May 08, 2008, 08:45
By Frank Nxumalo
South Africa’s trade union Solidarity says the failure by Gauteng’s provincial transport department to pay nearly R116 million in subsidies to the North West Star and Atteridgeville bus companies for the months of February and March this year threatens nearly 2 000 jobs.
The union says the two companies also depended on the subsidies for economic survival. The non-payment of the subsidies means that both North West Star and Atteridgeville Bus Services face financial ruin.
A letter from North West Star management to the trade union points out that the non-payment of the subsidies will seriously affect its cash flow. In the letter, the company indicates that it could only pay workers’ wages for this week. “From next week, we shall be unable to pay any wages or salaries and we will have no choice but to suspend our bus services."
Commuters pay nearly 50% of travel costs
In terms of the subsidy agreement, commuters pay nearly 50% of travel costs, while the department pays the rest,” says Solidarity spokesperson Jaco Kleynhans.
Kleynhans says the two companies were not the only ones who had been negatively affected by these developments. “If the rest of the bus companies in the province do not receive subsidies from the department within the next few days, almost 300 000 commuters will be left without transport.
"The latest increase in the price of diesel has also placed bus companies under great pressure," Kleynhans says.
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