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BUS OPERATORS MAY BE FORCED TO CLOSE

01 Feb Transport

Cape Town – Even though the Treasury has agreed to bail out the National Department of Transport, there is still no clarity on when South Africa’s bus operators will receive the millions owed to them in passenger subsidies.
On Friday, the Cape High Court ruled that the national government had to pay bus operators millions of rands in arrears for bus subsidies.

Bus subsidies were not paid because for three years the National Department of Transport had a budgetary shortfall of R1.2 billion which eventually caught up with them.

According to the National Department of Transport’s spokesman Collen Msibi, the company was allocated R2.9-billion for subsidies for this financial year, but it already had a R1.2-billion shortfall. Msibi said the shortfall was a result of increased fuel costs and additional passenger numbers.

The shortfall resulted in Golden Arrow and 10 bus operators in Gauteng not being paid since November, amid fears that bus companies would go under.

Source: Cape Argus

In Cape Town this would have meant the 250 000 commuters a day who use Golden Arrow would have lost their transport, and about 2 800 people would have lost their jobs.

Last week, the Cape High Court ordered the national Treasury to release R94.5-million and a High Court ruling in Gauteng has forced the national Treasury to cough up R300-million for Gauteng operators.

There was still uncertainty as to when the money would actually be paid, Msibi said.

Lindani Mbunyeza, spokeswoman for the National Treasury, said the government intended to pay bus operators “at its earliest opportunity”.

She said she could not be more specific.

She said that at a meeting on Friday between the Treasury and the national and provincial departments of transport, it was decided that the Treasury would forward the money to the transport company, which would then pass it on to the bus companies.

“The deficit covers the period starting in November 2008 until the end of the current financial year.”

Transport spokesman Alfred Nhlapo said: “The funds received from the national government in November 2008 were used to offset the deficit that was already in existence in the preceding year.”

Transport set aside R1.9-billion for operators in Gauteng and R92-million for Golden Arrow Bus Services in the Western Cape.

The Golden Arrow bus company had been forced to find millions of rands in bridging finance while it waited for the government to cough up its outstanding subsidies.

Golden Arrow executive director Barry Gie said yesterday the company would still be able to operate tomorrow and Tuesday and he was confident the money would be paid by then.

“It’s our every wish and desire to continue operating and we will do so for as long as we can,” he said.

And it is not just Golden Arrow that finds itself on the edge – embattled bus operators across the country said if the money is not paid over soon, bus services across the country would simply stop.

In Gauteng, the South African Bus Operators Association said it was seeking legal advice, and intended to submit an application to the High Court to order that the province’s Transport MEC, Ignatius Jaco, appear before the court for failing to meet yesterday’s payment deadline.

By Friday the government had only paid R6-million of the R300-million owed to bus companies in Gauteng.

Mbunyeza said they would be having “ongoing discussions” with national and provincial transport departments.

“We are meeting and discussing the position after (Friday’s) ruling.

“We are treating this matter with the urgency it deserves.

“We do not have a contract with the bus operators, but we agree they must be paid.

“But, there’s no immediate time frame.”