Revised taxi re-capitalisation programme: briefing by Department

Meeting report

SELECT COMMITTEE ON PUBLIC SERVICES
17 November 2004
REVISED TAXI RE-CAPITALISATION PROGRAMME: DEPARTMENT BRIEFING

Chairperson: Mr R J Tau (ANC)

Documents handed out.
Department briefing on the Taxi Re-capitalisation Programme

SUMMARY
The Department of Transport confirmed the decision of their Minster to revise the Taxi Re-capitalisation Programme. It was crucial that planned revisions were disseminated correctly to the public to avoid confusion and disputes. Past misrepresentations by the media should not be repeated. The Electronic Management Systems (EMS) and New Taxi Vehicle (NTV) tendering processes would be scrapped and replaced by non-tender processes. The Department had retained the programme's fundamental objectives, which were to replace ageing taxis; promote road safety; and create affordable and reliable public transport routes.

Members welcomed the fact that the programme was back on track, but had concerns about illegal taxis receiving the scrapping allowance, transport coverage in rural areas and the lack of discipline on the country's roads.

MINUTES
The Department delegation consisted of Mr L Montana, Deputy Director General: Department of Transport, Mr R Mutsi, Member of the National Executive Committee of SANTACO (SA National Taxi Council); Mr K Pillay, Chief Director: Subsidy Management (Department of Transport); and Mr M Bopape, Manager: Taxi Operations (Department of Transport).

Mr Montana briefed the Committee on progress with the Taxi Re-capitalisation Programme. He stressed the importance of the recent Cabinet decision to proceed with the programme in a revised form. The Minister had recognised the susceptibility of the public transport industry to changes in the taxi industry, as it carried 68% of South Africa's commuters. He acknowledged that taxi minibuses were too old and posed a safety threat - the average age of vehicles was currently 12 years - and that government intervention was essential to successfully renew the entire industry.

Cabinet had decided to scrap the EMS and NVS tender processes as they were too costly and it was feared that the taxi industry would transfer the added costs onto commuters. A non-tender format for replacing taxis was now envisaged. Scrapping allowances had been agreed at R50 000 per vehicle. The process would be phased in over seven years, beginning in April 2005. Phased implementation was critical for avoiding mistakes and for 'learning by doing', with allowance for revisions along the way. With the dropping of the EMS and NVS tenders, the Department would have to come up with an appropriate business model for the non-tender format, whereas the previous format had incorporated financial management by banks. Early proposals for new taxi specifications required a 'disabled seat' in each vehicle, but in seemed this would also be too costly. Providing for disabled persons remained an outstanding challenge to the Programme.

Vehicle specifications had been revised to accommodate the needs of specific routes, i.e. 35-seaters would be redundant on rural routes. The Department envisaged route-specific subsidies, awarded on a contract basis to taxis or buses pending application. It was critical that duplication of public transport subsidies did not occur. A system of feeders might prevent this, whereby one mode of transport fed into the other. District municipalities would have a role to play in dispensing these contracts. Despite shortages in rural areas, there was a distinct saturation of taxis on urban routes. This fed intense competition and put pressure on drivers to minimise costs by driving unsafely. The Programme should reduce the number of taxis on routes, since some taxi owners might choose not to replace vehicles with their R50 000 allowances. Stolen taxis did not qualify for allowances, and would be removed from the roads within seven years. Regulation of the industry required effective law enforcement, as previous transport violence and lawlessness was not acceptable.

It was possible that the Department would suggest amendments to the National Land Transport Transition Act to ensure smoother running of the Re-capitalisation Programme. Government's interest in the programme came with the proviso that there be no delays. The Department felt it was ready to implement the programme speedily and efficiently.

Discussion
Mr D Worth (DA) asked whether provision had been made by the Department for retraining and developing the skills of taxi officials, since there were proposed new vehicle standards and specifications. Would maintenance and roadworthiness be included in the new regulations? How did the re-capitalisation budget of R7.7 billion fit into the Medium Term Expenditure Framework? How would possible corruption be checked and prevented? Finally, what was the proposed destination of scrapped vehicles? If they still had a monetary value, how could the Department guarantee their not re-entering the industry?
Mr Montana responded that MPs had to assist the Department with enforcing checks and balances to avert any potential atmosphere for corruption.

Mr Mutsi responded that 360 people from the taxi industry had been targeted for customer care training next year, and 900 in business management training and professional driver's courses. The Department was consulting the Transport Education and Training Authority for advice on delivering education and skills training over a longer-term. The burden on the Medium Term Expenditure Framework was R150 million for 2005/6. It was possible that the figure could rise to R1 billion per annum in later years. The Department possessed a register of legitimate taxi vehicles through the National Transport Register. Scrapped vehicles were struck off the register. Of course, stolen gearboxes and engines did not disqualify vehicles. Prior plans looked at melting scrapped vehicles, but various metals industries had shown interest in re-using the scrap. The Department was investigating possible Black Economic Empowerment Initiatives for recycling the materials.

Mr M Mzizi (IFP) expressed concerns with the burden of costs laid on the poor, and what his party saw as the marginalisation of taxi owners and drivers by the Programme. For example, if a taxi owner had recently purchased a new vehicle he/she was at a competitive disadvantage to owners of old vehicles who would receive the same scrapping allowance. What of elderly widows who had inherited the allowance from their deceased husbands; banks would show no interest in helping them renew their businesses? Rural constituencies did not believe they could afford to re-capitalise. Many taxis were stolen vehicles. It was a gross misallocation of public money if illegal taxi owners received allowances for their vehicles. Lastly, voices on the ground felt that SANTACO management was not representative enough of taxi people.

Mr Montana took note of the IFP's concerns, but he was confident that the revised Programme was customised to the needs of the poor. A safer, affordable taxi industry was beneficial to all persons. The Department was committed to the development and empowerment of business owners. The current situation of the industry was untenable; nobody could dispute that. He hoped the IFP would support the Programme and recognise the primary intention of the Department to service the needs of the many. The Department used a tracker system for stolen vehicles. If illegal vehicles were not tracked immediately, they would be discovered in time, as the Department consulted broader criminal trends.

Mr Mutsi replied that he had specifically overseen the democratic election of a national taxi authority; SANTACO was approved by 90% of the taxi industry. SANTACO was addressing problems voiced against it by the other 10%.

Mr Pillay answered that the seven-year period of scrapping of taxis would be phased, so that younger taxis remained in the system longer than older ones, thus reducing the impact of competitive advantage/disadvantage on the Programme.

Ms H Matlanyane (ANC) was concerned with the fate of marshals and taxi drivers. How would the Programme accommodate these integral components of the industry? The problem with bakkies transporting scholars was not confined to rural areas. How was the Department facing up to this very serious dilemma? Taxi drivers were very disrespectful and noisy on the roads; did SANTACO propose to address this unsavoury aspect?

Mr Montana appreciated the illegality and danger of bakkies as means of public transport. The Programme intended to redress this issue, which was a reflection of the greater deficiencies in the current public transport system. Accessing rural areas was a key objective of the Programme. The working relationship of employers and taxi drivers would remain intact during the roll out of the Programme. The future of taxi marshals had not been determined yet, but would be handled by an Interim Plan. Law enforcement must be stringent to prevent reckless driving and bad attitudes on the road.

Ms B Dlulane was critical of taxi and train violence. Routes had to be more closely monitored with a view to the 2010 World Cup. Did the Programme accommodate a role for communities in rolling out policy?
She proposed that a workshop be held next year bringing together the Departments of Tourism and Transport, because more synergy was necessary between the two.

Mr Montana answered that operations would be decentralised as far as possible to involve Municipalities and Local Authorities, whose participation was vital to the success of implementing the Programme. The Department continued to work closely with Tourism, but would not guarantee subsidies to items that could finance themselves. Subsidies were intended primarily to increase opportunities for the poor.

The Committee Clerk added that Tourism and Transport were very closely related and their respective policy options impacted on one another.

The Chairperson concluded that gender representation in the Department had not been touched on today but would be addressed next year. Both sections of the final Draft Regulations should be prepared by the end of February and not March, as announced in the presentation, to give the Committee time for reviews.

The meeting was adjourned.