- January 29, 2009
- Posted by: admin
- Category: Transport
The government’s non-payment of R1.2 billion in subsidies owed to bus operators was an attack on people’s jobs, the South African Communist Party said on Thursday.
It would also deprive people of access to affordable transport, spokesman Malesela Maleka said in a statement.
The SA Transport and Allied Workers’ Union said on Wednesday that operators would be able to pay their staff for only the next two weeks if the government did not come up with the money.
The South African Bus Operators’ Association brought an urgent application in the Pretoria High Court on Thursday to try to force the government to pay the subsidies.
The outcome of that hearing was not known shortly before noon on Thursday.
Left unattended, the situation had the potential to result in job losses and drive many small operators into liquidation, said Maleka.
Small bus operators had already approached the SACP about their dire situation.
“Surely, as the SACP has consistently argued before, it cannot be that we throw billions of rands into wasteful expenditures like Gautrain, yet thousands of workers’ jobs and income for small bus operators are placed in jeopardy.”
According to Satawu, bus companies operate on a five to 10 percent profit margin, relying on the subsidies for 40 to 60 percent of their revenue, with the rest covered by fares.
The subsidies are determined by formulae in bus operators’ contracts with the government, and which could include the number of kilometres driven, and adjustments for fuel and labour costs, and growth in the number of passengers.
Golden Arrow Bus Service took the government to the Cape High Court on Wednesday over the R92 million in subsidies it was owed. The case was postponed.
In a statement, Golden Arrow executive director Barry Gie said the company could not guarantee that it would be in a position to continue operating after January 31 as it would be “insolvent by then”.
The department was reportedly short of money it needed to pay them because the National Treasury had refused to meet its original budget request. It had not paid the subsidies since November.
The Treasury, in turn, had reportedly accused the Transport Department of overspending.
The Treasury was not immediately available for comment on Thursday.
Source: Business Report – SAPA