Programme Director
Transport MEC Mr Willies Mchunu
President of SANTACO Mr A J Mthembu
SANTACO Secretary-General Mr Phillip Taaibosch, the entire executive and membership at large
Chief Executive Officer of SANTACO Mr Bongani Msimang
Heads of Departments and other government officials
Representatives of the taxi industry
Distinguished guests
Members of the media
Ladies and gentlemen
SANTACO air takes to the skies
Three days ago we launched SANTACO Airline at Lanseria Airport in Gauteng, marking a historic milestone in the taxi industry in our country.
The launch was the culmination of a grand idea which started many years ago. This is an idea that serves as undisputable testimony to SANTACO’s visionary leadership.
This vision has now given birth to the launch of SANTACO airline operations, a bold move that has left many grinning with envy and others refusing to believe that indeed leaders and members of a taxi organisation could hatch such an ambitious plan.
This introduction of SANTACO Airline will give an opportunity to many people who have always seen air-transport as a privilege of a select few; to fly for the very first time in their lives.
We understand that SANTACO Airline will fly daily between Johannesburg, Cape Town and Bisho, as it becomes South Africa's 5th low-cost carrier. The most remarkable element that makes SANTACO’s product offering very unique is that the new airline will introduce to our public transport system the first real integration of modes, meaning the integration of road and aviation transport and the first integrated ownership of the two modes.
Ladies and gentlemen, SANTACO Airline is an idea whose time has come.
SANTACO’s late entry into the aviation industry gives the organisation the benefit of business intelligence with regard to the challenges and opportunities facing a start-up low cost operator.
The low-cost airline industry is now 40 years old. The first aircraft in this category took to the skies in 1971 when US operator South West Airlines used its short haul, high-frequency, low-cost model to revolutionise the aviation industry.
Its success has been based on a low-cost structure and uncompromising focus on passenger service. As a result of this, South West Airlines has consistently made profit even as the rest of the industry took a blow during the volatile economic times and especially the negative fall-out from the September 2001 terror attacks in the US.
The influential Airline Business’s low-cost carrier and world airline ranking surveys showed that the 10 largest network carriers were highly profitable in 2006 and 2007. The following year in 2008 seven had lost money and eight were in the red in 2009 at an operating level.
The survey said when contrasted with the top 10 low-cost carriers - only two lost money in 2009, three in 2008 and one each in 2007 and 2006.
By all accounts low-cost airlines have remained consistently profitable, albeit at lower levels, than their 10 biggest network counterparts - which have tended to thrive in the good times and haemorrhaged in the bad. In other words, the experience of the world is that on average, over a given period, the low-cost business model has performed well through recessionary times. The low-cost airline industry has in recent history shown itself to be a robust model for the airlines around the world.
At the heart of a successful operation in this industry is a scientific and honest understanding of the passengers and the cost structures underlying the operations of an airline. As government we have identified the so-called “last mile”- getting people home from our trunk systems to their homes 24hours a day. SANTACO Air provides this door-to-door solution by taking people from the taxi ranks to the airport, flying them and taking them to their homes from the airport.
With this venture, SANTACO has woven the point of origin to the point of departure and to the final destination into a seamless, integrated whole serviced by a single provider operating across two different modes. This is the point at which this industry is reaching beyond the confines of its structural past and is extending its vision beyond the horizon and seeking better opportunities in the rest of the economy.
I wish to reiterate the call I made on Friday. Now that you have been on our roads for decades, and you are breaking new ground by taking to the skies, I urge you to look further beyond road and air transport. We wish to see you in our waters soon, claiming your fair share of the 95 percent of goods that are transported into our country every year. Nothing can stop you now!
SANTACOs 10th Anniversary
Today SANTACO celebrates the 10th Anniversary of its existence as an operator organisation driving the public transportation of our people. Over the period, the taxi industry has taken great strides transforming its image as an industry associated with the violent resolution of its disputes to one today which has resolved to banish violence to the dustbin of history.
Programme director, ladies and gentlemen
It has been a long and arduous journey for SANTACO which was formed at a conference here in Durban in September 2001 at the behest of our government. This followed lengthy discussions among all taxi organisations and federations that existed at the time. It is at this conference that SANTACO’s Constitution was adopted and the first elections were held.
To date SANTACO remains the official representative of the taxi industry and carries a mandate to sustain engagement with government and other stakeholders on all matters affecting the taxi Industry.
Ladies and gentlemen, together with the taxi industry we have come a long way.
- In April 2009, ahead of the elections of 2009, President Jacob Zuma asked the taxi industry to defer negotiations with him until after the elections. Later, following the elections, during the State of the Nation Address, President Zuma announced that the Minister of Transport would resume discussions with the industry by 11 June 2009.
- On 11 June 2009 we met over 2 000 representatives of the industry made up of taxi associations and their national structures.
- Prior to that, we had held fruitful discussions with leaders of the South African National Taxi Council (SANTACO).
- On 26 June 2009, we met the leadership of the National Taxi Alliance (NTA) and held similar consultations with provincial departments and affected municipalities.
By July 2009 we had started a "CODESA" of the taxi industry based on structured engagement on five strategic pillars:
- Implementing the Bus Rapid Transit (BRT) system and other Integrated Public Transport Network (IPTN) projects
- Taxi subsidisation and the Taxi Recapitalisation Programme
- Legislation, licensing and regulatory issues
- Enterprise development
- Communication and stakeholder engagement.
When we met the industry at Gallagher Estate on 30 July 2009, as part of the National Working Group, it was primarily with representatives of the cities with plans to implement the Integrated Public Transport networks.
As indicated above, the Working Group had agreed to prioritise the BRT negotiations so that agreement could be reached as soon as possible. Our engagement with the taxi industry has been characterised by honesty, straight-talk and, most of all, integrity.
In so doing as government we were giving meaning and active support to a future of peace, progress and prosperity for the taxi industry. Today we say judge us not on the heights to which we have ascended, judge us on the depths from which we have come.
SANTACO as an organisation has disappointed all the Doomsayers and evolved to what it is now – an organisation with a clear vision, mission and strategy aimed at positioning the industry as a major transport player in our economy.
As SANTACO continues in its strides, it does so from a solid base on which it has become the mode of choice for millions of commuters all over the country as indicated in the following statistics.
- The Taxi Industry commands a turnover of over R35 billion annually
- The Taxi Industry employs over 250 000 employees who are mainly lower and semi-skilled workers consequently contributing immensely to government’s poverty alleviation programme
- In addition the Taxi Industry serves ancillary economic activities such as hawkers and other informal retailers who rely on taxis for their livelihood
- The number of taxis operating on South African roads is 283 159, excluding the informal taxis awaiting permits.
The annual purchase power of the Taxi Industry is as follows:
- Fuel consumption: R15 billion
- Insurance: R2 billion
- Tyre Costs: R600 million
- Manufacturing: R2 billion
- Vehicle maintenance: R2.7 billion
- Lubricants: R110 million
- Employment Costs: R4 billion
- Passengers annually: R1.9 billion
UN Decade of Action and Operation Hlokomela
As part of TR3 2020 strategy SANTACO has defined its vision for the Taxi Industry and provides a programme and approach for the empowerment of the Taxi Industry. In the implementation of the TR3 2020 strategy, SANTACO launched Operation Hlokomela to provide active support for and create proper dialogue with commuters and drivers. This programme includes a framework to monitor Taxi operations and services rendered, through various initiatives implemented as part of operation Hlokomela.
Among others these include:
- Check points for compliance with road traffic regulations and general safety checks on vehicle condition
- Visible monitoring of drivers and driver condition
- Vehicle and driver assessment at the rank before the trip is undertaken to ensure proper registration of commuter particulars in case of an emergency.
We are excited because Operation Hlokomela has become a key component of our national programme in support of the “The UN Decade of Action for Road Safety”. This UN Decade of Action for Road Safety aims to reduce road traffic fatalities by half by 2015. Annually 14 000 people die on our roads with a total cost to our economy amounting to R52 billion per annum. This predicament calls for all sectors of our economy to work hand in hand in fighting road traffic fatalities.
Government partnership with the taxi industry
Our intervention in the taxi industry has never been about “taking bread away from the mouths of taxi operators”.
Since 1994 our engagement has been about recognising that there can never be meaningful Black Economic Empowerment in the transport sector without the taxi industry. When government implemented the Taxi Recapitalisation Programme, we were recognising a process started by taxi operators themselves.
Taxi operators have always recapitalised their vehicles - from the old “Valiants” to the “Siyaya” and now the Quantum. The taxi industry has always embraced and driven change and innovation in the transport sector since the 1970s. The taxi industry remains a key player in our efforts towards a transformed public transport system that is safe, accessible to all its users and which facilitates greater mobility for both the rural masses and urban poor.
In this regard we have said it is high time that the taxi industry extended its activities beyond the running of a taxi to other areas in the transport value-chain. Early this year in support of this vision, we witnessed the historic hand over to the taxi industry shareholders Phase 1A Bus Operating Company of the Rea Vaya Bus Rapid Transit (BRT) system in Johannesburg. The contract is valued at an estimated R184 million per year.
This is an important step towards institutional and service integration in the public transport industry in South Africa in a long time. With the taxi industry now involved in feeders and trunk route transportation, a hierarchy of mode deployment for taxis, buses, BRT and rail can now be planned and agreed upon. Each mode can now play its rightful role in the public transport system, and also the role it is best suited to play effectively. The taxi industry will now work with entities such as PRASA and the City of Johannesburg for shared and improved information in order to align and integrate public transport services better.
As a result of this development many other opportunities in Gauteng and other metropolitan cities of our country will open up for the further growth of our public transport network.
City to City transport
As part of taking empowerment to even greater heights, the Department of Transport will work with some of its agencies like PRASA, to implement innovative empowerment models for the taxi industry. For the subsidised bus contracts that are due to go out on tender, we will cement the role of the taxi industry. We want the taxi industry to command ownership, management of transport companies and start to own large assets. We must take this commitment to the realm of city to city transportation.
- Another immediate opportunity for bringing the taxi industry into the subsidy system lies in the commuter rail environment. Through PRASA we have been jointly creating inter-modal facilities and holding areas at some of our key rail stations countrywide with and for the taxi industry.
- We want to give formal recognition to this historic interaction, with the taxi industry providing feeder and distribution services at certain peak periods and appropriately compensated for their services.
COP 17 in Durban
As we are all aware, in December this year our country will host the United Nations Conference of Parties on Climate Change (COP17) Summit at this venue. It is hoped that this gathering will make headway in international efforts aimed at addressing the challenge of climate change.
The transport sector is reportedly one of the fastest growing emitter of carbon emissions in South Africa.
The sector's high carbon emissions are due to South Africa's urban sprawl and our poorly integrated and inefficient transport solutions. Managing travel demand and developing integrated, effective public transport systems are crucial in addressing this on-going challenge.
Focussing on transport alone would not solve high carbon emissions and factors such as developing compact, sustainable cities and promoting residence and workplace proximity will play a key role in improving the viability of public transport, hence lowering South Africa's carbon emissions.
I am glad that your organisation in partnership with government, has already taken steps to address this pressing matter. The pilot project that you have started with the Gauteng Provincial Government to convert ini-bus Taxis to dually operate on liquefied petroleum gas as well as petrol will go a long way to ensure that the transport sector plays its due part in addressing this issue.
I am informed that the three million rand pilot project which was facilitated by one of Blue IQ’s automotive subsidiaries, the Automotive Industry Development Centre, will see 70 dual-fuel taxis in operation in northern Pretoria and Tembisa.
This project has the potential to significantly advance our objective to create a ‘low-carbon economy and therefore must be supported.
October Transport Month
In closing, later this month we will launch the 2011 October Transport Month (OTM) and we hope to draw the country’s attention onto the entire transport sector. Our main focus for OTM 2011 will be in three primary areas namely Road Safety, Public Transport and the maintenance of road infrastructure through our labour-intensive programme S’hambaSonke.
In line with the recent decision of Cabinet Lekgotla, our intensified focus will be in resolving the challenges of job creation and service delivery. We invite the taxi industry and the transport sector to be part of these activities which we believe will take the agenda of transport in this country to even greater heights.
I thank you!
