ADDRESS TO KWAZULU-NATAL LEGISLATURE ON THE STATE OF THE MINIBUS TAXI INDUSTRY BY MINISTER SBU NDEBELE, MEC FOR TRANSPORT IN
KWAZULU-NATAL, Ulundi, 26 July 2000

Mr Speaker, Honourable Members, Members of the Media, Ladies and Gentlemen:

Introduction

The challenge that we faced when we took our seats in Government for the first time in 1994 was gigantic. There was nothing that any of us could build upon. The educational system was in shambles. The backlog on housing was mind-boggling. The culture of crime and violence ruled supreme. The many centuries of apartheid madness had paralysed our economy. To date, the general feeling is that we have managed, collectively as government to turn the country around even though many of these challenges are still upon us.

In the case, Ladies and Gentlemen, of the Ministry of Transport, of the many obvious challenges we have been faced with, few have been as deadly, and as complex, as those relating to the restructuring of the public transportation system. In South African terms, public transportation virtually denoted horror. It painted gory pictures of Minibus crashes, bodies of our loved ones scattered on our roads. In South African terms, public transport spelt gunmen spraying bullets at innocent passengers in broad daylight - and -- assassinations under the cover of darkness. On the other hand, Ladies and Gentlemen, our public transportation system represents the only model of successful black economic self-empowerment. It is the only sector where blacks control an entire sector through their ownership of the Taxi mode of transportation.

For every 1000 white people in South Africa, there are 450 cars.
For every 1000 Africans, there are 20 cars.

There are already 40 million of us and the roads can accommodate only so much. The aspiration of a car in every garage is simply untenable. Public transport represents the future and black people are already in it. The question is therefore to make that transport safe, efficient and affordable. By far the largest market share in public transport has been captured by the Kombi minibus taxi industry. The kombi has become easily the most distinctive national symbol. We are a nation of kombis - a Kombi-Nation.

It is in the context of this dichotomy - a cruel dichotomy - that we could not, as Government, wash our hands off the challenge of the restructuring of the Public Transportation System.

Today I report on the progress we are making in relation to our initiatives in the Taxi Industry.

DEMOCRATISATION OF THE TAXI INDUSTRY

The minibus taxi industry in South Africa is comprised of some 20 000 owners, 120 00 vehicles and 200 000 employees. It carries between 6 and 11 million passengers daily and has an approximate turnover of R12 billion in fares per annum. The industry also spends approximately R10 billion per annum on fuel, vehicle spares, insurance and other overheads.

Indeed KwaZulu-Natal with 17% of the current national taxi fleet ranks second only to Gauteng Province which has 35% of the taxi fleet. KwaZulu-Natal has 19 860 registered taxis administered through 287 registered taxi associations. More than R1 billion is spent on fuel alone every year.

Conflicts of a business nature (competition over routes, permits, fare increases and even leadership conflicts within associations) are all resolvable by the regulatory process set up within the Department of Transport in partnership with the taxi industry. This range of conflicts can be considered normal in any growing business in which rules have to be defined and refined. They are conflicts that occur within the rules and are resolvable by reference to those rules even when they might indeed challenge or question the very rules that define them. I am reminded here of the significant role that the humble tomato played in redefining fruit licences and vegetable licences into fruit and vegetable licences.

Conflicts of a business nature can be resolved through mediation and consultation and we have set up the mechanisms to achieve this in an orderly and efficient way. Conflicts stemming from divisions and leadership battles within associations are being dealt with through the democratisation of the taxi industry. The elections within associations, as well as regional elections, will be completed in August 2000. The end of this process will see a properly structured industry, speaking through legitimate leaders and for the genuine interests of the industry.

As part of the process of stabilising the taxi industry, we have initiated a process of creating democratic structures from association level. This process will culminate in a Provincial Summit, which will elect a truly representative provincial leadership of the taxi industry.

This democratisation drive will resolve some of the bigger problems causing instability. Let me highlight some of the problems created by the undemocratic leaders.

1. Financial extortion.
2. Hiring of hit-squads to maintain control of associations.

There are constant violent battles for the control of associations. It is therefore important that as government we take the initiative to democratise the operation of the industry. The elections for local associations have started on Monday, the 24th July 2000. Eight associations have already gone through this process on the first day. They will be counted amongst those who brought about democracy, peace, development and stability in the industry. This is a milestone in reshaping our country and indeed, the role played by this province to what needs to be enjoyed by every citizen who lives in it.

Mr Speaker,

Let me report to this House that the democratisation process has been fully endorsed by the taxi industry in this province under the leadership of Mr C. Ngiba, Chairperson of the Provincial Taxi Task Team. This province needs leadership of this nature that has to rise above any emotions and provide guidance under any circumstances in their quest for a better taxi industry.

They have signed a Memorandum of Understanding between the taxi industry and the Department of Transport that, amongst others, accepted and are to participate fully in this process of:

1. Democratise the taxi industry
2. Legitimise the industry leadership
3. Formalise industry representation before government entities
4. Create the foundation for transparency, accountability and good governance over the affairs of the Taxi industry at an individual and collective level.

They have also undertaken to subscribe to:

• Transparency and fairness in conducting elections of office bearers
• Observance of the right of registered members to cast their vote
• Recognition and acceptance of members' rights to challenge and verify election results.
• Recognition and acceptance of the right of the Registrar and the Department of Transport to scrutinise, verify and confirm election results.

Again, this is a major milestone. We are Building a Nation. They have contributed. They are leaders. They will be part of our proud history. Abaholi abaqotho.

OTHER STRATEGIC INTERVENTIONS

It is now known by everyone that there are problems at SATACO (South African Taxi Council) level, that is the representative body of the industry at the national level. There seems to be two groups vying for the control of the council.

As government, we cannot afford this. We are therefore involved in a process of bringing leadership unity. The problem seems to evolve around influences of some individuals and groupings that are not taxi operators wanting to control the processes. They want to have major benefits for themselves. They are playing some leaders against others.

The challenge for us is to clean the industry of these undue influences. The leadership must be in a position to take decisions based on what is best for the taxi operators on the ground rather than punting for some external financial interests.

I must state that the national problems could have affected our drive for leadership unity in the province. However, due to our support as government and the maturity of the taxi industry leadership here, such disunity has been averted.

A Special MINCOM meeting has been convened on Friday to assist in bringing unity of the national taxi leadership.

The Judicial Commission of Inquiry into Taxi Violence has commenced its investigations. Some of the taxi associations and individuals have already made submissions. Given the enthusiasm and energy of the Commissioners, we are convinced the violence that has engulfed the industry will be uncovered. We want to see most of the perpetrators being put in jail where they belong.

The Minister of Justice, Mr Penuell Maduna has appointed a new judge, Judge G. Alexander, to chair the Commission due to some practical problems with the previously appointed Chairperson of the Commission.

The Commission has full powers to deal with all aspects of taxi violence. We are determined to cleanse the taxi industry of criminal elements including those officials within the Department of Transport and other government departments who are part and parcel of the network of bribery, corruption and protection.

The main focus areas of the Judicial Commission into taxi violence will be:

• Empangeni
• Eshowe
• Ulundi / Mahlabathini
• Durban Long Distance Taxi Association
• Cato Manor / Chesterville
• Dalton

The Commission is part of an all-out effort driven by the department to remove the scourge of violence still engulfing the taxi industry. We have other mechanisms in place to manage various types of conflicts. These conflicts are characterised as:

1. Long Distance Taxi Violence

Some of the conflicts previously existed in the Province have been resolved through existing conflict resolution mechanisms. These resolved conflicts include:

a) Mkhuze-Pongola;
b) Bhamshela-Dalton Taxi Associations; and
c) Some other minor association conflicts.

There are however a number of long distance conflicts that have yet to be resolved. These arose out of the battle to control the remaining lucrative route network in the Province. The main networks involved are:

a) Durban to Johannesburg
b) Durban to Empangeni
c) Durban to Nongoma/Ulundi

There are basically two groups fighting to gain control of this route network. These groups are currently going through major re-alignments and are forging alliances with many associations throughout the Province. One could argue that these groups facilitate conflict to ensure that they retain control and in some cases start conflict in order to divide associations.

2. Urban-Based Group

This is a group of operators based in the urban areas like Durban. They possess massive financial resources which ensure that they remain major role players in the taxi industry. They use their financial resources to finance taxi violence in their quest to gain control of the Province's route network. Whenever there is conflict they will support one of the sides in the conflict and as a result forge alliances in various areas of the Province. Their modus operandi includes:

a) Contracting hit men to eliminate their opponents.
b) Using their financial resources to buy support of taxi associations involved in conflict in other areas by assisting them financially.
c) Adopting effective strategies for "divide and rule" within associations.
d) Paying Government officials and enforcement agents for favours intended to assist in criminal activities and to defeat the ends of justice. This includes ensuring that those involved in taxi violence are not arrested or prosecuted for their crimes. As a result no one has yet been arrested for violence and deaths caused by taxi violence in the Province.

3. Rural-Based Group

This group is based in the rural areas and derives its strength from links with rural faction groups. Although this group does not have major financial muscle it is able to mobilise "hit squads" easily because of its links to these rural hit men. This rural group is also in control of some ranks and has formed alliances with other associations.

The KwaZulu-Natal Standard Constitution for taxi operators places an obligation on associations to have internal conflict management structures. Each association must have the following:

a) A disciplinary committee to deal with internal disciplinary matters.
b) A grievance committee to deal with conflict issues internal to the association. This will mainly involve conflict between members of the association and its members (intra-association conflict)

If the conflict within associations is not resolved internally, it must then be referred to the Regional Taxi Council and must be reported to the Registrar for his/her consideration in terms of section 8(5) of the KwaZulu-Natal Interim Minibus Taxi Act. If the Regional Taxi Council fails to resolve the conflict, it must then be referred to the Registrar who will deal with it and issue a decision. This decision can again be appealed to the Tribunal and the decision of the Tribunal is final and binding.

Taxi operators or drivers involved in violent criminal activities resulting from taxi conflict will be dealt with by the Judicial Commission of Inquiry.

The KwaZulu-Natal Cabinet has established the Judicial Commission of Inquiry in April 2000 and the Premier subsequently issued a proclamation to that effect. It is tasked with ensuring that those taxi operators and drivers that are involved in taxi violence and criminal activities in the process are arrested and prosecuted. To achieve this task, Commission is linked to:

a) Special Prosecutions Unit; and
b) A Special Police Investigative Unit.

The Commission has started work and is in the process of investigating individuals involved in taxi violence in the Province. Hearings will be held in August 2000 where witnesses and those accused of taxi violence will be subpoenaed to appear before the Tribunal. Those from the taxi industry convicted of violent crimes will be prosecuted and imprisoned.

ON ECONOMIC EMPOWERMENT WITHIN THE PROVINCE

Government's taxi recapitalisation programme is on track. The six preferred bidders have met the Government's safety and comfort requirements and Government is expected to announce the successful bidder in August 2000. The new taxis will be equipped with satellite tracking systems to ensure that they travel according to their allocated routes. The programme is designed to replace the current fleet of 126 000 minibus taxis with 85 000 eighteen-seater or thirty-five-seater taxis which are designed as suitable for public transport.

Recently there has been considerable media attention concerning confusion about the Government's taxi recapitalisation programme. On 29 February 2000 I convened a Taxi Summit at the Durban Light Infantry Hall to address this very issue. A subsequent meeting with the taxi industry took place in Uvongo, Margate on 3, 4 and 5 May 2000 to go through the details of the recapitalisation programme. Full agreement was reached over this 3-day meeting.

I would like to re-emphasise that Government has committed itself to a strong consultation process with all stakeholders in the public transport industry. From Government's perspective, great pains have been taken to ensure that the consultation process is data driven. That is, a consultation process both to inform and to be informed by all stakeholders.

On 17 July 2000 the Human Sciences Research Council produced a media release concerning their research findings on Commuter and General Public Attitudes to the Recapitalisation Programme. They reported that the majority of South Africans support plans to replace the current taxi fleet with new and safe vehicles. Only 28% of commuters who regularly use the service were opposed to the recapitalisation programme. About 50% of those opposed to the recapitalisation plan did so in the belief that it would increase unemployment and result in higher crime levels. There is little or no substance to their fears.

The magnitude and boldness of the Government's taxi recapitalisation programme has perhaps caused some to loose sight of other business initiatives concerning the taxi industry. In April 1997 we, in the KwaZulu-Natal Department of Transport, hosted a Taxi Investors Conference to draw attention to the need to refocus the bargaining and purchasing power of the taxi industry. It is precisely for this reason that we have established 14 taxi co-operatives, taxi cities and have facilitated the formation of Umthombo Investment Company.

The fact that only 20% of taxis are purchased through associations or co-operatives is an indication of how embryonic our taxi structures are and how much room for growth there is. Further, the Moving South Africa study indicated that the operating costs of the national taxi fleet could be considerably reduced by replacing the current aged, petrol taxis with new diesel powered vehicles

• the petrol price is approximately 17% higher than the price of diesell
• The current taxi fleet experiences 13% vehicle down time because of its age
• the interest rates are at prime +6% -10%

Research has conclusively shown that the abnormally high overheads within the taxi industry are a direct factor in low profit margins and low wages within the industry. All indications are that our initiative to develop an integrated transport system will not only address duplication between modes of transport but will also reduce inefficiencies in taxi operations and improve profits.

The KwaZulu-Natal Department of Transport is attempting to address the regulation and transformation of the taxi industry in an holistic way that results in a win-win situation. We have a responsibility to the public to put in place a reliable, affordable and safe public transport system. This cannot be achieved simply by replacing old decrepit unsafe vehicles with new customised safe vehicles. An holistic approach addresses a wide range of issues that very seldom receive media coverage.

Thus, for example, the fact that our Asiphephe (Let Us Be Safe) programme, together with the provincial taxi office, offers taxi drivers a course which includes lessons on defensive driving, advanced driving skills, road safety, customer care and public relations goes unnoticed. Yet it is undoubtedly in the public interest and I am proud to inform you that on 14 December 1999 I presented a further 347 certificates to taxi drivers who completed the Taxi Education and Training Programme.

Thus far 1 200 taxi drivers have received advanced driver training. Under this programme owners and operators are also offered courses on business management. Since 1996, 800 taxi operators have gone through business training programmes arranged by the KwaZulu-Natal Department.

What could still delay us in achieving our objectives and goals?

Mr Speaker

The taxi industry in South Africa and in KwaZulu-Natal is on the verge of taking its rightful place in the mainstream economy. It is on the verge of being properly regulated and a democratic process will soon result in the election of office bearers who can truly represent the interests of the industry. It is obviously not in the interests of the taxi industry to go against public interest. It is, after all, a public transport passenger service. Without public support the taxi industry will not prosper and grow.

The recently published HSRC findings indicate strong public support for Government programmes to transform the taxi industry. This cannot be ignored either by us as politicians or by the taxi industry. The taxi industry should be mindful of the findings of the Moving South Africa study that indicated a changing profile of taxi users. This is, of course, to be expected as democracy in South Africa will inevitably result in improved economic and financial circumstances of the majority and present them with new options to meet their mobility needs.

The initiatives of the Department of Transport on the economic empowerment of the taxi industry, which commenced as far back as 1996, were intensified in 1999. The past twelve months saw some ground breaking strides on two fronts:

1. The development of a structural framework to enable the taxi industry to engage collectively in economic activities.
2. The setting-up, within the environment of a solid structural framework, of actual business ventures aimed at turning the taxi industry into a serious economic force.

The structural framework referred to above relates to the demarcation of the province into 14 economic nodes and the setting up of registered co-operatives in all 14 regions. Every single taxi owner who subscribes to the vision of an economically empowered taxi industry is able to participate by becoming a member of a co-operative of his area. Then there is Umthombo Investments Company, which has the 14 co-operatives as the sole shareholders. Through Umthombo the Taxi Industry in the province have a vehicle that harnesses the full bargaining strength of the taxi industry. Through the facilitation of the DOT in KwaZulu-Natal the taxi industry has acquired a corporate identity through which it is now in the process of pursuing partnerships with the private sector.

1. Umthombo Distribution Company a division of Umthombo Investments Company, commenced operations in July 1999 and is involved in the distribution of tyres and components throughout the province. It has now concluded a joint venture agreement with an established distribution and logistics company on a new joint venture operation that we see Umthombo gain significant market share in the distribution sector.
2. Through the Malandela initiative, Umthombo has struck a deal with one of the bidders short-listed in terms of the Taxi Recapitalisation tender. Through this agreement the 14 Co-operatives will operate dealerships and maintenance facilities to service the new vehicles. The agreement also provides a 20% stake for Umthombo in the manufacturing processes of the new vehicles as well as for the operation of freight and logistics services under the banner of Umthombo.
3. Umthombo Insurance Services is as a division of Umthombo Investments Company has been in operation since August 1999. From the its humble beginnings it is now in the process of acquiring another insurance distributor in order to strengthen its capacity to service the needs of the taxi industry.

We do not have the time and space here to report in detail, the empowerment initiatives that are maturing at the level of the 14 co-operatives, which are business entities in their own right. Following some delays resulting from uncertainties with some of the national programmes, taxi city developments in all of the 14 regions are becoming a reality.

THE NATIONAL INITIATIVES: RECAPITALIZATION PROJECT

These economic empowerment initiatives that we started have now dovetailed with the major national programme under the title of the Taxi Recapitalisation Project. Through the Recap Project, Government seeks to grapple head-on, once and for all, with problem of an ageing fleet within our transportation system. The Recap Project represents a comprehensive re-engineering of the Taxi Industry with two major outcomes:

1. The systematic introduction of safe and comfortable vehicles for taxi commuters through scrapping allowance which will incentivise taxi operators to hand in, on a voluntary basis, the very old vehicles for decommissioning.
2. The economic empowerment of the taxi industry through a package of business opportunities that the Recapitalisation Project affords the Taxi industry to participate in nationally through the SATACO structures as well as at the level of the provincial co-operatives.

These whole processes will kick-off in earnest next month when Government will announce the manufactures that will be licensed to supplying the new 18 and 35 seat vehicles.

ENDS

Issued by the Office of the MEC for Transport, KwaZulu-Natal, 26 July 2000

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