2009-12-15: First agreement signed between taxi industry and City of Johannesburg
NEGOTIATIONS are on track for taxi operators to run the first phase of the Rea Vaya BRT bus operating company.
Joint press statement from the City of Joburg and Phase 1A BRT Rea Vaya Negotiation Team: first agreement signed between taxi industry and City of Johannesburg.
NEGOTIATIONS are on track for taxi operators to run Phase 1 A bus operating company by end of first quarter of 2010.
Since August 2009, over 60 negotiators from the taxi industry and the City of Johannesburg met on a weekly basis to negotiate the terms and conditions of a bus operating contract that will be signed between taxi operators affected by Phase 1A of Rea Vaya Bus Rapid Transit system and the City of Joburg. The bus operating company, which will be owned by the taxi industry, will run Rea Vaya in terms of a bus operating contract which will be signed with the City.
Significant progress has been made in the negotiations.
First agreement reached
Parties have signed a landmark agreement in respect of loss of income for operators as a result of the introduction of the Rea Vaya starter service. A total of 167 operators have agreed to take their vehicles off the road in return for compensation from the City.
The 40 Rea Vaya buses that are presently in operation, transports the equivalent number of passengers as 167 mini-bus taxis. A total of R 3 167 000 has been handed out in compensation to affected operators. Today the last compensation cheques will be handed over.
The agreement provides for all the vehicles to be stored by the City up until such time as the bus operating contract is signed. If the vehicle owner becomes a shareholder of the bus operating company, then the City will either scrap or resell the vehicle for the operator.
Some of the proceeds of this sale will be transferred as equity in the new company and the remainder will be returned to the taxi operator.
“The signing of this agreement and the removal of vehicles from the Rea Vaya route is a sign that there is no turning back,” said Eric Motshwane, chairperson of the Greater Johannesburg Regional Taxi Council (GJRTC) and also member of the negotiating team.
Negotiation process
The negotiating teams are made up of City of Joburg officials and 29 representatives of over 300 operators affected by Phase 1A. These representatives were nominated by over 800 operators from nine of the ten associations who have licenses to operate on the Rea Vaya Phase 1A route and who are interested to become shareholders of the first Rea Vaya bus company.
The negotiations have been chaired by an experienced independent team of facilitators and both negotiating teams have technical support. The regional, provincial and national taxi structures have also been invited to attend as observers.
“I am very impressed with the dedication and determination of the negotiating teams. They have made significant progress and are on track to sign a bus operating contract which will herald in the full roll out of Phase 1 A” ,” said Councillor Rehana Moosajee – the Member of the Mayoral Committee responsible for Transport in the City of Johannesburg.
Presently only a Rea Vaya BRT starter service is in operation involving 40 buses on the trunk route from Regina Mundi in Soweto to Ellis Park. The full phase 1A of Rea Vaya involves 143 buses and will include routes from Protea Glen, Mofolo Park, Naledi and Eldorado Park as well as a redesigned inner city circular route.
The starter service has been run by a temporary bus operating company which will be taken over by the taxi owned bus operating company on the signing of the bus operating contract.
Progress on negotiations
After an initial period of information sharing, working groups have been hard at work deepening their understanding of each other’s positions and seeking areas of consensus and agreement.
Considerable progress has been made on understanding and agreeing the contents of the bus operating contract as well as the projected input costs of a future bus operating company.
This is critical so that an agreement can be reached on the agreed fee that would be paid to the future bus operating company by the city for each km that the bus operating company will run.
“The way the Rea Vaya bus operating company is to be paid is very different from what happens in the taxi industry and also different from the way in which the government’s bus subsidy programme has been run”, said Lisa Seftel, Executive Director for Transportation in the City of Johannesburg.
“In the Rea Vaya model, the bus operating company will be paid for each km that they travel and not for the amount of passengers that they carry. Thus there will be no incentive to speed or to wait until the bus is full. And there will be serious penalties if the buses are in poor condition or the drivers perform poorly,” she added.
The negotiating teams are confident that an agreement will be reached on the bus operating contract, the financial issues and also the structure and final shareholding of the future bus operating company.
A ‘participation framework agreement’ is being finalised in this regard which will need to be signed by each operator participating in the process. The framework will commit a participant to the outcome of the negotiations and the criteria by which shareholding will be determined.
Experience of the negotiations
“I would like to applaud our colleagues in the taxi industry, facilitators and COJ negotiations on a job well done. This was our first experience to be involved in such negotiations, and we are doing very well, said Mr. Sicelo Mabaso, a member of the Phase 1A negotiating team as well as part of the Top Six leadership.
“We have learnt a lot through these negotiations and we are now a formidable team confident that we can take over and run a professional commercially viable bus operating company, providing safe, affordable and reliable public transport,” added Eric Motshwane.
Way forward
In the New Year, after the Mayoral Committee has received a feedback on the negotiations and ratified the decisions of the negotiators, it will determine the date for the roll out of the full phase 1 A service.
“The Council’s decision that we should negotiate the first bus operating contract with affected operators and not go out on open tender, thus fast tracking the transformation of the taxi industry, has borne fruit,” MMC Rehana Moosajee concluded.
Contact details
City of Joburg: Lisa Seftel, Executive Director, Transportation (073 869 2727)
Phase 1 A taxi negotiating team: Eric Motshwane (082 956 3429) and Sicelo Mabaso (082 754 2765)
Tokiso Independent Facilitator: Tefo Raditapole (083 500 0625)
