J Radebe: SA Bus Operators Association national conference

16 February 2006

It is my pleasure to be here with you this morning. The transformation of
our public transport system remains a daunting task, and defining the role of
the bus in this changing environment will prove to be challenging. I say this
because there may be doubts among some in the bus industry that Government does
not believe in the future role of the bus within our public transport system. I
must indicate to SABOA and the industry as a whole that it is Government's firm
position that there is a still a role for the bus industry, a significant role
for that matter. I'll return to this theme later in my address.

The President has through his State of the Nation Address defined the key
strategic challenges for us as a nation. At the heart of our national effort
for social and economic transformation is the contract between the democratic
government and the people. The budget presented to Parliament yesterday has
further reinforced the overwhelming sense of optimism and age of hope that
President Mbeki spoke about last week.

The achievements of the past decade are a clear indication that when we act
together and decisively as a people, guided by a common vision of a better
South Africa that belongs to all, we will overcome the obstacles and become a
winning nation.

Government will play a major role in the realization of our key economic
goals through targeted interventions as outlined in Accelerated and Shared
Growth Initiative (ASGISA). Central to this is increased public sector
investment in economic infrastructure estimated at R370 billion. As you could
see in the budget, we are also beginning to witness marked increases in levels
of investment in transport infrastructure and services, which are key to
sustainable growth and development.

This is good news for transport in general and for public transport.
Increased investment in infrastructure, operations and people will contribute
immensely to improving the reliability of transport services, enhance the
safety of operations and enable forward planning by various transport operators
I am pleased to announce that the budget makes provision for additional
allocations to road infrastructure of a total amount of R1,9 billion, the
additional allocations of a total amount of R1,6 billion to passenger rail,
additional resources for the Road Accident Fund of R2,7 billion and the R3,5
billion through the Public Transport Infrastructure Fund over a three year
period, the Medium Term Expenditure Framework (MTEF) period. This is the
clearest signal ever that we are on course in our efforts to overhaul our
public transport. These increased funding allocations for transport services
are significant enough and will enable us to make the necessary targeted
interventions as required by ASGISA.

This commitment is communicating the message that Government at all three
levels, in partnership with the bus, taxi and rail industry must roll up their
sleeves and get to serious work.

The Department of Transport will respond to the challenge of improving
public transport and ensure that detailed business plans are provided and that
the committed funds are spent within the timeframes outlined in the budget
review. I am also encouraged by the fact that funds have been earmarked to
facilitate preparations and transport infrastructure requirements for the 2010
Soccer World Cup and beyond, for provinces and host cities. Through our 2010
Transport Agenda Framework, we will coordinate all initiatives and support
municipalities in delivering on the key public transport projects.

Transport has an important contribution to make in addressing the scourge of
poverty in our country, creating wealth and providing the necessary linkages
and opportunities between the first and second economy, including facilitating
improved access to public services for the rural masses. In this context, and
as part of creating sustainable communities based on mixed land use and
densities, it is critical that investment is focused in order to achieve
sustainable growth and development.

Public transport plays a significant role in facilitating economic activity
and maintaining social cohesion of many communities. Government at national,
provincial and local level embarked late last year on a public campaign to
champion the transformation of public transport. The message from consultations
with public transport users and communities is clear. First is that we need, as
a matter of urgency, to address the lack of reliability and inefficiencies that
characterize the current passenger transport system.

The fundamental lesson from our transport month comes from many communities
that do not have access to any form of frequent and reliable public transport
services. We will accelerate this year the implementation of flagship projects
such as passenger rail consolidation, taxi recapitalisation project, and
optimisation of the bus subsidy. These targeted interventions are aimed at
improving in the short to medium term the performance of our public transport
system. However, the major lesson of our public transport campaign is that we
need to move beyond these initiatives and set the precondition for the
realization of our long-term vision of safe and affordable public transport for
all.

The age of hope should see us making serious attempts aimed at transcending
the current commuter transport system. We need to move from this limited
commuter transport system towards a broad-based public transport system. Our
vision is one of a public transport system that provides certain minimum levels
of service in the urban and rural context and thereby enabling South Africans
to enjoy greater mobility.

Public transport and not a commuter transport system is what South Africa
requires as we move towards an age of sustained growth and accelerated
development. This will enable all South Africans, including the unemployed and
poor, to enjoy greater access to economic and employment opportunities as well
as social recreation.

Key elements will be a public transport system that is in operation for
longer periods of 18 hours or more in the major metropolitan centres, frequent
public transport services of between 5 and 15 minutes during peak hours to
enable South Africans to move with speed. Similar principles could be applied
in the context of the rural areas where frequent public transport services
should enable the rural masses to gain greater access to economic and social
opportunities. The need for transport authorities to plan such a system, set
and enforce conditions, as well as manage contracts with transport operators,
will be extremely critical.

Mr Chairman, allow me to elaborate on the specific role that Government will
play in such planned public transport environment. Firstly, Government will
take effective control of key elements of an integrated public transport
system, which should be affordable and cost-effective. We must agree that a
system driven primarily by the interests of operators will be a thing of the
past. This must be a public system in the true sense of the word characterised
by public participation, effective planning and enforcement of conditions and
standards. I must repeat here a point made by our Transport MinMec on numerous
occasions last year, that Government should take measures to reclaim all routes
and determine the terms under which they are operated.

Secondly, Government at all levels, working through transport authorities,
will set comprehensive standards for the operation of various public transport
modes. This will include the type and size of vehicles on these routes,
roadworthy requirements and standards, fare determination, frequency of
services, and so on. Most of all, we will need to ensure that there is regular
inspection to ensure that service and safety standards are adhered to at all
times. Operators will be granted contracts in terms of this system.

A critical yet practical question is what are the building blocks for such a
transition, and the timeframes for the realisation of such a vision? In
responding to this challenge, first is the implementation of integrated
ticketing and information systems. This will set the stage for a single public
transport product, which will attract people to use public transport.
Integrated ticketing and information systems will allow people to access
information and schedules about public transport services as well as allow
interoperability between modes.

The second and key building block of a good pubic transport system will be
the urgent need to implement deliberate travel demand management measures to
manage private car use in our major metropolitan centres. We are working to
develop pilot projects with the Metropolitan Councils of Johannesburg, Cape
Town and Ethekwini. An essential element of this initiative should be the
identification and implementation of dedicated bus and taxi lanes to allow the
speedy transit of public transport vehicles such as buses and taxis.

As earlier stated, we are considering integrated public transport facilities
and integrated ticketing systems to allow interoperability between the
different modes of transport.

Thirdly, the setting of clear public transport indicators such as reduced
travel times, reduced costs, to reduce the percentage of household income spent
on transport and the determination by the relevant transport authorities of the
nature and size of vehicles to be used, including regular renewal of the public
transport fleet and access to transport as well as other indicators will need
to guide the transformation of public transport.

Finally, the shift away from commuter to public transport will take place
over an extended period of time. It will in the short to medium term require
increased investment in public transport and a significant extension of
services in the townships, informal settlements and the rural areas of our
country. The fact is that a significant number of South Africans walk and/or
cycle everyday.

Our definition of passenger transport and all investment plans in respect of
public transport infrastructure will need to take into account that walking and
cycling have become modes of transport in their own right. We must provide in
our planning and delivery of road infrastructure. As part of this process and
leading to the 2010 FIFA World Cup, the Department is committed to providing
bicycles to school children and poor households in the rural and peri-urban
areas of our country.

We have begun the process with hundreds of bicycles already handed out
during the October Transport Month activities.

As promised at the beginning of my address, we will need to locate the role
of the bus in this changing environment. The current destructive competition
between modes is not beneficial to our system. The starting point for us is
that the long distances in our environment is such that it will require a
significant role for the bus within our public transport environment, and not
its reduction. The bus fleet must be utilized to the maximum and in some
instances needs to integrate with passenger rail services in major metropolitan
areas. In the context of the rural towns and peri-urban environment, we will
not be able to do without the bus. Therefore, the bus will be an essential part
of a planned public transport system based on scheduled services with regular
frequencies to facilitate improved mobility for all the people of South
Africa.

However, recognition of the continued role for the bus will require changes
by the bus industry itself. As bus services increase in some areas, it may be
necessary that through the integrated transport plans at local level, the bus
be expected to give way in some corridors to rail and/or the taxi industry. It
will be necessary that bus contracts be restructured over time to ensure the
participation of the taxi industry in subsidised public transport services. We
believe that this could be managed in a careful manner to the benefit of
passengers and in the interest of the different public transport modes.

The challenge for the bus industry is to work very closely with rail and the
taxi industry in a way that will eliminate duplications, improve services and
enhance the efficiency of the entire system.

The industry is well aware that the current commuter transport system is
inherited from our apartheid past; its primary objective was to ensure security
and stability in the supply of cheap African labour. It is essentially a
limited commuter transport system of subsidized bus and rail services to the
exclusion of the taxi industry and ignored the needs of pedestrians and
cyclists. We are therefore saying that the bus industry should approach the
issue of the role of the bus in this broader public transport context, as
against an approach that will seek to protect vested interests inherited from
the past.

An essential element of this transformation is the entry of new operators in
the bus industry. We have noted and are encouraged by the trend in the industry
where key players such as PUTCO, Interstate Bus Limited, Golden Arrow and
others have undertaken or are in the process of completing various kinds of
broad-based black economic empowerment transactions. The reality today is one
of the bus industry that has met and surpassed the black economic empowerment
(BEE) threshold and targets outlined in our BEE Transport Charter. We have
observed that 60% of the bus industry achieved the BEE targets as far back as
2003 - three years ahead of schedule. Some of the positive features in these
transactions include the introduction of a majority black equity shareholder, a
stake for all employees, subcontracting of certain routes to small operators
and the development of models for the participation of the taxi industry.

We support some of these initiatives in the context of the Broad-Based Black
Economic Empowerment (BBBEE) Transport Charter, which the Department will
present to you in the course of the day.

However, the participation of small bus operators and the development of
cooperatives remain serious shortcomings. I continue to receive complaints and
requests for assistance from small bus operators across the country that
continue to express frustration with what they regard as barriers to entry and
transformation for them.

Most of them remain outside the formal subsidy system and struggle to raise
capital and to recapitalize their bus fleet. I will be looking with keen
interest at how the industry responds to this challenge over the coming
months.

Of course, Government recognises that this transformation will require, over
an extended period, an increase in funding levels for public transport as a
whole. It will not be feasible to extend transport services and bring on board
the participation of the taxi industry if the size of the cake remains the
same. The allocation to the bus industry will increase by 10% over the MTEF
period. The Department of Transport together with the provinces are committed
to ensuring that increased funding allocations are provided to extend bus
services across the country. Growth in this industry linked to transformation
should see additional funding directed to this sector. The funding allocations
of more than R7.1 bn to the Gautrain Rapid Rail Project will provide
opportunities for the bus and taxi industry in terms of the integration
strategy developed by national and provincial government.

The policy of Government was presented and discussed with the industry over
the past 12 months. I must reaffirm that regulated competition remains the
policy of Government. The awarding of contracts will be based on open,
competitive tendering with operators expected to meet defined and comprehensive
operational and safety standards in these contracts. To this end, the next
Transport MinMec scheduled for mid March 2006 will consider all the submissions
from the industry on and finalise the Model Tender Document (MTD), which will
serve as the basis for competitive tendering. We will publish the final MTD in
the Government Gazette by end of March this year.

However, we have also indicated to the industry that there will be instances
where the pursuance of competitive tendering will not be the most appropriate
option and we seek to pursue broader social and economic objectives. In this
context, we have signalled our willingness to consider alternative options
subject to the pursuance of certain social goals and meet provisions of the
National Land Transport Transition Act. Already, many provinces have submitted
applications notifying us and seeking approval to enter into negotiated
contracts with operators.

As we discuss the policy of regulated competition, SABOA should reflect on
both and positive developments within the bus industry. A key feature of this
industry over the past few years has been the emergence of evidence and
allegations suggesting that some of the bus companies are guilty of defrauding
the State of millions of Rands. This is tantamount to stealing from the poor
and the people of South Africa.

We would like to see SABOA taking firm action against any of its members
found guilty of corruption and fraud. We call on SABOA to distance itself from
these operators. These fraudsters are not worthy of being members of an
association with such noble objectives.

On the part of the Government, we are already paying special attention to
this matter. We are tightening the terms and conditions of contracts and any
bus operator found guilty of defrauding the Government will be dealt with
severely. In the short-term, we intend to strengthen the capacity of Government
at national and provincial level to manage and monitor these contracts. To this
end, the Department is instituting forensic audits in all the subsidised
contracts awarded by the State.

This conference cannot afford to ignore the spate of accidents that involve
buses and claiming the lives of many innocent people and children. It is our
responsibility to stop this carnage on our roads. A common denominator in most
of the accidents has been due to the failure of brakes. Most importantly, the
buses involved in these accidents are clearly old and unroadworthy. I am aware
that most of these buses fall outside of our subsidized contracts. However,
there is an obligation to meet the relevant safety standards applicable to
buses. Bus operators must take responsible and will be held liable when
accidents are due to negligence, recklessness and unroadworthiness of
vehicles.

I have instructed the Road Traffic Management Corporation to urgently
explore this issue and engage with the South African Bureau for Standards
(SABS) with the view to improving safety of buses. We will ensure that
operators involved in subsidized contracts renew their bus fleet and that their
buses are subjected to regular maintenance and testing by authorised testing
stations. We intend to increase the frequency of such testing and lower the age
of these buses to ensure that operators renew their fleet.

Finally, the Department will act firmly against officials at testing
stations who collude with operators and issue fraudulent roadworthy
certificates. In some instances, I have been made aware that operators put in
new parts for purposes of getting roadworthy certificate, and immediately
remove this after this was secured. This conference will need to pay special
attention on how we enhance safety, improve the skills of workers, invest in
machinery and ensure regular maintenance for their fleet.

I wish to reiterate our approach to the challenges facing the bus industry.
Government has a clear and firm agenda in this area. However, we will work in
partnership and do not wish to push this by stealth. The partners should
appreciate that we do not have the luxury of time. We should no longer
apportion blame for the lack of progress but instead need to move together with
lightning speed. We will continue to engage with SABOA and the industry as a
whole. At the same time, we must emphasise that transformation and competitive
tendering are not up for negotiations.

I wish SABOA and the industry all the best in your deliberations. I look
forward to meeting the new executive in the coming weeks and to be briefed
about the outcomes of this important conference. We hope and trust that the
industry will work in partnership with the Government and contribute to the
realisation of our common vision.

I thank you!

Issued by: Ministry of Transport
16 February 2006
Source: Department of Transport (http://www.transport.gov.za/)