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As violence over the discontinuation of bus routes by Putco in Mamelodi, east of Pretoria, intensified, the company revealed that it had been forced to take the drastic step of abandoning unprofitable Gauteng routes because it had lost R300 million in servicing them.
Putco pulled out of a number of routes passing through Katlehong, Vosloorus, Thokoza, Mamelodi and Meyerton, citing low government subsidisation.
The company’s managing director, Franco Pisapia, said the routes were not sustainable any more and the company had endured R60 million in losses each year over the past five years.
“We have been running at an annual loss of about R60 million and we could not sustain it any longer, [lest] we suffocate ourselves.
“We have subsidised the department of transport for five to six years [while running at a loss],” Pisapia said.
Tshwane metro police spokesperson Isaac Mahamba said a total of seven Autopax buses were pelted with stones and damaged in Mamelodi on Thursday and Friday.
He added that a driver and three passengers needed to be hospitalised with injuries after they were shot at while in a Putco bus from Moloto as it drove through Mamelodi on Solomon Mahlangu Drive between the N4 and Pretoria.
Pisapia laid the blame for the discontinuation of the routes at the door of the Gauteng department of transport.
He said his company had hoped the department would engage with it and seek a solution to its challenges.
“I am very disappointed in the department’s attitude – that they left things for the last minute. The department could have engaged with us sooner in the interests of commuters, and avoided the problems unfolding now,” he said.
“We were prepared to discuss it with them to find a way of making this work. The department did nothing for six months, and only signed a contract with Autopax at the eleventh hour.”
Pisapia said that among their problems had been that the bus industry had taken a “subsidy cut of 17% since 2009, and we only received a 2% increase this year”.
For the company to keep the affected routes sustainable and profitable, Putco said it “needed a 40% subsidy increase [because] we can’t just increase fares”.
Pisapia said the funding model differed per route and contract and that a kilometre was subsidised at about R17 “which is far too little to run a business of this note”.
But Gauteng transport MEC Ismail Vadi accused Putco of selective decision making, saying the company had kept its contracts on those roads where it received higher subsidies, while halting its services on roads that were less subsidised. “Putco is not saying that they have kept the bulk of their contracts. How are those profitable to them but not these ones?” Vadi asked.
He said Putco was receiving R900 million of the R2 billion the Gauteng department of transport spent on bus subsidies. He said 11 bus operators in the province were left to share the remainder of the money.
Pisapia, however, reiterated that his company had been subsidising government on the now discontinued routes and could not have sustained the losses.
The company said it had notified government about six months ago that it would not be renewing contracts for certain routes when they lapsed at the end of March. They were asked to extend their service for three months to allow the department to find an alternative operator, which they agreed to.
Vadi said, however, that there was little his department could do about the subsidies, because they were fixed at national level.
“We don’t have powers to change anything,” he said.
Meanwhile, Vadi said the law would not allow government to subsidise taxis using money set aside for bus subsidies.
Mamelodi taxi operators on Wednesday prevented new bus operator Autopax, which is a subsidiary of the state-owned Passenger and Rail Agency of SA, from operating in the township.
But the Gauteng National Taxi Alliance, which represents Mamelodi taxi operators, said Vadi had been “negotiating with the industry with malice and in bad faith”. The alliance said it was mobilising its members to embark on mass action that would continue “until government hears them out” on demands for subsidies.
