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PRASA denies allegations of abuse of dominance at Jhb intermodal facility

13th February 2020

By: Marleny Arnoldi

Deputy Editor Online

     

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The Passenger Rail Agency of South Africa (PRASA) has welcomed the opportunity to present its case to the Competition Tribunal around allegations that it had abused its dominance through its bus transport subsidiary Autopax.

The Competition Commission earlier this week referred PRASA and Autopax to the tribunal for prosecution; the commission believes PRASA has been charging excessive prices to bus operators for the use of Park Station – the only intermodal terminal facility in Johannesburg.

Additionally, the commission alleged that PRASA had favoured Autopax in space allocation and had restricted or denied access to competing bus service operators to Park Station.

PRASA had engaged with the commission on the matter for the last two-and-a-half years.

PRASA in a response statement on Thursday said the fees historically paid by the bus operators were not enough to cover the operational costs of providing access to these bus operators and that the loading bays were not efficiently used by the operators.

Before entering into price agreements, the State-owned public transport utility engaged with the bus operators about its intention to ensure the terms of use of the bus loading facilities did not lead to PRASA effectively subsidising these privately-owned bus operators.

The commission said PRASA is the sole owner and manager of intermodal terminal facilities in South Africa, which are indispensable to both long-distance bus operators and to passengers, as it allows for the connection of different modes of transport at a single location.

PRASA, however, said it was not the sole provider of intermodal facilities as that was a function of local authorities that owned several formal and informal intermodal facilities that could be used by bus operators.

The commission, in its findings, explained that long-distance bus operators provided scheduled bus services that connect cities in South Africa to each other. The interprovincial operating licence required long-distance bus operators to secure access to terminal facilities.

Except for Autopax, long-distance bus operators provide an unsubsidised bus transportation service, and as such the cost of access to an intermodal terminal facility is important to them.

PRASA had introduced the Pay-on-Use system, together with the hourly access fees per bus at Park Station in December 2013.

The bus operators took PRASA to court to stop it from implementing this bus billing system and were not successful.

On further engagement with the operators, PRASA stated, it had taken into account that improving efficiencies of the facility would lead to new entrants into the facility and then the utility reduced the fees it initially intended to charge and the bus operators reportedly accepted this system and the new fees.

MORE CONTEXT

Before the new billing system was introduced, Park Station was servicing ten bus operators. As a direct result of the system, the operators that made use of the facility almost doubled to 19 bus operators on the same loading bays.

There was a waiting list of operators who were aware of the charges that were imposed for the use of the facility and who keenly wished to be included in the Park Station facility, PRASA said.

PRASA further stated that the system was more of a cost recovery mechanism than a profit-making system.

“The bus billing system had improved competition among the operators and we celebrated the fact that new operators managed to be catered for with the efficiencies introduced by the new system.”

AUTOPAX PREFERENCE

Around the issue of PRASA favouring Autopax in space allocation and loading bay discounts, the utility explained that Park Station was managed by PRASA Corporate Real Estate Solutions (CRES), a division of PRASA.

PRASA CRES is responsible for the overall operational management of Park Station, including access to the bus areas.

PRASA said its subsidiary, Autopax, had always been subject to the pricing and business decisions of PRASA CRES, including its mandate to collect operating fees from all 19 bus operators at Park Station.

In instances where Autopax had defaulted on payments to PRASA CRES, as was the case in August last year, PRASA CRES issued an order to deny Autopax buses access to Park Station as well as implemented stringent collection strategies of monies owed to PRASA CRES.

PRASA in its statement did not respond to allegations of preferred space allocation to Autopax.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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