Bus fare hike put on ice

2019-07-10 06:00
George Mokgothu

George Mokgothu

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The proposed 7,4% tariff hike in fares for passengers utili­sing Interstate Bus Lines (IBL) has been put on ice.

This annual increase in fares for passengers was expected to be effective from Monday, 1 July.

The IBL management and the Free State Department of Police, Roads and Transport both announced that the proposed 7,4% tariff hike has been postponed until 1 August.

According to the department the reason for the postponement was to give stakeholders more time to give their input on the matter.

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

The final decision regarding new tariffs is reportedly expected before 1 August.

The increase will be for passengers that daily utilise the IBL and Maluti Bus Service (MBS) as their mode of transport to work, mostly in Bloemfontein.

Last year IBL was forced to reduce tariffs to 6% from the hike of 7,5% which was initially proposed.

The bus company reduced tariffs after intervention by the department and threat of protest actions by passengers, who maintained the increase was unaffordable.

In 2017, IBL was also forced to reduce its annual fare increase to 6,5% from 9% following violent protests by unhappy passengers.

Unhappy passengers went on a rampage, torching some buses.

The proposed 7,4% increase would be versus an increase of 9% of IBL’s projected expenses for the just-ended financial term of 2018-’19, and also the 3,2% increase in subsidy from the provincial government for the same period.

Last year government’s subsidy increase of 3,2% was far lower than the 5,2% subsidy increment in 2017-’18 by government.

George Mokgothu, IBL’s chief executive officer, explained last year that based on its calculation the company was entitled to an 11% fare increase for 2018-’19.

The proposed 7,4% increase for the 2019-’20 term is understood to be also versus the current South African inflation rate of 4,5% and the country’s 15% VAT, which has added to the burden of a high cost of living for people and increased expenses for companies.

A tariff hike will mostly affect passengers from Botshabelo with the largest number of commuters, followed by Thaba Nchu with the second largest.

Commuters include people working in Bloemfontein and students attending tertiary institutions.

Currently the bus company has a fleet of 242 buses operating, having increased it from 169.

The number of buses increased in 1998 when the company entered into a contract with the Free State Department of Police, Roads and Transport.

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