Some subsidised bus contracts have been extended on a month-to-month basis for 19 years now as the government grapples to implement a permanent funding model for public transport.
Transport Minister Fikile Mbalula has revealed that lapsed contracts between the government and companies including Putco cannot be cut yet. He was replying to written questions posed in Parliament by EFF MP Nontando Nolutshungu.
They were extended on a short-term basis for fear of a “total collapse”, as Mbalula put it, of bus services in parts of the country.
Putco transported millions of people to and from parts of Mpumalanga and Limpopo to Gauteng daily.
The company did the same in many Gauteng townships, namely Soweto, Hammanskraal, Tembisa, Tsakane, Vosloorus, Soshanguve, Mabopane, Garankuwa, Sebokeng, Orange Farm and Atteridgeville, Mamelodi.
The “total collapse” that Mbalula fears would leave millions of commuters stranded. The private bus companies were subsidised to keep ticket fares affordable to commuters.
“The continued extension of subsidised bus contracts is simply to ensure that there is no total collapse of services in the country whilst the government is in the process of resolving this matter,” said Mbalula.
“There are ongoing discussions between the department and the National Treasury exploring various options for implementing a sustainable public transport funding model which includes the development of a subsidy policy.”
These discussions have not been finalised almost two decades after subsidy contracts expired.
“There are 34 subsidised bus contracts in Gauteng and seven of these belong to Putco,” said Mbalula.
“However, all bus contracts in Gauteng have reached the end of their contract life, some as far back as 2003, but due to lack of sufficient funds these contracts have not been renewed but are being extended on a short-term basis.
“This is a problem that is not only confined to Gauteng but applies nationally. There are 108 subsidised bus contracts across all provinces and all have reached the end of their contract life and have also been extended on a short-term basis,” Mbalula added.
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