Provincial Treasury approves R120m scholar transport bailout

The provincial treasury has approved a bailout of more than R120m for the scholar transport programme.

The provincial transport department had requested a R378.2m cash injection as it owed operators millions of rand but this could not be granted.

On Friday, provincial treasury spokesperson Pumelele Godongwana confirmed arrangements for the bailout had been made.

The treasury could not afford the requested amount and cited “financial constraints we are facing as a province”.

“This in itself does provide a liquidity risk for the province, and that is why prudent financial management had to prevail as we approved this excess facility,” Godongwana said.

“The excess facility was also endorsed by the premier [Oscar Mabuyane].”

Unpacking the conditions of the bailout, the treasury said the excess facility would be utilised to address current pressures in the department emanating from settlements made to scholar transport operators.

The department is to provide a sustainable turnaround plan in order to mitigate the ongoing concern issues by the end of March and “this should be reported at least on a quarterly basis”.

“The department should provide a repayment plan to provincial treasury on the excess facility,” Godongwana said.

“Further contracts entered into by the department of transport should be affordable and based on the existing budget for scholar transport.

“The department should work with the department of education to verify the number of scholars transported and only ferry the number of scholars that are provided for in the budget.”

The treasury wants the department to review the tariff structure for scholar transport to ensure affordability.

“As long as the department of transport remains in excess/overdraft, funds for service delivery of the province will be tied up and kept aside to ensure that, overall, the provincial revenue fund is not in overdraft so as not to be in conflict with the PFMA [Public Finance Management Act],” Godongwana said.

“The transport MEC must ensure implementation by the accounting officer of all remedial action as indicated and report to the finance MEC and premier on progress at least quarterly.”

Provincial transport spokesperson Unathi Binqose confirmed the department had already started processing payments of legitimate claims.

Binqose said the door was open for operators whose claims were questionable.

“We did process the payments amid challenges ... some induced by the problem of load-shedding.”

However, South African National Taxi Association (Santaco) B provincial coordinator Gabs Mtshala on Friday said the government had let the operators down because they had not been paid.

Mtshala said Santaco would go back to its planned shutdown on Monday.

The strike was initially scheduled for the reopening of schools, but was put on hold after talks with the provincial government.

“They did not negotiate in good faith,” Mtshala said.

On Sunday, the Eastern Cape Small Bus Operators Council’s Manelisi Siguqa confirmed that not all operators had been paid.

Siguqa said he hoped the department would deliver on its promise to pay all the outstanding invoices this week.

In his correspondence to the operators on Friday, provincial transport head Mzilindile Mafani said the department had made a commitment to pay all outstanding invoices through the payment run of January 24 and that funds would reflect in the bank accounts by Friday.

“The payments for scholar transport operators are made though a process that has no interface with both the national and provincial treasuries before the actual payment is made,” he wrote.

“Once the payments are processed, it is then that the department gets a report that shows the payments that have been effected.

“It is through the process and retrieved report, as indicated, that in the early morning of Thursday January 26 the department realised that there will be operators who would be paid and those who would not get paid by Friday January 27.

“The department has made every effort to ensure that those who were affected did make the run on Thursday and through a special run on Friday.

“Subsequent to the efforts, outstanding monies will reflect in the respective operators’ accounts, at the latest, on Wednesday February 1.”