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Feb 22, 2008

Improved payment process supports taxi recapitalisation programme

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Maishe Bopape from the Department of Transport discusses the revised scrapping allowance payout system (29/01/2008)
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Improving the mechanisms of payment of the scrapping allowance could go a long way to ensuring the successful implementation of the Taxi Recapitalisation Programme (TRP), reports the Department of Transport.

The TRP was announced in 1999 in an effort to improve the safety of taxi transportation. The Department of Transport offers an incentive to taxi owners who scrap their old taxis and upgrade to new taxis that comply with government prescribed standards.

Department of Transport taxi recapitalisation programme chief director Maishe Bopape says, “The Department, in consultation with stakeholders, particularly the taxi industry, is reconsidering the process of effecting the payment of the scrapping allowance in an effort to further enhance the implementation of the TRP.”

Bopape explains that the scrapping allowance is currently deposited directly into the accounts of taxi owners who successfully scrap their old taxis and those who exit the industry. There are concerns, however, that some operators do not necessarily use the scrapping allowance received to off-set the retail selling price on the new taxis. Instead these funds are then used for other private and/or personal matters separate from recapitalising the aged taxi fleet.

Bopape reports, however, that the new proposed method of effecting the scrapping allowance currently being discussed with the taxi industry will ensure that the scrapping allowance is used for purposes of assisting in the procurement of the new taxi vehicles as part of the implementation of the TRP.

“The proposed method makes provision for the scrapping allowance to be deposited into a single interest-bearing account for all approved applications for scrapping. Once the operator has made his or her choice of the desired new taxi vehicle and the vehicle financing is approved, the scrapping allowance and the interests accrued will then be released directly to the vehicle financier to assist in off-setting the retail selling price of the new taxi.

The scraping process entails a number of checks and balances to ensure that the vehicle intended for scrapping is indeed a legitimate one and is qualified to participate in the TRP. “These checks and balances include police markings on the vehicle, vehicle and document verification to confirm the registration of the vehicle as a taxi, availability and validity of legal permits or operating licences, besides other things. The verification and authentication process is then followed by a vigorous vehicle inspection at the scrapping site. “Once confirmation and clearance have been achieved, the vehicle is surrendered to the Taxi Scrapping Administrator (TSA) and is deregistered from e-Natis and the scrapping allowance effected,” says Bopape.

The taxi owner wanting to participate in the programme has to submit a valid taxi permit or operating licence to the TSA.

This permit is then checked against the vehicle and the annual vehicle licence issued by the Vehicles Registration Authority. “This is done to ensure that there are no loopholes in the scrapping system. The owner of a pirate taxi who does not have a taxi permit or operating licence may not scrap the pirate taxi in order to receive the allowance,” says Bopape.

He adds that the other checks carried out by the administrator include a check that the vehicle was not involved in any crime and has no outstanding traffic fines.

Bopape reports that, since the implementation of the new taxi recapitalisation system in October 2006, over 13 261 old taxi vehicles had been scrapped. Apart from the scrapped old taxis, the South African Bureau of Standards (SABS) has certified 26 types/models of new taxi vehicles that comply with the compulsory safety requirements that came into effect from January 1, 2008. Additional models are currently going through the SABS certification process and the numbers continue to increase.

Bopape reports that the implementation of the TRP is yet another intervention by government to bring about effective, efficient, safe, reliable and regulated public transport. The TRP also serves as a catalyst for public transport modal integration.

“The Department of Transport has realised that certain challenges exist in the public transport arena. “For instance, some areas could be better served by buses because the ridership in those areas is large, whereas other areas can best be serviced by taxis because of the smaller number of commuters. “The approach for the revised public transport strategy seeks to manage these imbalances by bringing synergies together through public transport modal integration,” says Bopape.

On August 17, 2007, Creamer Media Online reported that the Eastern Cape was leading in the number of old taxis scrapped and the scrapping allowance paid out. This was followed by Limpopo, the North West, KwaZulu-Natal, the Free State, Mpumalanga, Gauteng, the Northern Cape, and the Western Cape. Bopape reports that this is still the case. “The relationship that the Eastern Cape Department of Transport has with the taxi operators has created a situation that ensured that Eastern Cape is the province that is leading the way in taxi recapitalisation payouts,” says Bopape.

The original TRP aimed to replace the current 16-seater taxis with minibus taxis that have a seating capacity of between 18 and 35 seats. This has since changed after extensive discussions between government, the taxi industry and other stakeholders. These discussions led to the reconfiguration of the TRP which took cognisance of the concerns raised by the taxi industry around the programme.

The reconfiguration of the TRP includes eliminating 18- and 35-seater taxis and the introduction of smaller taxis. The reconfigured approach allows vehicle manufacturers to produce taxi vehicles with a seating capacity of 9 to 35, including the driver.

Edited by: Laura Tyrer
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