Putco responds to strike allegations
Putco suspends bus routes following financial issues.
Putco has responded to allegations about striking and states that they are, in fact, not striking — they are just not renewing certain loss-making tender contracts after they expire on 31 March 2015.
The major bus operator in South Africa has given the Gauteng Department of Roads and Transport (GDRT) notice of it’s suspension of bus services in Mamelodi, Mayerton, and Kathorus (Katlehong, Vosloorus and Thokoza). It should be noted that all other Putco services will continue as normal.
Putco’s Managing Director, Franco Pisapia said, “Under current operating and financial terms, the affected contracts are unfortunately not financially viable and the company cannot sustain servicing them any longer. The decision to withdraw from these areas was not an easy one. During the last three years Putco has made every effort to resolve current issues pertaining to the under-funding of these contracts by consulting with the provincial and national departments of transport, but with no success.”
Pisapia explains, “Due to the age of these contracts, the operational requirements and the cost basis of these contracts have changed dramatically since 1996 and as a result these bus contracts are simply no longer financially sustainable. Since 2009 the annual increases in the subsidy allocation for bus contracts has been consistently lower than the increases in the major cost items of bus operators such as fuel, labour and maintenance. Over time, this has eroded profit margins and pushed bus contracts into financial losses. It has been placing undue financial strain on the company for some time and is impacting negatively on Putco’s operations and services in other areas.”
This move will form part of Putco’s turnaround strategy which will help the major bus operator to be better able to meet its commitments to commuters. The company plans to redeploy all available busses and other resources to its other contracted routes. This change will affect approximately 180 of Putco’s current fleet of 1 900 buses.
The following bus services will be affected by the announcement:
• Bus services between Kathorus and Edenvale, Germiston, Linbro Park, Johannesburg, Boksburg and Kempton Park.
• Bus services between Evaton, Sebokeng, Orange Farm and Meyerton and the surrounding areas.
• Bus services between Mamelodi and the Tshwane CBD, the Southern Suburbs, the Eastern Suburbs and the Northern Suburbs of the City of Tshwane.
“Putco wishes to thank the bus commuters in Mamelodi, Meyerton and Kathorus for their loyal support to Putco during the last 19 years,” Pisapia said.
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