Date: 01/04/2008
Source: Eastern cape Provincial Governemnt
Title: SA: Mhlalo: Africa's Best 350 Ltd Bus operations launch

Keynote address by honourable Thobile Mhlahlo, MEC for Safety, Liaison, Roads and Transport at the launch of the Africa's Best 350 Ltd Bus operations

It is indeed a great pleasure to finally officiate the commencement of the Africa's Best 350 Ltd operations, which will present our rural communities with a safe, reliable and affordable public transport system. We know the challenges that are facing our people, especially in the former Transkei region, when they want public transport services.

Today we are collectively making visible and decisive intervention in this part of our province in an effort to provide a lasting solution to the public transport challenges that continue to haunt the rural communities of the region. This is a "first of its kind" major injection of quality public transport services into a poverty-stricken area, which seeks to enhance accessibility to economic opportunities through improved mobility.

We all understand that in order for the developmental democratic state to accelerate growth and transformation of our economy, we need to pay a particular attention to improving access of the previously marginalised groups of our society to the opportunities that have been presented by our freedom and democracy.

I would like to congratulate all the shareholders of this 100% black owned company and appeal to them to remain united in order to pave the way for a prosperous future. AB350 is one of the biggest 100% black-owned bus companies in the country and the second biggest bus company in the Eastern Cape behind Algoa Bus Company operating in the Nelson Mandela Bay Metropolitan Municipality.

As government, we remain committed to support this initiative and R944 million is being invested in this project over a period of nine years. Our support is clearly stipulated in the undertakings that we have made through the Aligned Draft Black Economic Empowerment (BEE) Charter for the bus sub-sector, where we committed ourselves to, amongst others:
* actively support the bus industry as a core component of the transport industry in South Africa
* engage the bus industry with a view to expand its desperately needed services.

The Department of Roads and Transport, which is spending R43,3 million will pay a monthly subsidy of R2,75 million per month for the seven year negotiated contract for phase one.

The rest of the money for phase one has come from a financing consortium, which comprises Scania Finance (R32million), Industrial Development Corporation (R15,5 million), Development Bank of Southern Africa (R10million) National Empowerment Fund (R3,5 million) and Eastern Cape Development Corporation (R2,5 million). This means that a total of approximately R107 million will be ploughed into phase one.

On that note, I would like to commend all the role players in this financing consortium and express our sincere appreciation on behalf of the provincial government. Today we are proud to announce that 26 buses (65 seaters) have already been purchased and 13 of them have started servicing 11 routes in the Mbizana area.

The remaining 13 buses will start the operations in Mount Frere next week. All AB 350 bus drivers have received induction and training on Questec electronic ticket machines. On 11 April 2008, another batch of 16 buses will be delivered to operate in the King Sabata Dalindyebo Area. The fourth batch of 16 buses will be delivered to operate in the Matatiele Area.

During this process, 220 permanent jobs will be created. A further 56 buses will be distributed by September this year and the last 55 with effect from April 2009.
Jobs to be created in the next seven years are 450 direct permanent jobs through the implementation of the three phases in the project.

AB350 will eventually operate a fleet of 175 brand new buses on 166 routes in the Alfred Nzo, O R Tambo, Amathole and Chris Hani Districts. This means more routes will be opened, which have not been serviced before and further enhance the access of the communities to job opportunities, health and education centres.

These routes have been identified by the department through a comprehensive Route Viability Study that was conducted. These buses will be operated from four depots in Mbizana, Mount Frere, Matatiele and Mthatha, which have been built at a cost of R16 million. There are plans to build depots in Butterworth and Queenstown and Lusikisiki.

Roads infrastructure

I would like to recommit the Department of Roads and Transport in ensuring that all the identified routes are prioritised for maintenance to avoid the quick deterioration of these new buses.

We have received R300 million for the maintenance of rural inaccessible roads. This year, we will further introduce new alternative technology to seal and stabilise our gravel roads. Later this month, I will convene a Roads Summit in Mthatha, where the department will present its priorities for the next five years and I would like to invite all local stakeholders to that summit.

In conclusion, once more, I would like to express my sincere appreciation to all those, who have been involved in the establishment of this legal entity, including the shareholders and financiers. This clearly shows that working together, united in action, we can achieve great things.

Issued by: Department of Roads and Transport
1 April 2008