Taxi owners stand to get R805m, shares in new BRT operating firm

Some Joburg minibus taxi owners stand to share a whopping R805 million among themselves. This will be compensation for having their vehicles scrapped to make way for the R2.2 billion phase 1C of the City of Joburg’s Rea Vaya Bus Rapid Transit (BRT) system down in Louis Botha Avenue. This is a similar system to two other bus operating companies which have been established since the BRT system was introduced in Joburg in 2009. Piotrans was established in 2011 to operate phase 1A, which runs between Thokoza Park in Rockville, Soweto, and the Joburg CBD. Ditsamaiso operates the Phase 1B route, between Soweto and the Joburg CBD via Noordgesig, Coronationville, Westdene and Parktown. It took three years of negotiations and planning to establish Piotrans, which involved over 300 taxi operators and a 12-year contract.

A chief executive and a board of directors will be appointed to run the company. The Rea Vaya phase 1C route – between the Joburg inner-city, Alexandra and Sandton – is currently being developed and bus operations are expected to come on stream by October 2018. The operations of the 17km BRT route will be run by a bus operating company consisting mainly of minibus taxi owners, the majority of whom are members of the Alexandra Taxi Association (ATA) and the Alexandra, Randburg, Midrand and Sandton Taxi Association (Armsta), whose vehicles are currently operating along Louis Botha Avenue. This means the minibus taxi operators, who will also relinquish their taxi operating licences, will become shareholders of the new company. Many of the minibus taxi drivers are expected to be trained to operate the 141 articulated and rigid BRT buses to be deployed. 

Privately-owned public bus company Putco, which also currently operates on the affected route, may also be expected to have a shareholding in the still-to-be formed company. Lisa Seftel, the city’s executive director of transport, says negotiations with the potentially affected minibus taxi owners and bus operators regarding the establishment of the new bus operating company are ongoing. She said plans were also in place to raise the required funds for the compensation of the affected minibus taxi operators. Seftel said compensation amounts will be subject to negotiations. “Yes, of course, there is a plan in place to raise the money for compensation,” she said. Seftel added that agreements on how many taxis will be scrapped were still being finalised.

“The number of minibus taxi owners who will be affected by the third phase is still to be finalised,” said Seftel. The removal of minibus taxis and Putco buses from the phase 1C route will contribute to the reduction of traffic congestion and a cleaner environment. “Once negotiations are concluded, there will be a handover or transition period during which a bus operating company is set up and compensation can be paid out,” she said. The two 12-year agreements have resulted in about 500 minibus taxis being scrapped and minibus taxi operating licences relinquished. Jabulani Ntshangase, spokesperson for the Alexandra Taxi Association, said nothing had been decided. “We are still in talks and negotiations with the city over payments and establishing the company. “But nothing has been decided yet,” he said.