Can of (cross-border) worms

What does the Cross-Border Road Transport Agency (CBRTA) actually do for operators? Why have the new fees been mooted? And is there any chance that this agency will ever do a decent job? GAVIN MYERS uncovers a can of worms…

As you may have read last month, yet another burden for the cross-border transport operator has been added to his (or her) seemingly endless list of challenges. Yes, as most of our readers will know by now, cross-border permit tariffs have been raised.

Officially gazetted by Minister of Transport Sibusiso Ndebele on 31 March 2011 under section 51 of the Cross-Border Road Transport Act, as amended, the new tariffs have been in effect since 1 April. In a media statement issued by the CBRTA on 8 April, reasons given for the increase centred on the fact that the CBRTA is a self-funded agency, “financing its operational and capital expenditure through revenue generated from the issuance of cross-border carrier permits and imposition of fines”.

“Permit tariffs have been adjusted on three occasions since the establishment of the Agency, in 1999, 2000 and 2003. This has created an untenable financial situation, which resulted in the Agency’s operations being chronically under-funded and barely in a position to respond to its strategic mandate. This financial situation was furthermore not sustainable in the long term if the Agency is to respond and executes its legislative mandate as prescribed under its empowering Act,” explains Sipho Khumalo, CBRTA CEO. According to Khumalo, functional areas that are linked to key performance areas and key performance indicators, at a process level, were identified.

The new permit tariffs provide for a differentiation of categories of vehicles and classes of their permits. An example is of passenger vehicles being classified into those carrying less than 35 passengers and those carrying more than 35 passengers (this in order to provide alignment to the definitions of the National Land Transport Act, 5 of 2009). As such, this tariff distinction seeks to provide differentiated tariffs between taxi and bus operators.

So, a minibus applying for a new permit for 12 months will pay R1 780 with an application fee of R160, compared to the R2 000 plus R180 application fee for a bus. Likewise, in a similar scenario a Class 1 freight carrier would pay R4 290 plus a R570 application fee, while a Class 2 freight carrier would pay R5 720 with a R760 application fee.

“The engagements with the tourist, passengers (bus and taxis) and freight operators were done and successful,” was the comment by CBRTA communications officer Ramson Masipa, about the CBRTA’s engagement with industry stakeholders such as around the tariff adjustments. However, industry paints a different picture, the fees coming in for some heavy criticism. Not least is from the Road Freight Association (RFA), who in mid-April took legal action against the CBRTA.

Gavin Kelly, technical and operations manager at the RFA, insists the organisation sent a letter to both Minister Ndebele and Khumalo stating that the fees are already exorbitantly high and querying what the CBTRA did for operators, after the RFA approached its members for comments. The new fees were implemented despite this –and opposition from the South African Bus Operators Association (SABOA).

“So far the new CBRTA fees are way above what other countries are charging. These have now become non-tariff barriers to trade in the region, which is taken very seriously. SADC has been approached to address CBRTA on the issue and for justification for creating a non-tariff barrier to trade in the region,” says Kelly.

But the question has to be asked: what does the CBRTA actually do? Speaking at the RFA conference in June (which you can read about in great detail on page 2), Deputy Minister of Transport Jeremy Cronin mentioned that CBRTA’s key task is to harmonise road transport in the region. “It is meant to think about the integration of our region. It must champion those things and assist the department in this regard,” he said. The Department of Transport’s own website maintains that the CBRTA is meant to “facilitate and regulate cross-border flows of traffic in a manner that optimises mobility and accessibility, thus contributing to the seamless integration of the Southern African Development Community”.

It is clearly not achieving this. Even Cronin was critical of the organisation, noting that “the CBRTA has not been an asset. It has been a pain in the neck for you and us”.

Having said this, he was upbeat about prospects for the agency for the future. “We have a new CEO (Khumalo) in place, who has asked for three years and the possibility to implement a turnaround strategy,” remarks Cronin. “They want to do a number of things in terms of their turnaround strategy – they want to replace their IT systems and improve the issuing of permits, they want to move to five-year permits – but they need to have the capacity to enforce the permit system.”

It must be said that this announcement was not greeted with enthusiasm by RFA members – sources within the RFA say Khumalo did not do the most exceptional job of leading the organisation. Of course, in fairness and even accepting that this criticism is justified, maybe he will do a much better job of running the CBRTA – but we’re talking a three-year turnaround strategy.

Neither transport operators nor the RFA are content to wait – and pay so-called exorbitant fees – for 36 months. In fact, Kelly and the RFA are even questioning the need for the organisation and recommending to the Minister of Transport that it be dissolved as it has no value. As an example, he points to the ministry in Zimbabwe currently not recognising the CBRTA because it says the relevant body in South Africa is the Department of Transport, and that the CBRTA is not the true body.

Cronin also questioned whether the increase will improve things regarding the organisation’s “key task”. The simple answer, as mentioned in “How SA risks losing its Africa gateway status” (FOCUS June), is no. If anything, it will push industries out of the country and place thousands of jobs at risk. “South African operators are looking at moving to Mozambique for some simple reasons: diesel is R3,80/litre cheaper and it costs 6 000 metika for a one-year cross-border permit,” says Kelly, also pointing to some operators indicating it is cheaper to pay the penalty fee than to buy the permits.

The RFA proposes there only be one, all encompassing charge; and that road user charges should not be confused with permits. “Thus, we should be paying for a transport permit fee, a road charge fee to use the road and third party insurance fee.”

Will the RFA succeed in its goals of seeing the demise of the CBRTA or, at very least, a reduction in the fees? We will obviously monitor this situation closely. We certainly hope, though, that the CBRTA (if, in fact, it continues to exist) will no longer be a “pain in the neck” for operators. This industry already has more than enough challenges on its hands…