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Africa|Financial|Service|Systems|transport
Africa|Financial|Service|Systems|transport
africa|financial|service|systems|transport

User-targeted public transport subsidy to be submitted to Cabinet by month-end

2nd June 2023

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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The proposed new Public Transport Subsidy Policy should reach Cabinet before the end of this month, says Department of Transport deputy director-general Mathabatha Mokonyama.

Government’s economic cluster has already had sight of the document, with the social cluster to follow, because “of the effects of the policy on the economy and society at large”, he notes.

If approved, the policy will be released for final public participation.

“Hopefully, by the end of the year, we shall have a finalised policy,” says Mokonyama.

The Public Transport Funding Model will also be approved this financial year.

Under the new policy, South Africa’s public transport systems face significant change, as funding will move from subsidising a particular mode and its service providers, such as buses, to a model where the user is subsidised.

“The key pillar of the policy is that we are targeting the user, irrespective of the mode they use,” says Mokonyama.

If, for example, a commuter uses a minibus taxi, a portion of the fare will be subsidised by government.

“Of course, for this to happen, you would need a formalised taxi industry,” says Mokonyama.

Even though taxis transport about 80% of public transport users in South Africa, the industry does not receive operational subsidies from government, with the exception of the taxi recapitalisation programme, where operators can scrap old taxis and receive financial assistance – a capital subsidy– to buy new vehicles.

By contrast, commuters who travel by train or bus — who make up 20% of the country’s commuters — benefit from the other 99% of the subsidies.

According to drafts of the new subsidy policy, any direct user-targeted subsidy will be limited to poor households whose income falls below a selected threshold.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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