State to chop travel costs
Bill sets limits on transport revenue raised in bid to control maximum passenger fares
THE GOVERNMENT IS proposing wide-ranging changes to the law to drastically reduce the costs of using all forms of public transport, including land, rail, sea and air travel, and to control prices paid by passengers.
If passed into law, the Economic Regulation of Transport Bill will introduce price control as a method for setting the maximum price that can be charged, or revenue that can be earned, by operators for the use of or access to its assets, facilities or services.
Among the bill’s goals is the regulation of prices “to ensure that normal levels of profit are achieved by regulated entities”.
Price control will include tariffs, charges, fees, tolls or other amounts that may be imposed for the use of any transport service or facility, a limit on the total amount of revenue it may raise, and on the returns it may derive from the assets used to provide its services.
The department hopes this will ensure that levels of profit which keep entities providing public transport services are sustainable, and will continue to encourage investment, but do not reflect monopolistic pricing or inefficiency in operations.
The proposed new law would apply to any market, entity, facility or service in the transport sector – unless Transport Minister Blade Nzimande grants an operator an exemption.
The proposed new law would allow Nzimande, in consultation with a new regulator, to declare that it applies to any market, or any entity, facility or service, irrespective of whether it is privately or state-owned, within the transport sector.
It would apply if Nzimande has determined that either a single operator controls more than 70% of the market or the preconditions for competition do not exist in the market.
Operators would be required to submit a proposal to the soon-to-be-established Transport Economic Regulator to request approval of price control for the facilities and services offered.
The regulator will be the primary enforcer of the proposed new law.
National Taxi Alliance spokesperson Theo Malele said although he welcomed the government’s current proposals, he hoped the department was not covering its tracks and pulling the wool over the eyes of the taxi industry over its complaints that it was allowing municipalities to operate buses and issue operating licences, therefore becoming referee and player.
He told Independent Media that the taxi industry was not charging market-related prices, but travel fares.
Price control, according to Malele, would also ensure that passengers in all modes of public transport were subsidised.