THE QUESTION
NATIONAL ASSEMBLY
FOR WRITTEN REPLY
QUESTION NO 452
DATE REPLY SUBMITTED: 18 APRIL 2013
DATE OF PUBLICATION IN INTERNAL QUESTION PAPER: FRIDAY, 15 MARCH 2013
(INTERNAL QUESTION PAPER NO 08 â 2012)
Mr P D Mbhele (Cope) to ask the Minister of Transport:
Whether the R7 billion taxi recapitalization programme that was
started in 2007 has been completed; if not, why not; if so, what are
the relevant details? NW605E
3. THE WRITTEN REPLY
The Minister of Transport
The Taxi Recapitalization Program (TRP) was officially launched in
Botshabelo in October 2006. The Program was approved by Cabinet on a
proposed plan of scrapping 100Â 000 vehicles over seven years on an
estimated budget of R7.7bn. In exchange for the old scrap vehicle
Government will compensate operators R50Â 000 as a form of capital
subsidy towards the purchase of a new compliant vehicle.
The aim of the program was to remove the unsafe old taxi vehicles off
the road and replaced by new TRP compliant vehicles. The TRP
compliant vehicles had a key focus on upgrading the vehicles to
enhance safety and comfort. These requirements were gazette on 4
September 2006.
A TRP funding strategy was prepared in June 2008 for submission to
Cabinet. The purpose of the Taxi Recapitalization Funding Strategy
was to provide a taxi scrapping funding strategy for the successful
implementation of the TRP taking cognizance of the increased demand
for scrapping, the budgetary constraints, the need to review the
quantum of the scrapping allowance as well as the inability of the TSA
to successfully scrap the number of OTVs within the approved seven (7)
year project timeframe.
2.
Increased demand for scrapping
The initial target market of the program was the legal taxi operators
and this was estimated to be 100Â 000 vehicles. However since the
implementation of the programme additional operators have been
identified via the special legalizing process (SLP) and the âBe Legal
Campaignâ (BLC).
Semi-legal operators
A substantial number of semi legal operators were identified through
the initiation and implementation of the TRP. There were deadlines
regulated for operators to apply for operating licenses and not all
operators who applied prior to the deadline were granted these. One
of the reasons for this is that operators had permits but no vehicle
at that point to link the operating license to and another reason is
the lack of capacity at operating licensing boards to process
applications prior to the deadlines. The number of semi legal
vehicles in the system amounts to 33 344.
KZN Court judgment
The KZN court judgment which ruled in favor of operators whoâs SLP/BLC
applications have not been considered by the OLB amounts to 7 699
vehicles categorized as semi-legalâs as confirmed by the KZN
Department of Transport in their Business Plan to the Department.
Since this ruling the Department has decided to include all provinces
into this process. The total number of vehicles for all provinces
amounts to 2Â 550.
Summary of increasing vehicle numbers
The Table below details the different categories by which OTVs were
identified.
| |SLP/BLC Applicants â | | |
|Vehicles on the |not considered for |Semi â legal|Total |
|system |conversion by OLB | | |
|100,000 |2,550 |33,344 |135,894 |
Quantum of scrapping allowance
The seven year period did not take cognizance of any escalation to the
required funding. The value of the scrapping allowance in 2004 was
R50 000 and the value of the scrapping allowance at the end of the
programme in 2013 was to be R50 000. This did not make economic sense
since the increase in inflation was not accommodated for.
The quantum of the scrapping allowance was therefore to be reviewed
taking into account CPI over the programme lifespan with special focus
on the transport specific CPI.
Budget Constraints
There was an overwhelming response from the industry to participate in
the TRP. In the first two years a total of R677.5 million was
allocated and spent to scrap 13,550 OTVs. The funding allocation for
scrapping in the second financial year was depleted by November 2007
thus creating a reputational risk for the TRP.
The Department has consistently requested funding from National
Treasury in line with meeting its targets for implementation. The
monies allocated by Treasury were however significantly less than what
was applied for. The allocations received to date indicate that this
trend most probably will continue. This poses a risk on the
successful implementation of TRP within its approved 7 year lifespan.
With an increase in the number of vehicles from 100,000 to 135,894 and
the scrapping of 13,550 OTVs in the first two years, a balance of
122,344 vehicles needed to be scrapped during the remaining 5 years of
the TRP.
The budgetary implications for achieving the TRP scrapping targets
within the approved lifespan for the programme, required an additional
R5, 486,143,500 in funding to scrap the remaining 122,344 OTVs over
the remaining five years of the programme and cater for the increase
in the quantum of the scrapping allowance in accordance with CPI
Cabinet Resolutions to the Funding Strategy
The following are extracts of the resolutions taken at the Cabinet
meeting dated 4 February 2009;
1. âapproved the annual Consumer Price Index-linked adjustment to
the Taxi Recapitalization Programme (TRP) scrapping allowance of
R50Â 000â;
2. âapproved the approach of funding the TRP over a longer period
than the originally approved seven years, subject to Medium Term
Expenditure Framework (MTEF) budget allocationâ
(This included the increase in number of vehicles)
Scrapping Statistics
As at the end of February 2013 a total of 53Â 765 old taxi vehicles
have been scrapped. The value of the scrapping allowance paid is
R2,932 billion.
The following table detail the number of vehicles scrapped per
Province per financial year as at the end of February 2013.
[pic]
The Program in its current format is under review to determine its
sustainability, whilst taking cognizance of the Public Transport
strategy and allowing for the integration of modes thus providing for
the reform of the Public Transport systems.