Durban Transport in crisis

2014-01-29 00:00

THE saga of Durban Transport’s woes has reached a “crisis” that will see an independent administrator run the company after the city had to pump another R8,1 million into the Tansnat Bus Service’s account.

A report tabled at yesterday’s executive council (Exco) revealed that Durban Transport, currently run by Tansnat Bus Service, a private operator, was in a “serious crisis” that had seen taxpayers’ money being used to rescue the situation. The bus fleet and depot are owned by the city.

The city pumped about R8,1 million into Tansnat coffers in December to enable the company to pay its staff.

City manager Sbu Sithole said Tans­nat approached the eThekwini Municipality for temporary relief after they had not been able to pay workers on time.

Sithole said the Tansnat cash flow problem posed a “catastrophic challenge” to the city’s public transport system and the money was paid “to ensure a continuity of services”.

He said the company owed the South African Revenue Service (SARS) R18,1 million in October 2013 and a further amount of R6,2 million in January. The company’s account was being monitored by SARS but the city could not allow a situation where the commuters would be compromised, he said.

Sithole said the payment to Tansnat was made while council was in recess in terms of Rule of Order 18, which allows the mayor and the city manager to deal with urgent matters without the approval of Exco.

Exco members agreed it was necessary for the city to bail out the private operator, but more needed to be done to address the current problem.

DA Exco member Heinz de Boer said the city had experienced problems with the operation of Durban Transport for a long time.

NFP councillor Bongiwe Mtshali said Exco needed to deal with the transport issue urgently. “The issue of Durban Transport embarrasses us and we must remember that drivers have families too.”

Minority Front councillor Patrick Pillay said issues between SARS and Tans­nat shouldn’t be an issue for the city. “We need to accept that we are now facing a serious crisis and need urgent involvement.”

Deputy mayor Nomvuzo Shabalala said the need for an administrator was urgent as Tansnat was now unable to operate.

• Additional reporting by Jonathan Erasmus

Timeline:

October 1, 2003: City awards the sale and operation of Durban Transport to Remant Alton Land Transport (Pty) Limited for a period of seven years. The company buys the service for R70 million and is led by controversial Durban businessman Jay Singh and the former ANC provincial treasurer Diliza Mji. During its period of operation, the bus service, according to reports, received over R1 billion in government transport subsidies.

April 2006: A fire destroyed 69 of its buses – believed to be the result of arson.

May 2008: The service stopped for two days when workers went on strike to demand a pay increase.

September 2008: eThekwini Municipality agrees to buy the bus fleet for R405 million. This buy-back agreement sparked a six-week long strike by bus drivers, who, among various demands, also demanded to be employed by the municipality.

January 2009: Commuters were left stranded when bus drivers protested the possible shutdown of Remant Alton.

March 2009: Remant Alton suspended its services and declared itself technically insolvent.

May 2009: Passengers left stranded again when drivers strike once more. claiming their working conditions are poor.

June 30, 2009: Remant Alton stops operating and dismisses all its employees. Transport and Allied Workers Union (Tawu) disputes the large-scale dismissal.

July 9, 2009: Then MEC for Transport, Community Safety and Liaison Bheki Cele and the former mayor Obed Mlaba announced Tansnat Africa — which operates fleets across the province and is partly owned by Mandla Gcaba, a relative of President Jacob Zuma — and would see the Remant contract through, ending in September 2010.

July 19, 2009: KZN bus operators launched an urgent application in the Pietermaritzburg high court seeking an order to have the award of the contract to Tansnat set aside, claiming it should have gone out to tender. The application was successful and the city took it on appeal, which was declared “moot” once it was heard in November 2010. Tawu claimed Tansnat should have continued employing all the dismissed workers and took the matter to the Labour Court.

July 2009: The U.S. Consulate Durban informs Washington via a cable, subsequently leaked by Wikileaks, of the issues surrounding the beleaguered bus contract.

2010: Tansnat continues to operate the bus service despite the high court ruling. The status quo has remained as the city attempts to find a workable solution to make the service viable

November 2013: Johannesburg Labour Court dismisses Tawu’s application against Tansnat.

January 27 2014: The city reveals Tansnat has a cashflow problem and the city had to make a “relief payment” of R8,1 million to the operator in December, when the council was in recess, or face the possibility of the service shutting down. Tans­nat is facing a hefty SARS bill.

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