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PUBLIC TRANSPORT , TAXI RECAPITALISATION PROJECT AND PUBLIC TRANSPORT SUBSIDIES

Department of Transport. PUBLIC TRANSPORT , TAXI RECAPITALISATION PROJECT AND PUBLIC TRANSPORT SUBSIDIES. 01 JUNE 2004. 1. INTRODUCTION AND BACKGROUND INFORMATION 2. POLICY THRUSTS ON PUBLIC TRANSPORT 3. THE TAXI PROCESS 4. COMMUTER RAIL BUS CONTRACTS AN INTEGRATED PUBLIC TRANSPORT SYSTEM.

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PUBLIC TRANSPORT , TAXI RECAPITALISATION PROJECT AND PUBLIC TRANSPORT SUBSIDIES

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  1. Department of Transport PUBLIC TRANSPORT ,TAXI RECAPITALISATION PROJECTANDPUBLIC TRANSPORT SUBSIDIES 01 JUNE 2004

  2. 1. INTRODUCTION AND BACKGROUND INFORMATION 2. POLICY THRUSTS ON PUBLIC TRANSPORT 3. THE TAXI PROCESS 4. COMMUTER RAIL BUS CONTRACTS AN INTEGRATED PUBLIC TRANSPORT SYSTEM CONTENTS

  3. Department of Transport INTRODUCTION AND BACKGROUND INFORMATION • The overarching objectives for a sustainable public transport system which contributes to the economic growth of our country are: • qTo increase investment in public transport infrastructure • qTo recapitalise the public transport fleet and • qTo increase access to affordable public transport services • The White Paper on National Transport Policy, 1996 • The promotion of a safe , reliable, effective, efficient, co-ordinated, integrated, and environmentally friendly land passenger transport system in South African urban and rural areas, to ensure that people experience improving levels of mobility and accessibility.

  4. POLICY THRUSTS Important for South Africa given its history, addressing significant barriers to social inclusion: §Reducing the need to travel; §Making travel more affordable; §And thus saving people’s income from increasingly used for transport cost. T White Paper on National Transport Policy, 1996, brought a clear focus, with the following key factors : Government recognizing that public transport is a basic need ·        To be efficiently provided so that resources are used in an optimal manner ·Based on transport plans     Creating a comprehensive integrated, multi-modal, public transport system Approached on the basis of competitive tendering

  5. Department of Transport THE RECAPITALISATION OF THE TAXI INDUSTRY • The primary aim of the taxi recapitalisation project at conception was aimed at: • Øproviding vehicles which will provide safe and affordable transport to commuters. (result of the aged minibus taxi fleet, average of 9-10yrs, which increasingly threaten safe to life). • Øcreating opportunities for jobs in the manufacturing and downstream industries. • Øpromote the use of diesel fuel as a more cost-effective and efficient fuel and thus lowering the operating cost. Based on the 1998 projections the strategy was to shift the transport sector consumption of petrol and diesel such that diesel exports and petrol imports are reduced.. • ØSupporting the objective of formalizing the taxi industry and thus have an effective regulatory framework which will assist in operators fairly sharing the benefit of transporting passengers and thus also curbing fights for routes. • Øbroadening the tax base

  6. In 1996 The National Taxi Task Team (NTTT) was established constituted of Government officials, community leaders and members of the taxi industry to: Investigate the conflict and violence prevalent in the taxi industry at the time. Make recommendations to Government on how to address findings thereof. Findings of the NTTT broadly grouped into three main areas, viz: The need to regulatethe taxi industry The need toformalisethe taxi industry The urgent need for economic empowerment for the industry. THE TAXI PROCESS

  7. On Regulation: The National Land Transport Transition Act , (NLTTA),2000 Associations and members thereof, encouraged to register with Provincial Registrars (Section 56 of the NLTTA apply). Operators currently converting permits to operating licenses as required ( Section 32 of the NLTTA apply). Establishment of the National Transport Register as required by the NLTTA (Section 52) – this is currently being rolled out with Provinces. Registration with the South African Revenue Services (SARS) is a pre-requisite for conversion of a permit to an operating license. Special Legalisation Process (SPL) initiated to give illegal taxi operators an opportunity to legalise their operations provided they met certain basic requirements- the “Be Legal Campaign” (BLC) , closed on the 31st December 2002 as per MINCOMresolution. PROGRESS MADE POST THE NTTT FINDINGS

  8. On Formalization: Democratic elections held at association, regional and provincial level in all Provinces. Democratically elected Provincial Taxi Councils (PROTACO’s) now serve as the mouthpiece of the industry at the Provincial level. The South African National Taxi Council (SANTACO) elected into office in September 2001, by all Province. PROGRESS MADE POST THE NTTT FINDINGS

  9. On Economic empowerment: Government initiated and funded pilot taxi co-operatives as part of the economic empowerment suggested by the NTTT. Pilot co-operatives became unsustainable due to lack of management skills of the industry and lack of funding. Additional economic empowerment for the industry embedded in capital subsidy through the taxi recap program. PROGRESS MADE POST THE NTTT FINDINGS Department of Transport

  10. BACKGROUND Seeks to replace the current 97 000 ageing fleet of 16 seaters with purpose built larger capacity New Taxi Vehicles (NTV) in the form of 18 and 35 seaters through a government tender process. Economically empower the taxi industry, through a once off capital subsidy, the scrapping allowance of 20% per vehicle translating into R4 billion over 4 years. Introduction of the electronic payment system to monitor and control data collection, provide audit functionalities, effect modal integration. Cabinet approval – September 1999 The dti issued request for proposals – November 1999 THE TAXI RECAP TENDER

  11. Due to: The need to first formalise and democratise the taxi industry ( completed in September 2001) De-linking of the Electronic Management System (EMS) from the New Taxi Vehicle (NTV) process, after it was realised that the EMS technology had overtaken developments of the process. ( Separate Tender for the EMS issued in March 2001, and four companies short listed.) Dispute between Government and SANTACO over the ownership and management of the EMS arose, and the matter was resolved end of 2002. Strategic review report which contained indicative affordability figures done in November 2002. TAXI RECAP TENDER DELAYED

  12. The following progress has been realized: The Steering Committee chaired by DOT reconstituted with the DTI, DME, Treasury and Office of Status of People with Disability( The Presidency ) The BAFO instruction document was issued to both NTV and EMS bidders. (21st May 2003) Government entered into negotiations with the bidders to secure 25.1% equity for the taxi industry. The BAFO submission was closed by the expected date of 12th September 2003. The evaluation process for both the EMS and NTV tender processes was completed and a report finalised by 19th November 2003. PROGRESS MADEON TAXI RECAP TENDER

  13. The following progress has been realized: The evaluated remaining NTV bidders are: TATA IVECO KWONG CHUNG MUDAN AUTOMOBILE DAIMLER CHRYSLER SOUTH AFRICA The only EMS bid is for : RSA EMS PROGRESS MADEON TAXI RECAP TENDER

  14. The BAFO received is mandated for this project at a funding requirement level of R4 billion. Additional funding requirement will be increased burden on the fiscus Should NTV prices proposed by the bidders be higher than current taxi prices. Some operators may not afford the cost of purchase and maintenance Although the project have added advantage of safety and comfort to commuters. Commuters may have to ultimately pay for fare increases A conditional approval of NTV Suppliers to be followed by Homologation and Endurance tests. Negotiations with suppliers still to be done. CHALLENGES FACING THE TAXI RECAP PROJECT

  15. RAIL FUNDING REQUIREMENTS

  16. CAPITAL FUNDING REQUIREMENTS Rolling Stock Age Distribution Coaches 1200 1031 1000 911 909 803 800 Coaches 538 600 400 313 200 117 0 11-15 16-20 21-25 26-30 31-35 36-40 41-45 Age Group

  17. CAPITAL FUNDING REQUIREMENTS ROLLING STOCK • NO INVESTMENT IN NEW COACHES SINCE 1988 • AVERAGE AGE OF FLEET 30 YEARS • 4500 COACHES WITH A REPLACEMENT COST OF R 63 BIL • 264 COACHES REFURBISHED in 2003/04

  18. Interim contract – untendered contract between the DOT and the operator Tendered contract – contract awarded by a tender board between DOT and the operator for the provision of public transport service Negotiated contract – allowed by the Minister to be negotiated with the operator rather than be put out to tender BUS CONTRACTS

  19. Tendered contracts – 58 Negotiated contracts – 2 Interim contracts – 34 PROGRESS REPORT -BUS CONTRACTS

  20. There are 10100 commuter buses (excluding municipal and long distance buses) Approximately 7500 buses are currently subsidised Approximately 2600 are unsubsidised Approximately 1.8% of the population was subsidised in the 2001/02 financial year On average passengers received R198 in subsidies per month = 6.7% of the average household income BUS SUBSIDY DISTRIBUTION

  21. BUS SUBSIDY DISTRIBUTION

  22. BUS SUBSIDY DISTRIBUTION

  23. Provinces to set aside a minimum of 30% of services to be contracted to companies with at least 50.1% PDI equity Remaining 70% of services a minimum of 35% PDI equity ownership required 10% subcontracting of the remaining 70% services to SMME/PDIs PROMOTION OF BEE: ROAD BASED P/TRANSPORT

  24. A National Supervision and Monitoring team is in the process of being appointed Subsidy Management System is being rolled out in all provinces on the National Transport Register QUALITY MANAGEMENT

  25. INTERGRATED TRANSPORT PLANS B U S T A X I R A I L AN INTEGRATED APPROACH TO PUBLIC TRANSPORT

  26. AN INTEGRATED PUBLIC TRANSPORT SYSTEM

  27. The National Travel Survey Surveyed 50 000 households To analyse: approximately 3,85 million public transport commuters 2.4 million ( 64%) use mini-bus taxis 21% use buses 15% commune to work by train. Is due for completion June 2004 AN INTEGRATED PUBLIC TRANSPORT SYSTEM

  28. Department of Transport Thank you

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