- February 4, 2009
- Posted by: admin
- Category: Transport
After a weeks-long struggle, Golden Arrow has finally been paid more than R94 million in outstanding subsidies.
The bus company was on the verge of bankruptcy because of the government’s non-payment of subsidies for December and January.
Golden Arrow executive director Barry Gie confirmed that the amount had been transferred into the company’s account by 2pm yesterday, eliminating the possibility of it going under.
“This has a huge, positive effect on our operations,” he said. “I hope the message of how important these subsidies are has got through to someone.”
Gie’s concern now was whether the subsidies for February and March would be paid timeously.
The Department of Transport has proposed that provincial treasuries should be more flexible in funding bus operators as a short-term solution for the subsidy crisis.
The proposal was among the interventions which department director-general Mpumi Mpofu presented to Parliament’s transport portfolio committee on Tuesday.
She said a new, bigger budget would be unveiled in April. This would keep bus operators properly funded for the financial year.
However, there was still the matter of subsidies for December, January and February being paid to certain operators outside the Western Cape. Subsidies for March would be paid in April.
Mpofu said more needed to be done on a provincial level when it came to authorising and funding individual programmes.
Therefore, provincial governments needed to consider funding shortfalls from their Provincial Revenue Funds – and not just from the national Treasury’s fund – when it came to programmes that had exhausted their budgets, as in the case of bus operators.
The provincial departments would need to collaborate with their treasuries to find ways of reallocating funds, she said.
In turn, the national Treasury would as far as possible make money available to allow for this.
Portfolio committee chairman Jeremy Cronin said Parliament could not condone unauthorised expenditure but a solution needed to be found to make sure bus operators received their subsidies until the financial year ended.
“We are urging the government to find creative ways of tiding us over, but not to let these creative ways become a pattern,” he said.
Cronin also asked for the department’s proposed remedies to ensure bus operators did not find themselves in the same trouble in 2010.
Mpofu said the department’s main long-term intervention was to change the kind of contracts signed by bus operators. This was in line with the Integrated Rapid Public Transport Network.
Interim contracts, which worked on a ticket basis, had to be converted to kilometre-based tender contracts and then eventually to negotiated contracts.
Andrew Donaldson, deputy director-general responsible for public finance at the national Treasury, said it was important for departments such as the national Department of Transport to budget adequately so there were no shortfalls with certain programmes.
While this was a difficult task, departments could avoid shortfalls by budgeting for existing contracts first, before concentrating on funding for new projects.
“We can’t have budgets where existing commitments are not budgeted for and departments come back later to ask for more funds,” said Donaldson.
Cape Argus – Leila Samodien