Radebe targets subsidies

Far-reaching measures, including penalties for driving passenger cars into congested areas, an end to public transport subsidies that encourage people to live far from their work, and an overhaul of state funding for bus, taxi and rail services, are being planned as the government revives its bid to reconfigure the commuter transport system.

But Minister of Transport Jeff Radebe will have to sell a number of politically unpalatable reforms if he is to give effect to the more rational and efficient people-moving framework that his predecessors began to formulate, but were never able to implement.

Chief among these is a reallocation of funding away from road and rail transport subsidies developed under apartheid to ferry workers from remote dormitory suburbs to work in urban and industrial centres.

These are generally seen as support services for the poor, but are effectively financial incentives to consolidate unsustainable urban settlement patterns, the Department of Transport now believes.

“Public transport subsidies need to be viewed within the context of passenger transport funding and not as an isolated service for low-income have-nots. Therefore we need to put transport needs and funding into a common pot and make the hard choices and trade-offs as informed by policy commitments,” Department of Transport Director General Wrenelle Stander said this week.

This approach could have a substantial effect on affluent commuters. Stander suggested that cities might want to limit infrastructure supply for cars and redirect funding towards public and non-motorised transport.

However, she stressed that efficiency criteria were agnostic about the wealth or poverty of transport users. This meant some of the working poor would have to move or face higher travel costs.

“Disadvantaged communities that have forcibly been displaced [and] who currently have subsidised services available should continue to receive a level of financial assistance for reducing this burden. These subsidies, allocated under the rationale of ‘relief of distance’ burden, should be continued, but gradually reduced and eventually be limited to commuting trips of 40km or less,” said Stander.

The approach is not new. Dullah Omar pointed out in a speech in 2000 that it would be cheaper to pay the average worker in KwaNdebele to stay at home than to subsidise his or her commute to Pretoria.

“The country simply cannot afford this type of transport subsidy. It is economically unsustainable, and cannot possibly meet any value-for-money test,” Omar said at the time.

Officials insist that the more pragmatic and energetic leadership now in place in the transport ministry and department will begin to make real progress.

After April’s elections, officials close to Radebe argued that his move from the more high-profile public enterprises portfolio to transport was not a demotion. He was being deployed, they said, to put his substantial political clout and “Mr Fix-it” skills to work in a languishing bureaucracy.

Last week’s announcement of a much more modest approach to the repeatedly delayed taxi recapitalisation programme was one sign of the new approach, resolving a deadlock with taxi associations that had dragged on for four years.

The 18- and 35-seater vehicles with sophisticated electronic management systems proposed under the original plan would have been considerably more expensive than existing minibuses. Taxi bosses insisted they would only cooperate with the programme if they received substantial subsidies for scrapping allowances for the current fleet.

The government has now agreed to a R50 000 scrapping allowance, even for operators who do not plan to replace vehicles. But it is understood that this amount was only considered adequate because the vehicles now envisaged will be cheaper than options available under the original scheme.

There is also more room for the market to operate under the revised terms of the programme. Vehicles may fit into any one of several size ranges, and specifications will relate primarily to safety. Operators can buy the new taxis from any manufacturer who meets the standards issued by the department.

The next step is to find a way to offer ongoing contractual subsidies to taxi operators. Bus companies get R2,1-billion a year in government subsidies, and commuter rail another R2,4-billion. Almost all of it goes to service two million low-income urban workers, Stander said.

It is not clear, however, how the fragmented and fractious taxi industry will be drawn into the subsidy net.

“Ultimately the challenge will be for local planning authorities to creatively utilise the strengths of the taxi industry and to plan accordingly,” Stander said.

At the moment there are serious problem with bus subsidies. Only 32% of road subsidies are spent on properly tendered or negotiated contracts. The rest — totalling R1,36-billion —goes on “interim contracts”.

Commuting: The hard facts

A new National Travel Survey is shortly to be released by the minister of transport. These are some of its headline findings: