Bus fare hike approved

2019-07-31 06:01

Following approval by stakeholders, the proposed 7,4% tariff hike in fares for passengers utilising Interstate Bus Lines (IBL) will officially be effective from tomorrow (01/08).

The hike was expected on 1 July, but was put on ice until August.

Both the IBL management and the Free State Department of Police, Roads and Transport announced that the postponement of the proposed tariff hike was to give stakeholders more time to give their input.

Stakeholders include the IBL management, Joint Route Management Committee, Free State Department of Police, Roads and Transport and the Passengers Focus Group.

The approval of the 7,4% tariff hike came after an increase of 5,6% of the subsidy by the Free State Department of Transport.

According to George Mokhothu, IBL chief executive officer, the subsidy increase was favourable.

“The increase in subsidy by 5,6% is better than last year’s 3,2%. However, we need to take into consideration the inflation rate, as well as the accumulated impact of the previous financial years’ increases, which have been far lower than what the bus company’s expenses were.”

Having taken into consideration the current economic situation, Mokhothu said the bus company had applied for a minimum increase of 11%.

“The company was at least hoping for a 9% increase in line with what other companies of its size have received approval for. The 7,4% as approved by the provincial Department of Police, Roads and Transport, although accepted by IBL, will pose serious challenges. It is way below the trend of operational cost increases at which its operational costs increase with. The weakening of the rand against the dollar also impacts the capital procurement of buses, the rise in cost of spares (12%), fuel (12%) and tyres (8%), and the increase of salaries and wages by 8%,” said Mokgothu.

He said IBL has a fleet of 242 buses. It has already invested around R9 million in procuring 69 seater buses to replace some of the older 65 seaters still operating in the rural Thaba Nchu trust areas.

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