Santaco continues fight for subsidy

Call by Santaco for taxis to be subsidised by the government. Image: Business Insurance

The industry, which is set to increase taxi fares in May, has sought subsidies to improve profitability and bring down the cost of taxi transport.

Last month Santaco asked the commission to investigate government subsidies to bus operators such as Putco and Golden Arrow, saying they unfairly disadvantaged the taxi industry.

The subsidies predate democracy and were applied after apartheid relocated people far from their places of work. On the sidelines of Santaco's national elective conference in Johannesburg chief executive Nkululeko Buthelezi said taxi operators were forced to drop their fares to compete with subsidised buses.

This compromised the financial sustainability of the industry. It forced taxi owners to neglect the maintenance of their vehicles, and contributed to low wages paid to taxi drivers.

Subsidies

"All public transport should be subsidised. It is not in the interest of government to abandon subsidies. We believe, however, that public transport subsidies should be shared," Buthelezi said.

He said that next month Santaco would appeal directly to the Competition Tribunal for an order to suspend all subsidies pending the outcome of the Competition Commission's investigation. At the same it would ask the court to nullify existing bus contracts and compel the transport minister to put out new tenders for bus contracts.

Phillip Taaibosch is keen to see subsidies flowing to taxi owners and operators. Image: Motor Online

The government instituted a moratorium on new bus contracts in 2001. Since then existing contracts have been rolled over in preparation for a new system that would make bus services a secondary rather than primary element of public transport.

Taxis need support

Earlier this month, Gauteng roads and transport MEC Ismail Vadi admitted that the province received qualified audits from the auditor-general because rolling over contracts contravened supply-chain regulations.

"You cannot extend a contract for 16 years. It creates a cartel," Vadi said.

Discussions with government, however, have failed to yield any gains for the industry.

Santaco's new president, Phillip Taaibosch, said government support for this industry was minimal. It should compel manufacturers of commercial vehicles and the petroleum industry to act in line with empowerment regulations. "As key stakeholders in both industries, taxis should benefit," he said.

He said taxi drivers themselves were never identified for empowerment and skills development.

Taaibosch said government consultation with the industry was insufficient. He was critical of Vadi's 25-year integrated transport master plan for Gauteng, saying Santaco was not consulted when the plan was drafted.

"Gauteng's plan will not be successful without the involvement of the representatives of the taxi industry," Taaibosch said."The request for a subsidy should be viewed in the context of lower costs for consumers," he said.

Source: Business Day via I-Net Bridge