Putco idles while department mum on public transport operations grant

Hopes that the eased Covid-19 pandemic restrictions will provide relief have been dashed once again for the public transport sector, as the economic outlook for 2021 has already begun to follow a pattern disturbingly similar to last year’s. 

Dismal figures may not even be accurate, and experts are warning that a third and fourth wave could plague the country later this year. 

The most recent tragedy to hit the transport sector was news of bus company Putco retrenching 214 employees, attributed to “declining passenger numbers and a loss of revenue”.

Putco said it had been engaging with government along with the South African Bus Operators Association (SABOA) since March last year to request financial relief.

ALSO READ: Putco ‘forced’ retrench over 200 employees as it waits for financial relief from govt

Mindful of the “sluggish economy and the impact on the fiscus”, Putco said it was requesting that part of the Public Transport Operations Grant (PTOG) be allocated to them as emergency relief. 

The financial shock of having to foot massive personal protective equipment (PPE) bills along with keeping up licensing and labour costs, among other financial constraints, has left the company with no choice but to issue Section 189 notices, they said. 

Sanitising buses is not a cheap exercise. Picture: Putco

Business as usual

SABOA said it projected that in total, the bus industry had had to fork out around R102,728,850 every month for sanitising their fleet. Very little of this amount was subsidised by government, SABOA executive manager Bazil Govender said. 

The transport sector is in dire need of PTOG payouts, which set aside 5% to compensate the sector. This amounts to approximately R337 million, SABOA said. 

“There has been no official engagement with industry with regards to the reallocation of the funds… And to date, very little or no relief has been forthcoming,” Govender explained. 

He said that other relief schemes such as the Unemployment Insurance Fund’s Temporary Employer/Employee Relief Scheme (Ters) were also of little help. 

It is now feared that the sector will have to soldier on with little cash for the next year. 

Last year alone, around two million people lost their jobs. 

Many of those lucky enough to still be employed are currently working from home, which further reduces commuter numbers, SABOA explained. 

In addition to this, passenger restrictions were observed in earlier lockdown levels. Passenger fare revenues make up around 60% of a commuter bus company’s revenue, which has left a gaping hole in the pockets of companies such as Putco. 

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Reduced passenger numbers have also led to layoffs and a significant number of buses being parked off and unused for months.

‘Not flexible enough’

Govender said the Department of Transport, as well as Minister of Finance Tito Mboweni, were not being “flexible and agile” enough in providing funding to the sector. 

Picture: Putco

SABOA is part of the National Economic Development and Labour Council’s (Nedlac) rapid response transport committee, and reported having countless high-level meetings. 

However, Govender said “nothing came from these meetings”, and that in the meantime, companies have had to self-fund additional costs such as sanitising, “at a huge additional expense”.

Govender said the issues faced by the industry were “directly related to the disconnect and approach between the tiers of government, as there is very-little-to-no alignment between national and provincial departments of transport”.

Some progress was made in Gauteng, but Govender said relief payments had been halted since August 2020, due to internal policy and approval issues remaining unresolved. 

Transport department spokesperson Ayanda-Allie Paine said the “precarious position” some bus operators currently found themselves in was “unfortunate and is a source of concern”. 

However, she said that bus operators qualified for “a plethora of government funds” due to them being formalised. 

“At present, bus operators in need of financial assistance are urged to make use of the Credit Guarantee Scheme, which provides loans to qualifying businesses.” 

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She said the department had “on several occasions” extended validity of documentation to ensure sustainability in the sector. 

Paine did not, however, mention the PTOG, or address Putco’s allegations of non-payment. 

Putco’s distress ‘self-created’

The National Union of Metalworkers of SA (Numsa) did not mince their words in placing Putco’s worries squarely on the company’s shoulders. 

In a statement issued on Saturday, the union said it believed that “Putco’s financial distress is self-created”, and pointed to “evidence of mismanagement”, rather than the pandemic, as being the source of the company’s retrenchments. 

They condemned Putco for cutting jobs, saying it was unlikely that the retrenched workers would find alternative employment “anytime soon”.

Numsa said it had “scrutinised” Putco’s financial records, and “picked up on many examples of mismanagement and wastage”. 

The union said the company’s buses were “old and poorly maintained”, which results in there not being enough buses on the road. 

They also questioned why Putco’s government subsidy, of which the company was said to have received at least 60% of during lockdown, still led to retrenchments. They said workers’ salaries were not paid for three months despite the subsidy. 

The union said millions were lost each year due to “fake tickets”, saying their “ancient ticketing system, which was invented in 1947 and has not been updated since”, was beginning to result in the company bleeding money. 

Numsa general secretary Irvin Jim said the union had not yet decided on whether they should take the issue to court, or go on strike. 

“But we are determined to do what is necessary to save jobs at Putco.”

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