SA transport policy … wanderings in the desert
16 Oct 2018 - by Nick Porée
South Africa has now had eight Ministers of Transport in about 25 years, often accompanied by their own personal DGs and senior staff, none of whom had any experience or competence in the management of this vital aspect of the country’s economy.
Transport policy has also suffered from the historical but totally illogical split of transport responsibilities which places railways and ports outside of the control of the Ministry of Transport. The road transport regulatory system evolved from the National Transport Policy Study (NTPS) in 1987 which recommended de-regulated road freight, but left ports and railway (and airline) as parastatal State Owned Companies (SOC). The SOCs are “self-regulated”, within the Ministry of Public Enterprises, which has also lacked technical appreciation of the role of transport, and the principles of effective management, in the commercial world.
Apart from the obvious restrictions to business caused by parastatal inefficiencies and mismanagement, nowhere in the current dispensation is there more obvious lack of competence than in the arena of road transport regulation and enforcement, with the plethora of unworkable and impractical regulations as evidence of total misunderstanding of the role of a regulator.
Current regulations in limbo or stalled for practicality of implementation include High Cube containers, Consignor-consignee, driving schools, evaluation of drivers, provisional driver licences, registration of weighbridges, driving time limits, inclusion of PBS vehicles into the National Road Traffic Act, AARTO, registration of Abnormal Vehicles for divisible loads, as well as the many recommendations from NTPS, NATMAP, National Freight Logistics Strategy and the Road Freight Strategy (approved by Cabinet in 2017). Meanwhile the costs of our shocking national road safety situation and the externalities and inefficiencies caused by bureaucracy are a huge drain on the economy.
According to the OECD, the principles of “good regulation”, are to;
(i) serve clearly identified policy goals, and be effective in achieving those goals;
(ii) have a sound legal and empirical basis;
(iii) produce benefits that justify costs, considering the distribution of effects across society and taking economic, environmental and social effects into account;
(iv) minimise costs and market distortions;
(v) promote innovation through market incentives and goal-based approaches;
vi) be clear, simple, and practical for users;
(vii) be consistent with other regulations and policies; and
(viii) be compatible as far as possible with competition, trade and investment-facilitating principles at domestic and international levels
When related to the above principles, the current South African road freight and passenger transport policies and regulations have not achieved the effects of “good regulation” and in many instances show clear evidence of practical misunderstanding of the “unintended consequences” of the legislation. The transition from provincial to national road freight regulation in the 1980s included many inefficiencies, including ineffective coordination between different levels of government, and at the national level, a lack of understanding of the principles, or competence, in the development of transport regulation. The result has been failure to achieve the Road Transport Quality System (RTQS) which was originally proposed by NTPS, and severe problems with the quality of road transport operations in many areas.
The South African road freight transport sector consists of about 75% of “own account” operators and 25% of “hire and reward” carriers, which means that the largest proportion of road freight transport is embedded in a wide range of industries and the 25% is made up of a core of high calibre operations and a large fringe of unqualified small carriers. The result is fragmentation of the “industry” and difficulty in developing common approaches and responses to regulatory issues. The failure to design workable road transport regulation has been primarily due to the bureaucratic processes by which legislation has been developed, and the lack of coordinated input from the transport industry. This due to failure to integrate resources to establish representative associations to effectively monitor and guide the actions of the authorities, such as exist in developed countries.
The problem and its solutions are identified and addressed in the Road Freight Strategy, which says, “It is recommended that the government should take the initiative to establish formal effective, active, and continual liaison with the industrial users and service providers in the road freight sector. In the current situation the governmental decision processes are based on the premise that the official pronouncements will result in change, whereas the reality is that the commercial world makes its own decisions, based on the policy pronouncements from the government. In the current South African situation, it is critical that the private sector decision-makers are given reason to support official policies and for that reason they must be party to the decision-making process.
An effective communication structure will prevent some of the impractical proposals for interventions and ensure that planning is based on the realities of the commercial undertakings. The range of negative perceptions is fuelled by stalled, recently proposed legislation, issues such as cross-border permit charges, perceived failures to manage parastatals, and the continual realities of bribery and corruption.
The current processes of limiting consultation and co-ordination to departments, provinces, parastatals, agencies and quasi-official structures insulates the entire process from the commercial and industrial sectors which are the recipients and payers for all the results of the governmental decision-making. It further fosters litigation. Recommendations for a consultative structure were made in the NFLS 2016”.
No further action has been initiated to implement the Road Freight Strategy (or NFLS), but it is still being discussed and promoted so there is still hope for change. It is to be hoped that the next restructuring of transport in South Africa will result in a framework that provides for logical integration of modes under one authority, scope for private sector investment in all modes, revision of regulatory and enforcement systems, and reorganisation of the Transport Ministry and its departments and agencies into lean, focused and professionally competent entities.
Nick Porée is an independent transport economic and policy consultant with a 35-year history of consulting on southern African freight logistics policy, including NTPS, NATMAP, NFLS, and RFS for RSA DOT. He designed the framework for the SADC Tripartite TTTFP programme and has completed many other projects around the region. He was author of the first report on high cubes in 2006, and has supported the many industry efforts to resolve the issue since then.