National Land Transport Amendment Bill [B7-2016]: briefing by Departments of Transport & Economic Development

Meeting report

Mr Hemant Patel, Chief Director: Regulation, Department of Transport (DoT), presented the National Land Transport Amendment Bill, 2016 to the Committees. He explained the main reasons for the Amendment Bill, and then listed the amendments related to various spheres of the National Land Transport Act, 2009. He further mentioned the consultations the Department had made, the key issues in the Bill, challenges moving forward and lastly, the financial implications.

Mr Patel said that the National Land Transport Act 5 of 2009 (NLTA) had been passed to further the process of transforming and restructuring the national land transport system that were started by the previous Transition Act (NLTTA). The Amendment Bill provided for developments since 2009, such as the rolling out of the 2007 public transport strategy.

The main reasons for the Amendment Bill were to make provision for non-motorized transport (NMT) and accessible transport in line with the international best practice, to revise some of the contracting arrangements for public transport services, to clarify functions of the spheres of the government, to streamline the administrative arrangements for operating licences (OLs), to make provision for electronic hailing (e-hailing) of taxis, to empower the Minister to delay the implementation of the Act (while the contracting arrangements were put in place), to correct errors and make consequential amendments

Definitions

The definition of ‘’association” in clause 1(a) had been amended. This amendment was needed because the Regulatory entities were required to keep information on associations and routes etc. In clause 1(b), the definition of ‘contracting authority’ was amended to include new contracting arrangements. In clause 1(c) the definition of “integrated public transport network” was amended. NMT was included and clarified Integrated Rapid Public Transport Networks (IRPTN) and Integrated Public Transport Networks (IPTN). In clause 1(d) the definition of “metered taxi service” was amended to make provision for e-hailing services. In clause 1(e), the new definition of Municipal Regulatory Entity” was included, which made it easier to read. In clause 1(f), the new definition of “Non-Motorised Transport” was included to make provision for NMT in the Act. In clause 1(g), the definition of Rail Commuter Corporation was updated to Passenger Rail Agency of SA (PRASA), so as to update the Act. In clause 1(h),(i),(j),consequential amendments to definitions necessitated by other amendments were made. In section 1(k), the new definition of “targeted categories of passengers” was inserted to replace “special categories,” in line with international usage.

Functions of Minister

Section 5 of the principal Act was hereby amended by the deletion in subsection (4)

of the word ‘‘and’’ at the end of paragraph (i), by the addition of the word ‘‘and’’ at the end of paragraph (j), and by the addition of the following paragraph:‘‘(k) promote measures to ensure the safety of pedestrians and all forms of passengers using public transport by means of regulations or the publication of guidelines or standards or through other appropriate measures,’’ because it complemented the act.

Regulations by Minister

Clause 3(a) of section 8 was amended (a) by the substitution in subsection (1) for paragraph (d) (8(1)(d)) to strengthen the Minister’s power to make regulations on the process of offering alternative services to operators expanded. Experience had shown the need for these regulations.

Clause 3(b) of section 8 was amended by the insertion in subsection (1) after paragraph (f) of the following paragraphs ‘‘(fA) fees payable for any application made in terms of this Act or any decal or document issued in terms of this Act; (fB) codes of conduct for operators or drivers of public transport services, which may differ in respect of different types of services or different categories of operators or drivers;’’

Clause 3(c) section 8(1)(h) was amended to include the power for the Minister to publish codes of conduct for operators and drivers. Clause 3(d) section 8(1)(h) was amended to  include the Minister’s powers to make regulations on colour coding and branding limited to where national uniformity was required. The purpose of the amendment was so that the MECs were empowered to make these regulations for their provinces. Clause 3(d) section 8(1)(n) was amended to allow the Minister to make regulations on meetings of regulatory entities. Clause 3(e) section 8(1)(y) was amended to allow the Minister to make regulations on requirements and time frames for vehicles etc. to accommodate targeted categories of passengers

Functions of MECs

In clause 4 section 9(2)(d) an amendment was made that the annual reports must include the prescribed information so it would update the Minister on the state of public transport in provinces on an annual basis.

Clause 5 section 10(1)(eA) was amended so that the MEC may make regulations on colour coding and branding of vehicles, subject to regulations made by the Minister.

Accessible transport and NMT

In clause 6 section 10A, a new section was inserted to promote accessible transport and NMT. The definition of accessible transport was included. The purpose of the amendment was that the Minister, MECs and the planning authority must take steps to promote accessible transport and NMT.

Responsibilities of spheres of government

In clause 7(a) section 11(1)a)(xi), power was included for national government (DoT) to enter into new contracts for public transport services. At present, the Act provided only for the national government to have powers over the old order contracts. In clause 7(b) section 11(1)(b)(xiiA), powers were included for provinces to include new contracts (negotiated, tendered and commercial) in municipal areas where the municipality did not comply with the prescribed requirements and criteria. Provinces needed these powers in areas where municipalities lacked capacity, to facilitate contracting and unlock deadlocks that may occur, e.g. if the province and municipality could not agree. In clause 7(c) section 11(1)(c)(v), an amendment was made that municipalities must do financial planning for land transport in consultation with rail operators as this was necessary to achieve co-ordination and integration. Consequential amendments and corrections were made on the rest of section 11.

In clause 7(h) section 11(1)(c)(xxvi), it was included that powers of municipalities to conclude contracts would apply to municipalities that met the prescribed requirements and criteria. The requirements and criteria were listed below. Clause 7(i),(j),(k),(l) section 11(2),(3),(4),(5),(6) had been amended so that only the operating licensing (OL) function could be assigned to a municipality. This was in line with the new aforementioned contracting arrangements. On clause 7(m) 11(8),(9),(10), the process of dealing with old order contracts between provinces and municipalities was clarified. Where a province contracts, the services must be in line with the Integrated Transport Plans (ITPs) of the municipalities or designed in collaboration with the municipality. The Minister was empowered to make regulations on requirements and criteria to be met by municipalities when contracting. The Minister was empowered to prescribe the contracting process in regulation and give directives. The criteria and requirements were: an acceptable ITP, the municipality had capacity, and the services in the area justified the contract.

Impartiality

Clause 8 section 13(1)(f) was amended to include the members of the SAPS, traffic officers and metro police in the list of persons who may not have a financial or business interest in the public transport industry. This promoted impartiality.

Inter-modal planning committees (IPCs)

An amendment was made to clause 9 section 15 such that the IPCs must be established by a date to be prescribed IPCs, and only to consist of officials (the Land Transport Advisory Boards included the private sector). The purposes of the IPCs were expanded. The IPC must facilitate a service level agreement with PRASA where appropriate. This improvement was based on comments and experience.

Municipal Regulatory Entities (MREs)

Clauses 10 and 11 section 17 and 18 were amended according to the consequential amendments and clarified that Municipal Regulatory Entities (MREs) would be responsible for services only within their municipal area. MREs were required to keep information on operator associations and their members, routes etc. The keeping of information was necessary because registration was no longer a national requirement.

National Public Transport Regulator (NPTR)

In clause 12 section 20, more detail was provided on the appointment and administrative arrangements for the National Public Transport Regulator (NPTR), which gave effect to the comments by the National Treasury.

National Public Transport Regulator

In clause 13 section 21, new duties for the NPTR were introduced to deal with passenger complaints, and advise the Minister on the treatment of passengers etc. The NPTR must keep information on operator associations, members and routes. The NPTR may issue directives to Provincial Regulatory Entities (PREs) and MREs where they were not performing their functions.

Provincial Regulatory Entities

On clause 14 section 23, more detail was provided on the appointment and administrative arrangements for the functions of PRE members: when taking decisions, they exercised an independent discretion as a quasi-judicial body (i.e. similar to a court). PREs reported to the HOD of the Provincial Department only on administrative matters – this aspect had been causing confusion. This promoted good administration and cleared up the current misunderstanding. Clause 15 section 24 required PREs to keep information on operator associations, their members, and routes in the case of minibus taxi services. This was necessary because registration was no longer a national requirement.

Municipal Land Transport Funds, Provincial Land Transport Frameworks (PLTFs) and Integrated Transport Plans (ITPs)

Clause 16 of section 27 was amended to show the consequential amendment on MREs. Clause 17 of section 35 was amended to include that the requirement to update PLTFs every two years was removed. This requirement was regarded as too onerous and expensive. Clause 117 of section 36(4)(c) now required that the MEC must also monitor other organs of state to see that they followed the correct procedures in relation to ITPs. The change was in response to comments received.

Rationalisation of public transport services

Clause 19 of section 39 was amended to provide that when a planning authority was rationalising public transport services, it must consult affected operators and relevant regulatory entities, and apply law enforcement measures before doing so. The provisions were to streamline the rationalisation process.

Negotiated contracts and stopgap contracts

Clause 20 of section 41 clarified the meaning of “once off” in relation to negotiated contracts. Procedural provisions currently in the contracting regulations were moved into the Act. Contracting authorities were obliged to negotiate only with affected operators, i.e. those on the relevant routes. The provision that the Ministers may publish model contract documents was extended to negotiated contracts. This was done on advice from the State Law Advisors. It dealt with problems currently experienced by contracting authorities. The Minister should be able to make the documents compulsory for negotiated contracts. Clause 21 of section 41A empowered contracting authorities to conclude stopgap contracts for not more than three years. This would provide continuity of services while the contracting authority negotiated with operators.

Subsidized and commercial contracts and old order contracts

Clause 22 of section 42 was amended so that subsidized contracts were made subject to the Municipal Systems Act, which said that a contracting authority did not have to go out on tender if negotiating with a municipal entity or another municipality. The provisions empowering the Minister to publish model tender and contract documents were streamlined. Provisions were streamlined. Clause 23 of section 43 was amended such that commercial contracts were also made subject to the Municipal Systems Act. Clause 24 of section 45, imposing limitations on the involvement of municipalities in public transport services, was repealed. The provisions came from the Transition Act and were redundant. Consequential amendments were made in clause 25 of section 46.

Rationalization of services

In Clause 26 of section 47, an amendment extended the deadline for converting permits to operating licences (OLs) for five years. This provided for administrative measures to streamline the conversion process. The reason for this amendment was that it would not be possible for the PREs to meet the December 2016 deadline. An administrative process would be started by means of regulations to ensure completion of the process. Section 48(2) clause 27 provided for the conversion of permits for scheduled services to commercial service contracts. This gave effect to government policy to promote contracts. In section 49 clause 28, an amendment was made so that the taxi recap provisions were amended to clarify them. The requirement that the new vehicle may not have a capacity of more than 20% larger than the old vehicle, had been removed. This was because of the comments from the PREs and industry.

Operating licences

A consequential amendment was made on section 51 clause 29. In section 53 clause 30, provisions on exemptions were clarified: staff services would be exempt where the employer owned the vehicle and did not charge a fare. Farmers were exempt only when conveyance took place during farming operations. This addressed the current uncertainties. Section 54 clause 31 clarified where applications must be made to MREs. In section 57 clause 33, an amendment was made so that regulatory entities must also consider contraventions of the codes of conduct when evaluating applications for OLs. This was a consequential amendment and streamlining. The PREs had commented that applications for OLs did not need to be published in certain cases. Section 59 clause 34 was amended to accommodate this. Section 60 clause 35 was amended so that applications for temporally licenses were streamlined. Section 62 clause 36 included the requirements to submit proof of insurance deleted, due to amendments to the Road Accident Fund. In terms of the RAF Act, operators could not be sued in the case of accidents, except in very limited circumstances. Section 64 clause 37 clarified that an OL could be issued to an accredited tourist transport operator if he/she were not the owner of the vehicle. This gave effect to the accreditation system for tourist operators.

Metered taxis

In clause 38 of section 66, the provision on standards for metered taxis was deleted as it was covered by the Legal Metrology Act, 2013 and other legislation. This section was amended to regulate e-hailing services: the Minister may make regulations setting standards and requirements for e-hailing services. The regulations may include that a meter was required, as well as an e-hailing application. The Minister may make regulations on the requirements for meters. The reason for these amendments were that the current services provided by means of e-hailing applications required regulation and control. Another reason was to clarify the nature of e-hailing services, and that the Minister should be empowered to regulate metered taxis.

Charter and staff services

In section 67 clause 39, limitations were imposed on charter service OLs: the applicant must show a need for the service, and that it would be provided on a regular basis etc. This was to stop abuse of charter OLs. Section 68 clause 40 clarified that an OL was not required for staff services where no fare was charged, and where staff services were contracted to an operator, he/she required an OL. This amendment would eliminate the current uncertainty.

Operating licences: general and cross-border transport

In section 73 clause 41, sizes of vehicles for purposes of replacement of vehicles were clarified and would eliminate any confusion that existed. Section 74(1)(a)  clause 42 allowed a vehicle to be replaced temporarily while the existing vehicle was sold, stolen or destroyed. This was in response to the request from operators. Section 75(3) clause 43 included the presumption that where passengers were loaded within 2 km of a border, the operator was undertaking cross-border transport, was removed. This provision belonged in the Cross-Border Road Transport Act. The amendment had been agreed to by the Cross-Border Road Transport Agency. In section 79 clause 44, the criteria for withdrawing OLs were amended to include the contravention of legislation and contravention of a code of conduct. The amendment arose from the comments from the PREs and consequential amendments.

Tourist Transport

An amendment was inserted in clause 45 section 81 that required applications for accreditation of tourist operators to be published for comment. This rectified the omission in the Act. In section 84 clause 46, the provisions that accredited tourist operators may use any suitable vehicle were clarified. This included rented vehicles that were suitable. An OL must be issued for the vehicle over the counter. The NPTR may impose conditions when doing so. The aim of this was to bring improvements to the accreditation system. A consequential amendment was made in section 86 clause 47.

General Amendments

The amendment made in section 92 clause 48 clarified and broadened who may appeal to the Transport Appeal Tribunal (TAT). It distinguished appeals under the Municipal Systems Act. The amendment made on section 93 clause 49, which provided that the existing transport authorities must be adopted into the municipality’s administration after the date determined by the Minister for the demise of the relevant authority, was amended. This amendment would eliminate an anomaly. The insertion made in clause 50 of section 93A was such that, to avoid legal challenges, the Minister may delay the implementation of the Act or exempt the NPTR, provinces, municipalities, PREs or MREs from implementing provisions of the Act for set times, where practicalities or lack of capacity prevented it.

Amendments of Other Acts

Section 93B clause 50 clarified section 84(1)(b) of the Municipal Structures Act as regards the public transport function between district and local municipalities. This was necessary to align the two Acts. Clause 51 amended section 23 of the legal succession to the SA Transport Services Act, 1989, to provide that PRASA must deliver must deliver rail commuter services at the request of a municipality in terms of a service level agreement and subject to budget availability. Clause 52 repealed sections of the Road Transportation Act, 1977, that were redundant and were not repealed when the Act was assigned to the provinces. This was necessary to “clean up” the legislation.

Key issues in the bill, and challenges moving forward

Key issues included the revision of the contracting arrangements for public transport services, provision was made for e-hailing of taxis, the Minister was empowered to delay the implementation of the Act while contracting arrangements were put in place, and IPTNs and stopgap contracts were introduced. Key challenges included the proposal by the Gauteng government for a transport authority, and the fact that the conversion of permits to OLs lapsed in December 2016.

Financial implications

The bill proposed clarifications on the roles and powers, as well as expansions on definitions, and therefore was not expected to have any additional financial implications that had not been envisaged by the principal Act.

Parliamentary procedure

The Department was of the opinion that the Bill must be dealt with in accordance with the procedure established by section 76 of the Constitution, as it dealt with public transport as envisaged in Schedule 4 to the Constitution.

Bodies Consulted

● The Department of Cooperative Governance and Traditional Affairs (COGTA)
● The Department of Trade and Industry (DTI)
● The Department of Tourism
● The National Treasury
● The National Consumer Commissioner
● All provincial departments responsible for public transport
● The Passenger Rail Agency of South Africa (PRASA)
● The Committee of Transport Officials (COTO)
● The Cross-Border Road Transport Agency (CBRTA)

Written comments were received from the following:

• The National Treasury
• PRASA
• The Cross-Border Road Transport Agency
• The Road Traffic Management Corporation (RTMC)
• The SA Local Government Association (SALGA)
• The eThekwini Metropolitan Municipality
• The eThekwini Transport Authority
• The City of Johannesburg Metropolitan Municipality
• The City of Cape Town Metropolitan Municipality
• The KwaZulu-Natal Department of Transport
• The Mpumalanga Department of Transport
• The Limpopo Operating Licensing Board
• The Limpopo Department of Transport
• The Gauteng Department of Roads and Transport
• The Eastern Cape Department of Transport
• The Free State Department of Police, Roads and Transport
• The Western Cape Provincial Regulatory Entity
• The Western Cape Department of Transport and Public Works
• The SA National Taxi Council (SANTACO)
• The National Taxi Alliance (NTA)
• Eastern Cape Taxi Operators
• The SA Network of Women in Transport (SANWIT)
• The Southern African Bus Operators’ Association (SABOA)
• Mr Paul Browning

Discussion

Mr S Mthimunye (ANC, Mpumalanga) said that Gauteng had made a submission with regard to the establishment of their own transport authority as a province. Was the Department prepared to go and start afresh the process to accommodate the submission by Gauteng? What could be a problem with this submission, if there were a problem at all?  What was the validity period of an operation permit?

Mr Patel replied that the Transport Authority may require them to consult.

Mr Neville Dingle, Advisor to the Department of Transport, replied that the validity period of an operation permit had been a maximum of five years under the Transition Act, but it had been changed to a maximum of seven years in the principal Act. There were special cases where it was issued for 12 years.

Mr M Rayi (ANC, Eastern Cape) also sought clarity on the Gauteng submission issue. How would the NCOP respond to the submission if Gauteng raised the submission when the NCOP visited province? Regarding the amendment in section 11(1)(a)(xi) clause 7(a), was it in line with section 139 of the Constitution in respect of the inability of a municipality to execute its executive responsibilities? With metered drivers, did the Act take into account the safety of both the drivers and passengers?

Mr Dingle replied that the new contracting arrangements had been just set up so that the provincial government could step in if the municipality lacked the capacity. This would be on occasions when the municipalities were not doing their job. The Act gave room for the Minister to intervene if the municipalities were not performing. This was to avoid fragmentation. Regarding the working conditions of the drivers, there was a certain determination under the Labour Relations Act, that an operator must sign a declaration that it would comply with labour law. Operators were not complying with the Labour Relations Act, and it had been suggested by Mr Paul Browning, that the licences should be suspended or withdrawn, but the DoT had some concerns with that, including the costs that came with monitoring the Labour Relations Act.

Mr T Mulaudzi (EFF) commented that the Bill did not mention the transportation of scholars. He asked when consultation had been done. What should be done about the contractors who did not finish their jobs?

Mr Dingle answered that the scholar transportation safety issue was covered under the National Road Traffic Act, which says that a goods vehicle may not be used to transport passengers for reward. Other regulations under the principal Act were in place, and it was more of a law enforcement issue for the transportation of scholars.

Advocate Takalani Ndanduleni, Assistant Director, Department of Transport, replied that consultation had started in 2013, and continued up until recently.

Regarding contractors that were not doing their jobs, Mr Dingle said that it was regulated by the Public Finance Management Act (PFMA) at the national and provincial level and by the Municipal Finance Management Act (MFMA) at the municipal level, so it was not an issue that needed to be regulated by the bill.

Mr M Sibande (ANC) shared Mr Mulaudzi’s concern that the bill did not touch on scholar transportation. He also asked why there were no subsidies for taxis. Why was the scholar transport subsidy regulated by the DoT, but distributed by the Department of Education and not the DoT? At the moment, the subsidy for Gautrain was three times more than the subsidy for metro rail, so why was the Bill not amended to allocate the subsidy budget to the poor metro rail passengers? Why were there no subsidies for taxi operators? Why did MyCiti buses take the routes of the taxis?

Mr Dingle replied that currently the idea was to involve the taxis in the bus context. There were some types of indirect subsidies. The Department was aware of this issue of unfunded taxi operators, and was looking into it. Regarding the routes, MyCiti had entered into intensive negotiations with taxi operators. In some cases, taxi operators had been involved as shareholders of some bus companies. In other cases, taxi operators had been paid to surrender their routes.

Mr G Radebe (ANC) referred to the responsibilities of the spheres of the government, saying the National Transport Act still worked within the confines of the Transitional Act. When was the DoT intending to align the relevancy of the Municipal Structures Act to address these particular challenges? What were the districts and municipalities doing to work hand-in-hand to include their plans in the Integrated Development Plan( IDP)? Regarding the amendment that the requirement to update PLTFs every two years had been removed, if this were removed, what implications would that have?

Mr Dingle replied that section 94 of the Municipal Structures Act provided a list of functions that must be undertaken by the district municipality, and the balance had to be done by the local municipalities. One of the functions in the list was public passenger transport as a district function, but that was not in line with the minimum requirements for the integrated transport plan, which provided for various issues. Regarding the amendment to the requirement to update PLTFs every two years, Adv Ndanduleni replied that they could review it after five years, since two years was too soon.

Mr L Ramatlakane (ANC) commented that he had not heard any provision that would transform public transport to be inclusive and not monopolized in the bill, and expressed his disappointment about this. What were the contraventions that had been referred to? There was no power to withdraw licenses. What could be done about the Integrated Transport Plan (ITP), because when someone applied for a new licence, the application could be refused if there was a surplus supply of services on the route? The Act did not provide for such a moratorium.

Mr K Sithole (IFP) suggested that there must be strong consequences for companies such as Putco, which had just abruptly decided it would not be operating between Mamelodi and the Johannesburg city centre. Was Uber operating legally in SA? If they were, what was being done to make sure that the highly regulated taxis could still compete with them, since they seemed to be less regulated? If one took a bus company that had been subsidised and it stopped providing services, it must face penalties. For Putco, it was Gauteng. If the operator were disobeying other laws, the operating licence could be withdrawn. In terms of the Act, they must have an operating licence, and if they did not, then they were operating illegally.

Mr M de Freitas (DA) sought clarity on the amendment to section 21 clause 13. He also shared the concern of Mr Ramatlakane that the bill’s amendment did not bring about transformation. He was concerned about the financial implications that came with section 47 clause 26.

Mr Dingle said he did not think that this issue could be addressed in the bill.

Mr C Hunsinger (DA) commented that it was important to get freight on the rail, and not on the road. What was the penalty if the municipalities, members of executive councils (MECs) or delegations did not execute the instructions according to the bill?

Mr Dingle answered that the policy was to get the freight off the road and on to rail. However, this was challenging as it was very expensive and some goods needed to be moved quickly, and therefore needed to be moved by road.

Mr W Faber (DA, Northern Cape) commented that it was not right to have scholar transport under the DoT in some provinces, and under the Department of Education in others. He believed that scholar transport belonged in the DoT. He commented that the DoT could not regulate the e-hailing business with meters. How would the DoT regulate the e-hailing transport system with meters, as it planned to in the Bill?

Dr Y Vawda (EFF, Mpumalanga) commented that it was important that the DoT monitored the systems it put in place. It needed to be wary of placing a greater burden on the already stretched resources of the country. He asked how setting rates and fares in the industry would be done if it was done by the government. He wanted clarity on the power to conclude contracts. How would it be decided that a municipality had the capacity to conclude certain contracts? He was wary about deregulating tourism transport.

Mr Dingle answered that the DoT could not regulate fares for commercial services because it would be anti-competitive.

Mr Hunsinger expressed his dissatisfaction with the bill. He gave an example, using the amendment to section 35, sub-section 4, which disregarded the importance of the separation of powers. He described this as disturbing. There was a lot that needed to be re-thought in the amendment of bill which had been presented.

Mr Ramatlakane also shared his dissatisfaction about the Bill, especially the fact that the Bill had no provision that protected the interests of the poor small business sector, particularly taxi operators.

Mr De Freitas was concerned that contracts made with operators stipulated that the operator was subject to labour law. Why was this on one side of the contract, since every citizen should abide by the labour law?

Mr Dingle admitted that the Department did have a bus monopoly that needed to be addressed.

Mr Ramatlakana suggested that his question should be reserved for discussion when more time was available.

The meeting was adjourned.