Presentation to the Portfolio Committee on Transport,22 March 2011

 National Taxi Task Team recommendation  Economic assistance  SANTACO TR Strategy  Industry initiated  Challenge to government for support  Public Transport Integration and Reform  Integrated system  System reform is inevitable

 Largest carrier of public transport passengers  Operations are unsubsidised  Unscheduled services- provide the most liked form of service by most South Africans, viz. door-to-door service  Fragmented isolated services  Mode competition on routes  SANTACO obtains annual grants from the Department upon submission of a Business Plan  Beginning to initiate sustainability programmes

 Annual financial support to SANTACO  Transformation of the Public Transport System- integration of the taxi operations into mainstream Public Transport  Shareholding  Cooperatives schemes  Set aside approach  Dedicated investment models

 Annual financial support to SANTACO  Annual grant/transfers that started from the SANTACO predecessor (SATACO) era to date  For the current financial year (2010/2011) the budget is R And for the next one (2011/12) is R  The Department has committed to at least the training initiatives pronounced in TR3 Strategy.  There is a need to cost the strategy in its entirety; which process the Department is willing to lead

 Transformation of the Public Transport System- integration of the taxi operations into mainstream Public Transport  Need to move from mode specific subsidies (rail and bus) to Public Transport Subsidies  All new designs (and re-designs) will be reviewed to ensure that they are integrated.  No new tendered or negotiated contract will be approved if they don’t subscribe to integration.  Taxi industry must be assisted to prepare for this transformation (organise themselves into entities that can compete in this space)

 Shareholding  The industry will be assisted to participate in mainstream public transport  Rea Vaya and Maluti (MBS) programmes of empowering taxi operators need to be expanded (take advantage of negotiated contracts in terms of the NLTA)  The process should be guided to avoid benefits to a few at the expense of the many

 Cooperatives schemes  Take advantage of the impetus to accelerate the implementation of the NLTA on contracting of public transport services to advance transformation.  Formalised structures like cooperatives must be promoted  Transport cooperatives strategy will be developed to provide guidelines in this regard.

 Set aside approach  History of public transport operations should be reason enough to design future public transport contracts the are biased towards the taxi industry  Public Transport monopolies should be encouraged to transform if they want to do business with government.

 Dedicated investment models  To ensure that the coming investment conference discuss vigorously the issue of funding for public transport and in particular support for the taxi industry  The Department is already having a working relationship with DBSA for technical support in this regard.

 National Land Transport Act, No. 5 of 2009  Public Transport Strategy  Cooperatives Act, No. 14 of 2005  Cooperatives Development Policy  Cooperatives Incentive Scheme Operational Guidelines (dti)

 National Land Transport Act, No. 5 of 2009  Negotiated contracts  41. (1) Contracting authorities may enter into negotiated contracts with operators in their areas, once only, with a view to—  (a) integrating services forming part of integrated public transport networks in terms of their integrated transport plans;  (b) promoting the economic empowerment of small business or of persons previously disadvantaged by unfair discrimination; or  (c) faciltating the restructuring of a parastatal or municipal transport operator to discourage monopolies.

 Cooperatives Act, No. 14 of 2005  To provide for the  formation and registration of co-operatives;  the establishment of a Co-operatives Advisory Board;  the winding up of co-operatives;  the repeal of Act No. 91 of 1981;  and matters connected therewith.  “co-operative” means an autonomous association of persons united voluntarily to meet their common economic and social needs and aspirations through a jointly owned and democratically controlled enterprise organised and operated on co-operative principles;  “consumer co-operative” means a co-operative that procures and distributes goods or commodities to its members and non-members and provides services to its members;

 National Land Transport Act, No. 5 of 2009  Negotiated contracts  (2) The negotiations envisaged by subsections (1) and (2) must where appropriate include operators in the area subject to interim contracts, subsidised service contracts, commercial service contracts, existing negotiated contracts and operators of unscheduled services and non- contracted services.  (3) A negotiated contract contemplated in subsection (1) or (2) shall be for a period of not longer than 12 years.  (4) The contracts contemplated in subsection (1) shall not preclude a contracting authority from inviting tenders for services forming part of the relevant network.  (5) Contracting authorities must take appropriate steps on a timeous basis before expiry of such negotiated contract to ensure that the services are put out to tender in terms of section 42 in such a way as to ensure unbroken service delivery to passengers.

 Cooperatives Development Policy  This policy statement deals with an important variant of economic enterprise, namely co-operatives and outlines the government’s approach to defining the cooperative enterprises as well as the policy instruments that will be utilized to achieve our objectives.  The policy statement deals with the promotion and support of developing/emerging cooperatives enterprises. These include small, medium, micro and survivalist co-operative enterprises.  The support measures to grow this sector are clearly outlined in the cooperatives development strategy as an implementation framework.

 In view of the foregoing, it is recommended that the Portfolio Committee:  notes the contents of the presentation  Support the initiatives taken and/or to be taken by the Department to support SANTACO’s TR strategy.