Presentation by the Southern African Bus Operators Association SABOA

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SMALL BUS OPERATORS NATIONAL SUMMIT
BIRCHWOOD HOTEL 23-24 NOVEMBER 2009

• Presentation by the Southern African Bus
  Operators Association (SABOA)
• Jackie Walters (Strategic Adviser)

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OVERVIEW OF THE PRESENTATION

• SABOA HISTORY
• SABOA STRUCTURES AND REPRESENTATION
• ISSUES REGARDING SMME BUS OPERATORS
• SABOA SERVICES AND INITIATIVES IN SUPPORT OF
  SMMES

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BACKGROUND TO SABOA

• FORMED ON 21 MARCH 1980 BY FIVE LEADING OPERATORS
  TO REPRESENT THE INTERESTS OF INDUSTRY
• SABOA IS A SECTION 21 NON-PROFIT COMPANY IN TERMS
  OF THE COMPANIES ACT
• CURRENTLY SABOA REPRESENTS ABOUT 13 000 BUSES
  AND COACHES, ABOUT 76 OF BUSES AND COACHES
  INVOLVED IN PUBLIC TRANSPORT IN THE COUNTRY
• COMMUTER SERVICES CONTRACT SERVICES SCHOLAR
  SERVICES
• ORGANISED PARTY SERVICES TOURIST SERVICES
  CHARTER SERVICES
• CROSS BORDER SERVICES SCHEDULED COACH SERVICES
  LONG DISTANCE SERVICES
• OF THE 900 OPERATING MEMBERS, 841 OR 93
  REPRESENT SMME BUS OPERATORS

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BACKGROUND TO SABOA

• A COUNCIL GOVERNS THE AFFAIRS OF THE ASSOCIATION
  THAT CONSISTS OF AN EQUAL NUMBER OF ESTABLISHED
  AND SMME MEMBERS
• MEMBERS ARE ELECTED EVERY TWO YEARS ON THE BASIS
  OF ONE VOTE PER MEMBER IRRESPECTIVE OF FLEET SIZE
• ON COUNCIL EVERY MEMBER HAS ONE VOTE
• THE EXCO CONSISTS OF 8 MEMBERS WITH EQUAL
  REPRESENTATION OF SMALL AND LARGE OPERATORS
• AT PROVINCIAL LEVEL GOVERNANCE STRUCTURES ARE IN
  PLACE IN EIGHT PROVINCES WITH THE EXCEPTION OF
  THE NORTHERN CAPE
• MEMBERS IN THE PROVINCES ELECT PROVINCIAL
  COMMITTEES
• THE ASSOCIATION IS FULLY TRANSFORMED IN ITS
  MANAGEMENT STRUCTURES AND REPRESENTATION
• SABOA IS FUNDED BY ITS MEMBERS AND ITS REVENUE
  GENERATING ACTIVITIES TO ENSURE ITS INDEPENDENCE
  AND ABILITY TO DIFFER FROM GOVERNMENT

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WHAT ARE THE MAJOR PROBLEMS WITH SMME EMPOWERMENT?

• MAJOR PROBLEM IS THE LACK OF PROGRESS ON THE
  POLICY ISSUES AND POLICY IMPLEMENTATION THIS
  LEADS TO A LACK OF BUSINESS OPPORTUNITIES
• LACK OF FUNDING TO IMPLEMENT THE TENDERING SYSTEM
  NOT NECESSARILY A DOT PROBLEM
• MONTH-TO-MONTH CONTRACTS UNTIL RECENTLY
• THE IMPACT OF THE DIVISION OF REVENUE ACT ON THE
  CONTINUITY OF BUSINESS LOWER SUBSIDIES
• THE HOA ISSUES AS THEY RELATE TO THE TENDER
  SYSTEM 10 RIGHT OF FIRST REFUSAL IS NOT
  APPLICABLE TO THE NEGOTIATED CONTRACTS
• LABOUR ISSUES IN THE TENDERING AND NEGOTIATED
  CONTRACT SYSTEM ESPECIALLY SECTION 197 OF THE
  LABOUR RELATIONS ACT
• THE DEVELOPMENT OF IPTN PLANS HAS TAKEN A LONG
  TIME TO COME TO FRUITION
• HOW TO INVOLVE THE TAXI INDUSTRY THAT REPRESENTS
  MORE THAN 140 000 MINIBUSES?

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WHAT ARE THE MAJOR PROBLEMS WITH SMME EMPOWERMENT?

• THE FUNDING OF SMMES IS PROBLEMATIC
• CAPACITY BUILDING IS CRITICAL AND ONGOING
• SMMES SHOULD BE ORGANISED IN MORE FORMAL
  BUSINESSES TO PARTICIPATE IN THE
  TENDERING/NEGOTIATED CONTRACT SYSTEM
• MAJOR EXPEXTATIONS ARE CREATED FOR BOTH THE SMME
  BUS AND TAXI INDUSTRIES TO PARTICIPATE IN THE
  SUBSIDISED BUS INDUSTRY
• IF THE OVERAL CAKE IS HOWEVER NOT ENLARGED
  THERE WILL NOT BE ENOUGH FOR ANYONE TO MAKE A
  LIVING OUT OF THIS INDUSTRY
• WE BELIEVE THAT THE DOT UNDERSTANDS THIS DILEMMA
  AND ITS POLICIES/ STRATEGIES ARE ADDRESSING IT

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SERVICES OFFERED TO SMME MEMBERSTRAINING

• ACTIVE INVOLVEMENT IN TRAINING AND CAPACITY
  BUILDING
• CLOSE WORKING RELATIONSHIP WITH THE UNIVERSITY OF
  JOHANNESBURGS DIPLOMA COURSES IN ROAD TRANSPORT
  ESTIMATED 8 000 PT EMPLOYEES TRAINED TO DATE
• SABOA ALSO HAS A BURSARY SCHEME FOR SMME
  OPERATORS AND BURSARIES ARE ALSO OFFERED BY UJ
• SABOA AND THE TETA WORK CLOSELY TOGETHER IN SMME
  TRAINING
• SINCE 2004 THE FOLLOWING TRAINING PROGRAMMES HAVE
  BEEN OFFERED TO SMMES
• 2004/5 SMME Skills Programme 320 learners
• 2006 Skills Programme for school bus
  operators 160 learners
• 2007 SMME Skills Programme 160 learners
• 2007 Learnership in Road Transport 100
  learners
• 2009 Skills Programme in Tourism 225
  learners
• 2009 Skills Programme in New Venture
  Creation 100 learners

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SERVICES OFFERED TO SMME MEMBERSINSURANCE

• SABOA INSURANCE SCHEME FOR SMME OPERATORS IN
  CONJUNCTION WITH GLENRAND MIB
• MORE THAN 442 OPERATORS PARTICIPATE IN THE SCHEME
  REPRESENTING 3500 BUSES
• SPECIAL INSURANCE RATES FOR SMMES THAT ARE
  NORMALLY CONSIDERED AS HIGH INSURANCE RISKS BY
  OTHER SCHEMES
• SMME OPERATORS ALSO BENEFIT FOR FREE MEMBERSHIP
  OF SABOA IF THEY HAVE 20 OR LESS BUSES

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SERVICES OFFERED TO SMME MEMBERSCONSORTIA

• IN ANTICIPATION OF THE ROL-OUT OF THE TENDER AND
  NEGOTIATED CONTRACT SYSTEM SABOA WAS INSTRUMENTAL
  IN SETTING UP A NUMBER OF SMME CONSORTIA IN THE
  RESPECTIVE PROVINCES, FOR EXAMPLE
• GAUTENG BASALEL /- 50 MEMBERS
• SCHOLAR CONSORTIUM /- 35 MEMBERS
• MPUMALANGA SAMBA SONKE /- 35 MEMBERS
• NORTHWEST SONDELANE /- 35 MEMBERS
• KWAZULU-NATAL KZN CONSORTIUM /-50 MEMBERS
• FREE STATE /- 35 MEMBERS
• THESE CONSORTIUMS ARE REGISTERED BUSINESSES WITH
  A MANAGEMENT COMPANY TO ASSIST THEM IN TENDERING
  FOR POTENTIAL BUSINESS

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SERVICES OFFERED TO SMME MEMBERS VEHICLE FINANCE

• FINANCING OF BUSES IS A MAJOR CONCERN FOR SMME
  OPERATORS LACK OF CREDIT RECORDS, FORMAL
  BUSINESS RECORDS, CONTRACTS, ETC
• A VEHICLE RENTAL SCHEME IS CURRENTLY BEING SET UP
  BETWEEN THE VARIOUS VEHICLE SUPPLIERS AND THE
  INDUSTRIAL DEVELOPMENT CORPORATION (IDC)
• PARTICIPATING VEHICLE SUPPLIERS WILL PUT A NUMBER
  OF NEW AND/OR SECOND HAND BUSES INTO A POOL WHICH
  CAN BE RENTED BY SMME MEMBERS
• SHORT TERM RENTAL SCHEME WHICH COULD BE
  FACILITATED THROUGH THE VEHICLE SUPPLIERS
  THEMSELVES OR THE JOINT VENTURE FINANCE COMPANIES
  (BANKING PARTNERS) OF THE VEHICLE SUPPLIERS
  PARTICIPATING IN THE INITIATIVE
• THIS SCHEME DOES NOT REPLACE THE CURRENT FINANCE
  SCHEMES OF THE VEHICLE SUPPLIERS BUT IS IN
  ADDITION TO THESE SCHEMES

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SERVICES OFFERED TO SMME MEMBERS SCHOOL BUS
OPERATORS

• MANY SMME MEMBERS ARE IN THE SCHOOL BUS BUSINESS
• THROUGH SABOAS INVOLVEMENT THE GENERAL OPERATING
  CONDITIONS OF THESE OPERATORS WERE IMPROVED IN
  SOME PROVINCES (GAUTENG ESPECIALLY) IN TERMS OF
  RATES OF REMUNERATION, PAYMENT OF OUTSTANDING
  CLAIMS, CONTRACTUAL OBLIGATIONS ETC
• SABOA WAS ALSO INSTRUMENTAL IN GETTING GOVERNMENT
  TO ISSUE A NATIONAL SCHOLAR TRANSPORT POLICY
  WHICH IS STILL UNDER DISCUSSION

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SUB-CONTRACTING AND JOINT VENTURES

• THE CODES OF GOOD PRACTICE NO LONGER ACKNOWLEDGE
  SUB-CONTRACTING AS PART OF EMPOWERMENT GOVT
  DIRECTIVE
• MANY OF THE EXISTING OPERATORS BEGAN AS SUB
  CONTRACTORS GAUTENG COACHES, JR CHOE ETC
• A SURVEY OF SOME OF THE LARGER MEMBERS OF SABOA
  ESTABLISED THAT THERE ARE CURRENTLY 25 OPERATORS
  OPERATING 165 SUB CONTRACTED BUSES
• EVERY CONTRACT HAS AT LEAST 10 SUB CONTRACTING
  INCLUDED
• JOINT VENTURE PARTNERSHIPS HAVE RESULTED IN 5
  OPERATORS OPERATING 234 BUSES
• WE BELIEVE THAT SUB CONTRACTING AND JVS HAVE
  MAJOR MERITS, ESCPECIALLY FOR FIRST TIME ENTRANTS
  TO THE SUBSIDISED INDUSTRY
• COMPLICATED COMPLIANCE RULES
• ADHERENCE TO TIME TABLES
• MAINTENANCE ISSUES
• MANAGEMENT ISSUES ETC

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OTHER SERVICES OFFERED TO SMME MEMBERS

• ANNUAL STRATEGIC PLANNING SESSION WHERE UP TO 150
  MEMBERS PARTICIPATE AND WHERE ANY MEMBER CAN
  GIVE INPUTS AND DETERMINE THE STRATEGIC AGENDA OF
  THE ASSOCIATION
• ANNUAL INDUSTY CONFERENCE AS WELL AS CONFERENCES
  AND MEETINGS AT THE PROVINCIAL LEVELS
• ACCESS TO INFORMATION ON TRANSPORT AND TRAFFIC
  LEGISLATION
• PARTICIPATION IN ESTABLISHED COMMITTEES OF THE
  ASSOCIATION
• ADVICE ON PERMIT APPLICATIONS
• ADVICE ON HOW TO START A BUSINESS
• GENERAL ADVICE APPLICABLE TO RUNNING A BUSINESS
• GENERAL TRANSPORT MATTERS

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SABOA VIEW ON SMMES

• SABOA BELIEVES THAT SMMES HAVE A VITAL ROLE TO
  PLAY IN PT
• SABOA HAS GONE A LONG WAY IN CREATING AN
  ENVIRONMENT FOR ITS SMMES TO PARTICIPATE IN THE
  FORMAL PUBLIC TRANSPORT SYSTEM
• CONSORTIA
• FINANCE
• ON GOING TRAINING
• CAPACITY BUILDING THROUGH CONFERENCES AND
  INFORMATION SHARE
• INPUTS INTO VARIOUS GOVERNMENT PROCESS ES THAT
  WILL INVOLVE SMMES IN THE FORMAL SECTOR
• LEGISLATION
• THE TENDERING AND NEGOTIATED CONTRACT SYSTEM
• AN INDUSTRY CODE FOR SUB CONTRACTING
• ASSISTANCE WITH TECHNICAL MATTERS
• DTI CODES OF GOOD PRACTICE ETC.
• THE ABOVE MAY NOT BE PERFECT BUT WHICH OTHER
  ASSOCIATION HAS DONE SO MUCH FOR ITS SMME MEMBERS?

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SABOA VIEW ON SMMES

• WE WISH TO CONTINUE ALONG THIS PATH AND WORK WITH
  THE SMMES AND GOVERNMENT TO THE BENEFIT OF
  OPERATORS AND USERS ALIKE
• WE BELIEVE THAT ONCE THE TENDERING AND NEGOTIATED
  CONTRACT SYSTEMS GET GOING AGAIN THAT THERE WILL
  BE MANY OPPORTUNITIES FOR SMME OPERATORS, WE ARE
  READY TO SUPPORT THE SMME OPERATORS IN THIS
  ENDEAVOUR
• AS BUS OPERATORS WE ALSO HAVE TO PROTECT OUR
  LEGITIMATE SHARE IN THE PUBLIC TRANSPORT SECTOR
  IF WE DO NOT DO IT COLLECTIVELY WHO WILL DO IT
  FOR US?