Engineering News

The Revised Taxi Recapitalisation Programme (RTRP), first announced in April by previous Minister of Transport Dr Blade Nzimande, is ongoing, and has already made “significant” progress, Transport Minister Fikile Mbalula has told Engineering News.

The initial taxi recapitalisation programme was launched in October 2006. Earlier this year, Nzimande announced government interventions to transform the minibus taxi industry and remove unroadworthy or noncompliant taxis from the country’s roads by revising the programme.

The RTRP resumed in March with the appointment of a new service provider, Anthus Services 84, as the technical partner responsible for the administration and management of the programme.

The revised five-year programme was rolled out to all provinces and Anthus Service 84 has a customised truck with which it can move its baling machines to where they are needed.

Mbalula indicated that 2 054 applications had already been processed for scrapping nationwide, as at September 30.

In terms of the provincial breakdown, KwaZulu-Natal is leading, having processed 727 applications. The status of the rest of the provinces is as follows: Gauteng, 563; Mpumalanga, 175; Limpopo, 148; the Western Cape, 146; the North West, 133; the Eastern Cape, 93; the Free State, 57; and the Northern Cape, 12.

With the current budget, the programme expects to scrap about 3 000 vehicles each year. Mbalula noted that, depending on the uptake in the number of applications, the programme is on track to achieve this.

The current phase of the RTRP is being undertaken through a special-purpose vehicle company, which will be jointly owned by Anthus Service 84 (40%) and the taxi industry (60%). Anthus Service 84 will also be the operational partner.

In accordance with the mandate of the Department of Transport (DoT), Anthus has established Taxi Recapitalisation South Africa (TRSA) as the trading entity to implement the RTRP.

To fulfil the transformation and sustainability requirements of the RTRP, 60% of the commercial benefits generated by the TRSA operations will flow to the taxi industry.

In this regard, Mbalula indicated that the RTRP is designed as a commercially viable programme that will enable the taxi industry to exploit and benefit from opportunities that are available across the entire industry value chain.

Thus, the taxi industry was being engaged to ensure that it played a significant role in the programme as beneficiary, and as meaningful participant, he noted.

To achieve this aim, the DoT is finalising an appropriate business model and structure for the Taxi Scrapping Entity (which includes both the taxi industry and Anthus) to ensure that the programme is implemented successfully and to the full benefit of the entire taxi industry.

“The RTRP has progressed well since inception in April 2019,” enthused Mbalula.

As a key success, he highlighted TRSA had, since April, hit the ground running to ensure that a critical component of the RTRP – the scrapping of old taxis – began with full force.

“All provincial sites are fully capacitated and functioning, as demonstrated by the numbers of applications being processed,” Mbalula acclaimed.

Industry Buy-In

In terms of collaboration with the taxi industry to execute the RTRP successfully, Mbalula indicated that the TRSA had been introduced to the national leadership in the industry, and, additionally, the DoT and the service provider were embarking on a round of provincial visits to key stakeholders, particularly the industry’s leadership in the provinces.

“The reaction from the taxi industry has been positive and participation has been enthusiastic, if somewhat impatient,” he said.

Moreover, Mbalula affirmed that there had been no opposition raised against the programme, having received “good support” from the taxi industry.

He said the industry had requested that the programme include old taxi vehicles that had been bought and registered after October 2006, given that those did not currently qualify for the programme. In this regard, the DoT was considering the request and the possibility of the programme continuing as a form of capital subsidy to the taxi industry and not just as a one-off, he indicated.

Mbalula noted that, owing to the voluntary nature of the programme, a challenge had arisen in removing all old taxi vehicles from the road. To this end, the department planned to engage the industry to consider the possibility of determining the age limit for a minibus taxi.

Further, the DoT was considering the inclusion of scholar transport operators using minibuses in the programme.

Other RTRP Elements

The minimum requirements for applications to scrap old taxis remains the same as those of the previous taxi recapitalisation programme.

The previous programme’s target was readjusted in 2017, with a target to scrap 135 894 old taxi vehicles.

The RTRP also increased the taxi scrapping allowance from R91 100 to R124 000 per vehicle.

The amended plan will result in the owners of illegally modified panel vans and unroadworthy minibus taxis receiving this amount in exchange for their vehicles being scrapped.

Mbalula urged recipients to reinvest the money to diversify their businesses or buy new, compliant taxis to provide safe public transport.

When he announced the RTRP in April, Nzimande indicated that the increase would help to address concerns raised by those in the taxi industry that the previous amount was not enough to replace their vehicles.

TRSA’s involvement in the process of scrapping illegally converted Toyota panel vans that are being used to transport commuters has to date seen 1 917 illegally converted vans designated for scrapping.

Mbalula noted that of these 1 917 panel vans, 1 157 had or had had operating licences attached to them.

As at September 30, 378 of these vans had been processed for scrapping. In terms of the provincial breakdown, this entailed 29 in the Eastern Cape, 18 in the Free Sate, 109 in Gauteng, 30 in KwaZulu-Natal, 42 in Limpopo, 34 in Mpumalanga, 53 in the North West, 3 in the Northern Cape and 60 in the Western Cape.

Realising Deeper Change

The RTRP is touted as aligning with government’s commitment to facilitating a conducive and enabling environment through legislative and strategic interventions for the professionalisation of the taxi industry by making it user friendly for passengers and operators.

The taxi industry transports an estimated 15-million commuters a day – about 68% of the country’s commuters.

“The key objective of the programme is to improve passenger safety and general compliance within the taxi industry by replacing the unsafe, unreliable and unroadworthy taxi fleet with purpose-built new taxi vehicles,” said Mbalula.

This includes strengthening regulation and law enforcement in the taxi industry, specifically in terms of operating licence control and vehicle roadworthiness.

The DoT said in April that, as part of the RTRP, government hoped to address the challenges facing scholar transport and cross-border taxi operations.

Under the RTRP, government has extended the scope beyond the scrapping of the balance of old taxi vehicles to include several other elements.

Firstly, this entails the development of sustainable and commercially viable RTRP management solutions leveraging and exploiting opportunities in the minibus taxi industry’s entire value chain, with taxi operators as active and meaningful participants.

Commercial enterprises include the affordable supply of new taxi vehicles, finance, short-term insurance, spare parts, repairs, fuel, lubricants, electronic fare collection and property management.

Apart from reducing the taxi industry’s dependence on government over time, revenue generated from the commercial streams would be deployed to promote the sustainability of the industry and fund the continued recapitalisation of ageing taxi vehicles beyond the current RTRP.

Secondly, the extent of illegal taxi operations across the country will be determined by conducting a nationwide survey to populate a comprehensive database of minibus taxi industry operators and operations.

The accurate statistics for the taxi industry will enable the DoT to undertake proper planning and embark on appropriate interventions.

Thirdly, the department intends to use the RTRP as a catalyst for the changing of the taxi industry’s current operating model.

The industry currently works on an individual taxi ownership model and collaborative route management structure through local taxi associations and regional, provincial and national taxi councils.

The department has highlighted this model as the main reason for conflict and violence in the industry.

Therefore, it aims to use the RTRP to unify the taxi industry by introducing collaborative ownership and operating models using structures such as cooperatives and corporatisation.

Apart from optimising the profitability and sustainability of the industry by introducing economies of scale, the benefits of collaborative taxi industry ownership and operating models will include the provision of employment for employees in the industry, such as the taxi drivers and rank marshals, with benefits such as better salaries, housing allowances, medical aid contributions, and hospital and funeral cover, as well as pension and retirement fund contributions.

This is expected to eliminate existing competition among drivers and encourage responsible driver behaviour and passenger safety.

It will also promote training and skills development, thereby enhancing professionalism and customer service, as well as creating wealth for taxi operators by rationalising taxi routes, eradicating overtrading on routes and increasing profitability and sustainability.