ETHEKWINI NEWS FLASH
 
FOR IMMEDIATE RELEASE
 
4 April 2016
 
Interventions to Stabilise Muniipal Bus Service Yields Positive Results
 
The Municipal bus service, run by private operator Tansnat, is stable following interventions that were agreed upon by both the City and the operator.
 
Interventions that were undertaken in January included establishing an intervention team to oversee the finances of the bus service as well as co-manage Tansnat’s new ring-fenced bank account.
 
The agreement signed between the two parties in January was to ensure there would be no further disruptions to the bus service. The agreement was made an Order of Court which saw the court application the City had initiated to liquidate Tansnat being adjourned pending a determination of whom between the City and Tansnat is indebted to the other, and by how much.
 
The agreement further provides for the appointment of a reputable law firm to adjudicate the issue of monetary claims that the City and Tansnat have registered against each other to determine, once and for all, how much each party owes to the other and how these debts are to be settled.
 
An independent mediator will soon be appointed to determine this.
 
The interventions implemented followed a number of disruptions to the bus service following diesel shortages and the late payment of staff salaries.
 
Progress made on stabilising the bus service was presented by City Manager Sibusiso Sithole at the Full Council meeting on 31 March 2016.
 
He presented a progress report on the matter which stated that the Executive Committee in January approved financial management support to Tansnat in order to prevent a total collapse of the bus service which would have had dire consequences for the City. A number of commuters rely on the bus service, which carries over two million passengers including scholars, workers and other commuters, every month.
 
“An agreement detailing conditions, under which the City would intervene to support the operation and how issues of disputes between Tansnat and the City were to be resolved, was signed by both parties in late January. The City’s Legal Department together with the legal team representing Tansnat took the signed agreement to court and the agreement was made an Order of Court,” said Sithole.
 
Part of the intervention was the approval from the Executive Committee to form an intervention team to oversee the financial management of Tansnat. The intervention team is now in place, led by KPMG with effect from 4 February 2016.
 
Following the signing of the agreement and the appointment of KPMG, the intervention process began its work.
 
The opening of the new ring-fenced bank account was finalised on 22 February 2016, with all bus operation income needs deposited into the account where the City, Tansnat and KPMG are the signatories for expenditure approvals.
 
March payments for staff salaries was made from the fare income collected without requiring the City’s contribution.
 
Sithole said the intervention team is currently busy with the process to deal with debts owed by the company as well as ensuring that monthly obligations such as diesel, salaries and the provident fund are paid timeously as well as appointing an independent mediator.
 
ENDS
 
Issued by eThekwini Municipality’s spokesman Thulani Mbatha.
 
For more information members of the media can contact Gugu Sisilana on 031 311 4855 or email: gugu.mbonambi@durban.gov.za or Princess Nkabane on 031 311 4818 or princess.nkabane@durban.gov.za
 
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