Today's Labour News

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gautrainMoneyweb reports that the Competition Commission (CompCom) believes the Gautrain rapid rail system was a big policy mistake.  

It has recommended that the Gauteng provincial government takes over Metro Rail, and integrates it with the Gautrain to run “a single system that doesn’t separate people according to class”.  CompCom commissioner Tembinkosi Bonakele on Wednesday also said the formula for the allocation of public passenger transport subsidies has led to distortions that impact on competition between the various modes of transport.  Increased funding for subsidies to the minibus taxi industry through the government’s taxi recapitalisation programme was one of several recommendations made in the commission’s preliminary report on its market inquiry into land-based public passenger transport released on Wednesday.  “The Gautrain is heavily subsidised and operates very differently from Metro Rail from a services and integration point of view.  There is no policy justification in a country like South Africa for the government to subsidise the middle class and decide to have no or lesser subsidies for the working class,” Bonakele said.  He reported that the inquiry looked very closely at the Gautrain model and compared it with Metro Rail services in Gauteng and found “huge inequities”.  He said what was required was a single system that was more reliable, and more regular times with a lower price for moving between Johannesburg to Pretoria.  Commenting on the distortions in subsidies, Bonakele said the subsidy system was highly fragmented with minimum coordination.  He said there was no formalised subsidy policy, although the Department of Transport was presently in the process of developing such a policy.  The inquiry’s recommendations are provisional.

  • Read the full original of the report in the above regard by Roy Cokayne at Moneyweb

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