National Land Transport Transition Bill: briefing

Meeting report

PUBLIC SERVICES SELECT COMMITTEE
7 February 2000
NATIONAL LAND TRANSPORT TRANSITION BILL: BRIEFING

Documents handed out:
Draft National Land Transport Bill
Slide presentation – background and summary of Bill

SUMMARY
This Bill (currently with the State Law Advisors) aims at laying the foundation for government policy on public transport. Historically operators have had control over the consumer’s mode of transport. The Bill will place control in the hands of the government with emphasis on the service and safety requirements of users. The Bill places the user at the centre of government’s approach to public transport and will provide a rational basis for building a public transport system. The Bill has five pillars. Appropriate institutional bodies must be formed and coordinated. There must be effective and integrated planning. Regulated competition and restructuring of the modes must be considered. Sustainable funding must be found. There must be effective transport law enforcement. Two mechanisms emerged: the permission strategy would be developed: ‘permission’ as a prerequisite to operate. ‘Regulated competition’: competition for the routes in terms of service contracts or permissions.

MINUTES
Mr Harvey, the Deputy Director General of the Department of Transport, presented the briefing on the Bill. The Bill is currently being considered by the State Law Advisors. It must be promulgated before 1 April 2000, that is, in the current financial year, so that it does not conflict with local government elections.

Scope of the Bill
Current legislation will not be repealed. Norms and standards are established by Chapter 2. They must be the same for all provinces but will take precedence where there is conflict. Where a province has no adequate legislation they must have regard to Chapter 3 although its provisions may be repealed by provincial legislation, which will take precedence on those issues.

Principles of national policy
The principles are not to be included in the Bill itself but will be published in regulations. Their inclusion may create an unsustainable duty on the state to provide certain services. The principle which is included is impartiality-defined as prohibiting named officials such as members of permission boards or members of appeal boards from being involved in public transport in a business sense.

Functions of the Minister/MEC
Both the Minister and the MEC has the power to make and monitor the implementation of policy. The MEC enjoys all the powers assigned to the provinces by the Constitution. The Minister will make regulations on Chapter 2 issues and the MEC on Chapter 3 issues.

Institutional structures
Transport authorities will have the function of ensuring improved transport service delivery. Transport functions will be grouped within a single institutional structure. The jurisdiction of these transport authorities may be based on either municipal boundaries or, as for example in East London, on combinations thereof. In establishing boundaries criteria established in the Municipal Demarcation Act may overlap.

These transport authorities have certain compulsory functions such as having to prepare transport plans, develop transport policy and manage the movement of persons and goods. They will also be required to perform a transport contracting function by a date set by the Minister and the MEC in consultation. The authorities will have additional optional functions, set out in the Provincial Chapter.

Provincial permission boards will receive and decide on new applications, renewals, amendments or transfers and conversions. There will be a single board and regional administrative offices. The permission strategy will guide the board in managing capacity; for instance they may re-deploy operators from areas of oversupply to where there is a lack.

A provincial registrar will be appointed in each province who will promote professional practices, monitor compliance with regulations and establish and maintain a provincial register. The registrars are not bound by the impartiality provision in the National Principles but other provisions regulate the disclosure of interest they may hold in an operation.

Appeal Bodies: apart from the local authorities which exist to regulate registration, the appeal bodies will provide checks and balances. There are two bodies: the Provincial Appeal Body and the National Transport Appeal Tribunal which handles inter- and intra- provincial and cross border appeals in the absence of the Provincial Appeal Body.

Registration
The Bills emphasises the benefits of registration and economic assistance, especially in the context of taxi recapitalisation and in respect of tendering for contracts. Registration will be in one province only. A National Transport Register will be established with information regarding associations, members and vehicles. However, in the light of the nature of South Africa’s industry, information will be treated as sensitive and highly confidential.

Vehicle size
The new Bill provides for four kinds of vehicles: the motor car, the mini-bus, the midi bus and the bus, according to seating capacity. However, as from 1 October 2004 there will have to be much tighter compliance in respect of seating capacity, with the current use of ranges (eg. between 19-35) being eliminated and a certain seating capacity (eg. 35) being required for classification in a class. The aim will be to control the number of seats available overall and also to strike a balance between supply and demand. By setting the date at 2004 existing operators should not be prejudiced.

Conversions
Permits will be converted on a date prescribed by the Minister. Permits will limit operators to particular routes, particular areas and ranks and, according to their seating capacities, to certain classes of vehicles.

Discussion
Mr Raju (DP, Kwazulu-Natal) expressed concern over the conduct of taxi drivers. He advocated the need for focus on the employment and training of drivers.

Mr Harvey’s response was that such concerns fell under the jurisdiction of the Road Traffic Act under which professional permits and conduct are regulated. However, taxi drivers were previously not required to hold professional permits. The recapitalisation project will introduce the permit system to taxi drivers. The new Bill itself introduces a code of conduct, which has a bearing on driver conduct. The Constitution of Association must also deal with employment practices which would include the regulation of acceptable conduct. So far the Department of Transport has spent money on professional driver training, an added benefit for registered associations.

Mr Suka (ANC, Eastern Cape) asked a number of questions. In respect of negotiated contracts, was there any means of monitoring their effectiveness? Usually, if badly negotiated, many problems can be caused for the contract itself. Mr Harvey responded by summarising: negotiated contracts form part of the regulated competition strategy. There must be publication of intent to obtain a negotiated tender. The tender must be designed before it can be negotiated. There is an attempt to structure it as a tendered contract - the documents have the same legal standing except that one will have been negotiated. The Bill takes an outcome-objective point of view; it enables the Minister to publish regulations to regulate the amount of money which can be set aside for negotiated contracts. A monitoring process is therefore attached to subsidisation.

Mr Marais (ANC, Free State) pointed out that there was a danger that such a limit could be in conflict with the new Procurement Act. Mr Harvey disagreed saying that all other tender requirements comply with the Act.

Mr Suka’s second question was in respect of applications for permission. When a dispute arises and an operator appeals, which clause protects him? Mr Harvey said that appeals are made to the National Transport Appeal Tribunal or the Provincial Appeal Body. However in respect of disputes the normal tender board procedures could be followed. Alternatively, in respect of an existing contract, the contract itself could contain dispute resolution mechanisms.

Mr Suka asked for clarification on the impartiality of officials involved in the permit process. Mr Harvey said that a conflict of interest was not permitted. But at issue was also the right to free economic activity. Clause 4 of the Bill excludes any law enforcement official in the transport sector from owning or running his own public transport business.

Mr Suka asked whether the new Bill would exclude 36 seater busses in favour of 46 seater busses. Mr Harvey said that although any vehicle with a seating capacity over 46 was a bus, it was necessary to have steps from 18 upwards for economic sustainability.

Mr Suka asked what is meant by ‘tender for contracts’? Mr Harvey explained that any time public money is used to subsidise the bus service, a service must be designed, a tender must be designed and then it must go through a tender process. The procedure must comply with all regulations on procurement.

Mr Suka enquired whether there was a process of developing a code of conduct. Mr Harvey said that currently there was a document on the code of conduct which had been drafted by the National Taxi Task Team (NTTT).

Dr Nel (NNP, Free State) expressed concern over provisions on the code of conduct in the memorandum where it stated that members are exempt from certain requirements in the code of conduct provision. Mr Harvey said that this was only a temporary exemption granted to members who were still in the legalisation process but where they were in fact being held up by government and not through their own fault.

Mr Sulliman (ANC, Northern Cape) asked how urgent the Bill was from the Department’s point of view. He also enquired who else was consulted when the legislation was drawn up and whether public hearings would be held. Mr Harvey said that the Bill is very urgent. It must be promulgated by 1 April 2000 if local authorities are to be brought into the taxi recapitalisation process. He stressed that urgent consideration of the Bill was required. Mr Harvey was of the view that the process up to now had been exceptionally open. Key stakeholders have been consulted. An important issue is that civil organisations have not given input but groups like SANCO have been kept abreast of the process. The main consideration is therefore how to involve those smaller organisations in the rest of the process.

Mr Mokoena (ANC, Northern Province) was puzzled by the fact that the new Bill would not repeal current legislation. Would previous laws be integrated? Mr Harvey’s response was that currently there is only one Act applicable in the national sphere, the Urban Transport Act, which only regulates urban areas. There are matters, which the new Bill does not deal with, in particular, funding issues and core cities which the Urban Transport Act will therefore still regulate. He emphasised that the new Bill would fill gaps and would not replace current law.

Mr Mokoena asked what would occur if the MEC and the Minister came up with different policies, in light of the fact that they both had policy-making functions? Mr Harvey replied that public transport is both a national and a provincial issue. But, although the Bill will allow the MEC to publish policy, it would have to conform to national norms and standards.

Regarding registration Mr Mokoena was uncertain whether an association would register in a single province at all times. Mr Harvey’s response was that although the Bill accepts ‘associations’ it recognises no basis for national associations. An association will therefore register in its province of origin. Although regulatory systems locate an operator in one place it also recognises the potential for cross-border conflict and in such a situation mediation could be used as a resolution.

Mr Mokoena further expressed concern over any possible pressure to belong to an association, particularly on people who could not afford membership fees. Mr Harvey reiterated that there were two ways to be registered: as an association member or as a non-member. In fact the registrar was compelled to register a non-member. The associations would not be permitted to regulate who was part of the industry.

Mr Raju (DP, Kwazulu-Natal) commented that taxi violence emanates from monopolies. He asked what the Department’s view was on this, in the light of its aim of involving as many people as possible in the industry. Could monopolies be allowed to continue? Mr Harvey answered that under the new Bill, local government would have total control over ranks. No taxi association would own a rank. Freedom of association protects membership of associations but only legal compliance will determine permission. Therefore it will be through the permissions process that membership of associations will be regulated.

Mr Suka (ANC, Eastern Cape) asked for further clarification on alleviating tensions at taxi ranks. He specifically referred to King Williamstown where there is the absurd phenomenon of taxi ranks on the freeway. Mr Harvey felt that the establishment of a rank is a government decision, however there should be a negotiation process when setting one up.

Mr Maloyi (ANC, North-West) queried the general effect of the Bill on the employment of taxi drivers. Mr Harvey said that more jobs will be created under the new Bill and furthermore taxi drivers will have the first option on jobs.

Mr Suka (ANC, Eastern Cape) raised a question about persons holding permits without a taxi. These sorts of permits should lapse after six months but often registrars cooperate with taxi drivers and will renew the permit. Would such a person still be allowed to hold a permit? Mr Harvey replied that the Bill links permits to a route, a vehicle and a person. The permit is therefore invalid if not linked to all three. Operators would not be permitted to trade a permit although they would be able to apply for conversions and transfers to the permissions board.

Mr Marais (ANC, Free State) asked who would be monitoring the non-profitability of associations. He made the assumption that these associations were S21 Companies. He also asked what formal benefits drivers would enjoy in the context of regulated competition. Mr Harvey pointed out that the association is not a business but an organisation. It may form cooperatives and this would be regulated by the Cooperatives Act. Regarding benefits for drivers Mr Harvey acknowledged that organised labour was demanding that conditions of the contract be conditions of employment.

The Chairperson, Ms Majodina (ANC, Eastern Cape) asked whether the Department has a strategy to regulate ranks and such matters since it is taking powers from the associations. Mr Harvey’s response was that the Minister was empowered to coordinate capacity development. Moreover the Department will be providing training for drivers.

Ms.Majodina also asked what the regulation of the taxi industry would be vis a vis the bus industry. Mr Harvey said that the bus industry would now have competition. The added benefit would be that taxi operators could more easily move into the bus industry. The overall effect would be less sectoral division in the public transport system. He also revealed that his Department was working with the Department of Trade and Industry to recapitalise the bus industry in the same planning cycle.

Ms.Thompson (ANC, Kwazulu-Natal) asked whether the scrapping allowance on the old vehicles was market related. Mr Harvey said that the total cost of buying a new vehicle would be considered since affordability is a very important factor. The allowance was therefore market related.

Mr Sulliman (ANC, Northern Cape) asked what the cost implications are if the Bill becomes an Act. Mr Harvey was unable to give a precise response since more detailed work is still being done on figures. For each province their cost would depend entirely on what strategy they chose. He could confirm that R20 million was being spent on the planning phase but made it clear that he thought this money was an investment in the future.

The Chairperson adjourned the meeting while Mr Harvey invited members to make use of his Department when briefing their provinces.