PUBLIC TRANSPORT, TAXI RECAPITALISATION PROJECT AND PUBLIC TRANSPORT SUBSIDIES

1 June 2004

CONTENTS

1. INTRODUCTION AND BACKGROUND INFORMATION

2. POLICY THRUSTS ON PUBLIC TRANSPORT

3. THE TAXI PROCESS

4. COMMUTER RAIL

5. BUS CONTRACTS

6. AN INTEGRATED PUBLIC TRANSPORT SYSTEM

1. INTRODUCTION AND BACKGROUND INFORMATION

The overarching objectives for a sustainable public transport system which contributes to the economic growth of our country are:

The White Paper on NationaI Transport PoIicy, 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.

 

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.

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

THE RECAPITALISATION OF THE TAXI INDUSTRY

The primary aim of the taxi recapitalisation project at conception was aimed at:

 

THE TAXI PROCESS

In 1996 The National Taxi Task Team (NTTT) was established constituted of Government officials, community Ieaders and members of the taxi industry to:

Findings of the NTTT broadly grouped into three main areas,

Viz:

 

PROGRESS MADE POST THE NTTT FINDINGS

On Regulation:

The National Land Transport Transition Act (NLTTA),2000

Special Legalisation Process (SPL) initiated to give illegal taxi operators an opportunity to legalize their operations provided they met certain basic requirements- the "Be Legal campaign" (BLC), closed on the 31st December 2002 as per MlNCOM resolution.

PROGRESS MADE POST THE NTTT FINDINGS

On Formalization:

On Economic empowerment:

THE TAXI RECAP TENDER

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 td monitor and control data collection, provide audit functionalities, effect modal integration.

· Cabinet approval - September 1999

· The dti issued request for proposals - November 1999

TAXI RECAP TENDER DELAYED

Due to:

PROGRESS MADE ON TAXI RECAP TENDER

The following progress has been realized:

The following progress has been realized

 

 

 

CHALLENGES FACING THE TAXI RECAP PROJECT

 

· 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

COMMUTER RAIL

· Commuter rail is operated by Metrorail on behalf of SARCC (an agency of the Dept.)

· Metrorail is a business unit of TRANSNET , reporting to the Department of Public Enterprise

· Dept has an MOU with SARCC and provides assistance in the form of subsidies.

 

RAIL FUNDING REQUIREMENTS

 

2004 /05

‘000

2005 /06

‘000

2006 /08

‘000

Operational

1 873 550

1973 843

2 092 274

Capital

655 000

688 300

729 598

Total

2 528 550

2 662 143

2 821 872

Operational

Shortfall

-

162 491

196 631

 

CAPITAL FUNDING REQUlREMENTS

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

 

CAPITAL FUNDING REQUIREMENTS

Rolling Stock Age Distribution

Coaches [PMG note: Graph Not Included]

 

BUS CONTRACTS

· 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 - Minister empowered by the NLTTA to negotiated contracts with the operator rather than tender contracts.

AN INTEGRATED PUBLIC TRANSPORT SYSTEM

The National Travel Survey Surveyed 50 000 households

PROGRESS REPORT: BUS CONTRACTS

· Tendered contracts - 58

· Negotiated contracts - 2

· interim contracts - 34

BUS SUBSIDY DISTRIBUTION

· There are 10100 commuter buses (excluding municipal and long distance buses)

· Approximately 7500 buses are currently subsidized

· Approximately 2600 are unsubsidized

· Approximately I .8% of the population was subsidized 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

PROVINCE

2001/2002

2002/2003

2003/2004

2004/2005

Eastern Cape

65,398,919.11

62,000,000.00

66,733,762.77

82,351,819.96

Free State

94,729,760.92

96,000,000.00

112,679,495.81

116,665,078.28

Gauteng

672,757,268.44

723,000,000.00

781,134,577.90

790,788,630.14

Kwazulu-Natal

379,945,998.57

379,742,000.00

448,295,115.14

446,653,044.03

Mpumalanga

157,035,418.76

162,000,000.00

190,112,148.87

211,475,250.49

Northern Cape

9,901,770.94

12,000,000.00

13,187,493.34

14,411,568.49

North West

46,837,580.53

40,000,000,00

24,069,272,94

39,064,324.85

Limpopo

61,305,657.84

72,000,000.00

73,006,134,96

83,935,508.81

Western Cape

226,883,624.91

260,000,000.00

334,781,998.27

372,694,774.95

1,714,796,000.02

1,806,742,000.00

2,044,000.00

2,158,040,000.00

BUS SUBSIDY DISTRIBUTION

[ GRAPH NOT INCLUDED]

PROMOTION OF BEE : ROAD BASED P/ TRANSPORT

· 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

QUALITY MANAGEMENT

· 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

AN INTEGRATED PUBLIC TRANSPORT SYSTEM

 

Rationale for Subsidy

Targets for redistribution

Spatial allocation

Mode to be subsidized

 

Equity Distance Affordable

Workers

Job seekers

Learners

Poorest

Needy

Disability

Densification

Urban

Rural

Rail

Business

Taxi

 

 

AN INTEGRATED APPROACH TO PUBLIC TRANSPORT

[PMG note: GRAPH NOT INCLUDED]

THANK YOU