Jul 27

Written by: SA Taxi News Editor
Monday, July 27, 2009 

Pretoria News 11 August 2009

Pretoria News 11 August 2009

The Tshwane Metro Police have heeded the call by the national Department of Transport to clamp down on converted panel vans illegally being used as taxis.

Last week the department called on provincial and municipal authorities to be on the lookout for the 1 070 or so vehicles it had identified as being converted.

In the market, panel vans are about R45 000 cheaper than taxis. Dealers buy these vehicles, convert them into taxis and then sell them to operators at the same price as a standard specification taxi to cream off large profits.

While these vehicles are not sub-standard, and could be used by non-public operators or for private use, they are not of the standard required for public transport.

Tshwane community safety spokesman Console Tleane confirmed that cases of "illegal minibuses" had been picked up by the Tshwane Metro Police.

But, he explained, these cases were usually not easy for the licensing division to identify because the paperwork could be made to seem legitimate by the owners. However, Tleane said the metro police were able to pick up the problem through physical examination by officers on the road. "We are not able to give specific numbers, although these will be made available soon," he said.

A converted vehicle is identified by a number of key characteristics - the side windows towards the rear of the vehicle are separated by a metal panel and the vehicle has a folding "jockey-seat" which has now been outlawed in public transport vehicles.

Tleane said officers took several "firm steps" if they came across such an illegal vehicle. "Firstly, the officer would literally strip of the licence disc of the vehicle so that it is rendered immediately unroadworthy.

"Secondly, the officer would issue a fine and order of ''Discontinue of Use''. That is, the vehicle cannot be used in any way until it is fixed," he said.

Tleane said the third step was to order all passengers out of the vehicle. "This is because the vehicle is illegal and therefore not certified to carry any passengers, or to be on the road.

"The last step, to complete the on-the-spot enforcement, is to order that the driver not take the vehicle from the scene.

"Instead, a tow-truck, which must be paid for by the owner or driver, must take the vehicle away. The owner or driver would then, after this on-the-road intervention, have to convert the vehicle to a legal status. This would mean that the vehicle would have to be reconverted properly into a panel van," he said.

Tleane said it was only after all the legal stipulations had been fulfilled that the owner could re-apply for the the vehicle to be licensed.

Last week SA Taxi Finance (SATF) announced that it had pledged R20 million to assist operators in upgrading their converted vehicles to the standard required for public transport.

SATF executive director Bonisile Makubalo said they estimated it would cost about R25 000 to upgrade a vehicle to the required standard. "About 100 vehicles have been made available to protect the taxi operators'' businesses while the upgrades take place," he said.

Summit TV 5 August 2009

Comment on the Ministers statement of the 31 July and an interview with Hennie de Beer

Summit TV takes a look at the problem of illegal taxis that's threatening financial chaos for the banks with Hennie de Beer former head of taxi finance at Absa

Giulietta Talevi: Welcome to Face to Face. Transport Minister Sibusiso Ndebele held a media briefing on Tuesday afternoon on the probe into illegal conversions of taxis and other vehicles. Recent articles in the Sunday Times newspaper suggested these illegal conversions could end up costing the banks around R600million if taxi owners are forced to haul these taxis off the road therefore incurring costs, loss of income and the inability to pay back their debt. Hennie de Beer is former head of taxi finance at Absa. Hennie, as I understand it you've assembled a legal team to represent taxi owners handing back vehicles that were illegally converted - why are you doing this?

Hennie de Beer: Correct. Very important is that the taxi industry is the main gear in the economy of South Africa. Why? They transport commuters as you know every day to work - if there are bus strikes they're still there to transport these people. We need these commuters every day in our local environment. Also, the taxi industry is a secondary taxpayer - one of the highest taxpayers in South Africa. If I can explain the average fuel that's pumped per month amounts to about 150 million litres - the secondary tax on that where maximum tax rates are 40% - if it wasn't for the informal taxi industry we might have been at 45%.

Giulietta Talevi: Sure. But they're not doing that out of a sense of altruism or because they've all got soft hearts - they're doing it because it's a business. A lot of these taxi owners converted vehicles illegally. What I want to know is why should the banks be forced to stump up the money if the onus on these illegal conversions is with the taxi owners?

Hennie de Beer: Good question. If I could just explain how it works - the bank is the ultimate responsible person, when he signs off that cheque he takes responsibility for that vehicle. He will have a direct agreement with the customer. Then where the vehicle was bought - the dealer - the bank will have a master discounting agreement in place. That master discounting agreement will say Mr Dealer if you have defrauded me or misrepresented the vehicle or that sort of thing how am I going to get my money from you?

Giulietta Talevi: Or I'm not going to finance the vehicle?

Hennie de Beer: Or I'm not going to finance the vehicle. Correct. What's happened now is that we found out that these guys have realised and be it willingly or unwillingly that they've got illegally converted vehicles...

Giulietta Talevi: Is this because they didn't do enough checks in the beginning? That they didn't have a proper system in place to ensure that these vehicles were legal conversions, or that they were legal to drive on South Africa's roads?

Hennie de Beer: In 2005 Toyota South Africa informed through the dealer network where Absa for instance had dealer representation on the floor - they sent a letter out to state that these vehicles impose grave danger to commuters...

Giulietta Talevi: The Quantum vehicles?

Hennie de Beer: The Quantum panel van conversions - that it might cause severe injury or death. What I then did once I got that letter I then contacted SABS myself confirming that and I phoned Toyota South Africa again and they told me that the structural compliancy of this vehicle does not allow for seats to be bolted into it. Yes, if Absa could have done it I'm sure all the other banks have done it in 2005 already.

Giulietta Talevi: This is when you were working for Absa and you understood then that you actually have to impose fairly stringent controls when you're giving out finance to the taxi owner?

Hennie de Beer: It was very important - because as the financier I take ultimate responsibility or accountability if something does go wrong. Yes, I implemented very strict filters - and I must also thank Absa and their staff for taking a lot of abuse. When you implement filters it's not easy - the dealers don't understand it, customers don't understand it. Yes, we stood away from it - and we did not or we tried not to finance any Quantum conversions.

Giulietta Talevi: So it's wrong for us to say the onus lies with the taxi owners to take responsibility for the fact that they illegally converted their vehicles - it's the financier and that's where the ultimate responsibility lies?

Hennie de Beer: Correct.

Giulietta Talevi: There's been figures - as I mentioned the Sunday Times article said banks could be liable for up to R600million - is that an accurate figure?

Hennie de Beer: If I can say I am aware of about 1,000 illegal panel van conversions and that's an average of between R240,000 and R280,000 where they were actually sold for those prices. Let's say conservatively the minimum price was about R240,000 that leaves us with about R240million.

Giulietta Talevi: Could the liabilities exceed that potentially?

Hennie de Beer: Yes.

Giulietta Talevi: I've heard figures of R1.3billion - is that accurate?

Hennie de Beer: Yes. Again that needs to be qualified - I think that's another exercise. A lot of for instance Iveco and Sprinter panel vans that were converted - they have structural points you can bolt seats onto. A lot of body builders were not approved to convert these vehicles. The Department of Transport is in the process of identifying these vehicles. Obviously if there is no Natis number for the manufacturer on the Natis document obviously these vehicles will also be scrapped so the losses can be much higher.

Giulietta Talevi: What now for both the taxi owners and the banks?

Hennie de Beer: First of all the taxi owner cannot speak to the dealer. The bank took over that function - it's a direct deal between the customer and the bank. The customer returns the vehicle to the bank. The bank can sue who they want to - they can sue the dealer, they can sue whomever. The problem is they have to refund the customer. Why? They financed a business unit based on a root model to state that this vehicle is going to generate this income per day - but there is an average loss of income between R400 and R700 per day so as we take in the vehicle that clock starts ticking. If the banks want to take a month, six months or two years they must be very careful because those figures of around say R240million can easily become R600million just in terms of the loss of income that they have to pay. Where are the customers going to generate another income? They have families to feed. There's huge implications...

Giulietta Talevi: Sure. Are the banks then legally liable for that loss of income? Is that definite?

Hennie de Beer: The legal opinion I got, yes.

Giulietta Talevi: To end off I asked you this before - I just want to understand why you are representing the taxi owners?

Hennie de Beer: First of all it's an industry that's not been subsidised at all - it's gone through the good and the bad times through the years. I was fortunate - I'm honoured to say that I've been in taxi finance since 1981 and I've seen the ups and downs. These people continue growing - they grew this industry. They are so important to the economy of this country. Honestly what people do not see - they maybe see a taxi and a taxi driver - but I deal with the taxi owner and the taxi associations. They are two worlds apart. Believe me better they are so well organised. I can tell you now they are actually good people to deal with. Yes, they do get exploited. Why? Because it's a multi-billion rand industry. Everyone is there just to make money out of it - they don't care about the taxi owner. That is why I'm more than willing to assist them through this difficult time.

Business Day 5 August 2009

THE government said yesterday it would not take more than 1000 illegally converted panel vans off the road, but would rely on taxi operators with unsafe vehicles to step forward and bring them for upgrading.

While as many as 1070 Toyota Quantum panel vans - built to carry freight, rather than people - have been illegally turned into passenger- carrying taxi vans, the government will not impound them, but will work with financing bodies and manufacturers to identify the illegal vehicles.

"You are not going to find them impounded," Transport Minister Sibusiso Ndebele said in Pretoria.

The government will say within days where taxi operators can take their vehicles to have them fixed. It is talking with financial institutions, dealers, and manufacturers, importers and builders to financially help fix illegal taxis.

Ndebele, however, warned taxi drivers who did not bring their vehicles in for upgrading that they risked losing their operating licences.

The illegal conversion of the panel vans, a practice since 2005, puts passengers at great risk.

"The damage and severity of injury in the case of these illegal panel vans transporting commuters, is far more severe when compared to a minibus taxi," Ndebele said.

Still, the government is under pressure from the taxi industry not to penalise operators . "The taxi operators are not criminals", said Philip Taaibosch, secretary-general of the South African National Taxi Council, the government-recognised and funded industry body.

"The taxi operator should not be punished. We should find a way how to assist the taxi operator when these vehicles are removed from the roads."

The withdrawal of an operating licence does not mean a vehicle is unroadworthy.

Rather, it cannot be used for the paid carriage of passengers. Likewise, the conversion of Quantum panel vans is not illegal.

They do not have the protective rollbars or secured seats of Quantum Sesfikile taxis, but owners who convert their goods vans to carry relatives or employees are not breaking the law.

They cannot, however, offer a paid public transport service.

The fault for the illegal conversions lay with the provincially operated taxi licensing boards, said George Mahlalela, a deputy director- general in the Department of Transport. "If you talk about system failure, the failure is around the licensing boards and we need to tighten that in all the provinces."

The boards were not checking the VIN numbers that identify a vehicle's type when they issued operating licences, Mahlalela said.

"We are doing our own internal investigation to understand the whole situation," said Kendridge Mathabathe, spokesman for the Gauteng transport and roads department.

Transport Minister Sibusiso Ndebele said yesterday the government would complete talks with the taxi industry soon on bus rapid transit (BRT) systems, the first of which begins in Johannesburg this month. He hailed a new "post-conflict relationship with the industry". A government-industry working group set up to resolve industry concerns met last week. Differences remain, however. "We need to accelerate the process of engagement around Johannesburg so that by the end of this month there's agreement on a whole range of issues," deputy director-general for public transport George Mahlalela said. He was contradicted by South African National Taxi Council (Santaco) secretary-general Philip Taaibosch. "It was absolutely wrong to single out Johannesburg." Santaco wants a national framework for the allocation of BRT side businesses such as fare collection, advertising, depot management and maintenance. The more these decisions rest at local level, the less influence Santaco will have in their allocation

Business Report 5 August 2009

The Department of Transport has called on taxi operators with panel vans that have been illegally converted into minibus taxis to surrender their vehicles to allow them to be upgraded to the legally required standard.

The converted taxis do not comply with the department''s safety standards, which makes them dangerous for passengers.

The department admitted system failure in the operating licensing boards, which it said were responsible for allowing panel vans to be illegally converted into taxis and licensed for use on the roads.

The panel vans cost about R45 000 less than a legal taxi vehicle.

Transport Minister Sbu Ndebele said yesterday that initial investigations revealed 1 070 illegally converted panel vans and not 4 000 as previously reported were operating as minibus taxis.

Ndebele said the department was "seriously considering" withdrawing operating licences of all affected vehicles and recalling these vehicles immediately.

He stressed there was no moratorium on the application of the law to the letter and law enforcement authorities would ensure they dealt with any illegality they encountered on the roads.

However, Ndebele said the government had entered into a "post-conflict" period with the taxi industry and had the support of the industry in recalling these illegal conversions.

Philip Taaibosch, the general secretary of the SA National Taxi Council (Santaco), said the body was taking responsibility for the problem and already had an operational call centre at its offices to assist taxi operators with these illegal conversions.

George Mahlalela, the deputy director-general of transport, said the licensing boards should have picked up from the vehicle identification number on eNatis that a panel van was a converted vehicle, and did not meet the specifications of the taxi recapitalisation programme and therefore should not have been licensed.

Taaibosch said the responsibility for illegal conversions lay with the dealers and converters and made an appeal that taxi operators should not be punished - a way should be found to help them when these cars were removed from roads.

Taxi operators were not aware they were buying an illegally converted vehicle and had paid the full price of the compliant taxi vehicle.

Mahlalela said the department had not established whether dealers had committed fraud in selling the converted panel vans to taxi operators. Remedial measures at the licensing boards would be based on the department''s understanding of system problems.

SA Taxi Finance (SATF) has committed to investing R20 million to ensure that illegal conversions it had financed were upgraded.

Martin Bezuidenhout, the executive director of SATF, said it had financed 210 of the illegal taxis and it would cost between R15 000 and R40 000 to upgrade each.

The group would make 100 loans to taxi operators so they did not lose income while their vehicles were being upgraded.

The group had three centres that would do the upgrades, they would be able to take in eight to 10 vehicles a day, and it would take a week to convert the vehicles.

Ndebele said other financial institutions had also indicated their willingness to help.

Marcel de Klerk, the managing executive of Absa vehicle and asset finance, said the lender had a dedicated filter process before approving finance for taxis and had identified only 17 potentially unsafe taxis it had financed.

The bank was investigating four or five options to resolve the problem "in the best interests of the industry and our customers".

Btu Absa''s exposure to the problem was small as it had between 4 000 and 5 000 taxis on its book.

Eye Witness News 4 August 2009

Transport Minister S'bu Ndebele has vowed to clamp down on the use of converted panel vans as taxis.

The Transport Department found over 1 000 of these vehicles are used to transport commuters.

Ndebele said his department could not and would not allow this practice to continue.

"In the event of a road crash the damage and severity of injury in the case illegal panel vans transporting commuters is far more severe when compared to a minibus taxi."

The minister warned those who drive converted vehicles to hand them over or face the consequences.

"We are actually calling for their withdrawal, withdrawing operating licenses of all affected vehicles and recallinfg thses vehicles with immediate effect."

Ndebele was reluctant to put a timeframe to the removal, saying his department was in constant negotiations with role-players in the taxi industry.

South African Government Information Service 4 August 2009

A very good afternoon and welcome to you all. Today's media briefing is primarily about two issues. The first is the illegal taxi conversions and the second is the National Joint Working Group on Public Transport.

Following recent media reports that illegally converted panel vans which do not meet government's safety standards were being operated as minibus-taxis, we in the Department of Transport, immediately, initiated an investigation into this matter.

We must emphasise that our initial investigations revealed that approximately 1 070 illegally converted panel vans, and not 4 000 as reported by some media, were operating as minibus-taxis for reward. These illegal taxis are being operated in contravention of the National Land Transport Transition Act (NLTTA). These panel vans, which have been converted illegally, are a danger to the community, the nation as well as the commuter, who is our most important client in public transport.

In the event of a road crash, the damage and severity of injury, in the case of these illegal panel vans transporting commuters, is far more severe when compared to a minibus taxi, which complies with the prescribed safety regulations.

As government, we want to re-iterate that one life lost on our roads is one too many. Therefore, unsafe and un-roadworthy vehicles cannot, and will not, be allowed on the roads. In the case of these illegally converted panel vans being operated as minibus-taxis, we are calling for the withdrawal of the Operating Licences and the recall of all affected vehicles with immediate effect.

We are, however, continuing our engagement with the taxi industry and all other stakeholders in this regard. We commend SA Taxi Finance for its commitment towards investing about R20 million to try and rectify the situation with regards to non-compliant taxis it had financed. We will also be meeting with other financial institutions and key vehicle manufacturers to ensure that their vehicles are legal. We also call upon any organisation or individual who may have any information that may assist the Department in its investigation to please come forward with such information.

Our probe includes the following:

• The validity of claims that illegally converted vehicles entered the system through the Operating Licensing Board.
• The number of illegally converted vehicles operating as taxis.
• The number of illegal taxis that have been financed.

The conditions of the Operating Licence are very clear. One of these conditions is that an Operating Licence, for recapitalisation purposes, must be attached to the vehicle and that such vehicle must meet the safety requirements as per the regulations.

We also wish to advise that the Department of Transport, through the National Regulator for Compulsory Specifications (NRCS), produces a Taxi Recapitalisation Compliance List that is published periodically. This is the only legal notice that lists compliant vehicles as well as compliant vehicle manufacturers, importers and builders (MIBs). Our responsibility, as government, is to provide our commuters with safe, effective, reliable, affordable and accessible public transport. Safety is a key priority of the Taxi Recapitalisation Programme and we will, therefore, intensify our efforts on illegal public transport operators and operations. To this end:

We have no moratorium on the application of the law to the letter. Our law enforcement authorities will ensure that if they encounter any illegality on our roads, they deal with it. This includes drunk driving, speeding and any one found driving an un-roadworthy vehicle. Our enforcement drives continues unabated.

Those operating non-compliant public transport vehicles will have to face the consequences of their actions. In this regard, any person found guilty of an offence, be it a government official or member of the public, and will face the full might of the law.

Our enforcement agencies have already pulled numerous illegal vehicles off the road. As investigations continue, more and more of these vehicles will be taken off the road. The SABS will be intensifying its investigation into illegal vehicle conversions, and once the Inspectorate of MIBs (Manufacturers, Importers and Builders) discovers that an MIB is performing such conversions, such MIB will be immediately suspended.

The department will conduct an investigation of all dealers who changed the status of vehicles from panel vans to passenger carrying vehicles. The department will, with immediate effect, block all transactions relating to panel vans.

The National Joint Working Group on Public Transport

With regards to the second issue, the national Joint Working Group on Public Transport (NJWG), as you are all aware, President Jacob Zuma told the taxi industry in April to defer negotiations on the Bus Rapid Transit (BRT) system until after the elections.

During the State of the Nation Address, President Zuma said the Minister of Transport would resume discussions with the industry by 11 June 2009. Indeed, on 11 June 2009 we met over 2 000 representatives of the industry made up of taxi associations and their organised structures nationally. Prior to that, we held fruitful discussions with leaders of the South African National Taxi Council.

On 26 June 2009, we met the leadership of the National Taxi Alliance (NTA) and held similar consultations with provincial departments and affected municipalities. We have now started a "CODESA" of the taxi industry. Our structured engagement focuses on five strategic areas:

1. Implementing the Bus Rapid Transit (BRT) system and other Integrated Public Transport Network (IPTN) projects.
2. Taxi subsidisation and the Taxi Recapitalisation Programme.
3. Legislation, licensing and regulatory issues.
4. Enterprise development.
5. Communication and stakeholder engagement.

Last Thursday (30 July), the NJWG met at Gallagher Estate in Johannesburg with 150 representatives from the taxi industry, primarily representing the BRT-implementing cities. The NJWG has agreed to prioritise the BRT negotiations so that agreement is reached as soon as possible. Whilst finalising the BRT-process, engagement on the other issues will continue so that an interim report is submitted soon and implementation commences by October.

Government is taking this matter very seriously and, therefore, it has received attention from the highest level. We also want to commend the taxi industry for the serious manner in which they have been engaging with us on this issue. Both government and the taxi industry are committed to finding a lasting solution to all outstanding matters.

In this vein, we would like to acknowledge the presence of the taxi industry here today. Their presence indicates a new leaf in our relationship as partners and stakeholders in the transport sector. We are fast unveiling a period where conflict is replaced by negotiations and engagement and where violence is buried and peace dawns. The future we are defining together will be characterised by economic empowerment and inclusion.

In conclusion, we have said that transportation is one of the key determinants of a developed economy. For many years South Africa has been described as a developing country but for us to move to a developed country, transport has an important role to play. Our vision is of an economically developed country in which the transport sector plays a key role. We will not be able to achieve this alone but together with commuters, transport operators and the entire nation.

Working together we can do more!

Business Day 4 August 2009 (The Times, The Citizen, Sunday Times, The Herald, Weekend Post, LegalBrief Today, YFM, Sake24.com, Voice of Cape, Cape Argus)

Operators using illegally converted taxis must report to the transport department for upgrades or face having their operating licences withdrawn, Transport Minister Sibusiso Ndebele said today.

Initial investigations revealed that about 1070 illegally converted panel-vans were operating on South Africa's roads, he told journalists in Pretoria.

"In the case of these illegally converted panel-vans being operated as minibus taxis, we are calling for their withdrawal and withdrawal of their operating licences. . . with immediate effect. "

Ndebele said the licensing board was partly to blame for failing to identify these vehicles sooner.

"The licensing board was not monitoring specifically these VIN [vehicle identification] numbers. We need to tighten the systems in the licensing board. "

He said engagement with the taxi industry would continue and commended SA Taxi Finance, which provides vehicles to the industry, for its commitment of R20 million to help rectify the situation.

The money would be spent on safety upgrades of around 584 vehicles, as well as rolling out 100 loan taxis, said SA Taxi Finance executive director Bonisile Makubalo.

"We want to protect the income of the operators. "

The SA National Taxi Council was also present at the briefing and said it supported the government''s initiative to keep commuters safe.

"We cannot allow, for the benefit of the commuters and the benefit of the taxi industry, to have illegal taxis on our roads," said secretary-general Philip Taaibosch.

However he appealed to the government not to withdraw operations licenses as they had fallen victim to "unscrupulous dealers and converters".

"Taxi operators are not criminals in the sense that they would go to the extent of converting these vehicles when they know they are illegal. "

"Minister, let's also find a way of ensuring the taxi operator does not lose a minute of his business," he said.

Transport deputy director general George Malehlala said any wrongdoing would be identified.

"If there's fraud within the system we need to find out. It could simply be ignorance of the system and the law or fraud. "

Ndebele said upgrading the illegal taxis to meet required safety standards would begin immediately and take about four months.

The National Regulator for Compulsory Specifications would also produce a compliance list of vehicle manufacturers, importers and builders (MIBs).

Should the department find illegal conversion in the market, a MIB would be immediately suspended.

Taaibosch said any taxi operator who was in doubt as to the conversion, legal or not, of his or her taxi, could contact 012-321-5046.

SA Government Information Service 31 July 2009

Transport Minister Sibusiso Ndebele has commended South Africa Taxi Finance for its commitment towards spending about R20 million to repair more than 500 unsafe taxis it had financed.

"We want to commend South Africa Taxi Finance for its commitment towards spending about R20 million to ensure the converted taxis it had financed were modified in order to make them safe and roadworthy. We will also be meeting with other financial institutions and key vehicle manufacturers to ensure that their vehicles are roadworthy. We hope to finalise our investigation into illegally converted vehicles soon following recent media reports that certain taxis did not meet government's safety standards. We want to reiterate that unsafe and unroadworthy vehicles will be removed from the roads.

"The Department of Transport is currently investigating reported incidences of illegally converted vehicles. The condition of the operating licence is that vehicles must meet the safety requirements as per the regulations. To this end, the recently announced national joint working group on public transport will also be dealing with this matter.

"In addition, the South African Bureau of Standards (SABS) will be intensifying its investigation into illegal vehicle conversions and once the inspectorate of Manufacturers, Importers and Builders (MIBs) discovers that an MIB is performing such conversions, such MIB will be immediately suspended.

"Furthermore, the department will conduct an investigation of all dealers who changed the status of vehicles from panel vans to passenger carrying vehicles. The department will, with immediate effect, block all transactions relating to panel vans.

"All banks and financiers are aware of the published safety regulations and the list of compliant vehicles issued by the Department of Transport.

"Enforcement operations on vehicles that have been illegally converted will also be intensified and numerous such vehicles have already been pulled off the road. However, investigations continue and more and more of these vehicles will be taken off the road. Those who are found guilty will face the full might of the law.

"The Department of Transport must categorically state that the taxi recapitalization compliance list that gets published periodically is the only legal notice that outlines compliant vehicles as well as the compliant modifiers that have been certified by the National Regulator for Compulsory Specifications (NRCS).

"The position of the Department of Transport is very clear. The Taxi Recapitalisation Programme (TRP) is a government initiative introduced in the interest of all South Africans the passenger, the operator and all other road users. The primary objective is the safety of all citizens.

"The TRP is an intervention to bring about safe, effective, reliable, affordable and accessible taxi operations by introducing new taxi vehicles designed to undertake public transport functions in the taxi industry arena," said the minister.

Sunday Times 2 August 2009

South African banks held emergency meetings this week after it emerged that they had financed deathtrap taxis, leaving them exposed to toxic taxi debt estimated at more than R600-million.

An analysis of government's eNatis system identified 973 Toyota Quantum panel vans, illegally converted into taxis, which had been financed by the banks after August 2007, when new safety regulations were passed.

However, Lee Dutton, head of the International Vehicle Identification Desk, estimated that there are more than 4000 Quantums on the roads that have been converted into taxis. All are unsafe under current regulations because they do not have rollover bars, and seats are not properly secured to the chassis, which has led to many fatalities already.

Dutton estimated that about 3000 of those vehicles have been financed by SA's banks. Because many banks provided finance of about R200000 per vehicle, this represents potential bad debt of R600-million.

The minister of transport, Sbu Ndebele, confirmed on Friday that "all unsafe and unroadworthy vehicles will be removed from the roads" - ratcheting up the pressure on banks to identify and deal with illegal vehicles on their books.

But the banks' exposure could be far higher than just for the illegal Toyota Quantums. An eNatis analysis last year "red- flagged" 6802 panel vans of all descriptions - including Ivecos and Mercedes Sprinter vans - that had been converted into taxis since August 2007.

Assuming all of these were financed by the banks at R200000 each, these vehicles represent an initial exposure of more than R1. 3- billion. Experts estimate that up to 40% of the 6802 vehicles may contravene safety rules.

While part of this debt has been repaid to the banks, some taxi associations say they intend to approach the National Credit Regulator to have the initial sales reversed entirely.

Hennie de Beer, the former head of taxi finance at Absa, has assembled a legal team to recover losses incurred by taxi owners who choose - or are forced to - stop transporting passengers in their illegal Quantums.

"We want the taxi owner to be put in the position he was before," he says. "At the very least this means the bank will have to refund their deposits plus instalments to date, plus daily loss of income. The longer banks take to react to this very serious problem, the more it will cost them. "

But SA Taxi Finance chief executive Martin Bezuidenhout said: "We don't believe they will have any success in proving that. And the problem of those taxis' safety features can be remedied. "

This week, the financiers all proposed different solutions.

SA Taxi Finance, which has 584 of the converted Toyota Quantum panel vans on its books, said it would spend R20-million to make the vehicles "structurally compliant" and return them to the roads. Bezuidenhout says he will provide 100 vehicles to taxi owners to use while their vehicles are being "converted".

But this involves "converting" illegal taxis once again - something which is expressly forbidden by law. Government has confirmed that there are no manufacturers, importers and builders in SA currently approved to convert a Quantum panel van into a commercial taxi.

Dutton agrees this is not a viable solution. "You can't simply fix this, because it would be another illegal conversion. You need government to pass a special regulation specifically to fix the Toyota Quantum issue, allowing these vehicles to be altered to become safe," he says.

Marcel de Klerk, Absa's head of vehicle finance, says his bank is still deciding what action to take on 28 illegally converted panel vans financed by Absa. "We've got three or four actions we can take, because we want to get out of those 28 (contracts). Even if we have to take that taxi, sell it for whatever we can get, and (finance) another taxi for that customer," he says.

KwaZulu-Natal's Department of Transport has already opened criminal cases against an Umgeni-based company that converted panel vans into taxis.

It gets worse. This week Business Times established that many taxis were financed using false operating permits, or short-term charter permits. This is a risk because taxi owners, and banks who lent them money, face sudden losses because the vehicles can be pulled off the road at any time. The taxi owners are also fuelling taxi violence as established operators fight for turf with illegal newcomers.

Last year 100000 "face value documents", which can be used to print false licence disks, were stolen from Alberton's licensing department. Dutton estimates that nearly one million have been stolen in recent years and are in circulation.

"When we became aware of this, we got a list of the numbers of these stolen documents from the Department of Transport. When a bank gets a finance application, it checks if the document it has was part of the stolen batch," he said.

Short-term charter permits only allow taxis to operate on a specified route and for a specified time (typically a few weeks). But banks typically finance taxis over 48-60 months, so the charter permit does not provide proof that the taxi operator will be able to service the debt over that time.

Nedbank's Johann de Beer describes this as "very risky". "You'd be careful not to lend based on that. You need a viable route for the duration of the (financing) contract to ensure the taxi owner can repay you," he said.

Hennie de Beer said charter permits represented a nasty chunk of bad debt for banks.

"An investigation in January by the Cape Town permit board showed that between 3000 and 4000 charter permits were issued in the last quarter of 2008. And we have proof that a lot of these permits were used to obtain taxi finance," he said.

None of the banks admitted they had financed vehicles using invalid permits. But Business Times is in possession of an affidavit from one taxi driver, Ayanda Tulumani, who says he was sold an illegal permit for R1500 by a vehicle dealership, which he never got. SA Taxi Finance then financed a R250000 taxi for him.

Other documents in our possession show that finance was granted based on charter permits. A temporary operating licence granted to Vuyani Nziweni in April demonstrates that Toyotas were financed using a "temporary operating licence" that was meant to apply only from April 9 to April 22.

A debt counsellor's analysis seen by Business Times of 500 clients shows 48 had their taxis financed without valid permits.

With Ndebele now focusing on pulling unsafe or illegal taxis off the roads, banks could face bigger write-offs than they thought.

Nedbank, for one, acknowledges the risk. "Could there be toxic taxi debt? I suppose there could, if the (taxi industry) isn't able to pay its accounts," said Johann de Beer.

This risk will increase if taxi owners cannot generate income because their vehicles have been pulled off the road.

Pretoria News 30 July 2009

SA Taxi Finance, a leading finance provider to the taxi industry, has launched a new safety initiative designed to rid the roads of unsafe converted panel vans.

The company said it would invest about R20 million to ensure that any converted panel vans it had financed would be inspected, made structurally compliant and returned to the roads.

It would also make 100 vehicles available at its own expense, to be used by affected taxi operators while their non-compliant vehicles were upgraded.

"As a leader in the financing of taxis across South Africa, we are taking a lead in lifting safety standards for the 15 million commuters who rely on taxis every day," said SA Taxi Finance chief executive Martin Bezuidenhout.

"We are making contact with all 584 operators this week and expect that the process will be completed within four months, following agreement with the authorities. "

Inspections would be staggered to ensure operators who needed a loan vehicle received one.

In the last quarter of 2007, the government introduced new safety specifications, which required all new taxis to have seat belts and roll-over protection.

The specifications stipulated Toyota vans should be restricted to a maximum of 14 seats with seats fixed to the chassis, not bolted or welded to the frame.

An SA Taxi Finance audit established that of almost 20 000 vehicles it had financed, 584 - less than 3 percent - were converted panel vans, of which 374 were compliant and legal and 210 legal but not compliant with the required safety standards

AutoWorld 30 July 2009

Safety on South African roads in general and all aspects closely related to public transportation are currently very topical. Following the valuations and findings of this year's FIFA Confederations Cup, which show an immediate necessity to improve all modes of public transport services to ensure a successful 2010 FIFA World Cup, Mercedes-Benz would like to reiterate that safety is paramount to all its products and that the brand takes all elements of safety extremely seriously.

"The Mercedes-Benz Sprinter and the various conversions undertaken by recommended Mercedes-Benz body builders, comply fully with the latest regulations and standards issued by the National Regulator for Compulsory Standards (NRCS/SABS)," says Nicolai Berger, Divisional Manager Vans, Mercedes-Benz Commercial Vehicles.

 "The latest example is the newly introduced (mandatory) roof escape hatch which has to be fitted to all TRP (taxi recapitalisation programme) taxi conversions registered as of 1 July 2009 onwards. The Mercedes-Benz Sprinter INKANYEZI taxi conversion comes with this feature as standard," adds Berger.

The Sprinter provides an unbeatably high level of safety and comfort. Featuring numerous innovations, the new Sprinter is achieving new milestones in the van world. As well as outstanding safety and supreme ease of use, one of its main strengths is its sheer variety and versatility. The Sprinter is available with a choice of wheelbase lengths, heights and types of roof. With a permitted GVM of between 3.5 t and 5.0 t, the new Sprinter covers all the major segments in its class. As a tipper or pickup, with a single cab or crewcab, the Sprinter chassis-cab offers a solution for virtually every van application in the construction sector.

The Sprinter's standard equipment also represents a benchmark in its class: in addition to many other details, every model now features power windows and central locking with remote control, a driver airbag, a six-speed manual transmission, wide-angle mirrors and Adaptive ESP®. It has now been further augmented by adaptive brake lights that start flashing when the vehicle is braked in an emergency. Instead of simply re­maining lit when braking, the brake lights flash for the duration of the emergency braking manoeuvre. An option for vehicles with a manual transmission is start-off assist: it prevents the vehicle from rolling backwards unintentionally as the driver switches from the brake pedal to the accelerator pedal when performing a hill start. During the course of the development work throughout the last years, Mercedes-Benz also further improved the acknowledged, exemplary safety level of the Sprinter.

Mercedes-Benz South Africa established a very close working relationship to it's recommended body-builders during the last number of years. The highly qualified and recommended partners supply bodies and conversions. These companies are evaluated by specialists from Daimler AG using a standardised and transparent process, looking closely at aspects such as quality management, development, sales and service.

Companies who successfully come through this evaluation process have their products and production descriptions included on a recommended body-building list, which is made available to every Mercedes-Benz dealer and salesperson, enabling customers to receive the very best advice. In this model, sales, service and product liability for the bodies and conversions are the responsibility of the recommended body-builder, however, the customer can rely on receiving a high-quality solution that is fully in line with everything one would normally expect of a Mercedes-Benz van.

"The Sprinter INKANYEZI (meaning the Star) is a vehicle with a complete package geared towards the needs of the taxi customers. This specialized package includes in-house financing available from Mercedes-Benz Financial Services, preferential insurance rates and full aftersales and service support through our extensive dealer network," concludes Berger.

Mercedes-Benz has an extensive dealer network - 42 dealers nationwide - available to provide the necessary support to the taxi industry. Many of the dealers in the metropolitan areas offer flexible servicing hours and have dedicated taxi service bays in their workshops.

The South African Taxi industry has long been asking for reliable and quality vehicles to transport their many customers over long and short distances. They have also demanded affordable parts pricing, flexible servicing and finance availability.

The Sprinter Inkanyezi is available on the newer Sprinter NCV 3 range on the following models, Sprinter 309, Sprinter 315 and Sprinter 518 as well as the tried and tested Sprinter T1N 308 and Sprinter T1N 416. The Sprinter Inkanyezi (meaning "the Star") has been developed in conjunction with all Mercedes-Benz recommended bodybuilders, ensuring compliance with the correct legislation and Mercedes-Benz quality and safety standards. It is available as a 15 seater commuter (Sprinter 308, Sprinter 309 and Sprinter 315) for the operators concentrating on short to medium distance traveling and a 21 seater (Sprinter 518 and Sprinter 416) for those operators traveling the longer distances.

With the complete vehicle, Mercedes-Benz also has the complete package. With in house financing available from Mercedes-Benz Financial Services, our dealers are able to tailor-make affordable financial packages for all taxi customers. We have also negotiated preferential insurance rates across the country to cut our customers costs dramatically.

From an Aftersales perspective, Mercedes-Benz has an extensive dealer network - 42 dealers nationwide - to provide the necessary support to our customers. Many of our dealers offer flexible servicing hours; with a number in the larger metropolitan areas having dedicated taxi service bays in their workshop. All this equates to the quickest possible lead time for services and repairs.

To further assist the taxi market, MBSA has discounted parts pricing on certain wear and tear items for general service and running costs. This means that our taxi customers can now get genuine Mercedes-Benz parts at very attractive prices to minimize running costs. We have also increased our vehicle warranty on our Sprinter NCV3 range to 2years/ unlimited kilometers and a12 year/unlimited anti-corrosion warranty. This gives more peace of mind to all our taxi operators.

The Sprinter Inkanyezi is the vehicle of choice for the SA taxi industry.

The Mercedes-Benz Sprinter passed the stringent South African Bureau of Standards (SABS) regulated rollover tests with flying colours as far back as 2004. More recently in July 2007, the new-generation Sprinter NCV3 model passed the necessary roll-over test.

The SABS 1563 tests are carried out to ensure that passengers are protected in the event of a rollover accident, which according to statistics is the highest cause of fatalities and serious injuries in the country's roads.

The objective of these tests was to establish if the Sprinter complied with the rollover protection SABS 1563 specification, and applies to single-decked vehicles built for the carriage of more than 16 passengers.

"Passenger safety is of paramount importance to Mercedes-Benz, and the Sprinter's strong superstructure is designed to ensure this safety," said Nicolai Berger, Divisional Manager, Mercedes-Benz Vans.

As part of the process, a 22-seater bus was fitted with an overhead parcel storage area and half sliding windows in the passenger compartment - representing the maximum allowable carrying capacity Sprinter bus.

The test instruments consist of the following:

• 1 X 800mm high tilting platform (made to comply with SABS 1563)
• 1 X forklift
• 1 X tape measure
• 3 X video cameras
• 3 X still cameras
•  3 X templates to mark off the residual space (manufactures and fitted to comply with SABS 1563)

The R66 bus rollover rig consists of a tilting platform 0.8m above the ground. The rig is used to carry out full-scale bus rollover tests, which conform to the SABS Regulation 66. Regulation 66 is a required standard for all newly registered buses in the country.

The rig can cater for vehicles with a wheelbase up to 8m and has been designed for vehicle weights up to 15 tonnes.

The tilting of the platform is done using a crane, which ensures a well-controlled and smooth motion. The coach is then free to topple off the platform once it's centre of gravity over-balances the pivot position.

SABS can also prepare the residual space templates and any other measuring systems required for R66 Approval. Three video cameras captured the impact sequences can be photographed from the front, rear and the overall proceedings. Below is a step-by=step process:

• A fully finished Sprinter bus was used for the test - all doors and windows locked
• Tyres were inflated to its specified pressures and all shock absorbers were standard - SABS 1563
• The battery was replaced with an equivalent mass
• The impact area was a solid concrete floor
• The forklift then slowly tilted the platform until the vehicle started rolling over on its own. After the vehicle completed its roll, it was inspected to observe if any part of the body penetrated the marked off residual space.

Conclusion: No displaced part of the vehicle protruded into the residual space. The Sprinter therefore complies with SABS 1563.

Daily News 30 July 2009 (Isolezwe,)

SA Taxi Finance (SATF), a leading finance provider to the taxi industry, has launched a new safety initiative designed to eliminate unsafe converted panel vans from the roads.

SATF will invest about R20 million to ensure that taxis it financed, which were converted panel vans, would be inspected, made structurally compliant, and returned to the roads, the company said yesterday.

It would also make 100 vehicles available at its own expense for use by those taxi operators affected, while their non-compliant vehicles were upgraded.

"As a leader in the financing of taxis across South Africa, we are taking a lead in lifting safety standards for the 15 million commuters who rely on taxis every day," SATF CEO, Martin Bezuidenhout, said.

"This initiative ensures that all converted panel vans financed by SATF will be inspected and rectified at our expense.

"Operators will be given a loan vehicle to enable them to continue to work while their vehicle is being upgraded.

"We are making contact with all 584 operators this week and expect that the process will be completed within four months, following agreement with the authorities," he said.

SAFM 29 July 2009   

Presenter: Taxi commuters continue to risk their lives by having to be ferried in unsafe taxis - taxis that do not meet the government safety standard. It is reported that 4 000 illegally converted taxis were operating on South African roads and some may have been used to transport FIFA Confederations Cup fans to stadiums last month despite their questionable safety standards. On Monday we spoke to acting CEO of the National Regulator for Compulsory Specifications, Moses Moeletsi. And he told us that his organisation had begun clamping down on some of the panel van converters or dealers. He joins us on the line. Good morning. Apparently you've been threatened with court action by some in the taxi industry. Is that true?

Moses Moeletsi: No, its not us who are threatened. I think this is running into positive things you know. What is happening is that the taxi owners are suing some of those motor dealers from which they bought those vehicles and they have copied us and I suspect what is going to happen is that the motor dealers now will have to come to the regulator and reveal these body builders.

Presenter: Give me a sense of the companies that are being sued. How many people in the taxi industry have come to you and said we're going to sue these companies?

Moses Moeletsi: I'm not talking on behalf of their lawyers but we saw just one individual company and two letters of demand from four taxis.

Presenter: Where is this company based? Is it against the same company or is it several companies?

Moses Moeletsi: Its only one motor dealer who has been selling these unsafe vehicles.

Presenter: Where are they based?

Moses Moeletsi: They are around Johannesburg, around Gauteng.

Presenter: Okay and you don't have a sense of how many vehicles they sold?

Moses Moeletsi: At this stage we don't. The most important thing here is, the motor dealers must come clean and divulge who are these individuals who are building these vehicles so that we can deal with them. Its easy when they are registered because they'll be deregistered by the Department of Transport. Then they will seize operating in that business. But if they are backyard converters, then the law must take its course.

Presenter: But are these above-board dealers who sold these converted vehicles?

Moses Moeletsi: Yes those are above-board dealers because they are financed by the bank. The banks wouldn't deal with dealers who are not above board.

Presenter: So they sold converted vehicles.

Moses Moeletsi: Not converted vehicles. They sold panel vans. To all intents and purposes, to the regulator those are panel vans. They are not passenger vehicles regardless of whether they are converted or not.

Presenter: What I don't understand is, what are the taxi operators suing the dealers for? For selling them panel vans?

Moses Moeletsi: Yes, for selling them - you see, again there are some fraudulent activities. If you go to buy a passenger vehicle and then you end up in possession of a panel van, some kind of a fraud has been committed there. I believe that the taxi owners have the law on their side to return those vehicles because the licensing department has registered those vehicles as panel vans, not as passenger vehicles.

Presenter: Lets recap now. What do you think needs to happen in the industry to put a stop to this practice of selling converted panel vans to taxi operators that then get used on the roads and do not meet the safety standards that are required?

Moses Moeletsi: Lets start first with the bankers. The banks must not lend any money to any taxi person without the necessary certificate from the regulator declaring that vehicle a taxi, in the first place. The second thing is that the Department of Transport should never allow these vehicles to operate as taxis when they have been registered as panel vans. The third issue is we need to strengthen the law not to allow any further conversion without proper registration with the authorities.

Presenter: Who needs to be prosecuted here?

Moses Moeletsi: I would assume that those who licensed those vehicles as passenger vehicles, when it was clear that they were panel vans. They need to be prosecuted.

Presenter: Now, for people who do not know whether their vehicles are panel vans that have been converted to taxis, where should they go - for those who still want to share more information with you? Where should they get in touch with you?

Moses Moeletsi: In fact quickly, if it is a 16-seater, it is a panel van. So immediately they can return it to their motor dealer. But secondly, they may approach the Department of Transport and the regulator. The regulator will assist them.

Presenter: Where should they get in touch with you?

Moses Moeletsi: 012 428 6069.

Presenter: Thanks very much for talking to us this morning. Moses Moeletsi is the acting CEO of the National Regulator for Compulsory Specifications

eNews Channel 29 July 2009

Presenter: The SA Taxi Finance has launched a new safety initiative designed to eliminate unsafe converted panel vans from the road. The organisation is a leading finance provider to the taxi industry. It will invest abut R20 million to ensure that taxis it financed, which were converted panel vans, would be inspected, made structurally compliant and returned to the roads. Joining us now is Martin Bezuidenhout, the CEO of SA Taxi Finance. Good afternoon and thank you very much for your time. This whole process of conversion of the taxi industry has been going on for quite some time. Your action, that you are launching this new initiative, is it a sign that things have been taking too long and they haven't really worked out properly and you are now grabbing it and saying, guys lets fix this?

Martin Bezuidenhout: That's exactly the case. I think the conversion of the panel vans has been in the news for the last few months. Its grabbed headlines. The issue is unfortunately narrowly focused around the legality, trying to apportion blame and find out what went wrong in the system. Our view is completely different. We've got commuters out there who deserve to be transported safely and in this regard, even though we represent a very small portion of these panel vans, we're taking the lead and we're saying all the panel vans that are in our book, legal or not, we are going to ensure that they are converted to make sure that they are safe.

Presenter: Maybe, but hopefully sending the right message - have you been communicating with the taxi owners and what has their response been to your new effort?

Martin Bezuidenhout: We haven't communicated with taxi owners. The process is to see this conversion take place over four months. We're getting finance sign-off     from the Department of Transport and the National Regulator for safety standards which will allow us to implement this plan.

Presenter: Okay. If I have a taxi and I'm financed by you, how is this going to work for me practically when I check over my car - if it needs to be converted, are you going to give me a loan vehicle? How re you going to make it work?

Martin Bezuidenhout: What we do is, we know which of our operators are at risk. Those operators have been contacted by SMS. We'll contact them telephonically and we'll advise them when to come through to some of the testing centres around the country. While the vehicles are in, we'll make available a loan vehicle for them to use so they can continue to generate income.

Presenter: You do have other similar colleagues in your industry who do what you do - who finance taxis. Are you aware or not if they're doing similar things because you represent a smaller portion of operators as you said?

Martin Bezuidenhout: As SA Taxi Finance we thought, given that we have a [Unclear] financing institution in the taxi industry, we thought that we needed to a stand. This issue has been debated for nine months already. We thought we needed to take a stand for certainly the vehicles that are on our books. We'll make sure that they're safe and hopefully others will follow suit.

Presenter: When are you starting this new initiative?

Martin Bezuidenhout: We've already started. We've already contacted our clients and we're in the process of rolling it out.

Presenter: We wish you well and thank you very much for coming through. That's Martin Bezuidenhout, the CEO of SA Taxi Finance.

The Times 31 July 2009 (Sunday Times, Pretoria News, The Witness, The Post, Mail & Guardian)

The SA National Taxi Council is considering taking criminal and civil action against dealers who sell unsafe converted taxis, a spokesman said on Friday.

Secretary general Philip Taaibosch said many members had found themselves in a difficult situation after innocently buying vehicles from unscrupulous dealers who had illegally converted them.

"To-date, all the involved parties have blamed each other rather than looking for a solution," he said.

He said SA Taxi Finance had agreed to upgrade converted taxis they had financed at their own cost, even though it was not their mistake.

The taxis will be upgraded to meet the new taxi recapitalisation programme safety specification.

SA Taxi Finance will invest about R20 million to ensure the taxis it had financed - which were converted panel vans - would be inspected, made structurally compliant, and returned to the roads.

Transport Minister Sbusiso Ndebele said his department would be meeting other financial institutions and key vehicle manufacturers to ensure their vehicles were roadworthy.

"We hope to finalise our investigation into illegally converted vehicles soon following recent [media] reports that certain taxis did not meet government's safety standards. . . unsafe and unroadworthy vehicles will be removed from the roads. "

The taxi recapitalisation programme is a government initiative aimed at making taxis safe on the road.

Business Day 30 July 2009 (AllAfrica.com)

SA TAXI Finance, a financial group that provides taxi loans, said yesterday it was preparing to repair more than 500 unsafe taxis it had financed.

SA Taxi CEO Martin Bezuidenhout said the company planned to spend about R20m to ensure the converted taxis it had financed were modified, making them "structurally compliant and returned to the roads to continue servicing the needs of commuters".

This comes after the Sunday Times reported that more than 4000 taxis that did not meet the government's safety standards were operating under the noses of banks, car dealers and the Department of Transport.

The lack of resolution of the matter by stakeholders, including the government, had prompted SA Taxi to launch its safety initiative, Bezuidenhout said. SA Taxi was contacting 584 taxi operators this week and expected to finish the process within four months, following agreement with the authorities.

Ranthoko Rakgoale, CEO of the Road Traffic Management Corporation, said yesterday his agency was bringing all relevant authorities, including the South African Bureau of Standards, together to ascertain whether there were any loopholes in the legislation that might have contributed to the illegal taxi conversion.

The agency would take action once it knew where the gaps were, he said.

Marcel de Klerk, managing executive of Absa 's vehicle and asset finance unit, said the bank, which has a total taxi loan book close to R1bn, had identified potential risk amounting to less than R4m on its books.

"Some implicated vehicles may have been converted after Absa had financed them without the bank knowing about these," he said. "We are investigating this. "

Standard Bank confirmed yesterday it had financed 40 illegally converted taxis.

Other banks, including Nedbank and Wesbank, are believed to have financed converted taxis since August 2007.

Logan Maistry, spokesman for Transport Minister Sbu Ndebele, said the minister had said he would make it a priority to remove unsafe and unroadworthy vehicles from the road.

To this end, Maistry said, the matter was being investigated by the department. The recently formed National Joint Working Group on Public Transport would be dealing with the issue.
Bezuidenhout said his company was making 100 vehicles available at its own expense for use by taxi operators while their noncompliant vehicles were being upgraded.

SA Taxi was taking a lead in lifting safety standards for the 15-million commuters who relied on taxis every day, he said.

eNews Channel 29 July 2009, (Kaya FM, Algoa FM, Umhlobo Wenene, SAfm, 5FM, Xitsonga News, Mtero FM, ECR x3, Gagasi 99.5 FM, Thobela FM x2)

News Report on R20 million investment

Presenter: The South African Taxi Finance has launched a new safety initiative designed to eliminate unsafe penal vans from the roads. The Organizations Martin Bezuidenhout says this is in an effort to lift safety standards. He says the Organization will invest about 20 Million Rands.

Int. Organization: Martin Bezuidenhout.  - The majority of these taxis are entitled to be on the road, whereas a small number of them are potentially illegal. However, we are thinking of getting to the bottom of it, what we are saying is it's the safety issue, let's go back and fix all the panel vans & let's bring them up to the right levels of safety so that 50 Million commuters can just ride in taxis without any fear that they are unsafe.

Citizen 29 July 2009

SA Taxi Finance, a leading finance provider to the taxi industry, has launched a new safety initiative designed to eliminate unsafe converted panel vans from the roads.

SA Taxi will invest about R20 million to ensure that taxis it financed, which were converted panel vans, would be inspected, made structurally compliant, and returned to the roads, the company said in a statement on Wednesday. It would also make 100 vehicles available at its own expense for use by those Taxi operators affected, while their non-compliant vehicles were upgraded. "As a leader in the financing of taxis across South Africa, we are taking a lead in lifting safety standards for the 15 million commuters who rely on taxis every day," SA Taxi CEO Martin Bezuidenhout said.
"This initiative ensures that all converted panel vans financed by SA Taxi will be inspected and rectified at our expense. Operators will be given a loan vehicle to enable them to continue to work while their vehicle is being upgraded. "We are making contact with all 584 operators this week and expect that the process will be completed within four months, following agreement with the authorities. " Inspections would be staggered to ensure operators that needed a loan vehicle received one.

Converting panel vans in South Africa began in the early 2000's, in response to a shortage of vehicles relative to demand and the fact that once converted, they could accommodate two extra seats, making them commercially more attractive. In the last quarter of 2007, the government introduced a new, higher level of safety specifications, which required all new taxis to have seat belts and roll-over protection. The new specifications also stipulated that Toyota vans should be restricted to a maximum of 14 seats with the seats fixed to the chassis, instead of merely bolted or welded onto the frame, as was the case with some of them. Converted vehicles were registered as taxis on government's eNatis system after being passed by the SA Bureau of Standards and government testing stations, whose duty it was to establish that these vehicles were adequately converted. An audit commissioned by SA Taxi established that of the almost 20,000 vehicles financed by SA Taxi, 584 -- less than three percent -- were converted panel vans of which 374 were compliant and legal in every respect and 210 legal, but not complaint with the required safety standards. In terms of current specifications, all 584 were considered unsafe.

eNews Channel 28 july 2009 interview with Martin 7'19"

Eye Witness News 27 July 2009

The Democratic Alliance has made a statement saying government should shoulder the blame for allowing thousands of illegally converted minibuses to operate as taxis.

The Sunday Times reported on Sunday that over 4 000 Toyota Quantam panel vans have been altered making them extremely unsafe.

Extra seats have been bolted onto the floor of adjusted taxis which also have no rear roll bar.

While the DA is demanding that government take responsibility the Transport Department's Thami Ngidi said it would ensure that the vehicles are removed from the road.

"The minister is going to apprise himself of the reasons why we got to this point. It's an issue that is going to be discussed together with the taxi industry and all the other stake holders including commuters," Ngidi said.

The Toyota Quantams were bought under government's Taxi Recapitalisation Programme while a fleet of them were used to ferry passengers during the recent FIFA Confederations Cup Tournament.

IOL 26 July 2009 (Also appeared in The Citizen)

The National Taxi Alliance on Sunday distanced itself from reports that it knows about some 4 000 Toyota Quantum panel vans having been illegally converted to taxis.

The alliance was only involved in the production and endorsement of the approved Toyota Quantum semi-luxury minibus and the Ses'fikile model, chairman Sicelo Mabaso said.

He was responding to a Sunday Times report that some 4 000 illegally converted taxis were operating on South African roads and had even been used to ferry Confederations Cup soccer fans to stadiums last month, despite their questionable safety standards.

Some of the taxis were found to have their seats bolted onto thin steel floors instead of onto the chassis. Windows were cut into the van, weakening the vehicle's structure. They also did not have the required rear roll bar.

An impact would crumple the vehicle's flat roof and rip seats loose, hurling passengers to their deaths, the newspaper reported.

The Gauteng Taxi Council's Michael Yende was quoted in the report as saying: "We will continue to take the risk and work with these taxis until we're physically forced to stop."

Mabaso explained that there were three types of Quantums, which included the semi-luxury, Ses'fikile and flat-roof minibus. He said he was not sure if the latter met safety regulations.

"The other two were approved by the department of transport and the SABS [South African Bureau of Standards]..."

He said the alliance was involved in talks that preceded their production.

Mabaso however said there were members of the alliance who owned the converted flat-roof Quantums who might not be protected against losses that might arise from the vehicles being called off the roads.

"These vehicles have certificates of fitness and buyers were supposed to have been informed of their illegality [prior to buying them], if they are illegal.

"Though I cannot confirm that indeed the flat-roofs are illegal, I have been asking myself for a while why Toyota did not launch them properly like the other Quantums."

According to SA Taxi Finance chief executive Martin Bezuidenhout, whose company handled 584 converted taxis between 2005 and 2008, the vehicles were legal from 2005 until the last quarter of 2007, when regulations came into force designating them as illegal.

"In October 2008 we recognised that there was a problem in that there were issues in licensing the vehicles.

"We conducted our own investigation in partnership with our vehicle identification desk and found that legal documents only stated that they were recapitalisation taxis and nothing about being converted panel vans."

However Bezuidenhout said due to the taxis being legal between 2005 and 2008, there were currently some that were legal and only a portion were not.

"The legal documentation is the problem, because it does not state that the taxis were converted," he said. This made it difficult to identify illegally converted taxis on the government system.

Bezuidenhout said the 4000 converted taxis that were reportedly illegal merely needed to be made safe.

Thousands of South Africans used the taxis daily. There were also concerns about the safety of tourists during the 2010 Soccer World Cup.

"We became aware of the problem in October 2008 and approached government with some proposals, and even though they have intervened we are now in July and the intervention is not speedy enough," said Bezuidenhout.

The Democratic Alliance called on the government to take responsibility by removing the vehicles from the roads and paying compensation costs.

"The department of transport needs to shoulder the blame for reports of 4 000 Toyota Quantum panel vans being converted into taxis without meeting roadworthiness regulations," it said in a statement.

"It appears that despite being aware of the problem all along, the department has taken no corrective steps.

"The compensatory costs would be far cheaper than the lives that may be lost and the litigation that may follow if these vehicles are not removed from our roads."

The transport department was not available to comment.

The Sunday Times 25 July 2009

More than 4000 deathtrap taxis - some of which have already caused grisly deaths - have been let loose on South Africa's roads by banks, car dealers and the Department of Transport.

The Sunday Times has established that about 4000 illegally converted Toyota Quantum panel vans have been operating as taxis, although they do not meet the government's safety standards.

Seats are bolted onto the paper-thin steel floor instead of being fixed to the chassis, windows cut into the van weaken the structure and there is no rear roll bar. Roofs crumple on impact and seats rip loose, hurling passengers to their deaths, according to a notice sent to banks last year by private vehicle investigation firm International Vehicle Identification Desk (Ivid).

"Even in the smallest crash, passengers' legs break like twigs," said a department official who did not want to be named. "We have 4000 time bombs driving around, costing lives, and nobody is doing a thing about it."

Some of these vehicles - many of which have been involved in serious accidents with high fatalities, including six children on one occasion - were even officially accredited to transport tourists during the recent Fifa Confederations Cup. And they could even be in use during the World Cup next year.

"We will continue to take the risk and work with these taxis, unless we're physically forced to stop," says Michael Yende of the Gauteng Taxi Council.

"We could have transported many tourists to the Confed games with these taxis. We just wouldn't know," said William Thembe, chairman of the Alexandra Taxi Association.

Now minister of transport Sbu Ndebele has vowed to make it a priority to pull these unsafe vehicles off the road.

Branding it a "concern", Ndebele was alarmed that the vehicles had been used to ferry foreigners during the Confederations Cup. He said this must not be allowed to happen at next year's tournament.

"We don't want to hear of people dying in taxis getting to a match, particularly if we know those vehicles are not suitable."

The illegally converted panel vans are estimated to ferry up to 400000 passengers a day across South Africa.

The country's banks, the department, roadworthy agencies, Bureau of Standards and car dealers have been blaming each other for indifference, negligence or incompetence.

The Quantums were bought under the government's taxi recapitalisation programme, which aimed to improve the safety of the 180000 taxis carrying 12 million people every day.

The banks, including Absa, Nedbank, Standard Bank and Wesbank, as well as vehicle industry credit provider SA Taxi Finance, have financed 973 converted Quantums used as taxis since August 2007, which is when regulations came into force designating these vehicles "illegal", according to an analysis of the government's vehicle database, eNatis.

The rest were either paid for in cash or financed by the banks before August 2007. eNatis confirmed there were more than 4000 of these converted Toyota Quantum panel vans operating as taxis on SA's roads.

The banks have admitted to the Sunday Times that they had more than 700 of these vehicles on their books, at an estimated finance value of R140-million.

SA Taxi Finance said it had 584 on its books, Wesbank and Absa "less than 50", Standard Bank 40, and Nedbank only three. Toyota Financial Services has not quantified its exposure.

Taxi owners were lured by dealers into buying Quantum Panel Vans from 2005 because they are up to R30000 cheaper and had more seats than the Toyota Quantum Sesfikile, the vehicle legally mandated to operate as a taxi.

The problem was flagged in a 2005 memo from Toyota, which said illegal conversions must not happen because it placed passengers at risk of "death or injury" and the company "in a situation where the client could sue us".

Toyota last week launched another investigation into illegal conversions of panel vans after fresh allegations surfaced of dealers supplying vans for conversion, Toyota spokesman Ferdi de Vos confirmed this week.

Absa has now decided to treat every deal as fraudulent. "We will either go after the customer, the dealer or the person who converted that taxi," said the bank's head of vehicle finance, Marcel de Klerk.

But a letter sent in February 2008 by the department's Kuben Pillay to the taxi financing committee, which included all the banks, suggests that banks will have to share liability. It says the government was alerted that banks were "financing vehicles that were not compliant to the September 2006 regulations". It warns: "Financiers would be held accountable for financing non-compliant vehicles despite being aware of the requirements."

Alarmingly, authorities have done little more than pass the buck. Though some vehicles have been pulled off the roads by police, there appears little concerted effort to do this.

Documents in the Sunday Times's possession show the issue was repeatedly raised by the department's vehicle technical committee, with the regulatory arm of the SABS coming under fire for failing to conduct regular inspection of companies licensed to modify vehicles, as they are required to do by law.

Roadworthy centres, which provided certificates of fitness to these vehicles, were also blamed.

Insiders in the department said illegal conversions had been on the committee's agenda at every quarterly meeting for more than two years, including last week.

"Everybody is trying to blame everyone else," said an official, who attended the meeting but did not want to be named.

"No one wants to take responsibility."

Bafana Mkwebane, the deputy director-general of transport who chairs the committee, declined to confirm this. "No official will talk to the media about this," he said.

Yende blamed the banks for the problem. "The banks require a taxi permit, so they knew they were financing taxis. We have fallen into a trap because the banks didn't raise any objections to financing these vehicles. The banks just look to see if you are creditworthy. They just want sales," he said.

James Chapman, who runs Santaco Trading - essentially the business arm of the SA National Taxi Council - agreed: "Banks may have been negligent to have allowed these vehicles to have ended up on their books."

But SA Taxi Finance CEO Martin Bezuidenhout laid the blame squarely on the government. "We as financiers saw documents that were legitimate, and these vehicles were registered by the government as taxis. It's unacceptable that their systems didn't identify these vehicles." Bezuidenhout said he was first informed in October 2008 that SA Taxi Finance had financed these vehicles "and we immediately stopped financing new vehicles that fell into this category".

Wesbank head of sales and marketing Chris de Kock said: "We expect the regulatory authorities (to) inspect the vehicle before a taxi operating permit is issued, or before it is registered as a taxi."

Absa's De Klerk said the VIN number - a registration number on the government system - clearly showed that a vehicle was a panel van, so Absa would not have financed these vans as taxis.

Johann de Beer, head of taxi finance at Nedbank, confirmed that the VIN number clearly showed which vehicles were Toyota panel vans. He said banks did not have too many options once they had financed these vehicles, other than "trying to rectify it".

"If these vehicles slip through, sure, I suppose we're responsible. Can (authorities) do something to us? Probably they can, because the responsibility is on us to ensure the vehicles we finance are authorised and legal," he said.

Standard Bank's Patrice de Marigny said: "These vehicles came to us through the franchise dealer network", adding that those responsible for converting the vehicles illegally "should be in jail".

Lee Dutton, who heads Ivid, agreed that the primary culprits are the conversion shops and dealers. "These are the guys who knew that what they were doing was illegal, but who knew they could make a quick buck by converting these vehicles and selling them as taxis," he said.

But with everyone decrying responsibility, passengers involved in accidents may find themselves unable to claim from insurance.

Insurance company Clarendon provides insurance for about 65000 taxis - about 80% of the insured taxi market. But CEO Louis Fivaz said when a converted panel van was involved in an accident "we might not pay out" for either the vehicle or passenger liability.

Fivaz said this was especially if the "conversion to an illegal vehicle contributes to the loss".

Meanwhile, the d epartment was investigating and promised to take action "against all concerned", said spokesman Sam Monareng.

The SABS was also investigating van converter companies and would suspend any found doing so illegally, he added.

Responding to reports that the vehicles had been used during the Confederations Cup, local organising committee spokesman Jermaine Craig said: "It's unclear the extent to which these vehicles were used during the Fifa Confederations Cup, but we have raised the issue with the relevant government transport departments."

So far FIFA is downplaying the issue.

But given the fact that authorities have been aware of the problem for years but done little to fix it, leaving public transport safety up to government may prove a deadly mistake for our World Cup visitors.

In March, for example, Eastern Cape taxi driver Ralton van Rooyen was jailed for nine years for killing six school pupils while travelling too fast round a bend, while reportedly driving an illegally converted Quantum.

In an inspection of salvage yards in Gauteng and the Western Cape, the Sunday Times found wrecks of another 10 illegally converted Quantums from recent smashes, some marked with blood stains and almost certainly resulting in heavy fatalities.

The Sunday Times 25 July 2009

Phola Katsisi is a single mother who lives in Pimville, Soweto.

She supports two families - her two daughters at home, and her mother and caregiver in faraway Zeerust - from the money she earns ferrying commuters in her minibus taxi to and from Johannesburg's oldest township, Alexandra.

When Katsisi, 45, was scouting around for a reasonably priced minibus two years ago, she tried a dealership in De Deur, 25km south of Johannesburg.

Friends in the taxi industry had told her there were bargains to be had. At the time, government's recapitalisation programme was in full swing, with dilapidated Toyota Hi-Ace vehicles to be replaced by fancy new minibuses, which typically cost more than R200000.

Months earlier, in August 2007, new safety regulations that applied to all vehicles operating as minibus taxis came into force. They required taxis to be fitted with seat-belts and rollover bars to prevent passengers' skulls being crushed during an accident.

Wh en the dealer asked Katsisi if she wanted a 14-seat Toyota Quantum for R255000, or a 16-seater model parked in the showroom for R228000, it was an obvious choice. After paying a R60000 deposit she took the necessary documents to the offices of SA Taxi Finance in Johannesburg, and a week later collected her taxi.

Next she took it for a roadworthy, receiving an official licence disc authorising her to carry 15 passengers plus a driver, and authorisation from the transport department's licence board to ply her trade. Last month Katsisi was lucky to be among 3000 taxi owners accredited by the Gauteng Transport Department to ferry Fifa Confederations Cup spectators between Johannesburg and Pretoria, getting paid R1400 a day for her efforts.

Things were looking up.

So it came as a nasty shock when Katsisi discovered this month her taxi was on the road illegally. She only found out after fellow Alex Taxi Association members, with the same vehicles, started being pulled off the road by metro police.

"I took this to the government to get a roadworthy and a permit, and they approved it," she says. "How can they say now that it's not legal?"

It turned out her dealer could offer bargain prices because he'd illegally converted a much cheaper Toyota Quantum panel van into a deathtrap minibus, with seats bolted onto a paper-thin body rather than the chassis, and no rollover bar.

Now she faces the prospect of losing everything as the government slowly starts cracking down on the illegal conversions by pulling them off the road.

Transport minister Sbu Ndebele confirmed as much this week when he told the Sunday Times that "there's no time that you can say to the police that we're allowing unroadworthy vehicles because we have a grand plan. That's not our approach".

But Katsisi isn't alone.

James Chapman, who runs Santaco Trading - essentially the business arm of the SA National Taxi Council (Santaco) - knows of dozens of Santaco members who are in the same predicament.

"What upsets me is that the taxi owners are now the ones taking the flak. But in most cases, they were simply presented with a vehicle they were told was cheaper," he says.

At each level the system failed. Despite warnings from Toyota as far back as 2005, that converting Quantum panel vans was illegal and dangerous, dealers bought these vehicles from convertors and sold them to unsuspecting taxi owners.

Then the regulatory arm of the SA Bureau of Standards didn't raise any red flags and didn't check on the convertors who were turning panel vans into taxis. Neither did the government, whose roadworthy agencies duly handed over a certificate of fitness for these vehicles to be used as taxis, and whose eNatis system registered the panel vans as taxis.

Then the banks , which many people expect to be prudent enough to check that they're not financing an illegal vehicle, simply registered the vehicles.

So where does this leave the taxi owners?

SA Taxi Finance CEO Martin Bezuidenhout says the risk can be mitigated.

"These vehicles still have a value, and they need to be taken off the roads. But they can even be converted so they can be used as taxis again". But to do this will cost between R15000 to R40000 per vehicle - and with no one owning up to the problem, it seems unlikely a willing funder will step forward.

And it will be the taxi owners like Katsisi, who were caught up in a network of events beyond their control, whose businesses stand to be destroyed by this collective botch-up.

"My 5-year-old is in a crèche and 17-year-old daughter goes to school at Bryanston High and I pay over R8000 in monthly instalments," she says. "It will ruin me if I can't use my taxi."

Sunday Times 25 July 2009 (Editorial)

Revelations that 4000 taxis with potentially fatal flaws are on our streets is a clear indication that the government has failed to deliver on its promise to clean up the minibus industry, and make it safe for the 12 million South Africans who use taxis every day.

As numerous gruesome accidents in these death traps attest, relying on talk shops to thrash out the industry's problems - from illegal taxis to the despised Bus Rapid Transit system - can have fatal consequences.

Transport minister Sibusiso Ndebele must take several bold steps now - steps that clearly state he's serious about putting an end to the carnage.

First, he must order all illegally converted Toyota Quantum panel vans to be pulled off the road immediately before they kill more children.

Next, he must find out why his own agencies and systems - including roadworthy centres, the maligned eNaTis vehicle registration system, and provincial authorities that issue taxi operating licences - failed to prevent taxi owners from getting permits to operate these death traps. And to ensure it doesn't happen again, he should create an oversight body for the SA Bureau of Standards and its regulatory arm, which should have prevented this fiasco in the first place.

The government has become used to treading gingerly when it comes to the taxi industry. But the risk for Ndebele is that such an approach would see this wound continue to fester as more people die. As we report, tourists were already being transported in these vehicles during the Fifa Confederations Cup because government agencies certified that the vehicles met safety standards. Unless this is fixed, there's every chance of it happening again next year.

The burning question is: who must be made to pay? The banks who financed these vehicles are abjuring culpability. Bankers knew as long ago as 2005 that the Quantums were death traps, so why did they not put in place enough checks to ensure that what they were financing complied with proper safety standards?

But the worst culprits are the conversion companies which, knowing these vehicles to be safety risks, turned panel vans into taxis and hawked them to car dealers to make a quick buck.

For taxi owners, it remains a biting irony that they were strong-armed into buying new vehicles under SA's taxi recapitalisation programme, only to find their fancy new vans are just as unsuitable as the old ones. Ndebele would do well to commit to negotiating a workable deal with the industry, so that owners can stay in business.

Pulling the vehicles off the road will be a tough call for the taxi owners who may have unwittingly become the proud owner of a 16-seater death trap, and it's a tough call for the funders who, at last count, had an exposure of more than R180-million to these illegally-converted vehicles.

Yet action must be swift and emphatic. Dithering would be a deadly mistake - both for visitors to the soccer World Cup who opt to use public transport in the false belief that they are in safe hands, and for South Africans who have no other choice.