Public transport associations have urged the Minister for Transport Barbara Creecy to lobby for a taxi recapitalisation fund that will provide at least half of the cost of a vehicle, extend the qualifying age for scrapping beyond 2006, and also initiate traceable value for licences.

This comes as Creecy yesterday said the government was looking at options, along with the banks, of de-risking borrowing for the taxi industry by using the taxi recapitalisation fund as part of measures of reducing borrowing costs for taxi operators as the industry struggles to to keep up with loans.

The South African National Taxi Council (Santaco) yesterday said it was in agreement that there needed to be a more effective scrapping incentive and a buy-in from the banking sector to de-risk the industry and boost confidence.

“The current allowance falls short due to its low value compared to the cost of acquiring a new minibus,” said Mmatshikhidi Rebecca Phala, Santaco’s national spokesperson.

Santaco said it agitated urgent attention to the extension of the qualifying age for scrapping beyond 2006 and addressing of the backlog of operating licenses, to support the industry’s efforts to modernize its fleet while remaining profitable.

It said the dates of scrapping vehicles and the backlog of licenses were hindering some operators from accessing existing scrapping allowances due to lack of documentation.

Theo Malele, national spokesperson for the National Transport Association (NTA), said the organisation had reported to the Department of Transport its dissatisfaction with the way banks made assessments of potential taxi buyers and awarded loans that the operators could not sustain in repayments.

“We use a model of a taxi on a route that averages R600 per day. That is R3 000 a week and you still have to pay the driver R700, so the R2 800 a week [remaining with the owner] which equals about R11 000 [and] falls far short of the R18 000 repayment that must be made to the banks. Its a serious shortfall,” Malele said.

Speaking on 702 talk radio yesterday morning, Creecy said the issue of unroadworthy public vehicles needed to be looked at from an economic perspective where everybody including drivers themselves do not want unroadworthy vehicles on the road.

She noted that operators had to pay more in loan repayments for their taxis than they were earning in a month from the vehicles.

“Part of the reason for this is the risk associated with lending money to the taxi industry,” Creecy said.

“We are having a look at where the pools of public money are in the government system and we are wanting to do some work together with the banks to look at if it is appropriate to use this money as a scrapping allowance or whether it would be better to use as money to de risk the cost of the loans.”

Malele said the NTA had also suggested to the department that the scrapping allowance, R151 000 per vehicle, was too little for an operator to acquire another one from it and said they had set an amount of half the price of the vehicle, which invariably starts from R450 000, which would peg the allowance at R225 000.

“Operators should contend with a R250 000 debt and maybe other expenses. Operators should be able to pay R12 000 a month and the period should not be above 60 months because after that time,” he said.

"The operator has replaced tyres more than five times, refurbished the upholstery more than two times, very possibly replaced the engine because it is a wreck by this time. Operators do not enjoy profits, only the banks do.”

He said the industry had hope that the consultations, which began when Creecy assumed office at the Department of Transport, would progress swiftly.

Creecy had earlier told Parliament the Taxi Recapitalisation Programme (TRP) was being reviewed as it was too expensive for taxi operators.

Originally launched in 2006 at an initial cost of more than R7 billion, the programme aimed to improve the sustainability of the taxi industry by replacing old and unsafe taxi vehicles with safer models.

The programme aimed to scrap vehicles registered before September 2006 with operators initially offered R50 000, which was later increased to R151 000 in 2023.

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