Programme Director
President of SANTACO - Mr Arthur Mthembu
Transport Director-General Mr George Mahlalela
Distinguished guests
Members of the media
The history of the taxi industry in South Africa is that of unparalleled Black Economic Empowerment (BEE). It is a story of how black people, cast aside by the apartheid regime, turned into the most powerful transporter of commuters in South Africa. This massive success story has however come with its own pitfalls.
Firstly, they were competing against bus and rail operators who were subsidised by government. Secondly, poor regulations of the industry resulted in violent conflict within and between Associations. Thirdly, the industry faced prohibitive costs of financing vehicles. These are challenges we inherited as a new democratic government.
To tackle these challenges, we established the National Taxi Task Team which through public hearings came with the following recommendations:
1. Economic empowerment of the industry
2. Formalisation through registration of Associations
3. Conversion of permits into operating licences
4. Democratisation of the taxi industry.
These recommendations were subsequently adopted by Cabinet as the blueprint for the transformation of the taxi industry. Let me deal briefly with each of these recommendations.
Economic empowerment
* Three pillars formed the basis for the economic empowerment of the industry.
* Refinancing of the taxi industry through the Taxi Recapitalisation Programme and integration into the subsidy system.
* Corporatisation through formation of taxi co-operations.
* Capacity development through education and training programmes.
What has government and industry partnership achieved over the past ten years?
On the Taxi Recapitalisation Programme, we now realise that the finances of many members are prohibiting them from obtaining finance from banks to buy new vehicles. We need to engage financial institutions on this matter.
One issue of public debate has been the Taxi Recapitalisation Programme (TRP) which has introduced on to our roads new vehicles which conform to better standards of safety. The aim of the TRP was to move unsafe old taxi vehicles out of the road and replace them with new TRP compliant vehicles.
The TRP compliant vehicles had a key focus on upgrading the vehicles to enhance safety and comfort. These requirements were gazetted on 4 September 2008.
The initial scrapping allowance value at implementation was R50 000 per old taxi vehicle scrapped and the period of completion was to be seven years.
Since implementation it has been realised that the allowance does not escalate and therefore the value of the allowance would shrink on a year on year basis. This has called for an urgent review of the programme to address these shortcomings.
A funding strategy for the TRP was developed and submitted to Cabinet in February 2009. Cabinet has approved that the programme be ongoing, in line with MTEF allocations until all the old taxi vehicles have been scrapped and that the scrapping allowance be increased annually based on the Consumer Price Index.
The scrapping allowance for the 2009/10 financial year increased from R50 000 to R54 300. The increased value for the current 2010/11 financial year is R57 400. The budget allocation for this financial year is R497 611 000 and the estimated number of vehicles to be scrapped in this financial year is 8669. As at the end of the 2009/10 financial year, a total of 38 760 vehicles have been scrapped and an amount of R1 729 903 200 has been spent on scrapping old taxi vehicles.
We have not progressed much on the subsidy front. The corporatisation of the industry is an important step in ensuring that the industry is a major player within our subsidy system. It is also important that we move decisively on the question of developing a positive relationship with banks and other financial institutions.
A comprehensive Enterprise Development Programme must be finalised as soon as possible in order to accelerate the economic empowerment of this industry.
Registration of Associations
We have made major advances in this area. We can safely say that all associations in all provinces have been registered with their routes and members.
Conversion of permits
We must agree that there are major challenges in this area. Provinces are struggling to complete this process. We still have backlogs in all provinces. We need to ask the question why is it a difficult process to complete. This should be our focus during this financial year.
Some of the challenges were also outlined by a study conducted by the University of Port Elizabeth such as:
* The slow pace at which the regulatory system is being implemented.
* The lack of law enforcement to protect legal taxis and keep illegal operators off the routes.
* Corruption in the issuing of permits to operators.
* Little or no provision of ranking facilities.
Democratisation of the industry
We envisaged an industry with democratic structures at association level as well as regional and provincial structures. All associations as well as regional and provincial structures of the industry have periodic elections after every four years. SANTACO was formed as a result of these democratic processes. The industry resolved in 2001 in Durban to form a united national taxi structure. This conference is a continuation of that historic conference.
The challenge we face together is the continuing splintering within the industry which needs to be managed and tackled head-on.
In their book, “ The road to empowerment of the mini-bus taxi industry is full of pitfalls” S Oosthuizen and M Mhlambi list a number of pitfalls facing the minibus-taxi industry on the way to becoming a fully fledged formal business. Let me mention some of them.
* Members of current structures in the minibus-taxi industry fear that a more democratic co-operative system could result in them losing some or all of the benefits and perks that they currently enjoy.
* Some private sector businesses currently have deals with the minibus-taxi industry and because these business owners fear that they might lose their market, they are capable of deliberately destabilising the minibus-taxi industry to keep their market share.
* People who benefit from the negotiations for the formalisation and development of the minibus-taxi industry could also prolong the process if they do not receive a fair deal or if the process does not go according to their plans.
* The formalisation plans and strategies are not always explained clearly and in the correct manner to members of the minibus-taxi industry.
As government, we have started a process to put content into the four areas as identified above. These key activities on our part involve the following:
- the Taxi Recapitalisation Programme
- integrating the industry into the subsidy net.
We are now 16 years into our democracy and at this conference we must assess how far we have come on our intentions over the years. We have asked the industry to be formalised and in SANTACO we now have a structure that is representative of the taxi industry and carries out elections which are monitored independently. This is a huge step in relations between the industry and government. Yet we must again on our part call on the industry to work with us in resolving the issue of subsidies and other outstanding issues.
The background we have elaborated on provides us a clear agenda for the next four years. This includes:
1. Enterprise Development
- establishment of co-operatives
- business partnership with financial institutions
- extension of the subsidy system and review of the Taxi Recapitalisation Programme.
2. Licensing and Regulation
Let’s find innovative ways of dealing with the backlogs in our licensing processes.
3. Democratisation
Lets us confront these challenges of having splinter groups mushrooming every time there are local grievance and in the process inconveniencing commuters. We need a pledge which will commit all of us and which will elaborate on our rules of engagements.
National Joint Working Group (NJWG)
We believe that the National Joint Working Group provides the answer to our challenges. There might be complaints that the working group is not delivering. We have no choice but to make it work. Like CODESA, there will always be complexities of issues on the agenda. But ultimately this difficult process created the constitution we are all proud of today. Let us use this forum as a vehicle to create a transformation of the industry which we will all be proud of.
If you want to, you may change the name of the NJWG so that it talks directly to the issues we want to address. That is the choice we need to make. Let’s make sure that over the next three months the broad framework for the transformation and empowerment of the taxi industry is completed.
As indicated, no matter is too big to address within the NJWG. The NJWG must deal with matters relating to inter alia, the Taxi Recapitalisation Programme, taxi subsidies, legislation, regulation and enforcement.
It goes further and also deals with enterprise and skills development, communication, stakeholder management, the Bus Rapid Transit Systems and Integrated Rapid Public Transport Networks. Put differently the transformation of public transport is incomplete without taxis which as we know move more than 64% of our daily passengers. We are confident that the NJWG will position the taxi industry to be a major player in transport services such as the Integrated Rapid Transport Networks. Indeed government agrees with the 2020 Vision of SANTACO that the industry must extend itself from one mode to being a multi-modal industry.
Through the National Joint Working Group we are going to tackle many of the issues which have arisen in the course of our relationship with the industry. We must invest in people to deal with the backlog in the issuing of operating licences by the end of the financial year. In the area of training and capacity development, we realise that interventions made over the past 10 years have had little impact and were limited to customer care, business skills and driver training. The NJWG is now our only way forward. There is no issue too big to discuss in the NJWG. In the NJWG we must review our progress on matters that affect all of us.
On the economic empowerment side, our view is that we need to have an enterprise development strategy for the industry. That strategy is based on the following three pillars: Corporatisation, Funding and Regulation. In a few weeks’ time, South Africa will host the 2010 FIFA World Cup, an event that the whole world will watch in their billions. As a country we will be rated on communication, energy and other infrastructure capability to host an event of this magnitude.
Importantly for the transport sector we will know in truth that FIFA 2010 World Cup is indeed about Transport and not just about sport. In preparation for the major tournament government has invested billions of rand over the last Medium Term Expenditure Framework (MTEF) in all aspects of transport including passenger rail, bus and taxi and airport infrastructure to get us ready for the World Cup and beyond.
In rail, the allocation has increased from R25billion to R38billion in the current MTEF and is being used to arrest the decline in infrastructure and address rolling stock availability. The Passenger Rail Agency of South Africa (PRASA) has upgraded key stations and critical infrastructure. In addition we have refurbished 2000 coaches and overseen the rollout of the South African Railway Police.
Ladies and gentlemen, we want to assure this gathering that buses and rail on their own could not ever be sufficient for our transport plans without the inclusion of mini-bus and midi-bus taxis. Again the taxi industry will become a major player in transporting general spectators during the FIFA World Cup.
Ladies and Gentlemen, the 2010 World Cup will only be successful because all South Africans are pulling together in one direction. This World Cup will be successful because all government departments have ensured that no stone is left unturned and nothing is left to chance. This event will be a runaway success because all our people, black and white, rich and poor are going to be behind the country and Bafana Bafana.
On the transport side this sort of unity in action means that we must engage all parts of our sector towards the execution of our transport plans during the World Cup and leave a legacy of principled collaboration with the organised taxi industry. In particular we want enhance the following areas of involvement for the taxi industry in transporting fans during the World Cup from:
* airports to match venues, accommodation nodes, transport hubs and Fan Fests
* railway stations, the match venue, transport hubs and Fan Fests
* park and ride sites and the match venue
* local accommodation to public viewing areas
* From Transport hubs to accommodation nodes
* Accommodation nodes to tourism attractions and shopping nodes.
We are proud that since its formation, SANTACO has demonstrated the leadership that is necessary to take the taxi industry from outside the formal economy into the formal economy. We are encouraged that SANTACO’s efforts in the transformation of the taxi industry are taking shape and will result in an industry that will become a player in the entire transport value-chain and the entire economy.
This is our vision, to see this industry broaden its impact as a key empowerment vehicle for millions of our people because in all honesty, there is no other industry that has empowered Black people in the manner that the taxi industry has already done. At the same time as we empower the industry we must stay true to our countries vision which places the commuter at the centre of our interventions. We must provide safe, reliable, efficient and sustainable public transport services. We will continue to engage SANTACO on all matters of concern. No issue is too big to be solved during our engagements.
Transport beyond the 2010 FIFA World Cup
Ladies and gentlemen for our economy to be sound and vibrant it means our transport programmes and interventions must meet the growing demands of industrial growth. In line with this, this financial year, the transport sector must play its role in moving this country from underdevelopment to a state of development to a developed country. To turn this into reality we have identified areas that the transport industry and other sectors of the economy should pool resources together and get things right.
These include:
* transport infrastructure
* public transport
* safety in all modes of transport
* rural development
* job-creation through Expanded Public Works Programmes
* the environment.
As part of this commitment we have already made huge investments on transport projects that will remain a legacy to the development of this country after the World Cup. These projects are the:
* R25 billion Gauteng Rapid Rail Link project
* R20 billion Airports Company of South Africa (ACSA) airports development programme
* R23 billion Gauteng Freeway Improvement Project
* R6,8 billion King Shaka International Airport will be officially opened by President Jacob Zuma on Saturday, 8 May.
The reality is that the result of these projects can only be economically sustainable if integrated transport operations that include taxis, buses and trains work together to link destinations that our people travel to.
Bus Rapid Transit System
The 2008 Transport Lekgotla resolved that the taxi industry must form the nucleus of the IRPTNs, inclusive of the BRT system. We must implement this resolution by creating sustainable IRPTN Business Models at local level of government.
As we work together to resolve whatever differences there may be, it must never be that government’s commitment to the BRT as implemented in Johannesburg is doubted. However we must also stress that we believe that taxi operators would in time graduate into public transport operators and that Government will give the necessary possible guidance and assistance.
As we implement the BRT in Johannesburg we must reiterate our condemnation of violent attacks recently in Soweto which resulted in death and injury to passengers. Government cannot stand idle when criminal elements threaten stability in our country by killing innocent people going about their business. If we allowed lawlessness to creep into our system, we would be allowing a descent into chaos.
We sincerely believe that together with the leadership of SANTACO we will deliver a safe, reliable and affordable public transport system for our people.
In conclusion, Programme Director, ladies and gentlemen, we are confident that this conference will at the end produce tangible and productive resolutions that feed into our common endeavour and national agenda of moving this country to being a developed country.
We wish you a fruitful interaction during this conference.
Thank you!
Issued by: Department of Transport
4 May 2010
