National Land Transport Act, 2009 (Act No. 5 of 2009)RegulationsSecond National Land Transport Regulations, 2025Chapter 1: Regulations on Contracting for Public Transport Services3. Requirements for contracts |
| (1) | Before entering into a contract in terms of section 41 or 42 of the Act the contracting authority must— |
| (a) | in the case of a municipality, develop and finalise its ITP and obtain approval thereof as required by section 36 of the Act read with the Minimum Requirements where it has not already done so and, where relevant, update the ITP in the manner required by the Minimum Requirements, subject to section 93(4) of the Act; provided that when that section is applied the municipality must at least have— |
| (i) | designed a network of contracted and non-contracted services and prepared a contracted services plan in the manner that is required for the public transport plan component of the ITP, or |
| (ii) | conducted surveys to determine the public transport needs for the municipality or the portion of the municipality sought to be covered by the proposed contract; |
| (b) | make provision for the incorporation of the requirements and conditions promulgated in the grant framework or frameworks provided for the funding of the proposed services published in terms of the relevant DORA; |
| (c) | prepare an operational and business plan as contemplated in the Grant Framework that complies with regulation 4; |
| (d) | conduct surveys on the route or routes or area or areas in question to compile a list, insofar as possible, of affected operators, and a list of their representatives, and |
| (e) | consult with the committees contemplated in the relevant Grant Frameworks as well as the lntermodal Planning Committee established for the relevant municipality or municipalities in terms of section 15 of the Act and any relevant Land Transport Advisory Boards established in terms of section 16 of the Act. |
| (2) | Before entering into a negotiated contract in terms of section 41 of the Act, the contracting authority must, in addition to taking the steps listed in sub-regulation (1)— |
| (a) | publish a notice in one or more newspapers circulating in the area or areas where the proposed services will be provided inviting affected operators to register with the contracting authority by a date stated in the notice; |
| (b) | after having conducted surveys of all relevant operators operating on the relevant routes or in the relevant area or areas as contemplated in sub-regulation 1(d), compile and keep a register of affected operators with their contact details and, where applicable, the contact details of their representatives, and |
| (c) | ensure that the representatives referred to in paragraph (b) are authorised in writing by the operator concerned by submission of a special power of attorney. |
| (3) | For the purposes of sub-regulation (2)(b), in the case where an operator holds an operating licence authorizing a number of routes, the contracting authority may have regard to the routes applied for by the operator when he, she or it applied to the regulatory entity for the operating licence and specific routes authorized in such operating licence, in determining whether the operator is an affected operator. |
| (4) | The contracting authority must then negotiate with such affected operators, either individually or through their representatives, with a view to concluding an agreement with the operators that may include offering them one or more of the following: |
| (a) | Alternative services to those that will be provided in terms of the contract as contemplated in section 39(1) of the Act; |
| (b) | shares or loan accounts in the operating company or companies or entity or entities that will be established or appointed to provide the services in terms of the contract with a view to promoting the economic empowerment of small business or persons previously disadvantaged by unfair discrimination; |
| (c) | shares or loan accounts in a company or companies or other entity established in the course of restructuring a parastatal or municipal transport operators, or |
| (d) | compensation or another appropriate inducement. |
| (5) | The contracting authority may address a written offer to an operator or operators contemplated in sub-regulation (2)(b) stating a date for acceptance of the offer, which notice must be delivered to the operator or his, her or its representative authorised in terms of sub-regulation (2)(c) at the physical or email address registered in terms of that sub-regulation. |
| (6) | Where an operator to whom an offer has been addressed in terms of sub-regulation (5) fails to accept the offer or to reply to the notice by the date stated for acceptance, the operator will be deemed to have rejected the offer and the contracting authority will not be obliged to negotiate with that operator any further, and the contracting authority must request the regulatory entity not to renew the relevant operating licence or licences held by that operator authorising the proposed contracted services. |
| (7) | Where an operator accepts an offer contemplated in sub-regulation (5), the agreement contemplated in that sub-regulation must include an undertaking by such operator to submit the operating licences or permits held by that operator authorising services on the route or routes that will be operated in terms of the proposed contract, for cancellation, amendment or conversion, as the case may be, to remove authorisation for any services that will compete with the services to be provided in terms of the contract. |
| (8) | Where an operator contemplated in sub-regulation (7) continues operating public transport services on a route or routes in violation of an undertaking given under that sub-section or is otherwise in breach of an agreement contemplated in sub-regulation (4), the operator will forfeit any benefit granted to that operator in terms of sub-regulation (4) after affording the operator a reasonable opportunity to provide reasons why the benefits should not be forfeited and if such reasons are not acceptable to the contracting authority, and the provisions of this sub-regulation must be included as a condition in such agreement. |
| (9) | Any benefit accruing to an operator in terms of an agreement contemplated in sub-regulation (4) may not be paid or transferred to the operator until that operator has complied with sub-regulation (7), subject to sub-regulation (8). |
| (10) | Before entering into a commercial services contract in terms of section 43 of the Act, the contracting authority must take the steps listed in paragraphs (a), (c) and (e) of sub-regulation (1). |