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Date : 16/02/2006
Source: Ministry of Transport
Title: Radebe: SA Bus Operators Association national conference


  Address by the Minister of Transport, Mr Jeff Radebe, MP, at the SA Bus Operators Association (SABOA) National Conference, CSIR Conference Centre, Pretoria

It is my pleasure to be here with you this morning. The transformation of our public transport system remains a daunting task, and defining the role of the bus in this changing environment will prove to be challenging. I say this because there may be doubts among some in the bus industry that Government does not believe in the future role of the bus within our public transport system. I must indicate to SABOA and the industry as a whole that it is Government's firm position that there is a still a role for the bus industry, a significant role for that matter. I'll return to this theme later in my address.

The President has through his State of the Nation Address defined the key strategic challenges for us as a nation. At the heart of our national effort for social and economic transformation is the contract between the democratic government and the people. The budget presented to Parliament yesterday has further reinforced the overwhelming sense of optimism and age of hope that President Mbeki spoke about last week.

The achievements of the past decade are a clear indication that when we act together and decisively as a people, guided by a common vision of a better South Africa that belongs to all, we will overcome the obstacles and become a winning nation.

Government will play a major role in the realization of our key economic goals through targeted interventions as outlined in Accelerated and Shared Growth Initiative (ASGISA). Central to this is increased public sector investment in economic infrastructure estimated at R370 billion. As you could see in the budget, we are also beginning to witness marked increases in levels of investment in transport infrastructure and services, which are key to sustainable growth and development.

This is good news for transport in general and for public transport. Increased investment in infrastructure, operations and people will contribute immensely to improving the reliability of transport services, enhance the safety of operations and enable forward planning by various transport operators I am pleased to announce that the budget makes provision for additional allocations to road infrastructure of a total amount of R1,9 billion, the additional allocations of a total amount of R1,6 billion to passenger rail, additional resources for the Road Accident Fund of R2,7 billion and the R3,5 billion through the Public Transport Infrastructure Fund over a three year period, the Medium Term Expenditure Framework (MTEF) period. This is the clearest signal ever that we are on course in our efforts to overhaul our public transport. These increased funding allocations for transport services are significant enough and will enable us to make the necessary targeted interventions as required by ASGISA.

This commitment is communicating the message that Government at all three levels, in partnership with the bus, taxi and rail industry must roll up their sleeves and get to serious work.

The Department of Transport will respond to the challenge of improving public transport and ensure that detailed business plans are provided and that the committed funds are spent within the timeframes outlined in the budget review. I am also encouraged by the fact that funds have been earmarked to facilitate preparations and transport infrastructure requirements for the 2010 Soccer World Cup and beyond, for provinces and host cities. Through our 2010 Transport Agenda Framework, we will coordinate all initiatives and support municipalities in delivering on the key public transport projects.

Transport has an important contribution to make in addressing the scourge of poverty in our country, creating wealth and providing the necessary linkages and opportunities between the first and second economy, including facilitating improved access to public services for the rural masses. In this context, and as part of creating sustainable communities based on mixed land use and densities, it is critical that investment is focused in order to achieve sustainable growth and development.

Public transport plays a significant role in facilitating economic activity and maintaining social cohesion of many communities. Government at national, provincial and local level embarked late last year on a public campaign to champion the transformation of public transport. The message from consultations with public transport users and communities is clear. First is that we need, as a matter of urgency, to address the lack of reliability and inefficiencies that characterize the current passenger transport system.

The fundamental lesson from our transport month comes from many communities that do not have access to any form of frequent and reliable public transport services. We will accelerate this year the implementation of flagship projects such as passenger rail consolidation, taxi recapitalisation project, and optimisation of the bus subsidy. These targeted interventions are aimed at improving in the short to medium term the performance of our public transport system. However, the major lesson of our public transport campaign is that we need to move beyond these initiatives and set the precondition for the realization of our long-term vision of safe and affordable public transport for all.

The age of hope should see us making serious attempts aimed at transcending the current commuter transport system. We need to move from this limited commuter transport system towards a broad-based public transport system. Our vision is one of a public transport system that provides certain minimum levels of service in the urban and rural context and thereby enabling South Africans to enjoy greater mobility.

Public transport and not a commuter transport system is what South Africa requires as we move towards an age of sustained growth and accelerated development. This will enable all South Africans, including the unemployed and poor, to enjoy greater access to economic and employment opportunities as well as social recreation.

Key elements will be a public transport system that is in operation for longer periods of 18 hours or more in the major metropolitan centres, frequent public transport services of between 5 and 15 minutes during peak hours to enable South Africans to move with speed. Similar principles could be applied in the context of the rural areas where frequent public transport services should enable the rural masses to gain greater access to economic and social opportunities. The need for transport authorities to plan such a system, set and enforce conditions, as well as manage contracts with transport operators, will be extremely critical.

Mr Chairman, allow me to elaborate on the specific role that Government will play in such planned public transport environment. Firstly, Government will take effective control of key elements of an integrated public transport system, which should be affordable and cost-effective. We must agree that a system driven primarily by the interests of operators will be a thing of the past. This must be a public system in the true sense of the word characterised by public participation, effective planning and enforcement of conditions and standards. I must repeat here a point made by our Transport MinMec on numerous occasions last year, that Government should take measures to reclaim all routes and determine the terms under which they are operated.

Secondly, Government at all levels, working through transport authorities, will set comprehensive standards for the operation of various public transport modes. This will include the type and size of vehicles on these routes, roadworthy requirements and standards, fare determination, frequency of services, and so on. Most of all, we will need to ensure that there is regular inspection to ensure that service and safety standards are adhered to at all times. Operators will be granted contracts in terms of this system.

A critical yet practical question is what are the building blocks for such a transition, and the timeframes for the realisation of such a vision? In responding to this challenge, first is the implementation of integrated ticketing and information systems. This will set the stage for a single public transport product, which will attract people to use public transport. Integrated ticketing and information systems will allow people to access information and schedules about public transport services as well as allow interoperability between modes.

The second and key building block of a good pubic transport system will be the urgent need to implement deliberate travel demand management measures to manage private car use in our major metropolitan centres. We are working to develop pilot projects with the Metropolitan Councils of Johannesburg, Cape Town and Ethekwini. An essential element of this initiative should be the identification and implementation of dedicated bus and taxi lanes to allow the speedy transit of public transport vehicles such as buses and taxis.

As earlier stated, we are considering integrated public transport facilities and integrated ticketing systems to allow interoperability between the different modes of transport.

Thirdly, the setting of clear public transport indicators such as reduced travel times, reduced costs, to reduce the percentage of household income spent on transport and the determination by the relevant transport authorities of the nature and size of vehicles to be used, including regular renewal of the public transport fleet and access to transport as well as other indicators will need to guide the transformation of public transport.

Finally, the shift away from commuter to public transport will take place over an extended period of time. It will in the short to medium term require increased investment in public transport and a significant extension of services in the townships, informal settlements and the rural areas of our country. The fact is that a significant number of South Africans walk and/or cycle everyday.

Our definition of passenger transport and all investment plans in respect of public transport infrastructure will need to take into account that walking and cycling have become modes of transport in their own right. We must provide in our planning and delivery of road infrastructure. As part of this process and leading to the 2010 FIFA World Cup, the Department is committed to providing bicycles to school children and poor households in the rural and peri-urban areas of our country.

We have begun the process with hundreds of bicycles already handed out during the October Transport Month activities.

As promised at the beginning of my address, we will need to locate the role of the bus in this changing environment. The current destructive competition between modes is not beneficial to our system. The starting point for us is that the long distances in our environment is such that it will require a significant role for the bus within our public transport environment, and not its reduction. The bus fleet must be utilized to the maximum and in some instances needs to integrate with passenger rail services in major metropolitan areas. In the context of the rural towns and peri-urban environment, we will not be able to do without the bus. Therefore, the bus will be an essential part of a planned public transport system based on scheduled services with regular frequencies to facilitate improved mobility for all the people of South Africa.

However, recognition of the continued role for the bus will require changes by the bus industry itself. As bus services increase in some areas, it may be necessary that through the integrated transport plans at local level, the bus be expected to give way in some corridors to rail and/or the taxi industry. It will be necessary that bus contracts be restructured over time to ensure the participation of the taxi industry in subsidised public transport services. We believe that this could be managed in a careful manner to the benefit of passengers and in the interest of the different public transport modes.

The challenge for the bus industry is to work very closely with rail and the taxi industry in a way that will eliminate duplications, improve services and enhance the efficiency of the entire system.

The industry is well aware that the current commuter transport system is inherited from our apartheid past; its primary objective was to ensure security and stability in the supply of cheap African labour. It is essentially a limited commuter transport system of subsidized bus and rail services to the exclusion of the taxi industry and ignored the needs of pedestrians and cyclists. We are therefore saying that the bus industry should approach the issue of the role of the bus in this broader public transport context, as against an approach that will seek to protect vested interests inherited from the past.

An essential element of this transformation is the entry of new operators in the bus industry. We have noted and are encouraged by the trend in the industry where key players such as PUTCO, Interstate Bus Limited, Golden Arrow and others have undertaken or are in the process of completing various kinds of broad-based black economic empowerment transactions. The reality today is one of the bus industry that has met and surpassed the black economic empowerment (BEE) threshold and targets outlined in our BEE Transport Charter. We have observed that 60% of the bus industry achieved the BEE targets as far back as 2003 - three years ahead of schedule. Some of the positive features in these transactions include the introduction of a majority black equity shareholder, a stake for all employees, subcontracting of certain routes to small operators and the development of models for the participation of the taxi industry.

We support some of these initiatives in the context of the Broad-Based Black Economic Empowerment (BBBEE) Transport Charter, which the Department will present to you in the course of the day.

However, the participation of small bus operators and the development of cooperatives remain serious shortcomings. I continue to receive complaints and requests for assistance from small bus operators across the country that continue to express frustration with what they regard as barriers to entry and transformation for them.

Most of them remain outside the formal subsidy system and struggle to raise capital and to recapitalize their bus fleet. I will be looking with keen interest at how the industry responds to this challenge over the coming months.

Of course, Government recognises that this transformation will require, over an extended period, an increase in funding levels for public transport as a whole. It will not be feasible to extend transport services and bring on board the participation of the taxi industry if the size of the cake remains the same. The allocation to the bus industry will increase by 10% over the MTEF period. The Department of Transport together with the provinces are committed to ensuring that increased funding allocations are provided to extend bus services across the country. Growth in this industry linked to transformation should see additional funding directed to this sector. The funding allocations of more than R7.1 bn to the Gautrain Rapid Rail Project will provide opportunities for the bus and taxi industry in terms of the integration strategy developed by national and provincial government.

The policy of Government was presented and discussed with the industry over the past 12 months. I must reaffirm that regulated competition remains the policy of Government. The awarding of contracts will be based on open, competitive tendering with operators expected to meet defined and comprehensive operational and safety standards in these contracts. To this end, the next Transport MinMec scheduled for mid March 2006 will consider all the submissions from the industry on and finalise the Model Tender Document (MTD), which will serve as the basis for competitive tendering. We will publish the final MTD in the Government Gazette by end of March this year.

However, we have also indicated to the industry that there will be instances where the pursuance of competitive tendering will not be the most appropriate option and we seek to pursue broader social and economic objectives. In this context, we have signalled our willingness to consider alternative options subject to the pursuance of certain social goals and meet provisions of the National Land Transport Transition Act. Already, many provinces have submitted applications notifying us and seeking approval to enter into negotiated contracts with operators.

As we discuss the policy of regulated competition, SABOA should reflect on both and positive developments within the bus industry. A key feature of this industry over the past few years has been the emergence of evidence and allegations suggesting that some of the bus companies are guilty of defrauding the State of millions of Rands. This is tantamount to stealing from the poor and the people of South Africa.

We would like to see SABOA taking firm action against any of its members found guilty of corruption and fraud. We call on SABOA to distance itself from these operators. These fraudsters are not worthy of being members of an association with such noble objectives.

On the part of the Government, we are already paying special attention to this matter. We are tightening the terms and conditions of contracts and any bus operator found guilty of defrauding the Government will be dealt with severely. In the short-term, we intend to strengthen the capacity of Government at national and provincial level to manage and monitor these contracts. To this end, the Department is instituting forensic audits in all the subsidised contracts awarded by the State.

This conference cannot afford to ignore the spate of accidents that involve buses and claiming the lives of many innocent people and children. It is our responsibility to stop this carnage on our roads. A common denominator in most of the accidents has been due to the failure of brakes. Most importantly, the buses involved in these accidents are clearly old and unroadworthy. I am aware that most of these buses fall outside of our subsidized contracts. However, there is an obligation to meet the relevant safety standards applicable to buses. Bus operators must take responsible and will be held liable when accidents are due to negligence, recklessness and unroadworthiness of vehicles.

I have instructed the Road Traffic Management Corporation to urgently explore this issue and engage with the South African Bureau for Standards (SABS) with the view to improving safety of buses. We will ensure that operators involved in subsidized contracts renew their bus fleet and that their buses are subjected to regular maintenance and testing by authorised testing stations. We intend to increase the frequency of such testing and lower the age of these buses to ensure that operators renew their fleet.

Finally, the Department will act firmly against officials at testing stations who collude with operators and issue fraudulent roadworthy certificates. In some instances, I have been made aware that operators put in new parts for purposes of getting roadworthy certificate, and immediately remove this after this was secured. This conference will need to pay special attention on how we enhance safety, improve the skills of workers, invest in machinery and ensure regular maintenance for their fleet.

I wish to reiterate our approach to the challenges facing the bus industry. Government has a clear and firm agenda in this area. However, we will work in partnership and do not wish to push this by stealth. The partners should appreciate that we do not have the luxury of time. We should no longer apportion blame for the lack of progress but instead need to move together with lightning speed. We will continue to engage with SABOA and the industry as a whole. At the same time, we must emphasise that transformation and competitive tendering are not up for negotiations.

I wish SABOA and the industry all the best in your deliberations. I look forward to meeting the new executive in the coming weeks and to be briefed about the outcomes of this important conference. We hope and trust that the industry will work in partnership with the Government and contribute to the realisation of our common vision.

I thank you!
Issued by: Ministry of Transport
16 February 2006

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