- November 1, 2009
- Posted by: admin
- Category: Transport
Cape-based empowerment company Hosken Consolidated Investments (HCI) thinks government could he heading down “a path obliging the curtailment of bus services nationally”.
HCI, which owns Golden Arrow Bus Services. says this is an issue that this is an issue that is completely destabilising the bus induustry – something that is likely to cause significant retrenchments, commuter dissatisfaction and disruption to businesses.
Last year GABS needed to go the High Court in order to force governemnt to meet its obligations of R100 million owed in terms of subsidies.
Writing in HCI’s latest annual report, CEO Johnny Copelyn says while government complied witht he court order for the fiscal year ended 31 March 2009, there are worrying indications thast insufficient funding has been budgeted for the new financial year.
This shortage of funds will, undoubtably, have a very negative impact on Transport’s ability to meet its existing contractual obligations and is likely to put further pressure on the GABS’ cashflow and services.
While some may feel HCI is calling government’s bluff on the subsidy matter, the truth is that GABS does play a meaningful role in the local economy.
Currently GABS operates 1116 buses, wheich convey around 250 000 passengers every working day.
Since HCI took over GABS in 2004 around R460 million has been spent on new buses and refurbishing the existing fleet.
In the past 12 months HCI disclosed that 95 new buses and 219 refurbished buses were added to the fleet – including the acquisition of five MAN Lion Explorer Bis Trains.
In the year to end March 2009 GABS generated R939 million in turnover and R92million in pre0-tax profits. Taht means the division accounts for over 10% of HCI’s R8 billion turnover, but only 3,5% of the group’s pre-tax profits.
Source: Cape Business News