National Land Transport Transition Bill: briefing

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
16 May 2000
NATIONAL LAND TRANSPORT TRANSITION BILL (B5B-2000)

Documents handed out:
National Land Transport Transition Bill (B5b-2000)

SUMMARY
The Department delegation, led by Ms Nothnagel, noted the amendments to the Bill that had come out of deliberations with the National Council of Provinces and SALGA. There are some overarching changes to terminology. The main one being the change from 'permission' to 'operating licence' after representations made by SATACO. There was extensive discussion on the specifications listed in Section 31 and whether they should be specified or left open-ended.

Members raised concerns over the taxi recapitalisation process. SATACO is still opposing recapitalisation but the tendering process is underway after a few delays and government will not allow the process to be derailed. Members who had met with taxi owners suggested that SATACO wanted a subsidy to be paid out to the organisation instead of in the form of a scrapping allowance to operators. The Department is opposed to subsidies because they are difficult to monitor and a scrapping allowance is their final decision.

MINUTES
The overarching changes to terminology relate to the term 'permission' which, in the context of the Bill, means a permit to operate a public transport service. The term has been replaced with 'operating licence'. 'Permission strategy' is now 'operating licence strategy' and a 'permission board' is now a public transport licensing board'. The changes arose out of consultations with SATACO, the South African Taxi Council, which is of the view that 'permission' implies too much state control over the industry. The change does not impact on the Bill itself.

Part 1
Clause 1: Definitions
The definition of 'public transport service' has been reorganised. The new definition is more concise although there is no substantive change to its content.
Mr Farrow (DP) commented that the terms 'midibus' and 'minibus' have connotations of number. He said this point had been raised in NCOP meetings but no amendment had been affected. The Chair, Mr Cronin (ANC), responded that in the definitions in Chapter 1 there were no specifications with regard to numbers.

Part 2
The principles for national transport policy, as stated in the White Paper on Transport, have been reintroduced into the Bill. This change was recommended in the NCOP hearings.

Part 3
Clause 5(5)(e):
The clause refers to the duties of the Minister. The term 'resources' has been added.

Clause 5(5)(i)(i):
The term 'meeting demand' has been replaced with 'satisfying user needs'.

Clause 5(6)(e)and (f):
A new Clause 5(6)(e) and (f) have been inserted. The effect of the insertion is that criteria and methodology for the rationalisation of public transport services may be prescribed by the Minister. In doing the rationalisation planning the planning authority must take into account needs and demands on the route. If there is little demand on a particular route the planning authority can rationalise the service on that route and allocate another route to the relevant operator. If the operator does not want the alternative route he must be offered compensation.

Part 5
Clause 10(6)(c):
'Financial' arrangements has been added to operational and procedural arrangements.

Clause 10(6)(d):
The term 'cadastral' has been replaced with ' point-to-point '. Ms Nothnagel acknowledged that the terms did not have precisely the same meaning but it was the closest substitute. The point had been raised in the NCOP meetings that a simpler word than 'cadastral' should be found.

Clause 10(8):
SALGA had requested that it be specified that a transport authority is a separate person from the municipality. Ms Nothnagel said the Department had not felt this to be particularly necessary but 'separate from' had been inserted on SALGA's request. A state legal advisor, Mr Netshitomboni, present at the meeting agreed that it was not necessary but that it would only make the separation clearer. Mr Cronin(ANC) added that the municipalities would probably not want to be dragged down by bad debt incurred by a transport authority.

Clause 10(13)(e):
'Organised labour' has been added as an additional group.

Clause 12(3):
The clause had previously referred to a 'competent MEC', which merely referred to the MEC designated to the task at hand. But it had been removed because the NCOP delegates had felt it implied the MEC might otherwise be incompetent and the term 'nominated MEC' had been substituted. Mr Farrow (DP) asked whether 'nominated' would not have legal connotations. Ms Nothnagel said no, it would not. It would simply be referring to the relevant Transport MEC.

Clause 13(2):
The words 'Subject to the approval of the governing body'-referring to the CEO of the transport authority opening an account for the authority, was inserted at the request of SALGA.

Clause 15(1)(b) :
'Provinces and municipalities' have been added to transport authorities as bodies to receive funds from the Minister in terms of the Division of Revenue Act to perform their functions in terms of the NLTT. This was done after SALGA's comments on the previous version.

Clause 16(b):
'Municipalities' has been inserted. Because the establishment of a transport authority is voluntary if an authority is not established municipalities will have certain transport functions. They will therefore receive funds from the MEC.

Clause 18(6)(f):
This is an enabling clause and has been added. Once a transport authority has been established it will have five compulsory functions, the fifth being the subsidisation of bus transport. In terms of Cl18(6)(f), when they take up this fifth function the money in the national budget will be made available to the provinces through the Division of Revenue Act.

Clause 18(3)(b):
'Demand' has been changed to 'utilisation'.

Clause 19(2)(c):
'Every planning authority' has been replaced with 'every transport authority and core city'. All municipalities will be deemed to be planning authorities. But there must be a deviation from different types of planning. Integrated transport planning, for instance, will only be done by municipalities or transport authorities while permission strategy planning or operation licence strategy planning will have to be done by all planning authorities.

Clause 24(1):
'Demands' have been changed to 'needs'.

Clause 26(1):
The MEC will decide which level of planning must be done by a particular body.

Discussion on Clause 31 in Part 9
Clause 31(1):
A new subclause has been added after Cl 31(1)(d). This provision will allow the Minister to provide for special categories of vehicles to cater for two exceptional cases: rural areas and tourist/courtesy services. Ms Nothnagel explained that during the NCOP hearings and provincial discussions concerns were raised that the vehicles set out in Clause 31(1)(a)-(d) may not be suitable for use in rural areas or for tourist services. There was therefore a recommendation by the NCOP that a paragraph must be added under subsection (1)(d). This allows more flexibility in the legislation. Clause 31(2) has also been changed to make provision for cross-border transport because there are certain SADC agreements and a number of permits to be taken into account.

Mr Niemann (NNP) referred to Clause 31(1)(a) which refers to a vehicle which can carry fewer than nine persons, excluding the driver, and asked whether nine people could ever fit into a car? Mr Dingle said that such a vehicle would include the Venture-type van for which one could obtain a permit for a metered taxi service. The plan would be to phase these out with minibus type taxis eventually.

Mr Cronin added that there are vehicles which seat close to nine, which fit into the above category, but whether or not they are issued with an operating licence will depend on other factors, not on the criteria set out in Clause 31(1)(a)-(d).

Mr Farrow (DP) asked whether it was not necessary to give the vehicle referred to in Clause 31(1)(a) a name and explain it in the definition so that it is not left open to any speculation.

Mr Cronin(ANC) said his understanding was that in essence commercial passenger service vehicles will come in four categories and these are stated in Clause 31(a)-(d). Did members have a problem with this?

Mr Slabbert (IFP) asked how many passengers a normal, four-seater sedan would be allowed to carry. Mr Dingle responded, saying that every car is made according to South African Bureau of Standards criteria. Depending on manufacturing standards the operating licence will be specifically for not more than four passengers.

Mr Cronin (ANC) said that the ANC were still undecided about the position to take on the issue of the 18-35 seater vehicles and the paragraph which had been inserted under Clause 31(d). There was a tension between leaving the paragraph in and thereby making the provision very specific. It might happen though, that in a few years time another vehicle might be manufactured which caters for a different vehicle capacity. How would this impact on future recapitalisation programmes?

The contrary argument is that if the taxi fleet is to be recapped, manufacturers and investors need to be attracted. Although these vehicle sizes are not mandated it could help to lower the price from potential manufacturers. Mr Cronin said the ANC were concerned about creating anxiety on the ground and yet they also did not want legislation that would box them in five years from now.

They were therefore faced with the following alternatives:
-keep Clause 31 as it is.
-amend it so that it takes a middle route between the other two options. For instance, the added paragraph could end at 'exceptional cases' and not add too many specifics.
-drop the reference to 18, 35 and 46 seaters.

Mr Cronin asked the law advisor, Mr Netshitomboni, to draft these alternatives to show what the implications would be. [later completed; see Appendix 1]

Mr Farrow (DP) suggested that since it is a transition Bill, the issues should be consolidated further down the line, for instance when the 2004 or 2006 dates kick in?

Mr Slabbert (IFP) said he supported the ANC's concerns. How did the Portfolio Committee feel about the 35- seaters? Are they viable? Members of his constituency did not want the 35 -seaters.

Mr Abrahams (UDM) said that taxi owners and drivers were asking who had decided that the 35 seater was the right capacity. [The effect of Clause 31 is that after 2006, if the Minister decides to exercise his right, no operating licences will be issued for minibuses other that the 18-35 seaters.]

Mr Magubane (ANC) said that he had held a meeting in the Northern Province with taxi owners and asked them why they are opposing taxi recapitalisation. Their response was that they do support recapitalisation but SATACO is pushing for the government to give the money being paid out in the form of scrapping allowances to them as an organisation. They would shop around and purchase the vehicles themselves. Mr Magubane was of the opinion that should SATACO receive this money it will never be used for its intended purpose. There was also a concern that some people were looking to get rid of stolen vehicles they had in their possession.

Mr Cronin (ANC) commented that it seemed that there was more insecurity than opposition from the industry. Affordability was also a major concern.
Mr Slabbert (IFP) added that SATACO do not represent all the taxis.

Mr Farrow (DP) broke off from the discussion to reiterate his earlier position that this is an administrative process and there would be ways of fixing the small problems later down the line.

Ms Mnumzana (ANC) thought that commuters were happy with the concept of the 18 to 35 seaters. She thought that operators would also simply modify their taxis to seat more passengers. Furthermore she thought that operators simply wanted cash in their pockets and felt that government must not be pushed into that process or let recapitalisation be derailed. Taxi operators do not even trust each other; financial benefits are their main concern. Nevertheless, though they may have petty concerns, the government must still take their problems and needs into account.

The Chair, Mr Cronin (ANC) felt that it was the intersection of the Bill with taxi recapitalisation, which was causing problems. He agreed with Mr Farrow (DP) that the Committee should not get too stuck because the Bill is provisional. But whatever choice was made they should understand the implications of their choice.

Ms Nothnagel tried to allay concerns over SATACO's representivity. She said that in all provinces there are currently preparations for the election of a new SATACO board. Currently there was only a Steering Committee in place. She said that splintering was a problem in the taxi industry and new associations were constantly being formed. The Bill tries to address this as the MEC will be able to decide on the minimum numbers of members who can be part of an association.

Ms Nothnagel explained that bus subsidies are available for road-based transport. When advertised the operator can tender with a bus or a taxi but sometimes taxi operators form a conglomerate and tender for a bus service. This is how taxis have become part of the bus industry.

Discussion on Taxi Recapitalisation
Ms Nothnagel said the questions that the Department was being faced with were: what is the value of the assistance being offered by government? How can the process be managed? The process was difficult to monitor which is why the scrapping allowance was decided on instead of a subsidy. Currently the value of the vehicles is being looked at in an attempt to bring the price down, which is why no information has been made available to the public. There have been delays in the tendering process.

She said that if Clause 31 were deleted in its present state there would be other implications for the Bill, especially in respect of conversions to current permit provisions. It had also been included to give some comfort to new investors who will have to build new plants and factories. It would also help planning authorities with strategy management. The more flexibility in the legislation the more difficult it would be for the planning authority board to make such decisions.

Mr Cronin agreed. He said that planning and strategy do not work well with flexibility although real life requires flexibility. There was therefore a tension between flexibility, which causes uncertainty and inflexibility, which might cause difficulties in the long term. He did not think a change to Clause 31 will have any great implications for conversions. He thought there was still not a need to specify vehicle capacity numbers, why not use the terms midi-and mini-bus?

Mr Farrow (DP) argued that the market dictates the kind of vehicle operators want to use by supply and demand. Another crucial factor is safety implications. He suggested that the Bill, and Clause 31 specifically, caters for the range of vehicle and the operator could then make his choice.

Mr Slabbert (IFP) asked the Department how the scrapping allowance works. Ms Nothnagel said she was not in a position to give an answer. However, Mr Harald Harvey, Deputy Director General: Transport, who served on the Committee, might be able to answer it during the following day's session with the Portfolio Committee.

Further Amendments
Clause 32(3):
'A permit authorising services by means of a minibus may be converted to an operating licence for a minibus, even if the number of authorised passengers increases' has been added. The increase referred to in the Clause is not to the changeover from 15 to 18 seaters. This is not seen as an increase for the purpose of the legislation.

Clause 37(2):
A new subsection 2 has been added. This is read with the special procedures for legalisation. In Clause 41(1), page 32, line 34, the Bill allows operators who are currently without permits but who adhere to the criteria specified to apply for a special permission to obtain a licence. This was decided in the Minmec meeting. These types of operators could apply for legalisation under current legislation and an operating licence under the Bill.

Clause 37(2):
Applications in terms of the special permissions provisions need not be published in the Government Gazette. It would cost millions if this were to be maintained.

Clause 51(3)(c):
'On the route or routes in question' has been added. The planning authority must pay compensation for the withdrawal of a route but the Department does not wish to exclude any public service operators, such as Golden Arrow, from receiving such compensation. Now only municipal operators are excluded. But where the operator was previously subsidised no compensation needs to be paid.

Clause 51(4):
'The Minister in consultation with the MECs must prescribe a minimum amount of such compensation' was added after SATACO expressed concerns that the planning authority will determine how much compensation is to be paid.

The meeting was adjourned until further deliberation tomorrow.