Tansnat owner Mandla Gcaba File picture: Nqobile Mbonambi

Durban - The eThekwini Municipality and the embattled Durban bus transport operator, Tansnat, have again crossed swords over the controversial financing of the service, with the latter demanding “an unpaid” R132 million.

The developments threatened to yet again leave thousands of commuters and unsettled bus drivers in limbo with the prospect of a strike should the stalemate not be resolved.

Public Protector Thuli Madonsela has also been drawn into the fray as the IFP’s Mdu Nkosi has asked that she investigate the controversy riddled service.

The Mercury has established that the city is in breach of a March court order, taken by consent in the Durban High Court, in terms of which a task team was to be appointed to oversee the bus company’s finances.

This comes after the establishment of an intervention team to oversee the finances of the bus service and co-manage Tansnat’s new ring-fenced bank account.

The city declined to comment on Tuesday.

Since last year, the two have been locked in bitter legal disputes, with the municipality insisting that Tansnat owed it more than R40 million and accusing Tansnat owner Mandla Gcaba of using the company’s bank account as his own. Gcaba denied this and Tansnat claimed the city, in fact, owed it millions.

The agreement, a joint statement from the city and Tansnat in April said, provided for the appointment of “a reputable law firm to adjudicate the issue of monetary claims that the city and Tansnat have registered against each other to determine, once and for all, how much each party owes the other and how these debts are to be settled”.

The interventions came after a number of disruptions to the bus service had left commuters stranded, following diesel shortages and the late payment of staff salaries, leading to workers going on strike.

Part of the agreement was that funds, including subisidies, relating to the service would be transferred into the account.

But a series of legal letters from the company to eThekwini suggests that the city had reneged on the agreement. Tansnat is now threatening legal action.

Letters of demand sent to the city, and seen by The Mercury, detail how the city had failed to abide by a court order instructing that a “ring-fenced bank account” be set-up for the operation of the service.

Subsidies

Tansnat legal representative Sandile Khoza, of Norton Rose Fulbright, wrote to city transport authority head Thami Manyathi and his deputy, Mlungisi Wosiyana, on May 20, raising the issue of the city’s failure to make the payment.

“eThekwini has failed to pay the monthly subsidies due to our client into the ring-fenced bank account as prescribed by the settlement agreement,” Khoza wrote.

About R36.5 million in subsidy had not been paid by the city, the letter stated.

“We are therefore instructed to demand from you, as we hereby do, that you pay all the outstanding subsidy payments amounting to R36 million into the ring-fenced bank account within seven days from the date of receipt of this letter, failing which we will institute legal proceedings against the city without any further notice,” Khoza wrote.

The non-payment by city manager S’bu Sithole was affecting the “critical service provider payments timeously, such as the diesel fuel supplier/s”.

“Our client intends instituting legal proceedings against the city should this conduct, which is in contempt of the court order, continue in future,” Khoza wrote.

On June 3, Tansnat stated that the R36 million “only related” to the city’s portion of the subsidy for between January and April this year. The figure then balloons to a staggering R132 million with the addition of about R100 million for further unpaid subsidies for between July last year and January.

Tansnat spokesman Vuyo Mkhize said the bus operator would only comment on the matter jointly with eThekwini.

He said, however, that Tansnat was “concerned at the city’s move to set up a municipal entity to run the buses”.

This move was in conflict with the intervention task team.

“Our worry is that this comes about in the context where we have this process (task team) outlined by this court order that has not yet been finalised,” he said. “This court order was meant to establish - once and for all - what is the true state of affairs; who owes whom and who is responsible for the disruptions that keep coming up.”

Municipal communications head Tozi Mthethwa refused to respond, saying the city “will not get into the merits or demerits of the enquiry”.

“Our position is that all matters relating to the running of the bus service will be dealt with through the intervention team set up by council, thus guaranteeing that bus operations run smoothly,” she said.

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@Sihle_MG

The Mercury