Satsa calls on Presidency to urgently intervene in licensing debacle

22nd June 2022 By: Darren Parker

The South African Tourism Services Association (Satsa) has called on the Presidency to urgently intervene and declare an immediate moratorium on new and renewal applications for accreditation, operating licences and permits within the tourism sector for the sake of saving jobs and preventing the loss of thousand of livelihoods.

Satsa CEO David Frost said on June 22 that the industry was in dire need of a resolution to the ongoing impasse between tourism operators and the defunct National Public Transport Regulator (NPTR), which falls under the Department of Transport (DoT), as the NPTR was failing to fulfil its mandate and was hamstringing the tourism industry.

Satsa wants the Presidency to prioritise the appointment of a task team to reassess the regulation of tourism vehicles and to implement solutions at the NPTR to end the paralysis being inflicted on the tourism sector by bureaucratic red tape.

Satsa in January sent a letter of demand to Transport Minister Fikile Mbalula, calling for urgent action to resolve the “unlawful” delays in issuing licences.

Satsa has also had numerous engagements with the NPTR and a host of officials in the DoT and the NPTR to no avail. So far, these efforts have proved unfruitful, it said.

Satsa has reported that hundreds of new and existing tour operators are unable to work, with many of them being forced to do so illegally, because the non-functional NPTR has been failing to issue tourism transport licences.

Under current regulations, tour operators need to be accredited by the NPTR to provide tourist transport services. As it stands, operating licences for tourist vehicles need to be issued by the NPTR within 60 days for new operators and within a day for accredited operators. 

However, the systemic failure of the NPTR’s licence issuing system has left operators stranded without licences for years despite applications being submitted well in advance and multiple follow-ups which have gone unanswered.

Frost bemoaned that the licensing paralysis was causing severe economic and reputational damage to the tourism industry by inhibiting the growth and job creation potential of small, medium-sized and large enterprises, resulting in business closures and job losses.

Nearly 1 000 applications have stalled at the NPTR, many of which are from small to medium-sized black-owned businesses.

Frost highlighted the negative impact the NPTR’s failure was having on the sustainability of tourism in South Africa and the wider South African economy.

The problems with the NPTR began more than five years ago, and for most of the last two-and-a-half years there has been no board at the NPTR, Satsa claimed.

The tourism sector generates about 10% of South Africa’s gross domestic product, creating job opportunities for more than 1.5-million people, many of whom are women and youth from rural communities.

Tour operators are central to the tourism sector because they transport tourists, take them on tours and act as the conduit for State revenue in respect of entrance fees to national interest points. They also promote and facilitate income for local hospitality businesses, restaurants and various micro-entrepreneurs within communities.

“This crisis requires urgent intervention by our government. Post-pandemic, tourism companies are already in financial crisis but are unable to recover because hundreds of vehicles are stranded without operating licences,” Satsa deputy chair Oupa Pilane explained.

He lamented that many tour operators were forced to operate without valid licences and were frequently being pulled over by the South African Police Service and other traffic officials who then impound the vehicles, leaving tourists stranded on the side of the road. 

“This is quite simply untenable. We understand that after two years of no NPTR board at all, an interim board has been appointed, but it will take months to get up to speed and to begin to address the backlog before it is able to follow the law in respect of the process and timing of licensing,” Pilane said.

He added that early indications were that the new board was merely perpetuating the failures of the old board.

“This is why we are calling for an urgent moratorium on new and renewal applications for accreditation, operating licences and permits, while government gets its house in order,” he stated.

Frost said the tourism industry was fully supportive of a system that ensures that compliant organisations are running fit and proper vehicles, which he viewed as critical in the maintaining and enhancing of South Africa’s reputation as a tourism destination. 

However, tourism vehicle operators who were trying to follow the process simply could not obtain licences despite every reasonable effort being made to do so.

“This results in an inability to invest in fleets. Tour operators own assets that cannot generate income but carry expenses. They cannot hire additional staff because vehicles can’t operate. Instead of running and growing their businesses, they are spending time dealing with red tape,” Frost said. 

“My business’ struggle with the NPTR has been for over four years. If the system worked, I would have significantly grown my business, developed valuable contract relationships with tour agencies and have hired more employees. 

“The NPTR’s failures are catastrophic for my business and as a young, black entrepreneur, I am deeply disappointed in my government’s failure to address the crippling red tape that is stunting the dreams of small businesses like mine,” said tourism business SouthernXplore owner Khotso Micha.

Satsa board transport committee chair and a specialist tour operator Onne Vegter explained that his company had bought new vehicles three years ago and had been unable to use them owing to licensing delays.

“We are fully accredited. Our applications were complete and correct. Each stranded vehicle costs us at least R8 000 per month in repayments, maintenance and insurance, and far more than that in lost revenue. The damage is enormous. We have lost millions as a direct result of the NPTR,” Vegter said.

Satsa conducted an industry survey on this matter in April, which revealed that 913 applications remained outstanding. These ranged between operating licence renewals, amendments, new applications, and transfers, as well as company accreditation applications and renewals. At least 391 vehicles could not be used legally, causing a minimum R70-million impact on the economy.

Four businesses have had to shut down because of the impasse at the NPTR, while 167 incidents of traffic officials stopping and harassing drivers in front of tourists were reported. Of these, 49 resulted in fines and 21 occurrences resulted in vehicles being impounded.

“While government should be playing a pivotal role in creating an environment that enables growth, the reality is that government red tape is impeding the sector and the entire system is paralysed, with dire consequences for both existing and new tour operators,” Pilane said.