.

In conclusion, the Department noted their agreement with some issues raised in the study. Further, he noted that the DoT is committed to the progressive implementation of the NLTTA. He contended that the NLTTA is transitional act, which requires broad consultation of stakeholders.

The Chair thanked the Department for what he called a "non-defensive response to the Palmer Development Group report". He then emphasised the need for interaction amongst all stakeholders in the interest of public transport.

Discussion
Mr Ainslie (ANC) asked for clarity on the compatibility of records of licensing authorities. He substantiated that the question arose from the submission by DoT that the IT system is compatible whereas the study reveals a different picture.

Ms Nothnagel: Department of Transport, replied that they have already started reaching certain levels of compatibility using a computerized register system. The Department admitted that there is a lack of compatibility but this is being addressed. Mr Mokokoane cautioned that compatibility is not major problem as the current software used in issuing licenses is similar.

Mr Farrow (DP) wanted to know if there is enough capacity to implement the NLTTA. He wanted to know how many posts have been filled and still need to be filled in this regard.

Ms Nothnagel replied that there is a specific director assigned to deal with implementing the NLTTA. The DoT is currently conducting interviews in order to consolidate capacity in respect of the NLTTA. However, she acknowledged that there still need to skills development and capacity building.

Mr Slabbert doubted the rationale of funding the study by the Palmer Development Group. He submitted that the NLTTA is unenforceable and difficult to implement. The Chair replied that the research was necessary to enable Parliament to monitor the progress and challenges in implementing the NLTTA. It will also assist the Committee in fulfilling its oversight role.

A Member asked for clarity on the difficulties encountered in the transportation of farm-workers as this is a sensitive issue and very close to his heart.

Mr Mokokaone replied that there are enormous challenges facing the Department regarding problems of farm-workers transport. The research commissioned by DoT proposes the creation of pilot projects in specific rural communities aimed at addressing the dynamics of farm-worker transportation within the framework of the NLTTA.

Mr Pillay (DP) wanted to know why the Australian model was being used in place of other developing countries being used as models.

Mr Makokoane answered that the Department found the Australian model to have been better compared to others. Therefore the Department merely wanted to illustrate how success could be achieved using this model.

Ms Majodina: Chairperson, Select Committee on Public Services, raised her concern that the study appears to have shown bias against the rural communities. She argued that the thrust of the study focused mainly on urban and affluent areas of our country.

Submission by South African Bus Operators Association
Prof J Walters presented the submission on behalf of SABOA. One of the issues focussed on in their submission is the funding of law enforcement. They noted that funding is important in the monitoring of public transport services to ensure that operators operate in terms of their permits, render acceptable standards of service, and do not transgress on each others routes. This form of law enforcement is one of the main pillars of the regulated competition objectives for public transport in the NLTTA. He submitted that the industry is extremely concerned about the lack of capacity to deal with this type of law enforcement.

They also argued that high level talks should be embarked upon to solve the funding of the tender/negotiated contract system in the country. (for the full submission, please refer to the attached document).

Discussion
Mr Farrow (DP) asked how the NLTTA impacts on the bus industry, taking account of the competition offered by state-owned buses.

Prof Walters said the existence of competition in the form of state-owned buses is the reality that private bus companies have to live with. However he hoped that the government could facilitate the privatisation of such buses in order to encourage fair competition and stimulate growth within this sector.

Ms Mnumzana wanted to know the role and approach of SABOA on Black Economic Empowerment (BEE). What is their proposal and how are skills to be transferred within the context of BEE? Prof Walters replied that his organization agrees with the concept of BEE. But he warned that random implementation may result in breaking of monopolies and create chaos within the bus industry.

Mr Ainslie (ANC) asked what the problems are regarding funding of the tendering systems within the bus services industry.

Prof Walters singled out the negotiated contracts as being problematic. The negotiated contracts are currently not being regulated and operate as a business practice. He submitted that there is subsequent uncertainty in this instance. He also alluded to the indefinite moratorium on the tendering system. The indefinite moratorium has resulted in a decrease in sales. This uncertainty is retarding the flow of investment within the bus service industry.

Prof Walters said that city buses are not subsidized and used different permit boards to apply for permit. This results in lack of uniformity in bus service industry.

Mr Mokokaone acknowledged there is a moratorium on the tendering system and as such has resulted in unintended consequences. He suggested that the Public Finance Management Act (PFMA) bars the DoT from lifting the moratorium. Therefore the moratorium is in conformity with the Act in question.

Mr Ainslie (ANC) asked if the PFMA sets out the limit of eleven percent for the tendering system.

The Chair replied that PMFA forbid the DoT to further award tendering contracts for bus services when there is no funding. [The submission by SABOA explained that sufficient financial provision has not been made to implement the tender/negotiated contract system. The lack of funding, as well as guaranteed funding for the duration of a contract (as is required in terms of the PFMA Act) is put forward as some of the reasons for the current moratorium on further contracts.]

Mr Mokokaone commended the representatives of SABOA for their constructive participation in the implementation of the NLTTA. Prof Walters accepted the perspective of the DoT on the NLTTA process. He urged the DoT to appreciate the complexity of operating the bus service within the current legislative framework and appealed for a more structured approach. The objectives of BEE can be advanced without inflicting harm on the efficiency of the bus industry. He suggested that the equity of blacks within the bus industry is critical to government policy, then pledged that SABOA is willing to engage constructively with DoT in the interest of commuters and the industry as a whole.

Submission by SACO
SACO submitted an analysis of the legal framework provided by the NLTTA. They said it was important to note that the delay in implementing some of the provisions of the NLTTA is not only frustrating, but not doing public transport a favour. There are some of the policy directives that have been agreed upon that need implementation. The whole public transport system will simply collapse or lose confidence of the people it is geared to assist.

Mr Farrow (DP) wanted to know the extent of the participatory role of SACO within the process of implementing the NLTTA.

Mr Sangwene, President of SACO, replied that his organization has been involved since 1989 in matters affecting commuters. Although it has branches in major cities, plans are afoot to launch branches throughout the country. He stated that SACO serves as custodian of commuter interests. The reality of public transport in our country is that is meant to serve the overwhelming majority of blacks.

A Member expressed his concern regarding the payment of exorbitant fares charged commuters. He therefore urged all parties to consider a review of housing developments. Mr Cronin also alluded to the housing development that is pushing people further away from the location of transport facilities. The Chair also asked if it is not fair to cross-subsidise poorer municipalities by historically richer municipalities. He submitted that considerations of equity requires that cross-subsidy be permitted.

Ms Majodina urged SACO to consulting with transport authorities at municipal level as there are local transport forums. The Chair submitted that unless SACO pushes transport issues on the agenda of local municipalities, transport issues will continue to be neglected. Mixing transport issues with housing and other critical issues may open debate on transport.

Mr Sangwene urged Members to consider funding for commuter's organisations. He argued that such is the case in Britain, where the government provides funding for commuters' forums and organisations.

There were no further questions and the public hearings were adjourned for the day.

Appendix 1:
SABOA SUBMISSION TO THE PORTFOLIO COMMITTEE ON
TRANSPORT
21 AUGUST 2002
COMMENTS ON THE REPORT ENTITLED :"KEY ISSUES EMERGING FROM BACKGROUND RESEARCH ON THE PROGRESSIVE IMPLEMENTATION OF TRANSPORT PLANNING IN TERMS OF THE NATIONAL LAND TRANSPORT TRANSITION ACT (2000)"

1. INTRODUCTION
   
   In studying the report SABOA wishes to restrict its comments to issues raised in the report that are of importance to the entire bus industry and will therefore not comment on the specifics of the report.
   
   2. THE FUNDING ISSUES RELATING TO THE NLTTA
   
   The funding issues relating to the implementation of the NLTTA have on numerous occasions been raised by the Association. These issues relate not only to the actual funding of the tender for contract or negotiated contract system, but also the funding necessary to create the required institutional structures at the local sphere of government, and the staffing of such institutions. Funding is however also important in the monitoring of public transport services to ensure that operators operate in terms of their permits, render acceptable standards of service, and do not transgress on each others routes. This form of law enforcement is one of the main pillars of the regulated competition objectives for public transport as foreseen in the White Paper on National Transport Policy (1996) as well as the NLTTA (See amongst other section 31 of the Act). The industry is extremely concerned about the lack of capacity to deal with this type of law enforcement.
   
   Funding issues related to the provision of transportation services for the disabled also need to be addressed as this matter is receiving high level attention and the industry will have to comply in one way or another.
   
   2.1 Moratorium on further contracts
   
   A moratorium on the issuing of further contracts has been declared by the NDoT. Reasons forwarded are two-fold:
   
   · A lack of adequate funds, as well as guaranteed funds for the duration of contracts.
   The unresolved dispute about the Tripartite Heads of Agreement.
   2.1.1 Funding the tender for contract and the negotiated contract system
   
   In the conceptualization phase of the White Paper as well as the conceptualization of the new dispensation of regulated competition through amongst other the tender for contract system, it was foreseen by government and operators that in the first phase of the system, that public transport costs would increase and then taper off in subsequent phases. The reasons for this phenomenon are as follows:
   
   · It is expected of the industry to re-capitalize its rolling stock and therefore to reduce the average age of the fleet from about 13,5 years to about 10 years. This would happen through the tender system. It is therefore understandable that the costs of the industry, post implementation of the system, would be higher - if only seen from a capital renewal point of view.
   
   · Apart from bus bodies, bus chassis, engines, gearboxes, differentials etc. are imported, thus making the industry vulnerable with regard to exchange rate fluctuations. This also gives rise to higher costs within the industry.
   
   · Labour and other operating cost items such as diesel have increased substantially over the last number of years thus negatively affecting the cost structure of the industry. This has been especially prevalent over the last two years with the increase in the price of diesel and the devaluation of the Rand against the Dollar and other major currencies.
   
   · Due to inherent financial risks concerning the revenue base within the tender system, and upon which operators have to tender, it could result in higher costs.
   
   · The bus industry in South Africa has been exposed to inter-modal competition for a long time with the de facto deregulation of the taxi industry. The companies have adjusted their businesses in line with this form of competition and the magnitude of savings expected from a competition point of view would therefore not be the same as in other countries where protected bus services were opened up to competition.
   
   Against the background of the rationale for cost increases, or the lack of substantial savings through the introduction of the tender system in the country, as discussed above, it is therefore not understood why sufficient financial provision has not been made to implement the tender/negotiated contract system in the country. The lack of funding, as well as guaranteed funding for the duration of a contract (as is required in terms of the PFMA Act) is put forward as some of the reasons for the current moratorium on further contracts.
   
   It is SABOA's opinion that this state of affairs is unacceptable as it negatively impacts on businesses and their employees. Furthermore, the association has no indication as to when the situation will be resolved, if ever. In the mean time operators are waiting for their services to be put out to tender and have the most difficult task of communicating this very sensitive issue to their employees. This causes uncertainty and low morale.
   
   It is the association's view that high level talks should be embarked upon to solve the funding of the tender/negotiated contract system in the country.
   
   2.1.2 Dispute about the Heads of Agreement (HOA)
   
   The Tripartite Heads of Agreement is a contract signed on 10 September 1999 between the NDoT, SABOA and organized labour. The purpose of the agreement is to govern the transition of the bus industry from a protected industry to an industry that will face competition through the tender for contract system - regulated competition. The agreement made specific provision for amongst other the following:
   
   · "The government will, as a general principle, in the first round of tendering following the interim contract, undertake to do all in its power, through the specification of the tender document and other measures mentioned below (by limiting set-asides, cutbacks, sub-contracting requirements etc. in the tender documents) to minimize lob losses and potential job losses in the bus industry. The government will also prevail upon the provinces to strictly adhere to such requirements. Notwithstanding the provision of this paragraph, government remains committed to its economic empowerment objectives with regard to previously disadvantaged communities, and all requirements for tendering in this respect, including those mentioned in this agreement shall remain in force".
   
   The agreement goes on to spell out in detail the transition arrangements from the interim contract system to the tender for contract system. The agreement is also very specific in its endeavours to protect jobs within the industry. It is therefore a major agreement that governs the transition of the industry and understandably the industry is not in favour of amending the agreement in the midst of the transition process. The industry is however prepared to discuss and clarify certain aspects, without compromising the existing agreement, unless consensus could be reached on proposed amendments where after the agreement could be amended.
   
   Due to pressure from government as well as organized labour to amend and discuss aspects of the agreement, two workshops of two days each were held earlier in 2002. These workshops were facilitated by an independent facilitator. A number of major issues were highlighted by the respective parties to the agreement that needed to be discussed.
   
   Following the workshops, the industry is of the view that progress was made and that concessions were agreed upon. Some of the remaining issues were however not discussed by the end of the last day of the workshop series. At the end of the last workshop day (15 March 2002) the NDoT effectively withdrew from the process and promised to communicate with labour and the industry within 14 days about the way forward. On the same day the NDoT also announced a moratorium on further contracts that would be effective from that date. To date no progress has been made despite a number of requests from the association to the NDoT to clarify its position.
   
   2.2.3 Summary on the lack of progress with the implementation of the tender system
   
   From the above points it therefore appears to be two separate moratoriums on the tender for contract system - one related to funding issues and the other to the HOA issues. The industry finds it unacceptable that there appears to be no progress. On the HOA specifically, there has been no formal communication - as promised by the NDoT, on the way forward as seen by the department. This lack of clarity and direction on major policy issues is disturbing. The industry is more than willing to enter into further discussions with the department in order to resolve the policy issues.
   
   3. RESTRUCTURING OF THE BUS INDUSTRY
   
   SABOA is committed towards the transformation of the industry. This is evident in the HOA that regulates the transition from a protected industry to an industry that faces competition. Furthermore, the HOA is clear about the empowerment of SMME's and previously disadvantaged groups within the industry. (The HOA is a negotiated agreement between the industry, government and organized labour that ensures an orderly, structured and evolving process). The industry remains committed to the HOA as part of the transition process, but is concerned that government appears to be of the view that the transformation process is taking too long and is too slow and may want to change the "rules of the game" mid-stream.
   
   It is also SABOA's firm view that the stalled process mentioned above, is hampering the further transition of the bus industry. Our research indicates that more than 60 new operators have entered the commuter bus industry through the tendering system. The vast majority of these operators were previously excluded from subsidized services. These operators were mostly existing bus businesses that took the opportunity to get involved in the tender system as stand-alone operators, sub-contractors or joint venture operators. The services operated by most of the larger operators have to date not been put out to tender, apart from KwaZulu Transport. (Only services in Gauteng, KwaZulu-Natal and the Free State have been put out to tender. A negotiated contract was concluded late in 2001 with an operator in the Limpopo province).
   
   With regard to the general lack of capacity from a business point of view within the SMME - type operators, the industry concurs and has for a number of years, through SABOA and in association with RAU, developed passenger transport training programmes. SABOA has also developed a training manual for SMME operators through its SABOA Development Foundation and in association with the transport SETA.
   
   A major problem faced by small operators is also the inability to access capital to acquire buses. This is a major stumbling block to encourage new "stand alone" businesses, as
   
   most of the smaller operators lack credit records or are not considered credit worthy by the financial institutions due to amongst other defaults and bad credit records. SABOA has had numerous workshops on this issue in an effort to address the difficulties faced by these operators. It nevertheless remains committed to introduce more bus operators from previously disadvantaged groups into the main stream of formal business in South Africa.
   
   4. ADMINISTRATIVE CAPACITY
   
   The association is in agreement with the finding of the study regarding the general lack of administrative capacity. This is evident in especially some provinces where there are large backlogs in the processing of permit applications and issuing of such permits. In some provinces there are also moratoriums on the issuing of further permits. This situation hampers the smooth provision of public transport services and is adversely affecting the communities that are dependent on public transport.
   
   There is also a major concern about technicalities that underlie cross-provincial border transport. Some provinces do not accept permits issued by Permit Boards in other provinces. The entire administrative system that underpins cross-provincial border permits is also cumbersome and needs to be reviewed to improve system efficiency.
   
   5. CONCLUSION
   
   In conclusion, SABOA wishes to re-iterate that it is prepared to work closely with the relevant institutional structures to resolve on-going policy issues. It is in the general interest of not only the industry and its employees, but also in the interest of commerce and the millions of passengers that depend on its vast array of services.

• 
  Appendix 2:
  1.INTRODUCTION AND BACKGROUND
  
  1.1 Introduction
  
  SACO's inputs are rather a response to what seems to he a thorny issue to the exponents of public transport. As a matter of fact, SACO does fully support the notion of promoting public over private passenger transport. The user-oriented transport policy of South Africa is engulfed in the National Transport Policy of 1996.
  
  The main objective of SACO's inputs is to, inter alia, analyse the provisions contained in the NLTTA that have to be implemented to give effect to the spirit and letter of the legislation and policy directives that have been adopted. In this document, we have refrained from commenting on the specific findings of the consultants at any of the study areas, but concentrated much on a helicopter view of the crosscutting issues relating to the issues identified in the discussion document. We are moving from the premise that the concerns and problems identified are the same all over.
  
  1.2 Background
  The government believes in the principle of subsidiarity in terms of which the decisions pertaining to public transport and related matters are devolved to the lowest level of governance. In terms of the Constitution, certain powers and functions currently being carried out by other competent levels of governance such as the provincial and/or national authorities or agencies, have to be devolved to the lower level of governance.
  
  2. IMPLEMENTATION OF THE NLTTA
  
  The major issues relating to the implementation of the NLTTA include, inter alia, the following:
  
  2.1 The Registration Process
  2.1.1The Taxi Industry
  In April 1995 the NTTT was formed to gather information from all relevant stakeholders. Its main objective was 'To investigate problems and issues within the taxi industry and to formulate solutions and/or policy options for recommendations to the National Minister/Ministerial Committee of Ministers of Transport (MJNCOM) to ensure the short and long term sustainability of the industry so that it can play an equitable and competitive role in order to promote an effective and efficient public transport system."
  
  The NTTT consultative process was started with a view to actively engage the taxi industry in the transport policy formulation process. The process brought the warring taxi associations together to identify issues and problems facing the taxi industry, make recommendations, and to pave the way forward for the development of a viable business oriented industry.
  
  In an attempt to regulate the industry, a Be Legal campaign was embarked upon by the province in conjunction with the local authorities. The registration of tax associations and the Special Legalisation Process (SLP) has been completed. Vigorous law enforcement was thereafter required to ensure that only roadworthy vehicles with legal permits
  operate on the routes allocated. Effective law enforcement would eliminate illegal operations.
  
  Minibus-taxi operators are required to operate according to the permits issued by the Local Road Transportation Boards (LRTBs). Most of these permits are indefinite. However, in recent years, there has been an attempt by the Provincial Permit Board to limit the duration of newly issued permits to five years or less. There is also a process to convert radius-based permits to route, and the taxi route colour-coding indicating the routes and ranks. The conversion process will assist the Operating Licensing Board in making informed decision when considering an application for an Operating Licence.
  
  2.1.2 The Bus Industry
  
  The government has in some areas such as Gauteng launched the registration process of buses (and metered taxis as well) to determine who is who in the public passenger transport sector.
  
  2.2 Operating Ucences
  
  Section 33 of the NLTTA provides that no person may operate a road-based public transport service without holding the necessary permit or operating licence, or a temporary permit in terms of the Road Transportation Act of 1977, or an authorization obtained or completed in terms of a replacing provincial law, for such special event.
  
  There is also the Moving South Africa Strategy (MSA) which largely endorses the principles in the White Paper. It emphasizes strategies such as densification of land-use in transport corridors, optimizing modal economics and the service mix to meet customer needs, travel demand management, and improvement of firm level performance and productivity.
  
  This document is attempting to describe the relevant policy issues relating to the preparation of an OLS. However, most of the policy issues are prescribed by the NLTTA, i.e are coming directly from the national, provincial and local government levels policy directives. There is however still plenty of room for policy formulation at local level as the process of transformation in transport goes.
  
  The purpose of the OLS is to ensure uniformity in the manner in which the local authorities should respond to the provincial Operating Licensing Boards upon applications for the Operating Licenses. Such a response should be based on the present available information and the status of planning.
  
  The OLS is meant to set out the parameters and criteria which are to be used by Planning Authorities to make recommendations to the Operating Licensing Boards (0 LBs) which will enable them, in disposing of applications regarding Operating Licenses, to achieve a balance between public transport supply and utilization that is both effective and efficient.
  
  In the formulation of the OLS, all three modes will have to be taken into account, especially in terms of the total transport demand (utilization) and the overall supply (capacity) that includes all modes of transport. The respective role of each mode for both the entire region and by corridor, reflecting the intended optimum modal share in broad terms should be determined. An OLS should contain detailed proposals with regard to each corridor or route for which applications are to be considered.
  
  At the heart of the OLS is the systematic evaluation of corridors, routes and facilities within the planning area in terms of available capacities, and the identified need for services. This process must, however, take into account the anticipated role of the different transport modes, the possible duplication of transport services and other planning consideration which may impact on the achievement of the stated objective of balancing public transport supply and utilisation in both the short and long term.
  
  The thrust of the OLS would be on assisting the OLB to make informed and sound decisions when applications for the awarding of new permits and/or the amendment or extension of the current permits are made. An effective OLS should enable the Planning Authority to make good recommendations that will enable the OLB to reach a decision whether to grant or refuse the awarding of new permits and/or the amendment or extension of the current permits.
  
  2.3 Transport Legislation And Planning
  
  It is a well established fact that policy directives per se are not enforceable, unless, of course, they find their way through to the legislation. Hence the National Land Transport Transition Act, 2000 (Act No.22 of 2000) was promulgated.
  
  The NLTTA gives effect to the national Constitution and national transport policy directives contained in the national White Paper on Transport, 1996. This piece of legislation (NLTTA) is very much important, and clearly sets out the principles and policies for national transport reform and the responsibilities of each sphere of government.
  
  The national Department of Transport (N DoT) promulgated the NLTTA to lay out national provisions that have to be adopted in order to attain uniformity across the spectrum, and also to serve as a guideline piece of legislation which the provincial authorities have to adopt and customize where necessary to suit their particular circumstances
  
  With regard to the Metropolitan Planning Authorities, transport planning has been done for many years and the preparation of Public Transport Plans and the Integrated Transport Plans may already be in advanced stages. Information and parts of the plans may be available, including aspects such as policies, goals and objectives, land-use frameworks, and any medium or long-term planning or restructuring of public transport.
  
  The RATPLAN and the OLS would both be taken up in the Public Transport Plan. The latter would, in turn, be an element of the Integrated Transport Plan. Law enforcement also forms a vital link with the control of the licences issued and should form part of any of OLS.
  
  2.4 Transport Authorities
  
  2.4.1 Background
  
  The main purpose for the establishment of a Transport Authority at the local level is to give effect to the national and provincial transport policies and legislation, and to foster improved transport service delivery to the local residents of the concerned municipality.
  
  The idea is to enable the local sphere of government to efficiently and effectively undertake, to the extent that it would be possible, the responsibility for public transport function at local government level.
  
  In determining the boundaries of a TA, the following criteria will be considered:
  · Dominant passenger movements;
  · Economic Inter Dependency;
  · integrated Land Use and Transport Development Potential;
  · Efficiency and Effectiveness of Transport Provision;
  Demographic, Natural and Geographical Factors and Characteristics;
  · Capacity to perform the TA function;
  · Other criteria
  
  One of the factors that are relevant to determining the boundaries of transport areas is, as quoted from the Act, "the extent to which public transport services are provided and operated effectively and efficiently within the area".
  
  The analysis of the efficiency and effectiveness of the transport system relates to the management needs of the transport function and whether or not public transport in the area is of such a nature that it warrants the establishment of a TA for a specific area. It therefore also relates to how efficient and effective the current system is. In essence it means that if there are no meaningful transport activities in the area that need to be managed by a TA, as intended by the Act, then there is no need to create a management structure (TA) for the function. Furthermore, the size and the efficiency of the system would also dictate the extent of the need to manage the function.
  
  The latter also means that even though the volume of the transport activities could be extensive, if the current situation is fairly effective and efficient then it would be questionable whether a different institutional arrangement is necessary. The more complex a situation presents itself, the more there is a need for control and management measures.
  
  2.4.2 Capacity
  
  Section 11 of the National Land Transport Transition Act, 2000 provides for factors to determining boundaries of transport areas, and thus include "whether there is a capacity within the area to perform and carry out any technical or specialised functions or work necessary for or arising from the governance of a transport area in terms of this Act".
  
  The successful implementation of a TA will of necessity require the necessary institutional support structures and resources of a different nature, including:
  
  Human Resources
  
  Powers and functions of a TA are wide-ranging and enormous resources will be required to carry out those functions effectively and efficiently. Currently some of those functions that are supposed to be carried out at this level are being carried out elsewhere by the other government organs, including the provincial government and agencies such as the SARCC. Should these powers be devolved to the metropolitan level, relevant resources and expertise will be required.
  
  There TA is supposed to be comprised of the democratically elected Councillors. The day-to-day running and management of the TAs will be carried out by the Transport Executive (TE). These two bodies are the most important if the TA has to succeed. The problem is that the local authorities do not seem to have enough human resources capacity and expertise to take this challenge.
  
  
  Infrastructure, Facilities and Equipment
  
  The properties, extent and spatial position of the following infrastructure within the area is identifiable. By infrastructure, facilities and equipment it refers to issues such as the properties, extent and spatial position of the following infrastructure within the area is identifiable, namely:
  
  · Road network
  · Rail Network
  · Public transport termini
  · Public transport and off-loading point / bays
  · Train stations
  · Model transfer facilities
  · Public transport routes
  
  3. PROBLEMS NOTED
  
  3.1 Public Participation
  
  The Reconstruction and Development (RD P) requires development to be a peopled driven process involving all members of society across the South Africa spectrum. People should be actively involved in defining and meeting their needs. Where attempts at development are being made without the active participation of all role players or are aimed at passive beneficiaries, these efforts do not achieve the intended purpose and are likely to produce negative results.
  
  The intended beneficiaries should be involved right from the planning stage of all developments. Local communities appear to be in the best position to determine needs in order of priority for possible negative consequences of new developments to be avoided.
  
  To achieve the maximum benefit of engaging the relevant stakeholders in public transport developments, the following assumptions can be made:
  
  · ensuring that they express genuine support for and ownership of those developments;
  · ensuring that they elect their legitimate representatives to the structures established;
  · ensuring that they are given the opportunity of expressing their views on public transport developments that may adversely affect them;
  · ensuring agreement on the co-ordination of support systems and communication procedures;
  · ensuring that there is adequate feedback to the stakeholders on matters affecting them;
  · ensuring that the elected or appointed structures acquire all the relevant information on time, understand and evaluate it, and arrive at a decision; and
  · ensuring that there is an agreed timeframe and clear guidelines for institutional structures.
  
  The role played by the NDOT cannot be emphasized further. The latter department provides guidelines for uniformity throughout the country on issues of national interest. The NDOT provides the basis upon which other levels of governance, namely the provincial and local levels will take queue.
  Due to lack of capacity or efficient public transport system in South Africa, in most instances, public transport users are being left with no choice of mode of transport that they prefer, or if there is any choice at all, that choice is very much restricted. In most cases, the users are restricted to particular modes of transport, and do not have a choice of mode. For instance, some communities are not relying only on the availability of the minibus taxis, but have also resorted to the use of the 4+1 sedan taxi type services.
  
  The moving South Africa Project (MSA) has identified six passenger customer segments, namely:
  
  · Strider customers - prefer to walk or cycles
  · Stranded - no affordable transport available
  · Survival - captive to the cheapest mode of public transport
  · Selective - can afford a car, but willing to use public transport
  · Stubborn customers - will only use car.
  
  3.2 Lack of Resources
  
  3.2.1. Funding
  
  It is regrettable that while the arrangement of the devolution of powers to the lowest level of government seems to be the most appropriate, there are no resources accompanying the said devolution of these powers and/or functions. The authorities to which these powers are being delegated are not adequately equipped to can deal with the powers devolved. Funds are still in the authorities that hare all along been involved with the carrying out of those functions and they do not want to let it go. This creates an untenable situation for the local authorities as more funds will be required in order for them to carry out those functions effectively.
  
  3.2.2 Human Resources
  
  Some of the devolved functions are too technical by nature and do require certain expertise and/or experience usually lacking in the local authorities. For instance, most of the local authorities do not have the necessary human resources capacity to undertake some of the functions and powers to be devolved. They are either understaffed or do not have suitably qualified personnel to carry out those functions. Most of the local authorities are still lagging behind, and are thus ill-equipped to deal with their Constitutional powers that have always been the competency of other levels of government such as the provincial or the national government.
  
  3.2.3 Infrastructure, Facilities and Equipment
  
  There is still a serious infrastructure backlog in most of the areas, particularly resulting from the new municipal demarcations. This also creates a problem with regard to the added powers and functions, whilst the local authorities are still grappling with the so called "bread-and-butter issues". In other words, they are not yet ready for the new challenges as they are still struggling to gain ground.
  
  3.3 Power Struggle
  
  There is still a power struggle between the local authorities and other levels of governance - the national and provincial levels of government. The provincial and national incumbents do not want to release the power that they have been wielding over
  
  the local authorities for a long time. Having noted the shortcomings of the local authorities with regard to capacity, they always prefer to dictate terms for them.
  
  3.4 The Use of Consultants
  
  Due to lack of capacity and the necessary expertise required, most of the authorities rely much on the use of consultants to carry out their functions, and thus perpetuate the impoverishment of their respective organizations, as there is no meaningful transfer of skills in the process.
  
  3.5 Joint Transport Authorities
  
  There is a problem regarding the boundaries of TAs. The legislation does allow for more than one municipality to form a combined TA. The municipalities' tax bases are not the same. Other well established municipalities will be cross-subsidising the others -resulting in unfairness. The composition of the Board will also have to be spread to accommodate the councilors from the participating municipalities. Decision-making will then be hampered.
  
  3.6 Integration of Services
  
  There does not seem to be integration of public transport services. Different operators are still operating as individuals. SACO envisages the situation in which different operators will be complementing or supplementing each other to attain modal integration.
  
  
  4. CONCLUSION
  
  SACO's inputs are not exhaustive, but cannot be outlined here for want of more time and resources. Given more time and resources, SACO will still need to consult with the relevant experts on some of the issues contained in the NLTTA. It is however important to note that the delay in implementing some of the provisions of the NLTTA is not only frustrating, but not doing public transport a favour. There are some of the policy directives that have been agreed upon that need implementation. The whole public transport system will simply collapse or lose confidence of the people it is geared to assist.