Road Accident Fund Amendment Bill; South African Maritime & Aeronautical Search & Rescue Bill: finalisation; National Land Trans

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04 September 2002
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report


4 September 2002

Chairperson: Mr JP Cronin (ANC)

Documents handed out:
Road Accident Fund Amendment Bill [B 27-2002]
South African Maritime and Aeronautical Search and Rescue Bill [B23-2002]
National Land Transport Transition Act, 22 of 2000
SANTACO Submission on NLTTA (Appendix 1)
Presentation by Ethekwini Municipality
SALGA Submission on NLTTA (Appendix 2)

The Committee formally considered the Road Accident Amendment Bill as well as the South African Maritime and Aeronautical Search and Rescue Bill. The Members adopted the Bills, albeit with slight changes.

The Committee also continued their oversight hearings into the implementation of the National Land Transport Transition Act. Submissions were heard from SANTACO, the democratically representative taxi body. SANTACO argued that the Act should have included a far stronger recognition of the need for a programme of transition. This would in turn have led to the transitional legislation being properly designed to facilitate the transition, rather than trying to put into place final structures and systems. There is therefore a need for a policy for transition.

The Ethekwini Municipality argued that there should be an attempt to allow TA's to find their own sources of funding because the municipality had a short fall in the funds needed to finance these authorities.

Road Accident Fund Amendment Bill
The Committee afforded the Department of Transport the opportunity to outline the proposed amendment to the Road Accident Fund Amendment Bill.

Clause d (10)
The Department of Transport proposed the following subsection:
"(10) Whenever a position on the Board becomes vacant before the expiry of the term of office referred to in subsection (2)(c), the Minister may appoint any other competent person, as contemplated in subsection (1)(b), to serve for the unexpired portion of the term of office of the previous member irrespective of when the vacancy occurs."

Ms N Maeko: Department, stated that the purpose of the amendment is to authorise the Minister of Transport to fill recurring vacancies on the Board of the Road Accident Fund. It is intended merely as an emergency measure to assist the Board to continue its business. She also alluded to the Satchwell Report on the Road Accident Fund, which is awaited, and will be handed over to the President by the Minister of Transport. The report was commissioned by the Ministry to look into problems around the payment of compensation or benefits by the Road Accident Fund. The Commission, headed by Judge Kathleen Satchwell, is investigating the current system and will make recommendations on improving this system. The Commission was appointed with effect from 1 June 1999. The Report of the Commission was originally required to be handed to the State President on or before 31 May 2000 but the life of the Commission has since been extended.

Mr Pillay expressed concern over the extended period taken by the Commission and wanted the Department to give a firm deadline on the completion of the report by the Commission.

Ms Maeko replied that this has been the concern of the Minister as well. However she pointed out that it is hoped that the report will be completed by the end of this year.

Mr Niemann (NNP) expressed concern over the short process of filling in vacancies on the Board. He argued that the amendment will result in appointments bypassing Parliament and give the Minister an unfettered discretion to appoint members of the Board.

The Chair noted his concern.

The Chair added that once the report is complete, it is believed that Parliament will allow public comments on it. He assured Members that there will be a massive overhaul of the Road Accident Fund.

The Chair suggested that subsection d(10) be retained as proposed by the Department of Transport and that subsection(11) be dispensed with. The Minster of Transport is obliged to appoint members of the board with diverse skills. The Chair read the motion of desirability and members voted in favour of the Bill.

South Africa Maritime and Aeronautical Search and Rescue Bill
The Chair afforded the Department of Transport an opportunity to deal with amendments to the Bill. Ms Maeko informed the Committee that her Department and Telkom have agreed on the introduction of a generic clause in respect of search and rescue mission of SASAR (see Appendix 2).

The State Law Advisers submitted that in accordance with the Telecommunications Act, Telkom is obliged to provide maritime services. Ms Maeko added that Telkom provides such a maritime service in terms of their two contracts with the Department. The Department recommended the word "must" not "may" be inserted in Clause 6(2) of the Bill.

Mr Farrow (DP) remarked that it is not necessary to add a new clause as proposed by the Department. The wording of the clause should also be left to the law advisers.

The Law Advisers indicated that both the Telecommunications Act and the Bill imposed an obligation on any entity with telecommunications services to provide maritime facilities to SASAR. Telkom would be acting in terms of the Section 44(2) of the Telecommunications Act in executing its SASAR mandate.

Mr Ainslie (ANC) was concerned with word "must" being added in Clause 6(2) of the Bill. He felt that the word seemed to impose an obligation on the Minister, notwithstanding circumstances in which the Minister might be unable to fulfil this role. The Department said that they would like to retain the word "must".

The Chair assured Members that the addition of "may" is not intended to diminish the powers of the Minister of Transport. The Chair read through the Bill page by page and read the motion of desirability. Members voted in favour of the Bill.

Presentation by SANTACO
The Presentation was conducted by the President of SANTACO, Mr Muofhe. After the presentation, the Chairman opened the floor for questions, which were answered by Mr Muofhe and his counterparts from SANTACO. They noted that SANTACO was formed less than a year ago, in September 2001, as the only democratically elected representative body for the whole of the taxi industry.

Since the National Land Transport Transition Act was signed into law by President Mbeki in June 2000 and brought into operation in December 2000, they could not offer input into the development of the Act or the policy process leading up to the Act.

However, they noted that many of the provisions of the Act do not support the wording in its title - that it is transitional legislation. The Act should have included a far stronger recognition of the need for a programme of transition. This would in turn have led to the transitional legislation being properly designed to facilitate the transition, rather than trying to put into place final structures and systems. There is therefore a need for a policy for transition.

Mr Slabbert (IFP) noted that they had made some valid points in their report. He was, however, concerned about the point on page 7 paragraph two in the written submission. "There is the distinct possibility that the members of a taxi association may find themselves having to bid for the right to operate a route which they have operated for many years, and which they have come to consider as 'theirs'. If their bid is not successful, they may be required to stop operating and allow the successful bidder to take over 'their' route". He asked whether this would not cost a great many lives? Secondly, what could be done to make drivers more road-friendly and disciplined?

Mr Muofhe replied that they were aware of the problems facing the taxi industry. The problem was with the culture of the industry. They take the routes and ranks as theirs. Anyone who tries to push them out finds it a problem. He said that they no longer wanted bloodshed, and there is already a big change. SANTACO has a big job in front of them in changing this mindset. TETA [the Transport Education and Training Authority] has done very little to assist us in this. They do not want to deal with SANTACO because they are not a statutory body. But SANTACO knows what is going on.

Mr Ainslee of the ANC asked for more detail on the difficulties that SANTACO is having with taxi registrars.

Mr Muofhe said SANTACO felt that the registrars are acting dictatorial. The reason for supporting these offices is for the system to be unified. Instead it is now necessary to "play" in a way that they do not feel comfortable with.

Mr Farrow (DP) enquired about subsidization and what has caused the delay. The Minister has said that SANTACO is holding the process up with the EMS bids. It wants to be a statutory body, but cannot be both judge and jury. Secondly, concerning the roadworthiness of vehicles: what is the organisation doing about that?

Mr Muofhe answered that as far as roadworthiness is concerned, this question should be addressed to government. What are they doing to support us? Before 1995, government was asked for cheaper vehicles. They saw the dangers of vehicles getting old. Then the idea of recapitalization was presented, and SANTACO was told to tell members not to buy any more "moving coffins". They bought into the idea. Unfortunately, recapitalization never happened. As far as registering EMS is concerned, in December 2001 SANTACO made a presentation to government. The government wanted refinements to the proposal, and they returned in January with the refinements but nothing happened until March. EMS is a management tool and it is how the organisation collects its funds, how the industry is made viable. Why does government want to manage the organisation's till? What is government's proposal? SANTACO is waiting, rather than stalling.

Mr Schneemann (ANC) asked what SANTACO was doing with respect to training. If associations want to, they can get drivers to drive properly.

Mr Slabbert followed up by noting that although SANTACO is the only democratically elected taxi organization, there are still hundreds of other organisations. Do all these organisations see eye to eye?

Mr Muofhe answered that they are waiting for government to help them with subsidies. They were told to buy into this, but four years have since passed. With respect to roadworthiness, they are still waiting for government - we want to better the conditions of our vehicles, but we need assistance to do that. Government is quiet.

As far as other associations were concerned, he said that Mr Slabbert was probably referring to the Group of six - they are members of SANTACO. The groups are not fighting. Another SANTACO representative added that on the question of training, there is a culture of training officers elected at provincial and national level. Training takes place, but we need to get subsidies. Capacity building is at the top of our agenda. Another SANTACO member said that the clients of the taxi industry cannot drive, they do not know how it works. So they make impossible demands on drivers. Also, vehicles are forced to run sixteen hours a day. SANTACO's position was that it knew what the problems were and therefore wanted to work them out.

Mr Slabbert asked what SANTACO's view was on law enforcement.

A SANTACO delegate stated that it is required all their drivers to possess a license and a roadworthy vehicle. Another delegate said that since last year, the number of taxi accidents was reduced. The operators try to do their best to ensure that their clients get home safe. Another member said that the taxi industry often take the lead in law enforcement, with operators working with the police in checking taxies. They adhere to, enforce and encourage the law.

The Chairman ended this session by saying that they should not lose sight of the greater picture. The NLTTA is over-elaborate 'first world' legislation that is not working. The Act is hopelessly over-ambitious.

Presentation by Ethekwini Municipality
The presentation was conducted by Mr Peters: Director, Traffic and Transportation-Ethekwini Municipality. The immediate concern noted by Ethekwini municipality was that Section 10(3) provides for an assignment of functions to the Transport Authority from provinces but without requiring agreement. A legal opinion received by the Municipality suggested that the TA was a separate legal entity but did not enjoy the constitutional protection that a particular sphere of government has. The other broader problem that was identified was the need for a sustainable funding source. The municipality currently faces a shortfall of R34,5 million per year to cover the cost of the TA.

The municipality therefore proposed that Section 10(13) be amended to require an agreement. Other proposals include having to pass appropriate financial legislation and ensuring, through the NLTTA, that the TA can raise its own funding.

Mr Pillay wanted clarity on how funding impacts on ordinary people. Mr Peters replied that lack of funding within the public transport sector. And at municipal level problems of funding exacerbate the already existing levels of capacity. He added that commuters are interested in sustainable public sector transport backed by adequate funding.

A Member asked whether restructuring includes public transport in view of the integrated development programme. The Chair replied that Transport Authorities (TA's) are mandated to deal with public transport in terms of the NLTTA and the Municipal Systems Act. But such a mandate is not backed by sufficient funds to enable them to execute this mandate.

A Member asked if the municipalities are identified as having to play the role of TA's.

Mr Mettler replied that in terms of the Municipal Systems Act, the TA's are meant to be municipalities. The municipalities exercise an executive role in the sphere of local government. However the NLTTA reveals some difficulties in regard to assignment of the TA's.

Mr Peters added that in the Ethekwini municipality, plans are afoot to relocate housing development closer to public transport facilities.

Mr Scheemann (ANC) asked for clarity on the issue of subsidies.

Mr Peters replied that there are discrepancies in subsidies allocated to different modes of transport. For instance, the rail and bus industry continued to receive more funding despite a decline in demand for their services. He recommended that with respect to subsidies, the issue should not be the mode of transport but the demand for provision of service within various modes of transport. He submitted that planning be rationalised in matching demand and supply within the public transport sector.

The Chairperson thanked all the participants in the hearings.

The meeting was adjourned.

Appendix 1:
4 September 2002


The SA National Taxi Council
The SA National Taxi Council (SANTACQ) welcomes and appreciates the opportunity to make this submission to the Parliamentary Portfolio Committee on Transport.

As members of the Committee may be aware, SANTACO was formed less than a year ago, in September 2001, as the first truly national and democratically elected representative body for the whole of the taxi industry.

Members will certainly be aware that the National Land Transport Transition Act (which we will refer to as the Act') was signed into law by President Mbeki in June 2000 and brought into operation in December 2000.

It will be clear therefore that SANTACO was not able to make input into the development of the Act or the policy process which led up to it - because SANTACO did not exist at that stage. This submission is the first formal opportunity for us to present the views of the taxi industry. So while we recognise that the Committee is meeting mainly to consider the Palmer Group report on progress in implementation of the Act, and we will address this shortly, we would first like to make a few general comments on the Act itself.

Our submission will therefore consider the following:

· Principles of Transport Policy
· Implementation Structures
· the Palmer Group Report
· the Way Forward


SANTACO Approach
We are pleased to note that the Act is transitional in nature. The explanatory memorandum which accompanied the National Land Transport Transition Bill when it was published early in 2000, suggested that government considered that the transition period would be three years

"the Bill is transitional in nature and is scheduled to be replaced by final legislation within the next three years."

We understand that the period is now expected to be much longer and, as will become apparent from this submission, SANTACO agrees with this.

Although we have not had the opportunity to make input into the policy on which the Act is based, we would like to assure the Committee that it is not the intention of SANTACO to try and press for changes of significance in the policy. We recognise the right of the democratically elected government to develop policy, and we are sure that it did consult widely with relevant organisations.

We will of course expect to be fully consulted during the development of the final legislation. During this process we will vigorously represent the interests of our members, but we will seek to do so through constructive debate and well-founded argument.

The debate must necessarily be robust because of the self-declared nature of the Act, as described in the explanatory memorandum to the Bill

"The Bill is designed to bring about a fundamental restructuring of the laws regulating land transport in the country, with the emphasis on public (passenger) transport."

A policy or an Act which sets out to 'fundamentally restructure' an existing position implies that there will be changes of substance and significance. All change poses a potential threat to existing interests. Large-scale change offers the prospect of bigger threats.

At the same time, of course, change implies opportunities. For the taxi industry the great opportunity lies in the principle of Black Economic Empowerment.

Black Economic Empowerment
Since 1994, the government has made it clear that Black Economic Empowerment (BEE) is a basic plank of its policy and strategies.

In respect of matters covered by the Act, BEE means that the proportion of the passenger transport industry owned by the historically disadvantaged must be increased. As SANTACO sees it, the danger in the present Act is that it may well result in quite the opposite - an increase in the proportion of the passenger transport industry owned by those who have benefited from the apartheid system. Let us explain the reasons for this view.

We represent the taxi industry. We recognise that BEE in the passenger transport industry need not be confined to taxi operators. Empowerment groups have taken positions in mining, manufacture and other sectors of the economy - why should they not also enter the passenger transport field?

The Palmer Group report thinks this is unlikely. In discussing the restructuring of the bus industry it comments

"Although it is generally accepted that BEE is one of the objectives of the legislation, there has been only limited breakdown of existing monopolies. There is a lack of potential investors with appropriate operational experience and the low returns in the industry make it an unattractive industry for investors." (4.3.5)

So it is unlikely that the big BEE groups will come in. But in any case, it is government's stated wish to extend the range of ownership from the small group of high-profile investors to the masses. The passenger transport industry already provides the best example of this in the form of the taxi industry, and there is therefore even! reason to see it as the base for an extension of black ownership of the passenger transport industry.
However, there is the danger that the opposite may occur

The passenger transport system of the future is based on formal sector planning and operations. Keywords are:
Formal, planned, orderly, scheduled, integrated, contracted

Keywords of taxi operations are:
informal, unscheduled, individual decision-making, no contractual relationships.

The contrast is clear. The transition of today's taxi operations (and therefore operators) into tomorrow's transport services will require a huge effort on the part of all concerned.

There is a perception in some quarters that the change will be achieved through the movement by taxi operators into bus operations, including the use of the larger vehicles envisaged in the taxi recapitalisation project. The Palmer Group report does not seem to think this likely. In its comments on 'Restructuring of the Bus Industry' it 'comments:

"Generally only taxi or long-distance operators have come forward, both lacking operational experience in the bus industry."

Unless this lack of experience is addressed, the bus industry will in all probability continue to be dominated by those who reached their position of strength in the days of the apartheid system. Even if taxi operators begin to use larger vehicles, they will be unable to benefit fully from the new planned transport system (for example, they will find it difficult to obtain contracts) because they lack experience in large-scale operations.

This problem will be made more acute by the policy of 'the appropriate mode on the right route' (to quote from the speech by the Minister of Transport on 13 August to the Cape Regional Chamber of Commerce and Industry). Over a period of time, the minibus will be relegated to the role of providing services on lesser router, or feeder services to main rail and bus routes. In other words, there will be a need for fewer minibus taxis.

This policy will be difficult to 'sell' to our members, and we will not even attempt to do so unless there is an absolutely clear plan (with proper allocation of adequate resources) to facilitate the transition of taxi operators into the role of transport operators.

Such a plan must have as its basic principle the need to first preserve, and then increase, the proportion of the passenger transport industry owned by historically disadvantaged individuals.


Policy is implemented through structures. We would therefore like to comment briefly on the Act in general by reference to the roles of the three new structures created under it, that is:

· the Transport Authority
· the Transport Registrar
· the Operating Licence Board.

There is of course, another structure which has been created during the period in which the Act has been in operation - that is SANTACO. We therefore comment also on the position of SANTACO in the implementation of the present Act and future legislation..

Transport Authority
This will have the task of planning public transport so that, to use the Minister's words, there is 'the appropriate mode on the right route'.

This principle has two objectives:

i) to make sure that public transport services are the ones that best meet the needs of users
ii) to ensure that all public transport services are provided in the most cost-efficient way (whether or not the services are subsidised).

To achieve this, all services will be planned by the Transport Authority. Most services will be contracted, either by means of a subsidised contract or an unsubsidised 'commercial' contract.

SANTACO has a great deal of concern about how the taxi operator will fit into this 'grand plan'. We can demonstrate our concerns with just a few examples:
1) Taxi operators are at present in many respects "free agents". They are authorised by permit, but within the bounds of that permit they have a great deal of freedom to operate as and how they wish. It will be difficult to persuade them that they should voluntarily subject themselves to far stricter controls without there being some very tangible benefits in return.

2) There is the distinct possibility that the members of a taxi association may find themselves having to bid for the right to operate a route which they have operated for many years, and which they have come to consider as 'theirs'. If their bid is not successful, they may be required to stop operating and allow the successful bidder to take over 'their' route.

We do not comment on the rights or wrongs of the perception of owning a route, merely draw attention to the fact that if such situations arise, they will almost certainly cause unhappiness and possibly lead to unrest.

3) The Act gives the Transport Authority the right to withdraw an operating licence where it considers there are too many taxis. It must offer either an alternative or compensation. This principle provides a potentially major area of unhappiness. Even if the principle is accepted, the compensation expected by the operator might well be that of a lifetime's lost future earnings. It is unlikely that this will be the view of the Transport Authority.

4) The concept of the 'commercial contract (along with the provisions for an operating licences strategy, and for rationalisation plans where there are subsidised services) suggests that there is no intention of extending the range of subsidised services. This means that, although taxi operators will be able to bid for existing subsidised services, their own existing services will not be considered for subsidy.

The reasoning seems to be that

· taxi operations do not at present receive subsidy
· but they continue to operate
· so they must be doing so profitably
· and therefore there is no reason to extend the subsidy system to include them.

This reasoning (apart from raising the question of 'what is 'profitable?') ignores some of the realities of taxi operations which, in other circumstances, are readily pointed out by critics of the industry.

It has frequently been observed that taxi operations are not always of a high standard. There is little in the way of operational management, supervision, driver training, ticketing systems, management information, planned maintenance, etc. These are costs which are currently not incurred, and the absence of these costs is one reason why taxi operators manage to stay in business.

The higher standards which will be demanded generally in the new transport system, and which would certainly be required under a contract, will inevitably incur higher costs of operation. The result will be either far higher economic fares - or renewed demands for subsidy.

Minister Omar has said on a number of occasions that the taxi will be brought into the subsidy system. We look to his Department to honour those promises, and to seek ways of doing this as a matter of urgency.

5) The Palmer Group report comments on the need to decide whether the Transport Authority should be 'internal or external' to the municipality:

"The issue as to whether the TA should be internal or external to the municipality (especially the metros) needs to be re-examined given the possible fragmentation with other departments, increased difficulty with regard to accessing municipal funds and decreased financial protection offered to municipalities

The report is clearly signalling a preference for external TAs. SANTACO agrees with this for the reasons given in the report, as well as for others including the desirability of the Authority to have members other than councillors.

These are specific concerns. There are others. The overall concern of SANTACO, however, is whether the transport authorities - whilst meeting their twin objective of user-friendly services and cost-efficiency - can also meet the broader government objective of economic empowerment.

The Transport Registrar
The Act makes clear that the role of the Transport Registrar is that of control. We believe that, as far as the taxi industry is concerned, the Registrar should also be required to be far more pro-active in building capacity within the industry - not least among the leadership of local associations.

In this brief submission we can point to only one example.

The Registrar is required to consider and approve the Constitution of a taxi association. The Act also makes clear that the Registrar must oversee the working of that Constitution, and may impose penalties for breaches of its provisions. In that context the Registrar is a legal 'enforcer'. We have no problem with that, other than to say that the Registrar must have the capacity to deal properly with the responsibilities placed on the office - something that the former Taxi Registrars almost totally lacked.

However, we also think that the Registrar must not act unfairly or in a dictatorial manner. For example, it would be unfair for the Registrar to impose penalties on an association because it failed to have its accounts properly audited, if the association has been given no assistance to understand formal sector financial procedures.

We were party to the development of the concept of the Transport Registrar, and we were assured that this office would be one which would help and assist the operators and associations. We regret to say that in many ways the Transport Registrar now has now too much power, and that it is often used unwisely.

The Transport Education and Training Authority (TETA) has the responsibility for developing and implementing the actual skills training programme. A wide-ranging capacity building programme is urgently needed; there is little sign of that happening at present.

The Operating Licences Board
It seems to us that the provincial Boards will largely become the servant of the Transport Authorities operating in its area. It will be required to issue operating licences to those who have been contracted by an Authority, or to other operators in accordance with an Authority's transport plans. For that reason we have less concern about the activities of the Board.

The close involvement of the transport authority may help to lessen the opportunities for corruption which have been a feature of the predecessors of the Boards - though the Palmer Group report says that "there are hints at possible corruption" in the processes of registration and the issue of operating licences.

It also says that:

"There is a need for greater clarity concerning the allocation of operating licenses to vehicles and routes, and the logic behind the different alternatives (e.g. enforcement versus economics)."

This is vitally important. The advantage of the new system should be that decisions are made on the basis of a policy implemented with the aid of objectively-researched facts and figures. If the policy itself is not clearly set out and understood, there will always be the suspicion that licences are being issued on the basis 9f guesswork, or even because favours are being offered.

The Act sets time limits for the issue of licences to the present taxi vehicle and requires that from a date which may be as early as 1 October 2004, operating licences should be issued only to those vehicles which meet the requirements of the taxi recapitalisation scheme. We point to the fact that the Act was signed by President Mbeki in June 2000. More than two years later the taxi recapitalisation scheme has still to be implemented.

We must also say that the recapitalisation scheme may have a fundamental weakness. No firm figures can yet be given for the cost of the vehicle because the contract has not yet been let. It is widely accepted, though, that the figure for the smaller vehicle will be close to R200 000

But our members cannot afford to replace the existing vehicle at a cost much closer to R140 000. So even with a scrapping allowance, operators will not be able to afford the new vehicles, unless there is a change to the operating subsidy system. WE urge the government and the Committee to give this matter of financing and funding the most urgent attention.

(In passing, we may mention the metered taxi. This falls under the provisions of the Act. It is our understanding that in most countries the regulation of metered taxis is a matter for the local or metropolitan authority. We think that this might be appropriate also for South Africa.)

The Act makes provision for the individual taxi operator and the primary (local) association. It makes no reference to the higher elected structures, especially at national level (SANTACO) or provincial level (the PROTACOs).

This is understandable since at the time the Act was developed, these democratically elected bodies did not exist. They do exist now, and their active involvement will be essential if the new transport policy is to be successful.
The role of SANTACO and the PROTACOs should be clearly spelt out in the final legislation.


We now come to comments on the report commissioned by the Portfolio Committee on the implementation of the NLTTA.

In this brief submission, SANTACO cannot deal comprehensively with all the issues raised in the report other than to say that, if it is taken as a whole, the reader must come to the conclusion that there has been very little effective progress in implementation. In some respects that is a good thing. The Act is transitional. The final legislation should take account of the fact that even the most well-thought-out policies are meaningless if they cannot be implemented.

The report makes clear that there is a widespread:

· lack of capacity
· lack of funding
· lack of co-ordination and integration

and we would like to use each of these as the basis of our comments on the report..

Lack of Capacity
The phrase 'lack of capacity' occurs over and over again. We are not surprised. The legislation is based on a first-world policy, with no more than a vague acknowledgement that South Africa is a developing country. SANTACO feels that many of the provisions of the Act do not support the wording in its title - that it is transitional legislation

The Act should have included a far stronger recognition of the need for a programme of transition. This would in turn have led to the transitional legislation being properly designed to facilitate the transition, rather than trying to put into place final structures and systems.

It is not too late to accept that weakness, and for the next legislation to facilitate a further period of transition. For that to be successful, though, we need a policy for transition.

That is far more difficult than simply describing the desired end-state, and so it is often put into the 'too difficult' file. But without a programme for the complex process of transition, the transition will not be successful, and the desired end-state will not be reached.

Lack of Funding
In one sense it is not surprising that this is also a major problem. There is never enough funding. Every Rand of public money can be spent 10 times over and more.

It is important though, in the sense that if the legislation increases hopes and expectations, but there is not enough money to put the ideas into practice, there can be disillusionment. The taxi industry certainly has had its fair share of experience in this area.

SANTACO hopes that the final legislation will have regard to the funding which is likely to be available and, as the saying goes, 'cut its coat according to the cloth'.

Lack of Coordination and Integration

An essential feature of the Act is that it envisages close coordination and integration between the planning and regulatory bodies. This has not yet happened.

In fact, some of those bodies do not yet exist, more than two years after the Act became law. Here are some quotes from the report:

"….there has been slow progress in appointments in terms of the NLTTA"
"….the lack of a sustainable financial framework is a major issue retarding the establishment of Transport Authorities."

If the statutory bodies do not yet exist there can obviously be no co-ordination between them.

But even where they do exist, there is little integration and coordination. This problem is reflected throughout the report; the following quotes are just a few examples:

"There is poor integration of the different modes with diverse funding streams resulting in an inefficient use of funds
"It is evident from the weak links with transport planning in the IDPs, the lack of coordination of stakeholders and the lack of institutional integration that a system of integrated planning is a long way off."
"…there is confusion and a lack of national consistency with regard to the issuing of operating licences and permits."
"Other key issues relate to the lack of integration between the Registrars and the Licensing Boards"

SANTACO's own experience fully supports these comments. We find in particular a lack of co-ordination in policy and practice between national and provincial government, and between the nine provincial governments. We accept that transport is a provincial competency, and although we would very much like to see it become a national one, we recognise that we are unlikely to persuade the government to consider a change to South Africa's Constitution.

Nonetheless, the fact that each province can make its own decisions not merely causes confusion - it also adds to the problems of capacity. Instead of one professional person dealing at national level with the complexities of a problem, nine people have to each tackle it in their own province.

We strongly recommend that the National Department of Transport take a far stronger lead in developing 'model practice notes' on a wide range of issues. These may not be binding, but they would undoubtedly be welcomed by the responsible officials in most provinces.

There are already examples of this. In December 2000, the Act came into operation by proclamation. At the same time certain regulations were published in the Government Gazette. They included a model pro forma Founding Agreement between the parties forming a Transport Authority. We are sure that this pro forma Agreement has been (or will be) used by most provinces exactly as it was published.

Yet the same Gazette included just a page or two about the minimum requirements to be included in a taxi constitution. It would surely have helped the provinces if there had been a full pro forma model constitution.

We strongly recommend that the National Department of Transport take a stronger lead in developing model practice notes and pro formae.

There is one other critically important lack of capacity highlighted by the report. In discussing Registration and Operating Licences it says:

"…there is a lack of sufficient capacity to monitor and enforce compliance by the operators."

This has been a complaint of taxi operators since the industry began to grow big in the mid-1970s. Legal operators have done everything they can to comply with the law, yet everywhere they see illegal and pirate operators running their taxis with absolutely no effective enforcement of the law. There is a great deal of cynicism over this. Unless the rights of legal operators are protected, there will be no chance of them accepting the big changes implied by the Act and the new transport policy.


SANTACO believes that it is essential for all stakeholders to develop an agreed and clearly-stated

· description of the desired end-state; and
· a programme for transition.

Desired End-State

The Act was developed to implement a policy which stemmed from a variety of sources, but which included the White Paper of 1996, and the Moving South Africa project whose final report (the 'Action Agenda') was published in May 1999.

Both of these sketched very broad pictures of the future land passenger transport system. They were also written several years ago. The scene has changed since then. We also now have some experience of the difficulties of implementation of the policy in the form of the Act.

It is time for a thorough review by all concerned. The outcome must be a clearly-stated picture of how all stakeholders view the future provision of passenger transport services.

This must include definite statements about Black Economic Empowerment in general and in particular, the future role of those who are today's taxi operators, and of their investment in the industry.

SANTACO recognises that this will bring to the fore some difficult questions. In the past - especially because there has been no fully representative taxi body - many of these difficult questions have been ignored or passed over without being resolved. They must now be fully aired.

Success can be achieved only if all stakeholders are fully agreed on the aims and objectives of the new land passenger transport system

Programme of Transition
If this agreement can be achieved, then the critical action is the development of a practical programme of transition. Many of the current problems in implementation of the Act stem from a reluctance to consider and face up to all the implications.

The programme of transition must include a genuine acceptance that changes will take a long time and require huge amounts of effort and resources. If it is unlikely that the required resources will be available, then the end-state must be adjusted accordingly. There is no place for impractical wish-lists.

This applies especially to the process of transition in the taxi industry. The taxi industry is informal. The new passenger transport system is entirely based on formal sector principles of planning and control.

Simply to get to first base will require a lengthy period of awareness creation and a careful programme of explanation that the opportunities can be greater than the threats.

Actual implementation will require a long series of small steps, each being consolidated before the next is attempted.

SANTACO accepts the general principles of the new transport policy as being implemented by the Act.

We believe that the policy offers significant potential benefits to the taxi operators of South Africa. At the same time there are clear potential threats, not merely to the interests of our members but to the broader economic interests of the country.

SANTACO pledges itself to enter into constructive dialogue with government with a view to maximising the opportunities and minimising the threats. We look forward to an early meeting with government with a view to making input into the next stage of transport policy.

Appendix 2:
29 August 2002

1. Executive Summary

1.1 The function of "public transport" is an assignment from national government to local government.

1 .2 The assignment of functions to local government from national government must take place within the framework as set out in section 9 of the Municipal Systems Act.

1 3 Adequate funding must be set aside to enable municipalities to perform the assigned functions.

1.4 Targeted capacity building programmes must be embarked upon to enable municipalities to perform the assigned functions effectively and efficiently.

1.5 The municipal function of "municipal public transport" as it appears in Schedule 4B to the Constitution must be defined as a matter of urgency.

2. "Public transport" is an assignment of a national function to local government

2.1 'Public transport service" is defined in the NLTTA as a service for the carriage of passengers by road or rail and includes mini-bus taxis, long-distance services and rail services. It must be noted that the regulation of all the services mentioned herein are being carried out by either the national government or the provincial government. Such services are being carried out across the current municipal boundaries.

2.2 "Municipal Public Transport" is currently undefined but would, at the very minimum, refer to transport services either operated or regulated by a municipality and could include other transport services that are assigned to a municipality by a provincial government or national government. Such municipal public transport would be confined to operate within the area of jurisdiction of a particular municipality.
2.3 It is the contention of SALGA that any type of public transport that is currently regulated or operated at a national or provincial level would not fall under the definition of "municipal public transport". In order for such public transport to become a municipal function, it must be assigned by the relevant authority (national or provincial) to a municipality.

3. The assignment of functions to local government

3.1 Apart from local government's 'original' functions of Schedule 4B and SB in the Constitution, a municipality has authority over functions 'assigned' to it by national or provincial legislation. In terms of the Constitution, national or provincial government can assign functions to local government in general or to individual municipalities. The legal regime for assignments is further elaborated in Chapter 3 of the Municipal Systems Act. In sections 9 and 10, the Act also distinguishes between assignments to municipalities generally and assignments to specific municipalities.

3.2 The Systems Act provides for requirements to general assignments by national legislation. Prior to the introduction of the Bill in Parliament, the Minister must -
1. consult with the Minister responsible for local government, the national Minister of Finance and with organised local government nationally (s 9(1)(a) Systems Act); and
2. request an assessment of the financial implications of the legislation from the Financial and Fiscal Commission and consider that assessment (s 9(1)(b) Systems Act).

3.3 Further, the Minister initiating the assignment must assess:
1. whether or not the assignment imposes a duty on the municipalities concerned;
2. whether the duty falls outside Schedule 4B and 5B to the Constitution; and
3. whether the performance of the duty has financial implications for the municipalities concerned (s 9(3) Systems Act).
If all three conditions are met, the MEC must 'take appropriate steps to ensure sufficient funding, and capacity building initiatives as may needed, for the performance of the assigned function or power by the municipalities concerned' (s 9(3) Systems Act).

4. Preventing an unfunded mandate

4.1 As is apparent from the legislative framework that deals with assignments, the need to source adequate funding is of paramount importance to sustain an assigned function. The law is clear that the Financial and Fiscal Commission is the only agency that could perform an investigation upon which the funding of an assigned function can be based.

4.2 When one has regard to the implementation of the NLTTA over the past two years, it is clear that there is a chronic lack of funding that hamstrung most transport regulatory processes in the municipalities. The PDG report accurately reflects the extent of the difficulties faced in respect of the lack of funding. It has an impact on human resources, capacity building and funding for public transport.

4.3 One of the real issues that any amendments to the NLTTA must address, is how national and provincial resource allocations must be directed to municipalities or transport authorities in order to fulfil their obligations in terms of the Act. In other words, the funding of the mandate, as set out in the Act, must be formalised and put into effect as soon as possible.

5. Ensuring capacity building

5.1 As is apparent from the law that deals with assignments, the ability of the municipality to perform the function must be measured and appropriate capacity building mechanisms must be put in place in order for the assignment to take effect.

5.2 When one has regard to the implementation of the NLTTA over the past two years, it is apparent that there are very real capacity constraints that are prevalent in the core cities, let alone the rest of the transport authorities. The PDG report accurately reflects the lack of capacity in the following areas:

5.2.1 lack of capacity to monitor and enforce compliance by the operators;
5.2.2 lack of capacity in non-metro areas;
5.2.3 lack of capacity in all sectors of the transport industry including operators, enforcement staff, and municipal bodies or authorities.

5.3 Another of the very real issues that any amendments to the NLTTA must address, is the building of capacity within municipalities or transport authorities in order to fulfil their obligations in terms of the Act. In this regard, attention must be given to a national capacity building programme aimed at enhancing service delivery in the transport sector as a whole, but more particularly within municipalities.

6. Defining "municipal public transport"

6.1 As has been pointed out in paragraph 2 above, there is a critical need for an appropriate definition for "municipal public transport". An appropriate definition will bring certainty to:

6.1.1 the function for which a municipality must take responsibility;
6.1.2 the functions that fall outside the municipality's area of responsibility;
6.1.3 those functions that are, in fact, assignments from the national or provincial government.

6.2 Any amendments to the NLTTA must include a definition of 'municipal public transport" in light of the fact that there is such a critical need for certainty in this regard.

6.3 SALGA suggests that the Portfolio Committee take the following proposal for an appropriate amendment under advisement:

"Municipal public transport means:

The regulation and control, and where applicable, the establishment and operation of services for the carriage of passengers, whether scheduled or unscheduled, operated on demand along a specific route or routes within the area of jurisdiction of the municipality."

7. SALGA supports the submission that will be made by Mr Peters of eThekwini in respect of any technical amendments proposed to the NLTTA.


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