R300 million boost for taxis

Wednesday, September 30, 2009
By: 
Chris Bathembu

Johannesburg - Emerging taxi operators received a shot in the arm today when banking group Absa and the Industrial Development Corporation (IDC) announced a R300 million deal to boost the industry.

Absa has undertaken to provide the money to fund emerging taxi operators and black entrepreneurs wishing to enter the highly competitive industry.

The arrangement will also allow taxi operators to scrap their illegally converted panel vans in favour of legal and compliant mini-bus taxis.

The IDC has agreed to underwrite up to 50 percent of any losses incurred by Absa, should clients financed under the scheme, default on their payments.

The deal was signed by Transport Minister Sbu Ndebele on Wednesday during the occasion to launch national Transport Month.

A storm erupted earlier this year when it emerged that thousands of illegally converted panel vans in Gauteng were transporting unsuspecting commuters, putting their lives in jeopardy in the process. At the time, Ndebele vowed to take action against the culprits. However, he has welcomed the deal, saying it will go a long way in assisting those struggling to enter this highly competitive industry.

Meanwhile, Ndebele has called on South Africans to leave their cars at home and use more public transport when going to work.

He urged the public to observe October, a month dedicated to transport, by using more public transport instead of private vehicles. Ndebele said the country's roads could no longer cope considering that there were more than 17 million licensed drivers and over eight million registered vehicles in South Africa. "This in turn contributes to the fatal crashes and serious injuries on our roads," Ndebele said.

These accidents were costing the country more than R14 billion annually. "Enforcement alone is not enough. Our integrated public transport networks should be planned to reduce traveling time and increase safety".

The Bus Rapid Transit (BRT) system, introduced in Johannesburg last month, represented one solution that combined safety and affordability of public Transport, added Ndebele.