ADDRESS BY THE HEAD OF TRANSPORT IN THE PROVINCE OF KWAZULU-NATAL, DR KWAZI MBANJWA IN THE GENERAL MEETING OF THE KWAZULU-NATAL TAXI COUNCIL HELD IN PIETERMARITZBURG AT THE YMCA

"TAXI RECAPITALISATION"

 

PROTOCOL OBSERVED

It is my honour to stand in front of you and talk about the taxi recapitalisation programme which is one of the sensitive topics in the taxi industry in South Africa. 

As we all know the KwaZulu-Natal Department of Transport and yourselves as the taxi i8ndustry in KwaZulu-Natal we have been singing the same tune as far as this programme is concerned. We have together made submissions to the National Department of Transport about our concerns since 1999. I am glad to say that most of these concerns have eventually been considered and accommodated in the programme. 

We may not get 100% of what we want but I am sure we have got more than 90%. It has not been the easy road but we have come this far. Thank you for you cooperation and I hope this will work better for the greater of the public transport industry. 

  1. Background

The programme was designed and announced to the public in 1999 by the Departments of Trade and Industry, Transport and Treasury.

  1. Objectives of the programme were the following:

  • To have a turn-around on the Road Safety records of the Taxi Industry

  • To introduce affordable bigger capacity vehicles 18 and 35-seater.

The following strategy was adopted to implement the programme.

  • To issue a tender to solicit vehicle manufacturers who will produce custom-made 18 and 35-seater vehicles.

  • The introduction of Electronic Management System (smart-card) to improve revenues

It was envisaged that this process will lead to safer and affordable vehicles. 

Many companies presented themselves and six companies were shortlisted to go to the next stage of the bidding process. Subsequently one withdrew and the other one was disqualified (AMC) due to sub-standard quality of their vehicles presently in the market. 

It was envisaged that this process will be completed in 2000. Four years down the line the process has not yet been completed. The central issue which delayed this process has been affordability of the vehicles -

  • To government due to increased scrapping allowance required for a more expensive vehicle

  • To operators

  • To commuters due to increased fares

As part of this process, government conducted a comprehensive review of the programme. Inputs were sought from all stakeholders i.e. the taxi industry through SANTACO and Provincial Transport Departments. We made our submissions and recommendations as a Provincial Department and we dealt with the following issues.

  • Scrapping of the bidding process

  • Setting up of specifications which will address safety considerations

  • Allow existing fleet to depreciate to their lowest value.

Such inputs resulted in the development of a revised strategy. The central consideration is - Affordability and Safety. It is agreed that this project should pass the test of affordability to commuters, government and the operators. Secondly it must enhance the safety drive of government and our society. Key elements of the new programme are the following:

  1. The scrapping allowance has been capped at R50 000

It is important to note that this fund will play a dual purpose  scrapping old vehicle and also used as a deposit for a new vehicle. It is envisaged that the scrapping process will only involve the oldest fleet which have depreciated sufficiently. This will be allowed to operate throughout its shelf-life.

  1. The seating capacity has been relaxed

The legal requirement for an 18 and 35-seater has been shelved. There is a bigger scope for seating capacity allowed in the revised framework. Theoretically, the existing taxi fleet on our roads can qualify if they could be upgraded to meet the required specifications. What will inform the choice will be the needs of a particular route?

  1. The bidding process has been scrapped 

All taxi-type vehicles will be allowed to be sold as long as they meet safety specifications to be developed by government through regulations. So therefore the bidding process therefore is discontinued. 

The bidders have been informed about this development. If there is no informal collusion between the manufacturers, it is likely that the vehicle costs will go down due to competitive pressures. If this happens, it will be to the benefit of every stakeholder. 

  1. Safety specifications will be introduced through regulations 

Since the bidding process has been scrapped, government will develop quality standards and safety specifications. This process will be completed in March of 2005 so that the roll-out of this project starts immediately after that. 

  1. Electronic Management System (Smart-Card) 

The introduction of the Electronic Management System (Smart-Card) as part of the Recapitalisation process has been scrapped. The taxi industry on its own will have to design their own Smart card informed by the following considerations. 

Electronic: The specific circumstances within the industry: The need to integrate all transport including busses etc

  1. Targeted taxi subsidies will be introduced simultaneously based on commuter needs. 

A framework for the subsidization of taxi-type vehicles is being finalized at the national level. This will allow taxi operators to benefit from subsidies in those areas where there is a need. 

As government we are busy preparing ourselves for the roll-out of the recapitalization programme. Key areas we are working on are the following:

  • Development of safety specifications

  • Put together an Implementation Plan

  • Finalisation of the legalization process 

It is important that we address some of the misconceptions associated with the programme. The following are questions which are generally asked by operators and the public at large

8.1     What is the price of the vehicles? 

There is no single price of the vehicle because vehicles are no longer going to be determined by government. Any vehicle manufacturer can produce a vehicle as long as it meets specification. Even the existing manufacturers can adapt their products to meet the new specifications. 

8.2     Who will pay for the settlement of my existing vehicle loan? 

It is envisaged that you will scrap your old vehicle not the one still in high purchase. You will have to operate your existing vehicle until you have settled your present debt and also it has almost lived its life-cycle. 

8.3     What do I need to qualify for the scrapping allowance? 

You must have a minibus-taxi with an Operating Licence from the Transportation Board. The rest of the procedure to be followed will be outlined in the next few months. Such procedures will be communicated to you in due course. 

8.4     What if the R50 000 is not sufficient to cover the deposit for the
          new vehicle? 

There are two ways to address this problem.

  • Subsidisation for taxis in poorer areas is being investigated by government to be used to augment your scrapping allowance. This however will not apply to all areas.

  • The range of vehicles to be bought range between 10-seaters to 35-seaters depending on the viability of the routes in question. So you will buy a vehicle which matches the capacity in a particular route. So the prices of such vehicles are not known because the prices are not going to be centrally-determined.

8.5     How many vehicles am I allowed to scrap? 

Operators will be allowed to scrap all their licensed vehicles when they are due for scrapping. You have a right to scrap a vehicle without necessarily replacing with a new vehicle. However if you decide not to replace, you will have to surrender your permit. 

8.6     How long will this programme be implemented 

It is envisaged that it will take place over the next 7 years. The process will start with old vehicles first. 

8.7     How will it be implemented and how am I going to be assisted 
          in sourcing funding from banks? 

The implementation plan for the project will have to be put together by all of us with your full participation. We are envisaging a situation where your Regional Taxi Councils will be critical in the implementation through your co-operatives and other business structures you will want use in the process. 

The revised Recapitalisation Programme is a positive step which should be welcomed by everyone. It gives a broad framework with details to be sorted out by market forces and by the repositioning of the taxi industry in the province. It is no longer a rigid and inflexible programme. 

In conclusion I would like to remind you that we are already in the festive season and I am appealing to all of you: 

DO’S

  • Pre driving checks (road worthiness)

  • Put your seat belt on

  • Put your lights on

  • Plan your trip (long distance)

  • Have enough rest

  • Keep a register of your passengers

  • Obey the road safety rules

  • Have all your papers with you

  • Treat your passengers well

  • Be considerate to other road users

DONT’S

  • Don’t drink and drive

  • Don’t overspeed

  • Don’t overload

  • Don’t use a cell phone whilst driving

  • Don’t drive for more than 2 hours having not rested

  • Don’t allow your passengers to show part of their bodies outside the vehicle whilst moving

  • Don’t play your music too loud 

Let me take this opportunity to wish you all the best during the festive season and I also wish you, your families and your staff a merry Christmas and a prosperous New Year. Let us arrive alive in 2005. 

 

"Asiphephe" 

Thank You.

 

back