A secial Executive Committee meeting of the eThekwini Council was held on Friday to discuss how effectively resolve the problems facing bus operator Tansnat, and ensure a smooth transition process to the new operational model of establishing a Municipal entity to run the service.
Measures to be undertaken include appointing an intervention team to manage the operation and finances of Tansnat, ring-fencing the operator’s account and appointing a meditator to investigate claims that the City owes Tansnat money.
The Municipal entity is expected to be formed by July. A report will be presented to the Executive Committee in February providing an update on progress made in establishing the entity.
Recently the bus service was disrupted after Tansnat employees went on strike over their December salaries and bonuses not being paid.
The City intervened and paid the salaries and provident fund of over 1 000 verified employees to ensure the bus service would be operational and not further inconvenience commuters. The money paid by Council was added to the Tansnat debt.
Two reports were presented to the Executive Committee on friday. The first outlined the action taken by City leaders while Council was in recess. This included the payment of R33.3 million by the City, of which R16 million was to pay the provident fund and the remainder (R17.3 million) staff bonuses and salaries.
The second report outlined recommendations to be taken to effectively run the bus service until a Municipal bus entity is in place to run the service.
The recommendations that were approved by the Executive Committee include:
• The postponement of the liquidation matter against Tansnat headed to Court in March;
• The appointment of an intervention team to manage the operation and ensure financial ring-fencing of the bus operation revenue;
• Opening a ring-fenced account for the business, into which all revenue generated will be paid. Expenses to be met will be vetted by the intervention team;
• An independent mediator will be appointed to address all claims between the City and Tansnat and;
• The agreement to be made an order of Court.
City Manager Sibusiso Sithole said various options were explored before it was decided to pay the outstanding salaries and bonuses of Tansnat employees.
Sithole said the City was prompted to intervene as commuters were adversely affected.
“Commuters told us they had bought their bus tickets for the month but with the bus service not running, they were stranded. They were not in a financial position to pay for alternate transport yet were expected to get to work. Tansnat employees also had commitments to meet such as bonds and school fees. Payment was made to employees directly after their details were verified, and not paid to the company,” he said.
He said while the previous issues had been resolved, they had to now look forward to resolve issues still facing the operator.
“Tansnat has indicated that they will have difficulties paying the January salaries of employees and have asked the City to intervene. This may also be a problem in ensuing months. We believe the recommendations implemented will assist in effectively managing the bus service until a Municipal entity is formed to take over,” Sithole said.
“We are trying to effectively manage the transition period until the Municipal entity is established. Our actions confirm that we have always done what has been in the best interest of Council,” he added.
Mayor James Nxumalo said the process to form the Municipal entity to run the bus service must be completed within the specified time frame. “We have to manage this process efficiently in the interim until it is finalised. We want a solution as soon as possible,” he said.
Deputy Mayor Nomvuzo Shabalala echoed the Mayor’s sentiment and said the City owned the buses which was why it was necessary to intervene.
“Claims by Tansnat that the City owes them money must be investigated by the meditator whom we expect will get to the bottom of who owes whom. The City prioritised the running of an efficient bus transport system since hundreds of our community members depend on it,” Shabalala added.
