Bus industry funding crisis: SATAWU briefing; National Land Transport Bill [B51B-2008]: NCOP amendments

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27 January 2009
Chairperson: Mr J P Cronin (ANC)
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Meeting Summary

The Committee was addressed on the NCOP amendments to the National Land Transport Bill [B 51D-2008]. The original amendments in the B-version of the Bill reflected a failure by the State Law Advisor to present all the consequential amendments. The NCOP had dealt with this matter in the C-version. The amendments dealt mainly with cross-referencing, grammatical changes and the addition of four clauses.

The Chairperson emphasised that no further amendments could be entertained as there was no time to refer the Bill back to the NCOP. The Committee committed itself to ensuring that an Amendment Bill was drafted by the new Parliament to deal with all further amendments.

The Committee was briefed on the bus subsidy crisis by the South Transport and Allied Workers Union. Corrective budgeting by the Department was questioned, and it was explained that there was some guesswork involved, as the oil price was an uncertain variable and elasticity in subsidy contracts was required. The Committee questioned the non-involvement of the taxi industry in this crisis.

The Committee resolved to host a meeting with National Treasury, the Department and all other available key players on 3 February 2009 to appeal to Treasury and the Department to make urgent contingency arrangements regarding the bus subsidy crisis.


Meeting report

Opening Remarks by the Chairperson
The Chairperson said that the State Law Advisors had failed to reflect all the consequential amendments to the National Land Transport Bill, but the Committee had taken a decision to send the Bill to the NCOP to give them a chance to deal with this matter.

Regarding the second item on the agenda, which was to address the crisis on the bus subsidy issue, the Chairperson said that there had not been sufficient time to inform the Department of Transport (DOT), and he extended an apology in this regard.

Mr B Farrow (DA) said that these matters might be sub judice at the moment. He asked if considerations could be delayed as the DA caucus was meeting that day to get mandates regarding the amendments. 

The Chairperson said that he thought the Committee had agreed that there were some anomalies, but further amendments could not be entertained because the Bill would then have to go back to NCOP. He added that there definitely were further amendments, and recommended that the Department look at this matter very early in the new Parliament as the architecture of the law has been fundamentally changed. The Chairperson asked if the DA needed to refer back to their caucus.

Mr Farrow said that the issue related to the South African Transport Services (SATS) amendment and the particular report with recommendations from Accelerated Shared Growth Initiative for South Africa (ASGISA). He expressed concern that perhaps something had been missed.

The Chairperson emphasised that the meeting was discussing process and if the DA was not ready that day, he hoped that they could be persuaded to agree with the formalisation of the amendments from the NCOP.

National Land Transport Bill: Consideration of the NCOP amendments
Mr Jits Patel, DOT Chief Director: Integrated Transport Planning introduced the team from the Department. Mr Patel said that the NCOP amendments were reflected in the C-version of the National Land Transport Bill [B 51C-2008]. The National Land Transport Bill [B 51D], the D-version of the Bill, was a composite of the amendments into the full text of the Bill. Mr Patel handed the meeting over to Mr Neville Dingle, DOT Legal Advisor, for a briefing on the amendments.

Mr Dingle said that all the changes reflected in the C-version of the Bill had been incorporated into the D- version of the Bill and reference would be made to this version. The amendments dealt with cross referencing, grammatical changes and the addition of or subtraction of certain words and clauses. Clauses 8(2); 20(3) and (4); and 29(4) had been added.

Mr B Mashile (ANC) said that Clause 93 (6) was open-ended about the restructuring of the administrations of municipalities, and as a result the new Act may be undermined due to non-compliance.

The Chairperson said that the Minister was being empowered to exercise her/his authority to set deadlines.

The Chairperson said the Committee was being presented with a bird’s eye-view of what was added in the rush of finalizing this complicated legislation.

The Chairperson noted that the South African Tourism Association had suggested further changes to the legislation and the Department was urging further amendments, but the NCOP did not have the time to effect further amendments.

He proposed that the Committee agree to accept the NCOP amendments with the awareness that there were many things that required further changes. The recommended Amendment Bill in the next Parliament would embody the NEDLAC processes and any other issues.

All Committee members expressed their support for the amendments.

South African Transport and Allied Workers Union (SATAWU) presentation on the funding crisis
Ms Jane Barret, SATAWU Policy Research Officer, introduced and explained the funding crisis in the bus industry. She stated that 21% of all commuters who used public transport travelled by bus and this figure had increased substantially since 2003. The tension between the National Treasury, the Department and the union was explained with an emphasis on the union’s commitment to ensuring that the public interest was served.

Ms Barret said that the Government owed the industry R1.2 billion, and if these subsidies were not paid by the end of the week, 26 000 jobs would be at risk and bus fares would have to be doubled. SATAWU appealed to the Committee to intervene in the crises and assist in finding a way forward (see document for further detail).

The Chairperson said that ideally Treasury, the Department, Southern Africa Bus Operators Association (SABOA) and SATAWU should all be together in a meeting so that the key players could speak with the Committee before an intervention could be made.

Mr Mashile asked for clarity about whether SATAWU supported the South African Bus Owners Association in the court action against the government.

Ms Barret replied that SATAWU was not a co-applicant, but had put in a supporting affadavit, as they had a direct interest in the court action.

Mr Farrow said that the major issue for the past four or five years had been the continual problem of funds. The Department of Transport did not budget correctively and court action would try to force the Government to pay. This crisis should be placed squarely in the Department’s hands as they should meet the level of subsidies required. The Department had shown a lack of insight regarding this matter.

Chairperson said that the Department could not be blamed because, as Ms Barret explained there was a bit of guesswork involved. One did not know what oil prices were going to be, and there had to be elasticity in subsidy contracts.

Mr E Lucas (IFP) asked what reasons were given by the National Treasury for not paying the money.

Mr B Pula (UCDP) said that the Committee should intervene and communicate how it was going to accomplish this and how soon it could accomplish this, given the short time available for intervention.

Mr Mashile asked if Government’s non-payment was for the full amount or a variable component of revenue. He questioned why the taxi industry was not involved in subsidies.

Ms Barret said that SATAWU did represent workers in the taxi industry. This crisis was about the bus industry and not the taxi industry.

The Chairperson clarified that the position the government was moving towards was operating subsidies based on contractual agreements, which related to the kilometers travelled and not to the number of people travelling, because this could be more easily monitored. Regarding mini-buses, he said that they should be part of a regulated system and there were plans to ensure that this happened in the future.

Ms Barret replied that she was trying to explain how the Department got into a shortfall, over a period of time. There were inter-departmental mechanisms that worked through Treasury. When there were shortfalls due to anticipated fluctuations the Department requested supplementary funding, which Treasury would decline. The subsidy flowed from Treasury to National Departments, to Provinces and then to operators. Provinces acted as the contracting authorities.

Ms Barret added that there existed correspondence from Director-General to SABOA for the month of November 2008, which stated that the Department was unable to pay because it did not have the money.

The Chairperson asked for agreement from Members that a meeting should be held on 3 February 2009 all the other parties concerned, to urge Treasury and the Department to urgently make some contingency arrangements and to focus on the major problem that needed attention.

All members supported this arrangement.

The meeting adjourned.


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