RECENTLY the bus service was disrupted in eThekwini for three weeks 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.
A special executive committee meeting was held on 22 January to discuss how to effectively resolve the problems facing 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 mediator 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.
Two reports were presented to the committee. 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 contributions and the remainder (R17.3-million) for 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 included:
The postponement of the liquidation matter against Tansnat, due in 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.
