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Recapitalisation Presentation to the Select Committee on Public Services

This presentation discusses the progress, issues raised by SANTACO, MINCOM decisions, EMS negotiations, funding confirmation, and finalization of BAFO in the taxi recapitalization process.

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Recapitalisation Presentation to the Select Committee on Public Services

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  1. TAXI RECAPITALISATION PRESENTATION TO THE SELECT COMMITTEE ON PUBLIC SERVICES (NCOP) 25 JUNE 2003

  2. Introduction • Progress made with recap • Issues raised by SANTACO • MINCOM decisions • Meetings with SANTACO

  3. Reasons for delay • EMS negotiations with SANTACO • Confirmation of funding • Finalisation of BAFO

  4. Progress with recap • Activity schedule was drawn-up indicating tasks to be completed by when and by whom • According to activity list – vehicles can only be rolled out by May 2004

  5. Progress with recap (2) • NEW TAXI VEHICLE • Several meetings by Steering Committee • SC differed on issue of the BAFO • National Treasury’s view to complete first affordability thresholds before issuing BAFO • NDOT and DTI of the view that: • Strategic Review project done in Nov 02 did contained indicative affordability figures • affordability will only be determined through BAFO • BAFO Instruction document issued on 21 May 03

  6. Progress with recap (3) • ELECTRONIC MANAGEMENT SYSTEM • RFP issued during March 2001 • Government prescribed a 25,1% equity of the company who wins the bid for SANTACO • Technical Evaluation Team evaluated the bid and recommended a company • Number of concerns raised by Steering Committee • Obtained legal advice • Appoint experts to do a quality check of evaluation report • Busy finalising a recommendation of the preferred bid/(s) to Cabinet

  7. SANTACO issues • SANTACO raised a number of issues in the media – given Government 14 days to respond • No formal document received • Specific issues • GOV & SANTACO to agree on a fast track process for recap • GOV not able to deliver vehicles before May 04

  8. SANTACO issues (2) • Specific issues • SANTACO to be recognised as a full & critical partner and must be included in the recap process on a permanent basis • GOV response: • Issues raised in numerous meetings on official and political level • Made clear to SANTACO that these tender processes are the responsibility of Government and should be managed by Government • SANTACO was consulted on related issues: EMS, roll out plan,

  9. SANTACO issues (3) • Specific issues • SANTACO wants the dates in the NLTTA of (2004/ 2006) to be amended • GOV response: • To obtain a political mandate from MINCOM to amend the dates according to the new dates of the vehicle roll out plan • A letter was sent to SANATCO confirming the Department’s position

  10. SANTACO issues (4) • Specific issues • SANTACO wants exemptions for their members to continue to use 16-seaters under specific conditions administered by SANTACO • GOV response: • NLTTA does not provide for such exemptions – all vehicles to adhere • Administration of legislation is the sole responsibility of Government and the role of SANTACO in this regard is unclear

  11. SANTACO issues (5) • Specific issues • SANTACO wants to take over the recapitalisation project and Government should only provide the legal framework • GOV response: • The regulatory framework is provided in the NLTTA and the Road Traffic Act • Government issued tenders and is accountable for the tender process • Unclear how this project can be handed to private sector • Government involvement provides certain level of surety to manufacturers, banks and insurers

  12. SANTACO issues (6) • Specific issues • SANTACO wants an official enquiry into the delays in the project • GOV response: • In the absence of clear and concrete indications of the nature of the alleged vested interests of officials – difficult to investigate such allegations.

  13. SANTACO issues (7) • Specific issues • SANTACO wants to announce the final winner in the EMS • GOV response: • The NTV and EMS-processes are Government processes and SANTACO can therefore not announce the successful bidder(s)

  14. SANTACO issues (8) • Specific issues • SANTACO requested Government to release agreed funding for road shows • GOV response: • 2002/03: R6,2 million including R272 000 budgeted for road shows • The budget for road shows not utilised yet

  15. SANTACO issues (9) • Specific issues • SANTACO requested that the issues of subsidy and the scrapping allowance be finalised in order to ensure affordability • GOV response: • Actual vehicle prize as determined by the BAFO will influence the level of scrapping allowance • In Nov 02, the Strategic Review Report recommended that scrapping allowance be increased ……

  16. SANTACO issues (10) GOV response: • Model Tender document also provides for smaller vehicle types • Department busy review public transport policy including subsidy policy which are currently discussed at the BEE Taxi-sub Sector meeting where SANTACO is represented

  17. MINCOM decisions • MINCOM met on 10 June 2003 and agreed: • That political intervention is needed to fast track the process, and an urgent meeting will be held consisting of: • Deputy President – Mr Jacob Zuma; • Minister Omar; • Acting Minister Radebe; • Minister Manual; • Minister Erwin; and • All MECs for Transport

  18. MINCOM decisions (2) • That the BAFO document be circulated to the MECs • After the the Ministerial meeting was held, MINCOM needs to meet with SANTACO to inform them of decisions taken

  19. MINCOM decisions (3) • That NDOT needs to prepare a discussion document for the meeting which will address among others the following issues: • The relationship between SANTACO and government; • Re-evaluation of the funds previously budgeted for the scrapping allowance; • The need for NDOT to take a lead in all transport related issues surrounding the taxi recapitalisation process, e.g. scrapping allowance, EMS tender and the BAFO process.

  20. MINCOM decisions (4) • That at Task team be established to constantly monitor progress on the recapitalisation process. Such a team will develop a realistic roll-out plan based on the decisions of the Ministerial meeting. The team to consist of the following members: • MEC Ndebele • MEC Vilakazi • MEC Mosunkutu • Mr Jerry Makokoane • Mr Maishe Bopape

  21. Meetings with SANTACO (1) • SANTACO and Government to jointly (through the technical teams) look into technical issues in the BAFO document, especially concerns raised by SANTACO. The ultimate clarities and settlement to be finalized by Monday the 23 June 2003. • SANTACO and DG’s of DTI and NDOT to meet again on Tuesday, 24 June 2003, so as to update each other on progress.

  22. Meetings with SANTACO (2) • On Friday, 20 June 2003, the Acting DG of Transport, Mr J Makokoane met with SANTACO accompanied by officials from NDOT and DTI to address SANTACO’s concerns relating to the BAFO document and the following were agreed: • The turning circle to remain as stated with a further clarity to SNPs • The ground clearing of vehicles to remain with a minimum of 215 mm • The second door request and that it is only allowed to be on the left hand side • The height of vehicles still to be checked by the technical team since it could not be determined with certainty as to why it should be increased from 170cm to 175cm

  23. Meetings with SANTACO (3) • The need to provide for wheelchairs in NTV will be clarified to SNPs that they quote three alternatives: • giving full compliance to access for people with disabilities, • quoting for no-compliance, • and lastly quoting for a 1% for disability out of the full required NTV fleet. • The ramp in the vehicles will be left to the SNPs innovation.

  24. Meetings with SANTACO (4) • That government representatives to seek a mandate from principles on giving SANTACO assurance in writing that the Scrapping Allowance will be considered between 20% to 30% within the approved Fiscus allocation of R4billion. • The ultimate scrapping allowance will be determined during the negotiations with SNPs and a final figure will then be ascertained.

  25. Meetings with SANTACO (5) • On Tuesday, 24 June 2003, the DG of Trade and Industry met with SANTACO during which much progress has been made with regard to the concerns raised by SANTACO regarding technical issues in the BAFO • it was agreed that Government will work more closely with SANTACO as recap reaches closer to the implementation phase

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