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The eThekwini Municipality has commissioned a management and strategy company to conduct a 10-month investigation into the city’s bus service at a cost of over R1 million.
Representatives from Pegasys Strategy and Development on Tuesday briefed the city’s executive committee on legislative processes and a business plan for the establishment of a municipal transport service.
The municipality could either operate the city’s transport service as a council unit, a trading service or a municipal entity.
Pegasys would investigate all the options and determine the appropriate option for the future of Durban transport, looking at feasibility, funding and financial implications.
The company would also investigate how other national and international cities operate their transport system.
City manager, Sibusiso Sithole, said a decision on the best model for Durban would be made in November.
“The decision will be based on which is more financially viable,” he said.
It emerged during the presentation that the city could lose R180m in public transport operations grant subsidy from the provincial government if it decided to take over full operation of the bus service. This would increase the city’s financial burden, said Pegasys.
“A legal question is whether the public transport operations grant subsidy may be used to subsidies a municipal contract or municipal-provided service,” read the document.
During a full council meeting earlier this year, the city had resolved to take over full operation of the bus company.
Durban’s public transport has been in a shambles since previous bus service provider Remant Alton – which was sold the bus service in 2003 by the city for R70m – pulled out in 2009, citing financial difficulties.
The company was replaced by Tansnat Africa in July 2009 and its contract was to run until the end of 2010, but it was declared illegal by a court later that year.
The contract has been renewed on a month-by-month basis.
In April, Sithole said irregular expenditure of R300m had been incurred by the council under this contract since December 2010.
Thami Manyathi, of the eThekwini Transport Authority, said, depending on the decision taken by the council in November, the investigation by Pegasys would be completed in May.
Opposition parties have repeatedly said in the past they would not support the move to have the municipality take over full operation of the bus service.
Minority Front councillor, Patrick Pillay, said for an efficient transport system the bus contract should be awarded to smaller private operators.