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Putco stops advertising of lucrative bus tender

Gauteng transport MEC Jacob Mamabolo has been stopped by Putco from awarding a lucrative contract to provide subsidised buses in the province. Picture: Jacques Naude African News Agency (ANA).

Gauteng transport MEC Jacob Mamabolo has been stopped by Putco from awarding a lucrative contract to provide subsidised buses in the province. Picture: Jacques Naude African News Agency (ANA).

Published Apr 15, 2022

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Johannesburg - Troubled bus company Putco has stopped the Gauteng provincial government from advertising the lucrative contract to transport passengers across the province.

South Gauteng High Court Judge Denise Fisher this week stopped Gauteng transport MEC Jacob Mamabolo and Transport Minister Fikile Mbalula from advertising the contract to supply of road-based subsidised public commuter services in Soweto, Hammanskraal, Tembisa, Tsakane, Vosloorus, Soshanguve, Mabopane, Garankuwa, Sebokeng, Orange Farm, Lenasia and Atteridgeville as well as Mamelodi.

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Putco wanted a declaratory order stating that Mamabolo was not permitted to put an opportunity to conclude subsidised service contracts out to tender in terms of the act until and unless there are valid and compliant transport plans and integrated public transport networks, as defined in the statutes, in place for the relevant areas.

Putco, the Trustees of the Bus Industry Restructuring Fund and the Southern African Bus Operators Association (Saboa), objected after the provincial government advertised its intention to invite other companies to bid for several lucrative routes that have been serviced by the bus company for decades.

Judge Fisher found that Mbalula had withdrawn his consent for the provincial transport department to go ahead with the tender process.

Mbalula is required in terms of the National Land Transport Act to give consent to provinces to contract bus companies.

”Even if the MEC is correct that the minister’s withdrawal stands until set aside – this does not change the fact that the tender process is, on any version, not capable of proper realisation without the approval of the national government,” the high court found.

According to the judgment, the harm that will befall Putco, the trust and Saboa as key industry players and representatives is clear.

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”If this inchoate tender process, which is not supported by national government, is allowed to proceed to its inevitable fate of not being capable of financial and structural realisation – many years of litigation are likely to follow with the attendant expense and frustration and inability to properly conduct business which comes with such litigation,” Judge Fisher said.

The court found that Mbalula demanded more planning needs to be done to ensure that contracts concluded pursuant to the tender process are sustainable from a transport planning and funding perspective.

Mbalula told Mamabolo that ongoing discussions between his and National Treasury that aim to create a uniform national approach that gives effect to public transport policy while maximising value to the taxpayer.

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The minister said he required more time to engage with the National Treasury and the Office of the Auditor-General in order to come up with a new dispensation, underpinned by a sustainable public transport funding model.

The provincial government, Putco, and Saboa have a tripartite agreement that has been in place for more than two decades.

Mamabolo also wanted to set aside the agreement through a counter-claim which Judge Fisher dismissed.

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The Gauteng provincial government did not respond to The Saturday Star’s questions this week.

The Saturday Star

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