While the Department of Transport believes that its R7,7billion Taxi Recapitalisation Programme (TRP) is a success, taxi associations say it's going to blow up in their faces.
Sicelo Mabaso of the National Taxi Alliance said: "The scrapping programme will not succeed. We warned the government but no one listened to us.
"The R50000 is too little for anyone to buy a new taxi. The taxis suggested to replace the old ones are expensive.
"Operators have been caught up in debt because of this. Some have had their vehicles repossessed."
Taxi bodies have pointed out that they would not benefit in any way if the programme continued in its present form.
Mabaso said: "Operators have been forced to leave the industry because they cannot afford the new vehicles.
"We fear that this recapitalisation programme will cause an increase in unemployment and crime will therefore increase."
The TRP was implemented two years ago and had seen 13600 old and unroadworthy vehicles scrapped by the beginning of the year.
The department hopes that by 2010 80percent of the old and unroadworthy taxis will be recapitalised.
The department's national spokesman Collen Msibi said: "The programme is continuing. Of the 118000 applications received, 86000 are already operational. Some are still being processed."
He said the department would continue to engage the South African National Taxi Council (Santaco), the only organisation recognised by the government as representative of the taxi industry. Santaco recently pulled out of the recapitalisation programme.
"We have been in talks with Santaco and hope to resolve all the problems that came up.
"Taxi operators in KwaZulu-Natal have been supportive of the programme and do individual scrapping of their vehicles," said Msibi.