Gallagher Estate, Midrand, 24 November 1999
Thank you for inviting me to THE SWEDISH EXPO AND SEMINAR and for giving me an opportunity to welcome you to this gathering. I wish to send warm African greetings to all our guests and wish you well during this occasion and your stay in South Africa.
I would like to express our profound appreciation to the Swedish Government and people for their contribution to the freedom struggle in our country, South Africa. Liberated South Africa is therefore also your home - your African home. Without your contribution perhaps we would not be a free people today. We therefore welcome the Swedish delegation with warmth and enthusiasm.
The contribution the people of Sweden made, helped to bring an end to apartheid, which was condemned throughout the world as crime against humanity. The humanity and dignity of all South Africa's people is today protected as a result of our democratic victory in 1994. Your solidarity will never be forgotten. We thank you for that contribution and once more, welcome.
Chairperson, my address today, will highlight what my Department has developed over the past few years. Though we are still in the early stages of implementation and the challenges seem daunting, I feel that there are significant opportunities for co-operation and investment in building and reconstructing South Africa's strategic public transport system.
President Thabo Mbeki, even long before inaugurated as President on 16th of June this year, has been articulating very passionately the "African Renaissance" - a vision that has full and unequivocal backing in government and elsewhere in our continent. As transport, our 20-year strategic vision, Moving South Africa (Action Agenda) for passenger transport is ambitious but nevertheless achievable. Furthermore, it falls squarely in line with the President's vision.
The African Renaissance calls for all those who experience Africa as a defining identity to take control of their destinies and work towards removing the shackles of uneven development, poverty, oppressive governance and cultural alienation that still binds so many of our people. Building on this theme, the passenger transport vision, as articulated in the MSA strategy, aims for a core network of high volume and high frequency public transport corridors especially in urban areas.
This network must be geared to meeting the needs of users, including those who are currently marginalised due to a lack of affordable or physical access. Over time this core urban public transport corridor system must be upgraded to cater for users with special needs including the disabled.
Our vision for rural passenger transport is to support the integration of sustainable rural communities into the social and economic life of South Africa.
Through transport, rural South Africans will be enabled to affordable and convenient access markets, employment, economic activity, health care, welfare services communication systems, retail services and social activity. To achieve this, transport will need to be integrated as a central part of government's co-ordinated rural development strategy and investment programme.
The inherited mobility and accessibility gaps in our systems weigh heavily on the poor and the marginalised. Many are forced to walk long distances. Many who manage to pay for transport are paying well over 20% of their incomes. Many have to forego travel altogether, thereby losing access to economic opportunity and services.
The spatial distortions of apartheid planning located people at the periphery of our economic centres, and low income housing subsidies and developments have up until very recently tended to exacerbate by favouring settlement on cheaper land at the margins. Already, average distances to employment and services are long by international standards, yet these distances have to be travelled by a mostly disadvantaged majority.
The reality is that the present public transport system is essentially failing its customers. For most indicators including access time; journey time; fares safety and security, customer goals are not being met for large numbers of passengers.
The challenges facing public transport in our country are strategic in that there is no escaping the need for trade-offs and choices. Old and inherited ways of doing things will not turn around an unsustainable industry whose customers are dissatisfied.
We have inherited and continue to grapple with a system that:
In short, we require focused investment in those public transport services that are able to meet the needs of targeted customers, over time.
From the broad policy and the strategic framework outlined in the White Paper and the Moving South Africa, it is clear that the role of government is to develop strategy and to engage in planning, regulation, monitoring and enforcement at the local level. The role of firms is to compete fairly and innovatively to meet customer needs. We are moving towards a regulatory framework which allows firms a wide latitude to adopt suitable tactics to service particular market segments.
Concerning ownership, our view is that regardless of whether firms are publicly or privately owned, they need to compete on the same footing. Therefore, we are emphatic about enterprises being financially ringfenced and liable for tax before they qualify for subsidised service contracts.
A lot of our current work is still focused on what we term the "Unwinding the legacy agenda". This entails dealing with the inherited institutional and operational legacy of a transport system geared to serve a previous order. On the institutional side we have drafted a National Land Transport Transition Bill which we hope to table before Parliament during the first term of the new millennium.
Let me share with you briefly what this piece of legislation seeks to address:
This legislation is transitional in that the system of local government including local boundaries is being revised and consolidated and will be finalised following the next round of local government elections. It must be remembered that public transport management has historically been in the hands of operators. Local authorities in the past focused on local roads, local traffic and in some cases on local whites-only municipal bus services. The creation of transport authorities with a mandate to plan, prioritise and monitor public transport services, is indeed a huge and challenging step forward.
In terms of operations, we have converted subsidised bus services to interim contracts and are phasing in a first round of competitive tendering for 5 year net cost contracts that is due to be completed by 2001. This transitional phase of tendering is restrictive in that there is not much latitude to completely redesign services and networks in line with an integrated local transport plan.
The process of formalising and assisting minibus taxi operators has been underway since 1995. Progress in getting operators and their associations unified has led to the formation of the South African Taxi Council which is recognised by government. The complete registration of all operators is expected to be completed shortly.
A comprehensive recapitalisation package of assistance to the industry to upgrade and renew the dangerously old vehicle fleet has been approved by Cabinet and is being implemented. A local and international request for proposals has already been issued inviting vehicle manufacturers to submit 18 and 35 passenger seater bus designs for approval.
The restructuring of commuter rail services is also pressing given the huge investment backlogs and the almost R1.5 billion rand of subsidy required by the current monopoly parastatal operator to transport around 500 million passengers per annum.
At this stage a number of options are being considered which draw on other countries' experience - both positive and negative - in privatising and deregulating rail services. A primary objective is to effectively devolve the function to transport authorities and to enable them to plan for and manage rail as part of a broader integrated public transport system. In addition, potential exists to involve the private sector in rail operations through concessioning and will be tested through a pilot project.
I would like to highlight at this stage a major strategic gap in the safety levels of public transport operations, in particular long distance buses and minibuses. A crucial part of unwinding the legacy is to urgently and effectively lower the number of crashes involving public transport vehicles.
As you probably know, there has recently been a spate of bus accidents in which over 100 people have died. In addition minibus accidents are proving to be far too common and deadly. We are committed to action on a broad range of fronts to deal with this unacceptable situation, both in the short and medium terms.
In the short term, we are reviewing the public and heavy vehicle focus of our Arrive Alive Campaign and are open to wratcheting up the levels of focused enforcement especially concerning long distance public transport.
We are also planning a more aggressive outreach and partnership campaign to persuade operators and drivers to improve their safety levels. In addition we have agreement by both the bus and taxi industry to lower the maximum speed limit to 100km/h.
We are together with labour and operators involved in a process of reviewing existing legislation and de facto practices in order to drastically improve safety levels. This review includes both driver, operator and vehicle related aspects. Proposals should be tabled by the end of this month.
I want to reiterate that Safety First on public transport is a crucial and non-negotiable pillar of our strategy. The thrust here is to perform strategic local planning that focuses on the identification of a core public transport network based on current demand patterns. This strategic network then receives priority in terms of upgrading infrastructure, vehicles and facilities and optimally deploying and utilising this capacity.
The strategic outcomes here are to raise ridership by increasing customer satisfaction and retention and also to improve vehicle utilisation rates. South Africa's major cities have started to embark on this strategic planning process through conducting detailed supply censuses called Current Public Transport Records.
More needs to be done however, and quickly, and the National department is interacting with provinces and cities to facilitate the fast-tracking of at least the identification of a core public transport network. A core public transport network will also lay the basis to promote supportive land use developments, upgraded interchanges, focused security provision, incentive-based contract packages and aggressive marketing to customers segments.
Central to Building a New Basic Platform is the effective regulation of the competitive environment so that supply approximates demand throughout the system, that prioritised services on the strategic core network are protected from destructive competition, that private car use is not inadvertently subsidised through untargeted infrastructure provision and that a stable environment is created for entrepreneurs to invest through the contracting system.
The major challenge in putting in place a New Basic Platform is to ensure that stable funding flows are linked to the devolved strategic mandates given to transport authorities. Most of the actions to improve public transport such as planning, monitoring, enforcement, formalisation incentives etc. require a short-term funding injection into the system as well as the redirection of current funds and anticipated savings. The National Department is currently liasing with the Department of Finance on the best options to fund the strategic upgrade of public transport.
Potential sources are higher allocations from national and provincial budgets, local user charges and levies and increasing passenger fares. A further requirement is to allow for funds to be "tagged" or dedicated for specific transport purposes only. A key issue to address is adequate political control over public funds and we are exploring long term options such as a transport funding agencies at different spheres of government which will allocate funds, in terms of an agreed strategy, via transport authorities to providers of infrastructure, services, and enforcement.
The third implementation agenda is: Creating Differentiated Services The strategic objective is to ensure the Basic Public Transport platform is able to innovate and upgrade to meet changing customer needs over time. A successful outcome would be the development of market segments higher up the value chain that are less price sensitive.
Revenue enhancement through differentiated services should complement the core public transport system and not undermine its required passenger volumes. Examples would include tourist, express, luxury and recreational services. Over time, a key target segment of differentiated or higher value services would be the Selective peak-hour car users.
Differentiated services do not only apply to higher end users but also to users with special needs such as the physically disabled, old, young and others who require special consideration.
The manner in which a service is operated, the design of the physical infrastructure and the vehicle all require an innovative response. The Department of Transport is undertaking a number of demonstration projects and is in the process of developing a strategic guidelines for special needs and disabled public transport users.
The common thread running through the Differentiated Services agenda is the inculcation of a strong operational attention to customer needs. Peak-hour car users, users with disabilities and even current users will become satisfied public transport users only if their needs are met and even exceeded. Lessons from strategic marketing show that users who are able to voice their needs and problems and who receive prompt attention and feedback are likely to remain loyal and generate repeat patronage.
I would like to conclude by reflecting on our experiences of early implementation of the Moving South Africa strategic framework and the regulated competition model.
Moving to a system of regulated competition requires political support and adequate financial and institutional resources to manage, design, monitor and enforce.
Regulated competition in public transport within our developing country context is a major challenge especially given our limited resources, newly created spheres of government, weak institutional capacity to perform new functions, and the fact that 60% of public transport's market share belongs to an informal sector industry that operates on a very different cost structure to formal sector providers.
The challenge that is posed to all of us is how to make regulated competition work in this context.
The liberalisation of transport markets in other countries and ongoing innovation in the means of regulation can only provide salient learnings for us all. I am looking forward to your inputs. Thank you for inviting me to inaugurate and welcome .
Finally, I hope you will still be here on Saturday (27 November) when South Africa takes on Sweden in the Mandela Inauguration Match at the FNB Stadium.
Thank you.