honourable Minister Jeff Radebe, Minister of Transport, Gallo Manor
7 September 2006
âThe importance of BBBEE in the Transport Industryâ
Programme Director
Managing Director: Mr Franco Pasipia
Directors of the Company
Government officials
Transport operators
Representatives of SABOA
Ladies and gentlemen
Members of the media
It is indeed my great pleasure to be part of this landmark achievement to
witness the launch of the Public Utility Transport Corporation (PUTCO)
Broad-Based Black Economic Empowerment (BBBEE) Share Scheme. It is also an
honour for me to be here with you to rejoice this most significant initiative
in the bus sector.
In general, the initiative aims to address the imbalances of the past. The
initiative is launched at the time when the Department of Trade and Industry
(dti) is about to present to Cabinet finalised codes of good practice on Black
Economic Empowerment (BEE) for approval this month. This then means the
Integrated Transport Sector BEE Charter which outlines steps to bring about
increases in the number of black people that manage, own and control the
country's economy would be aligned with the dti codes and gazetted under
Section 9 of the BEE Act of 2003.
We all know that pre-1994 era was characterised by limited or none
involvement of the majority of South Africans in the Transport Sector with the
exclusion of the Taxi Industry except that it remains unregulated of which the
Department through Taxi Recapitalisation is trying to improve the business
environment of this industry and ensure commuters are provided with safe and
reliable public transport. The benefits thereof were largely protected and
utilised by a minority of the population business purpose.
In essence, the Transport Sector was not regarded as a key component of
economic growth and development to black people. Prior to 1994 the Transport
Sector development was largely a missed opportunity. The President through the
State of the Nation Address in February 2003 renewed government's commitment to
fight the continued exclusion of the black population from mainstream business
or economy.
The President also indicated that government would now look to further
facilitating BEE through legislative and policy measures which are now
happening as the dti recently enacted the BEE Act of 2003. The dti is about to
finalise the codes of good practice and my Department is working towards
finalising the Integrated Transport Sector BEE Charter, which encompasses the
bus sector BEE Charter. All these instruments serve as basis for such
endeavour.
Today a number of South Africans living in poverty is estimated to reach
anywhere between 45% to 55% (20 - 28 million) and is not confined to any race
group, however it is concentrated among blacks particularly Africans, whereby
61% of Africans and 38% of coloureds are poor compared with 5% of Indians and
1% of Whites. BEE has been effectively placed at the centre of economic growth
to redress the imbalances of the past by transferring ownership of and
management of South Africa's economy to the majority of its people and we are
today witnessing PUTCO launching BBBEE share scheme that aims to change the
status quo.
The new government that came into power in 1994 inherited a host of
constraints that limited the potential of the Transport Sector to play a more
meaningful role in the national economy. These constraints include:
* lack of inclusive, effective national, provincial and local structures for
the development, management and promotion of the transport sector
* inadequate or non-existent ground transportation especially in the rural
areas
* lack of infrastructure in rural and urban areas
* poor transport services
* poor involvement of local communities and previously neglected groups in the
industry as a result of government policies
* limited development scope
* local communities did not have access to the lucrative Bus industry and Bus
markets
* the potential of the domestic bus sector was largely suppressed due to the
segregation access to bus opportunities that prevailed
* segregation policies restricted access to Bus infrastructure and services for
the black population and such policies resulted poverty increase.
We all agree that the Transport Industry plays a very important role in our
economy, which contributes to the socio-economic improvement of millions of
South Africans. The BBBEE in the Transport Industry aims to among others:
* promote economic transformation in order to enable meaningful
participation of black people in the transport industry
* achieve a substantial change in the racial composition of ownership and
management structures and in the skilled occupations of existing and new
enterprises
* make the Transport Industry more accessible, relevant and beneficial to black
South Africans
* increase the extent to which black women, black people living with
disabilities and black youth own and manage existing and new enterprises and
increase their access to economic activities, infrastructure and skills
training
* increase the extent to which communities, workers, cooperatives and other
collective enterprises own and manage existing and new enterprises as well as
increase their access to economic activities, infrastructure and skills
training
* contribute to the sector's growth and sustainability.
During apartheid public transport,especially the bus sector was used as a
tool to segregate black people away from towns for them not to use in
residential areas but only for work purposes, which created a distance from
work to home and travelling long distances. The then government provided buses
as a mode of transport to be used by black people to and from work of which
were ran separately from white people municipality buses through the Group
Areas Act of 1950.
The intention was not to empower black people but rather to make sure that
they were segregated from white people, they were excluded from participating
in the industry that regulated competition. The bus industry impacted
negatively on daily lives of black people, as there was overcrowding in buses;
lack of proper terminal facilities, ranks and long queues and no safety and
security measures. Most Back South Africans depended on buses as a mode of
transport. Lack of competition within the industry excluded the majority of
South Africans into the mainstream economy in terms opportunities through
economic empowerment. The ownership within the sector was white owned with no
blacks as either in management positions or shareholding with any skills
development to improve knowledge of blacks in operating level. Most of workers
within the industry were black people at lower level, with no equity ownership
to top management. Today we see that disparity is being broken and our people
are able to participate freely in the economy and able to benefit through the
BBBEE Share Schemes such as those of PUTCO.
Let me take this opportunity to formally congratulate PUTCO with the efforts
they took in making sure that BBBEE is happening in their company. My
Department would also like to note and acknowledge PUTCO's efforts in
participating in the development of the Integrated Transport Sector BEE Charter
through the South African Bus Operators Association (SABOA). With the kind of
BBBEE share scheme that PUTCO is implementing we would also like to edge other
parties to take such initiatives in making sure that employees within their
companies do gain economic benefits.
As government we are looking forward to make sure that our people understand
economic opportunities that are there for them even to go further in assisting
them to unblock the blockages that may arise during the process of advancing
BBBEE. The work by the Department started as early as 1996 through the
introduction of the White Paper on National Transport Policy and subsequently
in 1997 the interim contracts were entered between Bus Operators and Department
of Transport with empowerment models to accelerate the entry of black Small,
Medium and Micro Enterprises (SMMEs) into the bus sector.
The government is also involved in the bus sector through subsidy, which is
a sign that the bus sector has opportunities in changing the life of our people
through business opportunities. The narrow based empowerment that focuses on
ownership and management is not enough to empower black people to be part of
the mainstream economy. As government we had to drive empowerment through the
introduction of BBBEE. Since late 2002 till to date the Department is working
with the industry to finalise the bus sector BEE Charter which sets targets as
instruments which measure contributions to BEE across the seven indicators of
broad-based black economic empowerment.
The indicators are: Ownership, Management and Control, Employment Equity,
Skills Development, Preferential Procurement, Enterprise Development and
Corporate Social Investment. It is important to indicate that with the about to
be finalised codes of good practice by dti and the Integrated Transport Sector
BEE Charter by DOT in collaboration with dti and sector stakeholders at large,
we are delighted that bus industries like PUTCO continue to implement BBBEE
without giving excuses that they are still awaiting for codes of good practice
to be finalised as other industries or companies are currently doing.
Therefore, we encourage that everyone in the transport sector should actually
take what PUTCO is doing as a model.
In conclusion, ladies and gentlemen, you all know that we are faced with the
challenge of making the Accelerated Shared Growth Initiative for South Africa
(AsgiSA) and the 2010 FIFA World Cup a success. The achievement of these and
our economic development goals are inseparable. Our objectives to make these a
success depend on how we co-operate, co-ordinate, research, plan and implement
together through advice and information sharing. Our progress in investing for
growth and development will be guided by policies that we put in place and the
role of the BBBEE should be part and parcel of making sure that our economy
benefits the majority of South Africans.
I thank you.
Issued by: Department of Transport
7 September 2006
