The taxi industry plays a strategic role in the economy and in society. Our information indicates that the taxi industry is a dominant mode within our public transport arena. The industry carries almost 68% of commuters on a daily basis. Within the context of the review of the public transport system, we will need to integrate the taxi industry into the public transport. There is no doubt that a more focused approach to formalize and assist the taxi industry will be in the best interests of commuters.

It is against this background that Government is keen to expedite the implementation of the Taxi Recapitalisation Programme. Indeed, some serious delays were experienced in the past during the process. The evaluation of the original four (4) bids received was finalized early this year, and the Steering Committee made its conclusions about the two tenders that were issued. By way of a summary, the evaluation of the bids indicated that the programme, in its original form, which included the tender for the manufacture of the New Taxi Vehicle (NTV) and Electronic Management System (EMS), was neither affordable to the national fiscus nor profitable to the operators. In this regard, it will also not be affordable to commuters because under its current configuration operators will certainly increase their taxi fares to increase their profit margins.

At its meeting yesterday, Cabinet endorsed the recommendation of the Steering Committee regarding the bidding process for the NTV and EMS. The decision of the Cabinet has been communicated to the bidders by the Department of Trade and Industry, which was responsible for issuing the Request For Proposals. We will await their response to the letters sent to them as per the requirements of the bidding process.

The decision of the Cabinet is primarily about taking forward the Taxi Recapitalisation Programme in a revised form, whilst retaining the central objectives of the original programme as outlined above. The decision was also informed by the outcomes of the extensive consultations undertaken by Government with the taxi industry. There is convergence of views on how to take forward the Taxi Recapitalisation Programme,

The Taxi Recapitalisation Programme, as approved by Cabinet, will be implemented from the beginning of the 2005/2006 Financial Year, unfolding over a period of seven (7) years at an estimated cost of R7,7 billion. The following are the key pillars of the Taxi Recapitalisation Programme moving forward:

• The introduction of specifications for the NTV through Regulation by the Minister of Transport, with focus on the safety aspects of the vehicles by a defined date (s).
• The introduction of a once-off scrapping allowance of R50 000 per scrapped vehicle to legal operators or registered minibus taxi vehicle. The scrapping allowance will be rolled over a period of five (5) years to ensure affordability to the national fiscus. This will also enable those operators who have recapitalised enough time to use their existing new vehicles.
• To complement the safety specifications, Government will introduce thresholds or bands for vehicle seating capacity instead of requiring that the NTVs have a seating capacity of 18 and 35. The various bands/categories will be informed by the needs of a particular route.
• Government will sustain the formalisation and registration of the taxi industry across Provinces, so that effective regulation of the industry and enforcement of the law by Government (and not self regulation) takes place.

We will move immediately to put in place the necessary infrastructure and proceed with the rollout of the programme in the second half of 2005. Implementation will take place in a phased manner over a seven (7) year programme.

Government is confident that this intervention will go a long way towards sustaining the taxi industry, and bring greater benefits to our commuters in the form of safe and reliable fleet and affordable services. Through partnership with the taxi industry and commuters, we will move forward with determination to implement an intervention of economic and social significance.