Date: 02/11/2010
Source: The Department of Transport
Title: SA: Ndebele: Address by the Minister of Transport, at the Santaco launch of the TR3 2010 Strategy, Midrand

PROGRAMME DIRECTOR

PRESIDENT OF SANTACO MR. ARTHUR MTHEMBU

SECRETARY GENERAL OF SANTACO MR. PHILLIP TAIBOOSCH

REPRESENTATIVES OF THE TAXI INDUSTRY

PUBLIC TRANSPORT OPERATORS

DISTINGUISHED GUESTS

MEMBERS OF THE MEDIA

LADIES AND GENTLEMEN

Ten years ago we said, in South African terms, public transportation
virtually denoted horror. It painted gory pictures of minibus-taxi road
crashes, taxi violence and bodies of our loved ones scattered on our roads.
But we also said, on the other hand, the taxi industry represented, and
still does, a great model of successful Black economic self-empowerment. It
is the only sector where Black people control an entire sector through their
ownership of the taxi mode of transportation.

There are already 50 million of us in South Africa today and our roads can
accommodate only so many. The aspiration of a car in every garage is simply
untenable.

Public transport therefore represents the future and Black people are
already in it. The question was therefore back then to make public transport
safe, efficient and affordable. Today you are pronouncing yourselves that,
as a national structure, you want to play a part in the development of our
economy. We therefore congratulate you on the strides you have taken. We are
ready to work together with the industry to identify opportunities. Over the
past ten years we have seen an increase towards investment by the taxi
industry in the transport sector. Today the industry owns garages,
dealership networks such as Taxi Choice, partnerships with Toyota - all of
which have seen serious returns for you as the taxi industry.

Today the taxi industry consists of mini-buses and midi-buses and is a major
player in our economy:

* public transport by taxis accounts for 65% of the transport total, 20% by
bus and 15% by rail;

* consists of approximately 150 000 public mini- and midi-bus taxis; and

* has an estimated turnover of more than R16,5 billion.

The initiatives of the Department of Transport on the economic empowerment
of the taxi industry commenced as far back as 1996. Today in November 2010,
more than ten years later we are here to recommit ourselves to a new taxi
development agenda. We have both the objective and subjective factors which
are conducive for a major, giant leap forward. The main objective factor is
that public transport is on the rise and defines the future of mobility in
South Africa, in Africa and the world.

We cannot afford to continue building more roads and parking bays in cities
as this simply encourages more traffic over the medium term to long term. No
city in the world not even London, Chicago, Venezuela, Paris or New York has
solved urban mobility challenges through private car use.

Switching car users to public transport, walking and cycling will make a
major contribution to our global responsibilities of protecting the
environment. Public transport provides a greater level of safety and stress
free travel than private transport. To reposition public transport
government has made massive investments in the sector and particularly in
the development of the public transport infrastructure and services. Over
the past five years we have invested R48billion in our Bus Rapid System,
rail and the Taxi Recapitalisation Programme. This expenditure pattern is
going to continue over the next ten years.

We have spent over R9billion rolling out the Integrated Public Transport
Networks in four cities. Already, in the Rea Vaya BRT in Gauteng, the taxi
industry owns and is involved in the operation of the BRT. There are
concrete plans to extend these Rapid Networks into other cities. Secondly,
we are about to develop new long-term contracted services in all provinces.
This will be completed in all provinces over the next two years. These
contracts will vary between seven and 12 years at an average of R5billion a
year as subsidy from government. This constitutes 40% of the revenue streams
for the contracted services. This means that there is an additional
potential revenue stream of R12billlion flowing into the sector if you
include commuter fares.

We have plans to upgrade the Moloto Corridor into a Rapid Rail system. At
the moment we are paying R300million per annum for one service which is
again 40% of the total revenue stream. We also have plans to develop a
high-speed train between Durban and Johannesburg. All these projects are not
a threat but represent a massive opportunity for the industry. We have plans
to develop high-capacity corridors serviced by bus or rail transport,
supported by taxi distributor routes serviced by taxi or bus transport. At
the centre of our strategy is to provide transport that is safe affordable
and reliable.

Our strategy is to provide the greatest convenience to the commuter with the
aim of providing a round the clock means of moving from point A to B in all
parts of our country whether rural or urban. In addition to opportunities
created by government, there are also many opportunities in the private
sector for the industry. Opportunities exist in finance, vehicle
manufacturing and fuel among others.

We need to look beyond just the obvious opportunities and look at the entire
value-chain. Again our view is that there are massive opportunities in
vehicle manufacturing. There are massive opportunities in the local
manufacturing of buses, taxis and also rail coaches and locomotives. These
opportunities are about deriving economic benefits through the entire
value-chain. The industry must reposition itself to become a major
investment stakeholder in all these developments.

We have already defined part of the value chain which is: transport finance,
fuel, spare parts, tyres or even the manufacture of vehicles. Furthermore we
are saying the taxi industry must move and partake of the opportunities in
rail, freight transport, maritime, aviation and infrastructure development.
With regard to fuel there are big opportunities which are occasioned by our
country and the world's commitment to a cleaner environment over the next
decade or so.

The sector is the biggest polluter through the use of fossil fuels. Let us
turn this negative situation of climate change into a positive business
opportunity. We are faced with an urgent need to retrofit all our vehicles
in order to reduce our total carbon emissions as a country, continent and
the world. The taxi industry must take advantage of this and many other
opportunities. The taxi industry must play an important role in the roll-out
and operation of these projects.

The challenge for the industry therefore is about

* the creation of corporate structures;

* skills development; and

* unity and cohesion within the industry.

We guarantee government support. We want the industry to take this giant
leap through the training of owners and drivers, maintaining unity and
becoming investment partners in the public transport system of our country.

NEW DAWN IN TAXI INDUSTRY

Today marks the launch of the Taxi Industry's Strategy for 2010- 2020 and
the Taxi Academy. These two achievements are the fulfillment of our vision
applied through our three-pronged approach which involves:

1. The creation of a structured engagement on all matters between government
and the taxi industry.

2. The development of a structural framework to enable the taxi industry to
engage collectively in economic activities.

3. The setting-up, within the environment of a solid structural framework,
of actual business ventures aimed at turning the taxi industry into a
serious economic force.

The taxi industry is moving forward with the entire country towards the
development of world class public transport in South Africa. We are not
moving backwards but forward together to move the people of South Africa
with safe, reliable and affordable public transport system. Our focus as the
Department of Transport is to place transport at the centre of moving South
Africa from being a developing country to being a developed country.

THE TR3 2020 STRATEGY REDEFINING, RESTRUCTURING AND REPOSITIONING

We welcome the strategy particularly how you see the evolution of the
industry till 2020. We agree that we need to Redefine, Restructure and
Reposition the industry. Flowing from this let me outline our terms of
engagement and support for the industry:

* Firstly, we want to adopt your TR3 2010-2020 Strategy as the basis for our
partnership with the industry.

* Let us move with speed with the establishment of the Taxi Academy.

* We will redirect the budget we have set aside for taxi training which is
R5.5million to ensure that the Taxi Academy is up and running latest by the
beginning of the next financial year.

* Let us strengthen our partnership for the development of public transport
co operatives and other legal entities critical for the growth of the
industry.

* Let us give ourselves three months to consolidate the strategic
partnerships with key private sector partners including banks, vehicle
manufacturers, technology and other relevant partners

For us to be able to drive this ambitious programme, the Department is
establishing a Project Management Unit with sufficient resources and skills
to implement this programme. I encourage the industry to build that project
management capacity as well, so that we can ensure that there are dedicated
teams from both government and the industry to manage these projects. All of
us are speaking about the opportunities for the industry. The challenge for
us now is to put in place people, infrastructure and systems in order to
ensure that these identified opportunities are turned into viable and
bankable businesses.

CONCLUSION

To conclude, a vibrant taxi industry that shares the vision of
transformation in improving public transport in addition to bus operators
and passenger rail operations is what is needed in this country. We have
faith in SANTACO. SANTACO has the mandate to lead efforts to unite the taxi
industry. It is only through working together, the taxi industry, government
and the private sector, that our endeavor to implement our much needed
integrated public transport networks can be achieved.

I THANK YOU