National Land Transport Transition Bill: briefing

PUBLIC SERVICE SELECT COMMITTEE
7 March 2000
LAND TRANSPORT TRANSITION BILL: BRIEFING

SUMMARY
The Bill is about taking public transport through institutional mechanisms, planning, funding, enforcement and regulated competition. It attempts to untangle South Africans from a legacy of an ungovernable public transport system that is based on the needs of operators and not commuters. It establishes a new foundation based on the needs of commuters. National norms and standards are being set regarding transport authorities, permissions boards, transport planning, law enforcement and registrations. The Bill will be implemented on national, provincial and local government levels and will provide a broad framework for further legislation on specific matters and implementation. The Bill depends on the provinces to a large extent, since they run the major parts of the regulatory framework - the registration and permissions processes. The difference between Taxi Recapitalisation Project and the Bill was discussed along with the cost of implementation.

MINUTES
Mr Harold Harvey (Deputy Director General: Department of Transport) presented and explained the National Transport Transition Bill

Summary of National Land Transport Transition Bill, 2000
The Bill is designed to bring about a fundamental transformation of land transport laws, with the emphasis on public (passenger) transport. The full national transport policy, as formulated in consultation with the provinces, cannot be implemented -

immediately due to the need to dovetail it with the new and proposed local government legislation. For this reason the Bill is transitional and will be replaced by final legislation within the next three years. The Bill sets the scene for the long-term restructuring of the land transport system. By providing for formalisation and regulation of the minibus taxi industry, the Bill will be an invaluable tool to promote order and harmony in the industry and is essential to implement the proposed Taxi Recapitalisation Project.

The Bill is divided into four chapters:
Chapter 1 deals with introductory matters.
Chapter 2 deals with matters of national concern. It focuses on matters contemplated in section 146(2) of the Constitution as setting national norms and standards and applying national land transport policy, and will take precedence over provincial laws dealing with similar matters (clause 3). Chapter 2 will therefore apply in all provinces.
Chapter 3 deals with matters of provincial concern, and will apply in each province unless a province has its own legislation to replace it or parts of it (clause 2(2) and the definition of "replacing provincial law").
Chapter 4 deals with general matters, and will apply in the provinces.

The Bill will amend the definitions of "motor car" (less than 9 persons excluding the driver), "minibus" (9 to 18 persons excluding the driver), "midibus" (19 to 35 persons excluding the driver) and "bus" (more than 35 persons). The new definitions will provide for the Taxi Recapitalisation Project. Road traffic legislation will be amended accordingly.

Part 1 deals with the definitions, purpose and scope of the Act as well as the application of the Act in the provinces

Part 2 provides that policy published by the national Minister of Transport (the Minister) may contain principles to be followed by all role players. It provides that various officials, such as members of permissions boards, must be impartial.

Part 3 provides for functions of the Minister, which include the power to publish national land transport policy in the Gazette and the keeping of a national, integrated land transport information system.

Part 4 provides for similar functions for the MECs responsible for transport.

Parts 5 and 14 provide for transport authorities (TAs) to be established by a founding
agreement between one or more municipalities, the relevant MEC or MECs and,
where funding will be provided from the national sphere, the Minister. A transport
authority will be a separate legal person, and will be formed for a transport area.

TAs will have some compulsory functions, such as preparing transport plans, and will be able to assume a number of voluntary functions. Municipalities will be able to choose whether to form TAs or to remain metropolitan transport areas (MTAs) under the Urban Transport Act, 1977.

The administrative, technical and professional work of a TA can be undertaken b y-
staff of the TA, or one or more transport or planning departments of participating municipalities, or a separate body, such as a company, called a transport executive.

Part 6 provides for interim funding arrangements for land transport. The Minister may make money available to provinces, TAs or municipalities for land transport from funds appropriated by Parliament, subject to conditions that the Minister may impose. The provinces may make this money available to TAs and municipalities for land transport. Municipalities may make appropriations to TAs of which they are a part. The Bill regulates the financial affairs of TAs.

Part 7 stipulates general principles for transport planning. Each MEC will be able to prescribe similar principles. TAs and core cities of MTAs, and where appropriate, municipalities, will be planning authorities to prepare the following plans as component parts of the integrated development plans of the relevant municipalities or participating municipalities, as the case may be:
a national land transport strategic framework by the Minister
provincial transport frameworks by the MECs
current public transport records by all planning authorities (a detailed record of existing services and facilities as a basis for other plans)
permissions strategies by all planning authorities (upon which recommendations to the permissions board will be based)
rationalisation plans by planning authorities where there are subsidised services in the area (tactical plans to rationalise services)
public transport plans by planning authorities that have significant public transport services (containing the planning authority's strategies for public transport)
integrated transport plans by transport authorities and core cities, and other planning authorities required to do so by the MEC (a strategic plan, including a detailed budget and a priority list of projects, that will also integrate transport planning with land development planning).

All persons and institutions will be bound by transport plans, and substantial changes in land use that impact on land transport may be undertaken only with the consent of the planning authority

Parts 8 and 15 provide that each MEC must establish a permissions board to hear applications related to permissions (i.e. authorisations to undertake public transport). Boards will be able to establish satellite offices for administrative purposes. Provinces will be able to provide for the functions of the board to be undertaken by similar bodies established by TAs.

Parts 9 and 16 deal with permissions. To implement the Taxi Recapitalisation Project, the Bill provides that only approved vehicle types, will be allowed to be used for public transport after a date set by the Minister, not earlier than 1 October 2006. Also, by a date to be set by the Minister, not earlier than 1 October 2004, no new permissions will be granted or issued for vehicles other than the approved ones. The approved vehicles carry:
less than nine persons, excluding the driver; or
18 persons, excluding the driver; or
35 persons, excluding the driver; or
46 or more persons, excluding the driver.

The following apply regarding permissions:
Existing permits will be converted to permissions by a date set by the Minister in consultation with the MECs. The MEC will be able to defer that date in consultation with the Minister. Any permit not so converted will lapse. Permits issued for an indefinite period will be converted to indefinite permissions, and permits issued for a definite period will be converted to permissions for the same period. Radius and areas permits will be converted to route-based permissions or, in limited circumstances, ones that are area-based. Holders of permits will not be able to convert them unless the services authorised by the permit have been provided continually for 180 days.

No one will be entitled to a new permission as of right: they will be granted or refused in terms of transport plans, based on recommendations from the planning authority, if the applicant has the ability to provide the service and is not disqualified by previous convictions.

Only one permission will be issued per vehicle. Certain persons directly involved (in applications related to permissions, in preparing permissions strategies, processing applications for registration or undertaking law enforcement related to public transport) may not hold permissions. Where a subsidised service contract or a commercial service contract has been awarded to an operator, the board must issue that operator with a permission for the duration, and subject to the conditions, of the contract.

Permissions may not be hired out to other persons. A vehicle used under a permission to provide services in terms of a public transport plan, may not also be used for long distance services unless the planning authority specifically approves this. The exemptions from the definition of "public transport" contained in section 2(2) of the Road Transportation Act, 1977, or replacing provincial legislation, will apply.
A significant change from the status quo, is that operators conveying learners and students will require permissions, except for once-off tours where the educational institution owns the vehicle or it has been set aside for the use of that institution. Temporary permissions will be required for special events in terms of Section 20 of the Road Transportation Act, 1977 or replacing provincial legislation. Provinces may make different arrangements in this regard.

Part 10 deals with "regulated competition". All new subsidised services must be put out to tender. To qualify as a tenderer for a subsidised service contract or a commercial service contract, an operator must:
- be registered in the case of a minibus taxi-type service;
- conduct operations according to business principles and be "financially ringfenced", and
- be liable to pay income tax.

A municipal or parastatal operator who is not liable to pay income tax may qualify, once only in respect of a particular service, where it was operated on 1 October 1996 and was not previously subject to an interim contract or a current tendered contract. Municipalities will not be allowed to tender for contracts, but a transport service established by a municipality will be able to do so if "financially ringfenced".

The Minister may allow a negotiated contract as an exception to the tendering requirement, once only in consultation with the MEC, to promote small business or to facilitate the restructuring of a parastatal or municipal operator.

Where a planning authority determines that services authorised by a permission in its area are no longer required, it must offer the holder alternative services, failing which it may apply to the board to withdraw the permission. The board may withdraw the permission after hearing representations from the holder, if the holder is compensated.

Part 11 provides for the keeping of a National Taxi Register to contain information related to registration of minibus taxi associations, their members, and of non-members. A provincial taxi register must be kept for each province. Each MEC must appoint a provincial taxi registrar.

Parts 12 and 17 deal with the registration of minibus taxi associations, their members, and non-members. To qualify for full registration, an association must comply with the following:
· It must have been in existence for the minimum period prescribed by the MEC.
· Each member must hold a valid permit or permission and operate within the authority thereof.
· Its members must have converted their permits to permissions.
· The number of its members must be above the minimum prescribed by the MEC.
· It must have a constitution that complies with the standard minimum constitution prescribed by the MEC.
· It must have subscribed to a code of conduct prescribed by the MEC.
· It must be based in the province where it applies for registration.

Associations whose members do not all hold permits or permissions may apply for provisional registration, if a specified minimum percentage of their members hold permits or permissions or have applied for them. All associations registered or provisionally registered before the commencement of the Act will be regarded as provisionally registered, but may apply directly for full registration if they qualify.

Non-members will be allowed to register if they have subscribed to the code of conduct, hold a valid permit or permission and operate in accordance therewith and are based in the province. In addition, non-members may register only where there is no registered association on the route or routes where the applicant operates, or, where there is such an association, only if
-the applicant has been refused membership of the association; or
-the applicant does not meet the association's requirements for membership; or
-the association's requirements for membership are unfair; or
-the applicant cannot reasonably be expected to become a member of the association; or
-the applicant would be subjected to unfair discrimination if admitted to membership.

Only registered associations and operators will be entitled to financial and other benefits provided by the government, TAs, or core cities, except for subsidised training.

The Registrar will be able to cancel or suspend the registration of associations and non-members for misconduct, or non-compliance with the association's constitution or the code of conduct.

Part 18 deals with law enforcement. Provincial transport departments may appoint road transport inspectors. Powers of authorised officers to impound vehicles operating without proper permissions or permits are increased. Law enforcement in this legislation does not refer to traffic law enforcement. This is law enforcement in terms of operators: whether they are sticking to their routes, and have their permissions. Public transport economic law enforcement was the focus not safety law enforcement. Nevertheless the importance of bringing safety and economic law enforcement together is extremely important. A transport law enforcement inspector has no authority at the moment under the Road Traffic Act to pull a vehicle off the road. This has to be changed. Two big changes are being worked: amendments to the Administrative Adjudication of Road Traffic Offences Act and the Road Traffic Management Corporation Act to allow these two systems to actually enforce this legislation. The other change is the work being done on the Training and Certification standards for Transport Law Enforcement Officers - where essentially they would be qualified registered traffic officers who in addition have been trained to implement this legislation. Thus when stopping a vehicle to check it for a permit, they could also do a roadworthy check and check the drivers licence and operator licence as well.

Chapter 4 deals with general matters. It provides that provinces may establish appeal bodies to hear appeals relating to applications concerning permissions for intra-provincial services. Where no such body is established, appeals will be lodged with the national Transport Appeal Tribunal established by Act 39 of 1998. Appeals concerning inter-provincial and international services must also be lodged with the Tribunal.

Discussion
Mr Harvey said that a few hours before the meeting he had received a fax from the National Taxi Drivers Organisation (NATDO) in which they essentially rejected the Bill and the replacement of old taxis with new ones.

(Q) Mr M Sulliman (ANC, Northern Province) requested copies of the submission by NATDO for the members so that the provincial legislatures could also be sensitised around the feelings of NATDO.

(A) Whilst Mr Harvey had no problem with distribution of this to the provinces, he pointed out that there was in fact a question mark around the credentials of the organisation and secondly the legislators in the provinces should get a full picture of what the stakeholder inputs were. The Department had a summarised table of the kinds of inputs received during the process. It would thus be much more useful if a more complete picture could be shared with the committee.

(Q) Mr M Sulliman wanted to know what the cost implications were of implementing the legislation.

(A) Mr Harvey said that there were some broad numbers if the Bill was fully implemented. The Department had been very careful to go through the legislation and say what it was that was new and what was being done already. Permissions boards would be fewer since there would only be one per province. The provinces were already running the registrar's offices. So there was nothing major which was new.

There were two places where new money would come in. The one was the planning process, since it was a more sophisticated planning process. The department had set aside a portion of money from the Urban Transport Fund to assist local authorities with planning but this was not sufficient. An extra R80-100 million per annum would be needed on top of this for the first five years. After this period planning would not cost as much. The other cost was the transport authorities themselves. If National Government wanted this to work it had to put down some serious money. At the same time local authorities should not think that National would now become a "cash cow". This was said since one would negotiate with a local authority, who wanted to delay the putting out to tender of services in their area and say that they were still busy with their grand plan. In essence local authorities knew that National would be throwing some money into transport. This was an opportunity to fund previously municipal-subsidised bus services with National Funds and use the saved municipal funds for other things. Councils could save up to 80 million rand in the process! At least some of this should be put back into transport.

(Q) The chairperson, Ms P Majodina (ANC, Eastern Cape) asked whether the she was right in assuming that the viability of the Bill would depend on the provinces because the MECs had certain powers to regulate matters in the Bill.

(A) Mr Harvey agreed that the Bill depended on the provinces to a large extent, since they ran the major parts of the regulatory framework - the registration and permissions processes. They were however doing this already, either through provincial legislation or some administrative decision.

(Q) The chairperson felt that the Permission Board had to be totally impartial. She asked whether there would be certain criteria used in order to appoint persons to such a board.

(A) Mr Harvey agreed and said that one of the overriding principles in the Bill was that no person with an interest in the transport industry could sit on the permissions board. Section 4(2) laid down the criteria on this issue.

(Q Further, the chairperson wanted clarity about the "distinguishing marks to be placed on vehicles".

(A) Mr Harvey said that there would be two kinds of distinguishing marks. The one would be route markings, where it would specify from A - B with different colour coding. The other kind of distinguishing mark was association symbols. There had been violence in the past which had erupted as a result of people having had the wrong stickers on their taxis. Operators could register as a taxi association or under certain circumstances as individuals.

(Q) Ms Majodina asked how an individual would be made accountable if he did not want to belong to a taxi association. To which code of conduct should he subscribe?

(A) Mr Harvey said that it was quite difficult to get registered as a non-member, since the first port of call would always be the association. There were specific conditions under which one was allowed to register as a non- member, for example, one would have to show that the membership fees of the association were exorbitant. Nevertheless he recognised that this issue had to be addressed with caution since someone could take this to the Constitutional Court on the grounds that it was a violation of the right of freedom of association.

(Q) The chairperson asked if Long Distance Operators were required to have special permits.

(A) Mr Harvey said that the idea was to be either a short distance or a long distance operator. The transoprt plan put together by a city assumes a certain supply in that market to meet people's needs. Operators could not simply disappear to the Transkei every time they get a church group who needed to go to a funeral, or a soccer club going to a soccer match. However this did not mean that an operator could not do a special hire on a weekend. The operator could go to the permissions board and apply for a special permission in this regard.

(Q) Ms Majodina wanted to know if an operator would have to get another permit for using a different vehicle when the operator's usual vehicle was out of action,?

(A) Mr Harvey said that permit sharing by different drivers was not allowed, however if your vehicle was out of action you would be able to get an amendment of permission to allow you to use another vehicle for a period of time.

(Q) Mr L Suka (ANC Eastern Cape) asked what would happen if it was decided on Friday evening that a group needed transport on the Saturday morning and the Permissions Board was closed?

(A) Mr Harvey said that it was possible to get a special hire standing permission from the Board outside of commuter hours similar to the tourist service permission. He accepted the point that there may be a need for the permissions board to be able to process emergency applications outside of normal hours. Mr Neville Dingle, a consultant for the Department, said that this issue had been grappled with quite a bit and it had been left to the provinces. Some provinces had "adhoc authorisations" where the operator gets a book of authorisations which he fills in and later sends a copy thereof to the board. Others had a temporary permit where one had to go to the Board which, as Mr Harvey said was a problem since the Board closed at 4pm on a Friday. He repeated that this issue had been left to each province to sought out.

(Q) Ms B Thompson (ANC, KZN) was worried about all the "red tape" in this regard and asked whether a permission obtained for a special trip had to be handed back after the trip.

(A) Mr Harvey said that a temporary permit would indicate that the permission would expire after the special trip had been completed. Without this red tape, operators would do exactly what suited them and as a result you would find short distance passengers standing without transport on Friday afternoons or when ever. He added that most of the endemic violence involving long-distance services was a direct result of short-distance operators abusing the temporary permissions as a way of getting into the long-distance markets. It was not intended that an operator use a series of temporary permissions to operate a long-distance business.

The chairperson agreed that the red tape was necessary.

(Q) Mr Suka wanted clarity on whether each Taxi Association or Union would be governed or regulated by its own code of conduct. Did this mean that the Department did not have its own code of conduct. Was there equal treatment in respect of the bus industry?

(A) Mr Harvey said that the Bill would have a set of regulations, setting out a standard constitution, and a standard code of conduct. Thus an association could amend
these and adopt them. However they could only be amended to the extent that they remained consistent with the standard constitution and code of conduct.

In terms of equal treatment with the bus industry, he said that whilst there could be short-term discrimination, the view was that the bus industry would become registered in the future as well. Thus there was no such thing as a Taxi Registrar - it was a Transport Registrar.

(Q) On the subject of the subsidised service contract, Mr Suka felt that bus operators were not very happy with the negotiated contracts of taxi operators. He wanted clarity on whether the taxi industry was a parastatal or independent and whether the department was regulating the industry for economic development.

(A) Mr Harvey said that the bus operators did not like the negotiated contracts simply because they felt that it was a gap that government would use to give advantage to taxi operators. It was a long, hard fight to get the bus industry to agree to the tender system and now taxi operators were being favored by means of the negotiated contracts which left the door open for subsidisation. If one read the clauses in the Bill, it would be seen that the door was in fact kept very small. The Minister would limit the amount of subsidy money that could go into subsidised contracts. The initial test for a negotiated contract was that it had to be proven that it was the optimal way of furthering black economic empowerment or restructuring of a parastatal for black economic empowerment.

(Q) Mr A Marais (ANC, Free State) wanted to know what were the credentials of the National Taxi Drivers Organisation.

(A) Mr Harvey said that NATDO was a registered trade union in terms of the Labour Relations Act. It has a claimed membership that has never been verified by the Department of Labour. It was the view of the National Department of Transport, based on its experience of working with its colleagues in the provinces, that NATDO represented a group of drivers which was almost exclusively Soweto-based. This was not to say that the issues they have raised should not be engaged on. However, in the Department's view, they were not a national union.

(Q) A member said that although it was pointed out that the Taxi Recapitalisation Project should not be confused with the Bill. Somehow the Bill does touch on the Recap program where approved vehicles are mentioned. In terms of the Recap program the idea was to start from 18 passengers and up. Yet the Bill talks about vehicles containing nine persons excluding the driver. For what purpose was this smaller size vehicle included?

(A) Mr Harvey said that the issue of nine-seater taxis was included for meter taxis which also needed permissions.

(Q) Chief Hlengwa (ANC) said that there was confusion between the Taxi Recapitalisation Project and the Bill. He wanted some clarity.

(A) Mr Harvey said that government was busy restructuring public transport which included the restructuring of the taxi industry. The taxi restructuring programme has three big components: Legalisation (regulation control and permits), Formalisation (registration process; the standard constitution and code of conduct) and Economic Assistance.

Initially economic assistance was simply helping the taxi industry in some of the provinces establish provincial cooperatives for driver and business training. By 1997 it was clear that there was an economic crisis in the taxi industry. Vehicles were getting old and there was no means to replace the vehicles. This was because of the way the cost structure was organised and the oversupply of operators who were not able to save enough money for vehicle replacement. If they needed a loan, banks would tell them to pay an interest rate of 35% as opposed to the standard 19%. They also could not get insurance.

The government decided to address the economic fundamentals of the industry. What emerged was the Taxi Recapitalisation Project . This was purely about how to assist the taxi industry to replace its vehicles. The current average age of a taxi is ten and a half years and in economic terms they should not last longer than eleven years. Practically speaking they did last longer than this with the help of elastoplast, sticky tape and other things! The problem was that the older taxis were dangerous. According to the Arrive Alive statistics for December 1999, the rate of deaths attributed to long distance taxi accidents in rural areas have increased by 70%. The average 16 seater minibus is not designed for public transport. The original design was for a panel van. The replacement of these vehicles had to be with vehicles which were specifically designed for passengers. Tracking systems would be installed as a "micro-chip" in the taxi to ensure that that the vehicle was on its legal route and was registered. To try and compensate for the expense of these technological advancements, the vehicle had to cater for 18 passengers. Diesel engines would be used instead as diesel is cheaper and more fuel efficient.

The Taxi Recapitalisation Project is thus a once-off project where approved vehicles, meeting the specification requirements, would be sold to operators who if they scrapped their old vehicles would get a subsidy in the form of a scrapping allowance.

The Bill only dealt with seating capacity specifications and restrictions. Thus taxi operators were being warned not to buy a vehicle in the future without certain specifications. Manufacturers were being reassured that their vehicles would be required. The Taxi Recapitalisation Project was necessary. The accident statistics were horrific - 10 000 deaths per year on our roads of which 15% were caused by taxis. This problem was being addressed in a way that would help the taxi industry (which had 60% of the public transport market and was historically disadvantaged) to make the change.

(Q) Ms R Ndzanga (ANC, Gauteng) asked whether taxis would be able to convey tourists to tourist attractions. Would there be special training for taxi drivers to do this type of work or would they have to be accompanied by someone who was well informed around tourism.

(A) Mr Harvey said that anybody could operate any kind of service. Other than the permissions, there were no other barriers to the taxi industry to get involved in another industry. The tourism market was very open to the taxi industry. Nevertheless there was a provision for special kinds of permissions in the case of tourism services. There was legislation under the Minister of Environmental Affairs and Tourism about the registration and training of tour guides. It was stressed that drivers could not act as tour guides simultaneously due to obvious safety problems. Tour guides had to be registered with the Minister.

(Q) Mr Suka said that there had been some indications that COSATU viewed this new regulation of the taxi industry as in some ways privatising the industry. It had called for nationalising it instead. What was the Department's reaction to this?

(A) One of union's arguments was that public transport was a social service and it should not be profit driven. Although there was an important debate here and the arguments should not be diminished, he felt that this had to be seen in the context of the debate around GEAR and privatisation. He said that what had characterised the debate by the department and the unions on this subject was that ideological issues have not clouded the process - there was agreement to disagree on the strategy. After this there would be a very effective negotiation on how you would deal with the job loss issues. The tender system would create a change in the labour market because there would be bus contracts running for four or five years - as opposed to life-time contracts. This had implications for the way in which workers got employed. Employers try and take advantage of this and push it in the direction of contract employment, so there are agreements in place on how this is managed.

(Q) Mr Marais noted that in Section 12 of the Bill there was no specificity on MECs.

(A) Mr Harvey said that the definition stated that it meant the MEC for Transport.

(Q) Mr Marais asked whether the permissions process would introduce quotas.

(A) Mr Harvey said that the initial phase of the permissions process was a straightforward conversion. If one had a legal permit, you would get the new permission. There was no major change in the allocations. The transport plan would set the quotas.

(Q) Mr Marais said that at a previous briefing, Mr Harvey had said that registrars would continue. However in Section 94 of the Bill, Mr Marais could not see any mechanism for continuity. Further the independence and terms of the office, its budget and location were not addressed.

(A) Mr Harvey said that that in Section 52(4) of the Bill there was a transitional appointment. This was in Chapter 3 dealing with stop-gap provincial legislation. The independence of the registrar was managed in Section 95 of the Bill. It was seen as inappropriate to require that a registrar must have no vested interest in the industry, since the history was that the most effective registrars were people who came from the industry and knew what was going on. Nevetheless, any interest a registrar may have, had to be declared. They had to recuse themselves from involvement in matters in which they may be associated, and there was also a transitional provision stating that the registrar had to get out of the industry after a certain time. The term of office was not specified. Issues of budget and allocation were provincial matters.

(Q) A committee member pointed out that the transport forum was currently responsible for disciplinary and grievance matters. One of the problems was that the persons serving there were not "fit and proper". They were not knowledgeable about legal processes for example. How did the Bill and provincial legislation plan to deal with this?

(A) Mr Harvey said the behaviour, discipline and grievance matters of individual operators were addressed within the association. The registrar could intervene if there was a procedural dispute between an association and a member about how to deal with such a matter.