ADDRESS BY THE MINISTER OF TRANSPORT, DULLAH OMAR AT A PARLIAMENTARY MEDIA BRIEFING

Issued by the Ministry of Transport

12 September 2001

TRANSPORT 1994 - 2001: HIGHLIGHTS OF THE PAST SEVEN YEARS AND MAJOR CURRENT INITIATIVES

1. Institutional Transformation

To get to the position in which we find ourselves today with regard to the regulation and management of the transport sector as a whole, we have had to carry through a wide range of fundamental reforms to the institutional framework within which the transport economy functions.

First of all, in the Transport White Paper of 1996 we had to fundamentally reorientate government's goals for the transport sector to bring them into line with the values of our new democracy. The Vision for the South African transport system that was spelt out in that document has continued to provide the framework for all subsequent policy developments and institutional reforms. It is:

"To provide safe, reliable, effective, efficient and fully integrated transport operations and infrastructure that will best meet the needs of freight and passenger customers at improving levels of service and cost in a fashion that supports government strategies for economic and social development whilst being environmentally and economically sustainable."

In order to achieve this vision, it was realised that government would have to completely re-think its approach to the management of transport in South Africa. The basic shift of emphasis required was also captured in the 1996 White Paper.

"In the past, Government's dominant role has been as a regulator of bureaucratic detail, a provider of infrastructure and a transport operator, but it has been weak in policy formulation and in strategic planning.

Government intends to reverse this legacy, and to focus on policy and strategy formulation, which is its prime role, and on substantive regulation, which is its responsibility, with a reduced direct involvement in operations and in the provision of infrastructure and services, to allow for a more competitive environment. Government will emphasise strategic planning and bring together key players in broader national strategies than could be achieved by any single player.

Government will retain the regulatory role to ensure unbiased regulation of safety and quality in general, to control market access for transport operators where this is necessary, and to prohibit excessive tariffs in the case of monopolies. This will need a national government machine which is smaller, more focussed and more skilled, and which can regulate more complex relationships with operators."

And finally, the White Paper pointed out that:

"Public policy making is carried out at various levels of government.[...] Because of this, transport institutional policy needs to address arrangements for the relationships between various spheres of government as well as the structure for non-government or statutory bodies."

The practical results of these key shifts of emphasis are now well established:

The NdoT has scaled down its staff component from over 1000 employees to around 250;
Four new arms length regulatory Agencies were created and have been functioning well for the past three years:

- The South African National Roads Agency (SANRAL); - The South African Maritime Safety Agency (SAMSA); - The South African Civil Aviation Authority (SACAA); - The Cross-Border Road Transport Agency (CBRTA).

In May 1999, a 20-year strategic framework for transport was published, under the title Moving South Africa - The Action Agenda. Many of the concrete policy initiatives that have developed since then - in the areas of safety regulation, transport planning, rail and ports restructuring, urban and rural corridor developments etc - derive directly from the vision of the White Paper and the analyses and scenario-sketches of Moving South Africa.

The Agencies have opened South Africa up to full participation in international regulatory bodies such as ICAO, the IMO and PIARC and have played a major role in new policy formulation activities in areas such as international search and rescue agreements and the Yamassoukro Declaration on Open Skies for Africa.

Both the Agencies and the transport parastatals and statutory bodies (ACSA, the ATNS and the RAF) have all gone through major internal transformation processes to ensure representivity from the leadership level downwards, and the parastatals in particular have to take the lead in providing training and capacity building programmes for our regional neighbours.

Road safety has become a demonstration area for coordinated and collaborative governance linking together the national, provincial and local spheres, both through Arrive Alive and the new framework proposed by The Road to Safety, 2001-2005.

2. From Restructuring And Reorientation To Accelerated Delivery

A number of the key delivery achievements that have flowed from the restructuring process and the freeing up of energies through strategic public-private partnerships can be listed:

The Maputo development corridor, the N3 road project, the N4 Platinum Highway and the Lubombo SDI road project.
The all-round gains to the economy and our people that have flowed, and are continuing to flow, from these concession projects:

- 1300 kilometres of road are being upgraded, rehabilitated and maintained by these funds;

- 6 860 direct jobs have been created, with salaries amounting to R321 million;

- Approximately 17 000 people have been trained in skills varying from basic life and business skills to relatively complex construction skills - to a total value of R12.6 million;

- Some 530 SMMEs have been developed. Contracts to a total value of R207.7 million have been awarded for design and construction work, while R113.4 million has been awarded for operation and maintenance contracts.

- At the top end of the empowerment scale, three very large contracts have been awarded: one, for seven sections of road construction valued at R31.6 million has gone to the Vulakabusha joint venture, while another, for bulk diesel and bitumen supply has gone to the empowerment group TEPCO at a value of R16.1 million.

- The largest of the three, however, is a R38.6 million contract for the building of the Maputo and Moamba toll plazas, the Nelspruit Maintenance Centre and the TRAC offices in Nelspruit. The contractor, GMF, is a joint venture between two SMMEs - one South African and one Mozambican.

On non-concession projects, not only on national but on provincial roads where assistance has been requested by MECs, major employment and training successes have been registered:

- 6 400 jobs have been created at a salary value of R86.2 million;

- SMME contracts have been awarded to the value of R101.5 million in design and construction and to the value of R19.6 million in operations and maintenance;

- 31 contracts to a value of R135.8 million have been awarded for rehabilitation, improvement and new facilities; and

- 6 000 people have been trained at a cost of R3.6 million.

Large-scale infrastructure investments and job creation programmes have also been going ahead in the framework of the government's poverty alleviation programme:

- In the 1999/2000 financial year we allocated R100 million to the Eastern Cape and Northern Province. This was used to complete 55 engineering projects, mainly focussed on re-gravelling rural roads, building drainage systems and carrying out minor bridge works.

- The R50 million invested in the Northern Province resulted in the upgrading 233.3 km of gravel roads and the completion of 104 drainage structures. Over a 24-month period 5 193 jobs were created, with 1 543 woman participating in the various projects.

- The other R50 million invested in the Eastern Cape was used to upgrade 634 km of gravel roads and construct 6 new bridges. 4 138 people were employed, including 1 802 women.

- For the year 2001/2002 a further R94 million has been allocated. The funds have been divided between national and provincial government and projects will be carried out in the Western Cape, KwaZulu-Natal, Free State and the Northern Province.

- The national projects will focus on roadside facilities to accommodate pedestrians, non-motorised vehicles and long distance travellers. Infrastructure such as off-ramps to taxi and bus bays, pedestrian crossings, passenger shelters and safe trading facilities are planned. This will boost economic activity and promote safety and comfort. Provincial projects will continue to focus on upgrading rural access roads and minor bridge construction.

- The KZN Department of Transport's has developed an innovative household-based infrastructure project called Zibambele - Doing it for Ourselves. This is a rural poverty relief scheme that has allocated some R200 million for access road maintenance to some of the most destitute households in the deep rural areas of the province, mainly headed by women.

- Building on this foundation - and with the help of SANRAL - Zibambele has been augmented by a 4-stage emergent entrepreneur's programme. The combined programme ensures that there is a direct line of development from basic poverty relief through to more sophisticated upgrade and construction work. Work of this kind is a critical lever for rural development in that it opens up whole areas of the hinterland previously isolated from schools, clinics, social services and market access.

There have been spectacular improvements at airports such as Johannesburg International, Cape Town International, Durban International (now nearing completion) and a number of smaller airports. The issue of King Shaka Airport is also being addressed.
A tender to the value of nearly R400 million has been awarded for upgrading Metrorail rolling stock and signalling equipment. 176 Metrorail coaches are to be upgraded to come on line from July 2001 to the end of 2002, and there are currently 15 projecunder way to upgrade signalling systems at various places.
Under the Department of Public Enterprises, 200 locomotives are to be upgraded.35 of them will be delivered this year.
Johannesburg's Park Station has seen a major upgrade and across South Africa 72 other station upgrades have been completed at a cost of R532 million. A further 14 upgrade projects are currently in progress, at a cost of R142 million. In addition, therre now 73 modal interchanges in operation nationwide.
Despite these improvements, the last year has seen an unacceptable number of serious rail station incidents and train crashes, that have caused loss of life, injury and grief to passengers and their families.My first response to these tragedies was tosure the establishment of full Judicial Commissions of Inquiry to determine their immediate causes and pinpoint the system failings that gave rise to them. However, I had already instructed my Department some time ago to produce a plan for the creation of a Rail Safety Regulator for South Africa, whose role would be to effectively monitor and manage all areas of rail safety risk, independently from the operators of rail services. This work has now been completed and draft legislation prepared. I will be submitting the Bill to Cabinet in the upcoming Parliamentary session.
On the side of South Africa's ports development and management::

- Over the past year very significant upgrading has been going forward at all our commercial ports. Portnet (under the DPE) is investing over R3 billion in this process. Richards Bay is flourishing. Durban is due for a massive upgrade. Coega development is taking off.

- To facilitate greater efficiency and productivity, government has resolved to separate the landlord function of Portnet from operations. This function will reside in a special entity, while at the same time great scope will emerge for the private sector to become involved in competitive tendering for port operations. To ensure that these changes are managed rationally and safely, my Department is currently finalising a comprehensive Commercial Ports Policy document.

3. Safer Roads I: Arrive Alive, The RTIA and the RTMC

Since the launch of Arrive Alive as the lead campaign for the promotion and enforcement of road safety and road-user responsibility in South Africa, road fatalities have fallen by an average 7.4% over each of its first four phases.At least 270 lives have been saved each year since the start of Arrive Alive, at a cost saving to the economy of over R450 million.

But much more needs to be done. We are therefore in the process of expanding the focus of Arrive Alive beyond traffic law-enforcement and traffic safety communication to include:

traffic engineering;
adequacy of road signage;
traffic calming measures; and
dedicated pedestrian safety programmes.

All this will be backed up by improved adjudication, including much greater use of roadside courts. But the most important shift has been from a "holiday periods only" approach to a planned and coordinated year-round enforcement and adjudication programme, carried out jointly by provincial and local authorities.

In support of this reorientation of Arrive Alive, I am pleased to confirm today that the final preparatory steps are now being taken for the establishment later this year of the Road Traffic Infringement Agency. This will put in place an effective, efficient and streamlined fine processing and collection system that will take routine traffic offences out of our over-stretched court system, create "quick pay" incentives for prompt fine payment and eliminate fine evasion through the power the Act confers on the Agency to attach defaulters' property.

We are also fully prepared for the launch of the Road Traffic Management Corporation, which will take place as soon as we have prepared the new municipal authorities for their devolved traffic management functions. The RTMC will give South Africa the unified body it needs to overcome the current fragmentation of traffic management and policing across hundreds of provincial and local jurisdictions; and it will bring a new professional coherence and improved morale into the entire system.

4. Safer Roads II: A New Strategy To Get To Grips With The Fundamentals

The Road to Safety 2001-2005 is a comprehensive strategy aimed at attacking the underlying causes of crashes and deaths on our roads.

It has identified the six key problem areas that contribute to the carnage on South Africa's roads. They are as follows:

1. Many drivers on our roads aren't licensed, can't drive properly or won't drive responsibly: speeding, moving violations and driving under the influence of alcohol or drugs are still very serious concerns.

2. Many vehicles are unfit for the road.

3. There is extensive fraud and corruption in the driver training and licence testing system and in the vehicle testing and registration system.

4. Poor fleet maintenance and systematic overloading are widespread in road freight and public passenger transport.

5. There are serious disparities in road conditions nationally; and finally,

6. We have a totally unacceptable rate of pedestrian casualties

What does The Road to Safety do to address these problems?

It looks hard at systems and structures;
It proposes a set of fundamental reform actions backed by targeted investments and public-private sector partnerships;
It opens up space wherever possible for public empowerment and community participation.

The Road to Safety concentrates its attention systematically on the three major components of the system:

the road user;
the vehicle; and
the road environment.

I will be releasing The Road to Safety to the public before the start of the end of year festive season. In the meantime, I will just point in a very summary way to its main emphases in each of these three areas.

With regard to road users, the strategy deals with drivers, pedestrians and public transport passengers:

Drivers: Here, the main focal points are: enhancing basic driver competence; eliminating fraud and corruption from the driver testing and licensing system; and communicating and enforcing aggressively to build a climate of safe road usage and voluntary law compliance.

Pedestrians: Here, the main focal points are: completing the roll-out of the road safety action-learning programme in the school curriculum, from pre-school level to Grade 12; creating active community-based road safety forums to empower our people to participate actively in the identification of hazardous pedestrian locations and the design of low-cost remedial engineering works and traffic calming measures.

Public transport passengers: Here, the main focal points are: regulating public transport operators through a strict Code of Practice governing fleet safety management, professional driver fitness and working hours; and, secondly, introducing a Passenger's Charter setting out the minimum safety and service standards passengers can expect and demand from operators. The Charter will be actionable via company complaint lines and a National Complaints Hotline overseen by the Department of Transport and linked to Traffic Police and SAPS command centres.

With regard to vehicle fitness:

As part of the consultation process with operators around the Code of Practice, special attention is already being given to the examination of key vehicle safety features and new technologies. These relate to issues such as roll-over protection, sub-standard parts and spares, tyre safety management devices and top speed limiters.

We will soon be embarking on a major review and overhaul of the current vehicle testing and registration system. This will examine the ownership structure of the industry, the testing systems, manuals and procedures currently in force, the qualifications of examiners and the location and powers of the Inspectorate.

The overriding aims are to create tight and unambiguous test procedures, stamp out corruption, ensure efficiency and create opportunity for new entrants into the market. As the industry stabilises, the medium term goal is to move towards compulsory periodic testing for all vehicles over a specified age or kilometrage.

We have already begun to step up efforts to curb vehicle overloading, but this is set to become a full-scale sub-programme of The Road to Safety. We have consulted widely on this issue with stakeholders and technical experts, and are urgently revising the current National Overload Control Strategy to formulate a sustainable long-term approach to funding and operations. This will, amongst other things, include:

Getting full provincial commitment to budgetary allocation within the MTEF framework.
Implementing a revised operational strategy for inter-provincial and cross-border monitoring and enforcement actions, in cooperation with the National Roads Agency.
Making optimal use of existing traffic control centres and decommissioning those that are not sustainable.
Extending the use of pubic-private partnerships to manage and maintain prioritised traffic control centres and install and operate weigh-in-motion sensor systems.
Increasing the deployment of mobile weighbridges and new weigh-in-motion sensor strips, and developing standards to secure their evidential viability in court.
Ensuring that weighbridges are available for enforcement at all freight terminals and ports.
Developing a formula for compensatory fines - i.e. fines charged for the distance / number of kilometres travelled overloaded.
Impounding both the overloaded truck and the goods overloaded.
Suspension of the operator's license after 3 counts of overloading.
Working in partnership with Spoornet and local government to promote a more responsible attitude to safety and environment.

With regard to the road environment:

The overload control measures outlined above will play a significant role in reducing the maintenance costs currently incurred through damage to the roads infrastructure. One highly successful route to date has been the use of the Build, Operate and Transfer (BOT) model for national road infrastructure financing. But we are also developing important new initiatives to mobilise both domestic and international aid funding for investment in upgrading and new construction works.

This will begin with a special emphasis on rural access road improvements in development nodes identified by the government's Integrated Sustainable Rural Development Strategy (ISRDS). It will go forward hand in hand with important research work already completed on planning models for inter-modal rural transport services and will be aligned with the work of the Local Transport Authorities envisaged in the National Land Transport Transition Act.

5. Land Transport: Finding The Balance Between Road And Rail

Earlier this year, the President announced a Cabinet decision to support a shift towards a better balance between road and rail in both freight and passenger transport. This will be a long-term process, beginning with actions to level the playing field - making rail transport more attractive while imposing and enforcing strict controls on road transport.

This will require some or all of the following measures:

The development of a road and rail traffic database that quantifies damage and costs on the road;
The development of a model that allows for accurate internalisation of externalities/hidden costs;
The recovery of road usage costs by using other means (such as license fees) rather than the fuel levy;
Actions to harmonise maximum axle-weight limits and overload control strategies within SADC. This will then need to be backed up by tighter law enforcement and punitive sanctions for both freight and public passenger vehicle overloading.
The revision of planning guidelines to facilitate the movement of more freight to rail: Local Transport Authorities when preparing transport plans will be expected to consider, and where appropriate promote opportunities for rail connections to existimanufacturing, distribution and warehousing sites adjacent or close to the rail network, and to allocate sites suitable for new development that can be served by rail.
Directing funding at proposals that demonstrably shift passengers and freight from road to rail. This will ensure that sufficient capacity is available for existing demand or new demand.
Investigating the possibility of setting up a Rail Freight and Passenger Investment Fund/ Grant.
Identifying ways to enable Spoornet to expand its markets and give it the chance to develop the heavy load market by:

- Creating the right condition for the revival of rail freight through ease of access to ports, borders and improving customs and excise;

- Addressing obstacles and bottlenecks to growth.

All this does not mean that we are downgrading the importance of the road transport sector. We know that it plays a vital economic and social role in our country, and that many aspects of the services it offers can never be replaced by rail. But we want a rational debate that puts the interests of the nation, the economy, the road infrastructure and the passenger before any sectoral interest.

6. The Minibus Taxi Process

Cabinet approved the Taxi Recapitalisation Project on 15 September 1999.The project is aimed at replacing 127 000 vehicles in the minibus taxi fleet with purpose-built public transport vehicles while simultaneously regulating and empowering the taxi industry, creating job opportunities, promoting the use of a cost-effective fuel and providing safe and affordable transport to commuters. This project entails the provision by Government of a scrapping allowance to taxi operators as an incentive to surrender their current vehicles and either (a) to purchase a new "fit-for-purpose" vehicle which is suitable to the South African public transport environment, or (b) to exit from the taxi industry thereby addressing the current over-supply.

Cabinet also approved in principle the expenditure relating to en route enforcement for four years and the provision of permit compensation and auditing for four years.

Cabinet further approved in principle that the vehicles be diesel-based and that empowerment opportunities be negotiated with the taxi Industry. This strategy, which will over time increase the differential between petrol and diesel prices, will not only benefit the taxi industry, but address other national issues related to fuel, fiscal revenues and certain import/export imbalances.

Progress To Date

An International Request for Proposals (RFP) for the supply, financing and insuring of new 18 and 35-seater vehicles was issued to assemblers on 27th September 1999. The RFP also required the provision of a maintenance plan and electronic management system.

Bidders were requested to highlight the following issues specifically in their proposals:

fastest possible availability of vehicles;
lowest cost to ensure affordability to taxi operators;
design and features to ensure maximum safety standards;
cost-efficient operating economics, including a diesel engine for cheaper fuel usage; and
smart-card and tracking technologies to facilitate taxi operations and regulation.

Specific emphasis was also placed on environmental and labour considerations as well as to cater for commuters with special needs (disability).Consortia also have to demonstrate the maximum socio-economic benefits to South Africa, specifically in terms of job creation (through maximum local content manufacture), export markets, BEE and SMME development through, inter alia, value sharing mechanisms for the taxi industry in consortium arrangements.

The desired solution, both from an industry perspective and from an implementation point of view, involves providing two types of vehicles, namely 18 and 35-seaters.The reasons for this include:

Operator economics - because of the wide range of distances and densities on different routes, the 18 and 35 seaters differentiation are essential to maintain optimal economics for taxi operators;
Taxi customer service issues - waiting times for customers become too long on lower density routes unless a smaller (18-seater) vehicle is used
The rural environment - for which a 35-seater is most suitable.
The urban environment - where, certain lower-density routes, larger vehicles would take longer to fill up to achieve the same occupancy rates as the smaller 18-seaters.This would result in a lower level of customer service (i.e. longer waiting time) alower revenue per vehicle on some routes as fewer trips could be completed.

The tenders closed on 29 November 1999 and extensive evaluation was done of the bids. The following short-listed bidders were announced: AMC, GAZ, TATA, IVECO, Daimler Chrysler and Kwoon Chung.

The Taxi Recapitalisation Project has now advanced to the stage where negotiations are to be conducted with the 6 selected short-listed bidders. This is the penultimate phase of the project prior to the submission of recommended bidders to Cabinet. Cabinet will in due course be asked to approve one or more of the recommended bidders as preferred suppliers of purpose built taxis as well as associated services to the taxi industry.

A comprehensive evaluation of the proposals has, however, revealed areas for negotiation, which have in turn required the process to be further elaborated and the initial deadlines to be extended. Furthermore, the recent developments with regard to the status of the Interim SATACO and the requirements for a democratic elected unified taxi representative body, have also impacted on the process.

The Way Forward

NTI will now issue instructions to the short listed companies addressing the issues of concerns in order for them to present a best and final offer (BAFO).These instructions will include issues such as the preferred electronic management system (EMS).After receiving the BAFOs, a negotiation phase will be undertaken by a Negotiation Team appointed by the Minister of Trade and Industry, under the advice of the Project Steering Committee. This team will consist of representatives of Departments of Trade and Industry, Transport, Minerals and Energy and the National Treasury. The team will engage with the approved bidders with a view to concluding contracts specifying detailed obligations.

7. Transport Developments In MAP & SADC

The NdoT sees the essential role of transport in the Millennium Africa Recovery Programme/New African Initiative as being that of an opportunity catalyst. From a transport point of view, the key issues in creating an effectively coordinated African response to global market challenges are market access, mobility and systems integration. These are the factors that - in an overall environment of increasingly effective governance - make sustained economic and social development possible.

My Department will be contributing actively to the practical realisation of both MAP and SADC developmental goals in three major areas:

Promoting Safe Skies: This involves ensuring that adequate safety and upper air space control regimes are in place across the continent, supported by efficient air traffic and navigational services and systematic human resource development and acity building programmes.
Promoting efficient and effective aviation networks: This involves regulating as necessary to make air transport affordable, creating regional hubs and air carrier alliances and supporting one another to put in place a high quality African airps network.
Promoting efficient and effective maritime transport services: This involves creating seamless land-sea-air transport systems, built up within advanced logistical frameworks, supported by rationalised and integrated search and rescue services aunderpinned - once again - by systematic human resource development and capacity building programmes.
Promoting rail systems integration: This involves replacing a colonial rail geography that served primarily extractive purposes with a strategic corridor-based approach to regional market integration that standardises rail gauges and promotes pic-private partnerships to mobilise the very large sums of money required for capital investment in rail infrastructure.
Promoting road systems development and infrastructure maintenance: Within the context of the SADC Protocol on Transport, Communications and Meteorology, a great deal of work has already been done to introduce commercial management practices in member states' national roads sectors, to harmonise driver licensing, route numbering, road signage and overload management, and to introduce transparent road funding systems incorporating the user-pays principle. Common understandings are coming into place to cover such issues of mutual concern as:
fuel levies (designated as road charges);
vehicle licence fees;
road tolls;
abnormal and awkward loads;
weight-distance type charges;
streamlined and efficient passport control and customs posts;
cross-border user charges; and
entry fees payable by foreign-registered vehicles.

All of these initiatives must, however, increasingly be developed and promoted at the wider African level to create the levels of efficiency and cooperation upon which the vision of a regenerated African economy depends.