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Cablegate: Johannesburg Bus Rapid Transit (Brt) Roll-Out a Success,

R 081325Z SEP 09
FM AMCONSUL JOHANNESBURG
TO SECSTATE WASHDC 6598
INFO AMEMBASSY PRETORIA
AMCONSUL JOHANNESBURG

UNCLAS JOHANNESBURG 000133


E.O. 12958: N/A
TAGS: ELAB ATRN ECON SF
SUBJECT: JOHANNESBURG BUS RAPID TRANSIT (BRT) ROLL-OUT A SUCCESS,
WITH MINOR LABOR UNREST

1. The City of Johannesburg launched its long-awaited Bus
Rapid Transit (BRT) system on August 30, 2009. Independent taxi
operators staged a mild protest with a `go slow' on August 31,
and there were reports of isolated acts of violence over the
following three days which police believe were perpetrated by
individual taxi operators. This first phase of the BRT roll-out
had been postponed in June 2009 following an outcry against the
BRT system from the taxi operators and a more organized campaign
of violence and protest. The full BRT is expected to be
implemented no later than January 2010.

Background
---------------

2. The BRT coaches, also known as Rea Vaya, each carry up
to 90 people. Rea Vaya stations are located along major
Johannesburg commuting routes, spaced about half a kilometer
apart. The two billion rand (USD 254 million) BRT project was
approved by Johannesburg City in 2006; this was modeled on
municipal bus systems in cities like Bogota and Mexico City.
The country-wide BRT system was proposed by participating South
African cities as part of their local transport plans, but it
also forms part of South Africa's broader national strategy to
create integrated public transport systems. Johannesburg is the
first city to get the system running, but Cape Town, Port
Elizabeth and other cities plan their own BRT networks. The
first phase of the Johannesburg BRT is expected to raise 1.5
billion rand (USD 195 million) in annual revenues. To win
buy-in from the powerful independent taxi (minibus) operators,
BRT and municipal officials have offered to share approximately
150 million rand (19.5 USD million) of BRT revenue with
participating operators.

3. Municipal officials recognize that the BRT system will
displace taxi operators working on the routes earmarked for the
BRT. Approximately 575 taxi operators will be affected when the
full BRT is in place. The proposed Johannesburg City plan is
that taxi owners and operators become part-owners of the Bus
Operating Companies (BOCs) that will run the BRT and be
contracted to the city. The debt for the buses will also be
passed on to the BOCs.

Taxi Industry goes on strike
----------------------------------

4. In April 2009, thousands of taxi drivers embarked on a
one-day strike against Johannesburg's BRT system. They accused
the municipal government of `stealing' business from the taxi
industry. The strike was not coordinated with or through the
powerful Congress of South African Trade Unions (COSATU). Taxi
operators blocked major highways and routes; sporadic violence
around town was reported. The South African Department of
Transport and COSATU criticized the taxi operators for
disrupting traffic and putting the lives of commuters at risk.
The former Minister of Transport (and now Minister of Justice)
Jeffrey Radebe publicly stated that the BRT will be a `win-win
situation' for all South Africans, arguing that the taxi
operators would suffer no loss of profit or jobs. Following the
protest and violence, Johannesburg shelved plans it had to roll
out the BRT system prior to the recently-completed FIFA
Confederations Cup tournament (in June 2009), preferring instead
to start Rea Vaya without the world's attention on South Africa.

5. On August 17 the South African National Taxi Council
(SANTACO) issued a strike notice to protest the new public
system on August 27. The City of Johannesburg vowed to go ahead
with the rollout on August 30, despite the SANTACO threat of a
national strike. Following ongoing negotiations between taxi
operators and city officials, the strike was called off by the
South African Taxi Association (SATA); however, SANTACO and some
taxi operators did conduct a `go slow' on Aug 31, the first work
day after the rollout, which affected some commuters along
non-BRT routes and outer Johannesburg areas.

Violent actions against the BRT
----------------------------------------

6. On September 2, 2009 assailants shot at two BRT buses
in Soweto, despite the heavy security presence of 350 soldiers,
police officers and metro cops assigned to BRT stations and
along the bus routes. Police have not identified the shooters,
but voiced suspicion that independent taxi operators were
involved in the incidents. In addition, there were isolated
reports that some taxis blocked individual BRT routes near the
Noord Street taxi station. Police arrested one taxi driver and
impounded his taxi; no other arrests have been made in relation
to the shootings. Following the September 2 events, the City of
Johannesburg has committed itself to maintaining significant and
prominent security measures in support of the BRT system.

Taxi industry not pleased with the absence of government's
funding model
--------------------------------------------- --------------

7. South African National Taxi Council (SANTACO)
spokesperson Phillip Taaibosch told Consulate Labor specialist
that government had not adequately explained to independent taxi
operators how the Rea Vaya bus rapid transit would compensate
those taxi owners who traded in their business for a stake in
the new system. Taaibosch maintained that government has not
produced a funding model of the BRT project outlining its
sustainability and its ability to integrate taxi operators.
According to Taaibosch, the BRT model is built on taxi operators
surrendering their taxi operation licenses for a stake in an
operation company that will run the new bus system; the taxi
operators are concerned with the city's lack of clarity on the
financial implications for the taxi industry.

8. Lisa Seften, Johannesburg's Executive Director of
Transport, stated that the city would guarantee a minimum income
to the operating company created to run the buses. Seften noted
that the city would make its financial model public only after
concluding negotiations with the taxi associations affected by
the BRT roll-out. According to Seften, there are 10 separate
taxi associations in Johannesburg, of which nine had signed up
to negotiate with the city.

9. Coment:
The BRT system roll out on August 30, 2009 was preceded by
strong resistance from SANTACO. However, nine other taxi
associations are already involved in the negotiations process,
and the City of Johannesburg may yet conclude successful
financial negotiations to win their buy-in. SANTACO does not in
principle oppose the BRT system, but the operators are not yet
willing to commit themselves to a deal that has no clear
financial plan for the industry. The City of Johannesburg is
committed to the BRT system. SANTACO, as the only taxi
association out of the ten South Johannesburg taxi associations
not yet on board, will eventually have to work within the
Johannesburg City proposal. Both sides realize that, with only
nine months to go until the 2010 FIFA World Cup, the
negotiations between the City of Johannesburg and the Taxi
industry must not be delayed any further. City and national
security officials have made clear that they will not tolerate
violence by the taxi associations, and will maintain strong
security measures in support of the BRT.


PASSEN

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