GIPTN PNT 20 & 26 June 2013

The George Integrated Public Transport Network Primary Negotiating Team (PNT) participated in a mediation process on 20 and 26 June 2013, following a Deadlock situation that was reached during a previous PNT session.

The mediation process focused on the issue of maintenance of income / compensation to existing operators, and resulted in the following agreement. The agreement was signed by the Municipality, the Province, CGLU and representatives from Uncedo Services Taxi Association, George Taxi Owners Front Association, George Huurmotorvereniging and Louis Transport. The PNT will resume normal negotiations to address remaining items in the operator contract.

1)The parties agree to the following compensation in respect of buy-in (maintenance of income) and buy-out:

1)The parties agree to the following compensation in respect of buy-in (maintenance of income) and buy-out:

1st License 2nd License 3rd License 4th & Subsequent Licenses
Buy Out R350,000 R200,000 R150,000 R100,000
Buy In Per month for 5 years R5,500 R3,000 R1,500 R1,000

This offer is based on 388 operator licences and 196 operators.

2) Government will pay 80% of the buy-out on relinquishing operator licences and will pay the balance of 20% within three months of payment of the first tranche. This ratio is dependent on the buy-in and buy-out numbers referenced in clause (7) below.

3) Government will escalate the buy-in payments by CPI on an annual basis, starting once operator licences are relinquished.

4) Government will contribute R10 million towards working capital on commencement of formal services in terms of the operating contract.

5) Government will make available up to R5 million to cover vehicle debt existing before 26 June 2013. This amount is ring-fenced and is only available to people who sell their vehicles through a Government Assistance programme. The money will only cover the shortfall on the debt, and will be available to both those who buy in and buy out. This debt assistance is subject to the buy-in and buy-out numbers referenced in clause (7) below. This is further subject to the successful application to National Treasury for the additional R5 million funding.

6) All amounts referenced in this agreement are before any applicable tax.

7) Minimum buy-in of 200 operator licences (out of 388 – to be verified) and 120 operators (out of 196 – to be verified). Government will consider the minimum participation requirement of 200 operator licences and 120 operators in lieu of the original empowerment intent, but requires an indication from Industry of the number of operators expected to buy-out and buy-in. The parties agree that this matter is still open to negotiation.

The above will be incorporated as the compensation model in the final operating agreement.


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