Metrobus is failing to collect much needed revenue to help the company return to profitability because of major loopholes in the revenue collection system, said Transport MMC Nonhlanhla Makhuba.
The details about the struggling bus company emerged in the Joburg council sitting last week.
Makhuba conceded there were loopholes in the system of fare collection and was draining millions of rand.
“Without a proper working system we are unable to improve revenue. With the budget that has been allocated in the next financial year and measures put in place by the department, we will get to bottom of this.”
Metrobus spokesperson Goodwill Shiburi said, “Revenue shortfall is caused by poor and obsolete collection as well as bus shortfall.”
Shiburi added “... an estimated fare revenue shortfall amounting to R25million per annum (40%) can be directly attributable to poor revenue collection system.”
According to its mid-year performance assessment report for 2017/18, “revenue realised for the quarter was R325m against a target of R348m, reflecting a R23m revenue shortfall”.
The report further stated that “the entity has been making losses over the past 15 years and one of the major causes had been the inability to collect all the revenues due”.
A source alleged that the cash system was being exploited by drivers who did not check in some of the fares.
“Large sums of money continue to drip out of the company. Buses operate daily but do not make a profit.”
Makhuba said discussions were under way for an integrated cashless payment system for both Metrobus and Rea Vaya.
The city has budgeted R80m in the 2019/2020 financial year and R50m in 2020/2021 for these improvements.
The integrated cashless system is expected to be implemented in 2021.
Shiburi said the budgeted amounts would be directed towards “the interim revenue collection system while Metrobus awaits the finalisation of the integrated revenue collection system”.
The company did not have enough buses to service its clientele and Makhuba said Metrobus had been granted permission by the council to lease buses to make up for the shortage.
The majority of the buses had reached the end of their lifespan, she added.
Metrobus will only likely to be re-fleeted in the 2019/20 financial year as the council has only budgeted to fleet Rea Vaya Phase 1C in the current financial year.
The company had leased 10 buses which were already operational, said Makhuba. She said plans were afoot to lease 20 more but did not indicate when this would happen.
The city also intended refurbishing about 29 buses, she said.
Johannesburg’s treasury division and its Department of Transport were in talks to derive plans to introduce a cashless payment system to improve revenue collection, she said.
The 2017/18 midterm performance review report showed that Metrobus transported about 5 million people, falling short of its 7 million target.
Shiburi said the council was working to improve its communications and marketing platforms to attract more commuters to the system.
They were also “leasing buses for high-demand routes and have established a reliability unit to reduce the number of buses out of operation”.
A Metrobus member of the passenger forum, who do not want to be named, complained that the service was unreliable and that most of the fleet was old.