Probe into anti-competetive behaviour in public transport sector
A wide-ranging probe by the Competition Commission into possible anti-competitive behaviour in the public transport sector could result in the government moving to strengthen regulatory bodies.
The National Public Transport Regulator, intended to oversee fares and regulations in the sector, is not functioning as it should.
The commission believes there are aspects within the sector preventing or restricting competition, possibly hiking costs for the 70% to 80% of South Africans who rely on public transport.
The commission expects to launch a two-year probe, into how prices are set and regulated on June 7. The process will also consider how well the government is juggling its twin priorities of subsidising transport and ensuring cost-effectiveness.
However, the time frame and ultimate priorities of the investigation, which could lead to spin-off probes into collusion, is still in question. A key issue would be the fragmentation of pricing. Rail policy is set by national government while the regulation of bus services is determined by provinces, and taxis — both metered and mini-buses — are regulated jointly by provincial and municipal authorities.
Metered taxi rates are set by provinces but licences are issued by municipalities. The broad oversight of fares, pricing and licensing was contemplated in the 2009 Land Transport Act.
Independent transport analyst and former board member of the regulator, Paul Browning, says beyond oversight of the transport and tourism sector, there are no signs of the regulator performing any of its other functions.
"The role [under the Act] was to do research — insight into matters of costing and pricing, what fares would ensue — that was meant to be the role of the regulator, but there has been absolutely no move whatsoever to bring a broad overview function. It is quite it is unfortunate," said Browning.
Another individual, who declined to comment due to their organisation’s expected participation in the competition probe, said building of regulatory oversight has been "painfully slow" and is likely to emerge strongly in the probe.
A key issue from the regulator’s side, and one likely to be seen in commission findings, is the manner in which operating licences are granted by provinces for cross-provincial transport, the source said.
The department of transport says it is seeking to capacitate the regulator, but has faced austerity measures in terms of financing for personnel. "The preparatory work on the monitoring of public transport in the country has started. The other functions will be fulfilled once adequate personnel and other resources have been sourced," the department said.
The commission is expected to further clarify its focus areas later in June, as it begins public hearings, surveys and meetings with various sectors. Areas of high public interest are expected to be the rise of app-based ride services — whose fares are not yet regulated — as well as the lack of public subsidies to the mini-bus taxi sector.