Negotiations collapsed between the city and members of the N2 Express Joint Venture (JV) operating company. The company is made up of Route Six Taxi Association, Golden Arrow Bus Service (Gabs) and the Congress of Democratic Taxi Association (Codeta).
On Saturday, mayoral committee member for transport Felicity Purchase announced that the N2 Express service would be suspended until further notice.
Purchase said lawyers from the city and Codeta had been in talks to reach an agreement. By Saturday, they had not and this could spell disaster for the already constrained N2 highway, given the unreliable train service.
At the root of the problem is the collapse of the relationship between the three shareholders, with Codeta opposed to working with Gabs. Codeta raised concerns about further extending the three-year contract as this would be the fifth extension in two years.
When the contract ended in June 2017, it was extended for six months, then two months, three months and a year. Now the city is seeking another extension after this contract lapsed on Friday at midnight. Codeta approached the Western Cape High Court on Friday but failed to interdict parties from entering into new agreements.
“This is all about Golden Arrow dominating the operation, which prompted questions that if this is JV’s contract, why is Golden Arrow dominating every level of operation, from the employees to the handling of money?” asked Codeta’s lawyer, Barnabas Xulu.
“The contract looks like it was just a front, one that is aided by the city, which is the contracting authority. Codeta has raised these concerns on several occasions, but the city did not act, so we, the client, are asking why we need Golden Arrow? If you look at it, the whole concept was to empower owners of minibus taxis. They had to surrender their taxis and permits to this N2 Express. Golden Arrow is running this operation but are not transparent with the other members.”
He added that a special general committee (meeting) with affected communities would take place tomorrow. In its court papers, Gabs denied the allegations, stating that it had been sharing profits with other parties as of last year, with R1 million given to each.
General manager for Golden Arrow Derick Meyer said it was the service vehicle operator, which meant that although the contract was between JV and the city, Gabs was responsible for delivering a bus service on behalf of JV. This entailed managing the running of 43 buses and 124 employees comprising drivers, supervisors and mechanics.
In his affidavit, Meyer said allegations that Gabs was deliberately excluding Codeta from JV, and Codeta did not derive any financial benefit were untrue.
“Both Route Six and (Codeta) have received R1m in dividends of JV for the financial year ending June 2018.
“Each shareholder stands to receive dividends of approximately R5m to R6m over the current financial year, based on JV’s March 2019 management accounts, which showed a profit (before tax) at approximately R18m for the financial year to date.
Chairperson of Route Six Henry Williams conceded there had been disputes over money with Gabs previously, but believed it was an old matter that had since been resolved - which Codeta was using in an attempt to run things themselves.
“Gabs is competent and capable of running the company, but we as the taxi associations are not capacitated to take over the company.
“The coloureds and the blacks don’t have the capacity to run a bus company of that nature as yet, but we are moving in that direction.
“Now Gabs has capacitated us for the past three and four years and we are not ungrateful,” he said.
“We have differences and there were outstanding issues, but they are company matters this has become political because one party is not satisfied. We know they were wrong, but Golden Arrow has come to the party; they are willing to share profits. In fact, they have started sharing profits.”
MEC for Transport and Public Works Bonginkosi Madikizela said he welcomed the city’s stance to suspend services until a resolution was found.
“It is in the best interest of people, because we know what happens when taxi associations are not happy.”