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Monthly payment scheme for taxi owners announced
ABU DHABI — Abu Dhabi’s taxi and hire car regulator, in partnership with the National Bank of Abu Dhabi (NBAD), is delivering on its promise of compensating current taxi owners fairly, as part of its initiative to transform the Emirate’s transportation sector.
According to the Decree No. 19 issued in 2006, the launch of an innovative financial vehicle, called the Compensation Fund, will ensure regular monthly payments to licence owners, with the introduction of the new taxi system in the second half of 2007.
Following a competitive tender for all national banks in Abu Dhabi, NBAD has been appointed by the regulator as financial advisor, fund manager and custodian for the compensation scheme.
Starting from the third quarter of this year, taxi owners will receive a certificate entitling them to a monthly income of Dh1,000 after they hand in their licence at the Department of Vehicles Registration and Licencing during the phase-out periods.
The certificate, known as a beneficiary certificate, will be valid for 25 years and entitles the owner to an income that is similar to the one of operating a taxi.
“As we switch to a modern, safe and cost-effective taxi system, taxi owners will benefit from fair, regular and customer-friendly monthly payments without the hassle of running a taxi operation. Together with NBAD, we have structured a state-of-the-art compensation fund that ensures long-term security, flexibility and peace of mind for current taxi owners,” Khaled Saleh Al Rashedi, General Manager of Taxi and Hire Car Regulation Centre (formerly the Taxi Transport Regulation Centre), said at a Press conference yesterday.
“While the fund is sophisticated, it will be easy for taxi owners to take advantage of the benefits once their licences are handed over. We’ll introduce dedicated NBAD ATM cards and various NBAD banking services to enable collection of monthly payments from the NBAD’s largest ATM network in the UAE. We’ll also provide a full range of money transfer options,” said Rashedi, adding that the full details of the payment scheme would be announced in the coming months.
Rashedi stressed that the process of the selection of the franchise companies had not yet been completed. “Some companies are giving an impression in the media that they will be operating taxi service in Abu Dhabi, which is absolutely wrong since no decision has been taken in this regard so far,” he pointed out.
He said the companies would be allowed to operate any brand of car that carried four to five passengers, while 7-seater taxis would be introduced later.
Stuart Henrickson, Head of Corporate Finance, NBAD, explained, “The scheme puts the needs of taxi owners first and foremost. An investment fund will be set up and maintained by NBAD, driven by the strategy to invest in low risk and capital guaranteed investments. For taxi owners, monthly payments will be made through a simple, safe and secure NBAD process that can be tailored to individual needs.”
Beneficiary certificates issued through the Taxi and Hire Car Regulation Centre to licence owners will provide holders with a high level of liquidity. These certificates are tradable on an individual basis between UAE nationals and are not open to trade with corporations. All transactions will be supervised by the Taxi and Hire Car Regulation Centre and NBAD.
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