Treasury gave Gauteng Roads two R2bn bailouts in 2 years
Politics / 11 November 2017, 11:56am / Baldwin Ndaba
Johannesburg - The National Treasury gave the Gauteng Department of Roads and Transport a bailout of almost R2 billion, despite it failing to account for travel claims by 34 bus companies.
The bus companies were appointed to ferry commuters to various parts of the province.
This was the second bailout for almost the same amount in the past two years, the Gauteng Provincial Legislature’s standing committee on public accounts (Scopa) heard on Friday.
The shocking admission was made by the head of department, Ronald Swartz, when he and senior managers appeared before the committee yesterday.
If the National Treasury did not approve the irregular expenditure, the provincial Department of Roads and Transport would be docked about R2bn by the provincial treasury when it allocates its annual budget for the 2018/2019 financial year.
Swartz told Scopa that his department was subsidising 34 bus firms but was “unable to monitor every single trip they undertake” to justify payment.
He said the payment was made based on claims submitted by the bus operators to the provincial department, but the auditor-general had made adverse findings against the department.
The department had been obtaining similar qualified audit reports on these bus contracts for the past three years, which prompted Scopa to summon the department's top officials before it to demand answers.
According to the auditor-general’s report, the department had an irregular expenditure of more than R2.3billion on bus subsidy contracts alone for the year ending March this year.
Other irregular expenditures included:
* R17.1 million for the extension of security and cleaning contracts due to ongoing litigation.
* R8.7m in Instruction to Perform Work (IPW) for the design and construction of two roads.
* R12m for the construction of taxi ranks in Vereeniging.
* R918 000 for the payment of disciplinary enquiries which are still under investigation.
Swartz admitted the department does not have systems to validate the claims of trips taken by these bus operators.
As a result, irregular expenditures “were going to continue to be a problem”, he said.
Worsening the problem was the failure to monitor firms appointed to do the tracking and failing to keep minutes and records of their work.
Swartz said the department has now entered into an agreement with Putco to conduct electronic monitoring, which would see the companies install tracker systems on their fleet of buses to monitor every single bus trip.
Scopa also heard that the National Treasury had already condoned the irregular expenditure on the bus contracts.
The provincial department’s chief financial officer, Sanele Zondo, said they “received approval of irregular expenditure condonation from the National Treasury amounting to R1.959bn, which is in respect of the extension of the bus subsidy.
“This is in full support of the R1.959bn that was requested by the department as part of the condonation request,” Zondo said.
In a further bid to reduce the irregular expenditure, Swartz told Scopa that his department was on the verge of handing five of these bus contracts to the City of Tshwane and the Sedibeng district municipality to manage the operations of the contracts and to reduce the burden on it.
Similar plans were made for the City of Joburg.
The department also plans to cancel the Moloto routes, which would probably save it R1bn.
Zondo also told Scopa that they were waiting for the National Treasury to approve R381m for the design and construction of roads and a taxi rank in Vereeniging.