- January 26, 2009
- Posted by: admin
- Category: Transport
The bus service that ferries over 250 000 people across Cape Town every day is on the verge of bankruptcy and has approached the courts for a lifeline to force the government to immediately pay millions of rands in subsidies owed to it.
The Golden Arrow Bus Services has filed an urgent application at the Cape High Court in a bid to obtain more than R92 million in outstanding passenger subsidies the government owes it for December and January. The application was filed on Friday.
The move to get the funds immediately follows an order handed down by the High Court Just over a week ago, in which the respondents – the provincial and national transport departments, the Minister of Finance and the Minister of Transport were ordered to pay Golden Arrow the outstanding subsidies for December and Januarl as well as those up until March.
Interest and the company’s legal fees were also to be paid.
This was decided after an out- of-court settlement between the parties on January 15.
However by Friday the money had still not been paid.
The dispute began in November when the SA Bus Operators Association was informed that its subsidy budget for the financial year had been exhausted.
Consequently, subsidies would not he paid to operators from December to March, until Finance Minister Trevor Manuel outlined the new budget in April.
In its initial court papers, Golden Arrow indicated that its “financial survival is at stake” and that it depended on the subsidy money to rescue it. And it needed it as soon as possible.
“Unless the relief sought in the notice of motion is obtained, the Applicant (Golden Arrow) will not be able to meet its commitments from the end of January 2009 and will to all intents and purposes be insolvent by then,” Golden Arrow executive director Barry Gie said in an affidavit.
The founding affidavit said that without the money, it would not be able to continue its services to some 250 000 commuters it transported in the city and its surrounds every day.
In a statement by the spokesman for Transport and Public Works MEC Kholeka Mqulwana on Friday, the department said it was “doing everything it can to ensure that the money due to Golden Arrow is paid”
Source: Cape Argus – Leila Samodien