Durban - The debt that bus company Tansnat owes the eThekwini Municipality has ballooned to more than R800 million – and it is expected to reach R1 billion by January, according to the city.
Councillors revealed during a recent council meeting that the company was now the municipality’s top debtor, with its debt growing at a rate of R30 million a month.
However, Tansnat disputed this amount, saying yesterday that the matter was the subject of a court case.
Tansnat chief operating officer Vickesh Maharaj said the figure was incorrect.
“The dispute with the city is subject to court proceedings. There is also a reconciliation process on invoices for which we are awaiting a meeting with the city,” he said.
A few months ago, the company’s debt, based on reports tabled by the municipality, was at around R600 million.
The revelations emerged as councillors were discussing rising overall municipal debt, which now stands at R21.6 billion.
The municipality and Tansnat recently concluded an arbitration process to try to resolve the debt issue.
Mayor Mxolisi Kaunda recently revealed sketchy details about the arbitration, saying the matter had been resolved in the city’s favour but refused to divulge anything further.
The company told “The Mercury” recently that it was studying the more than 100-page arbitration judgment and taking legal advice.
The adjudication process has been ongoing for over three and a half years with approximately 51 days of hearings, dealing with very complex issues. We will accordingly be guided by our legal team on the way forward and the options that we have at our disposal,” the company said at the time.
During the council meeting, DA councillor Warren Burne said the municipality was owed R21.6 billion – R1.6 billion of this was owed by the top debtors. “One debtor in particular owes more than half of that amount.”
He said the debtor (Tansnat) owed R873 million and the next big debtor was a distant second at R226 million.
“That (R873 million) debt is increasing at a rate of over R30 million a month. When we convene next year, that debt is going to be over R1 billion by one debtor – the operator of our bus service. This ballooning debt puts the municipality in a tight corner because it could have been avoided. A few years ago the city approved a resolution to establish its own entity to run the buses. This is yet to be implemented,” said Burne, adding that Kaunda and the council should either recover the money or write off the debt.
“Let’s not pretend it is good money if it’s not. If this is good money, we would not need to borrow a billion rand in next year’s budget because we would get it from the operator who runs our buses.
“It is absolutely bizarre that a municipality can be in this situation that the contractor that runs its public buses owes it a billion rand,” he said.
IFP councillor Mdu Nkosi said the issue of the ballooning debt was a serious concern and there was no political will to address it.
“Tansnat is not the only one that owes us, government departments are the other culprits.
“We have been saying that the city administration, when they go to negotiate these things they should involve us as the opposition.
“Because when they go there alone, they talk as comrades, they just ‘massage’ each other and nothing comes of that,” Nkosi said.
Kaunda described the finance report as worrying. “But I acknowledge the economic situation of (those) who are unable to pay us, some who have lost their jobs because of Covid-19 and the unrest, so we understand that.
“The second part is the issue concerning the arbitration that the councillors are raising.
“Arbitration has been concluded and the issue now is that our administration is studying the report and will present the report to us as a council so that we can make our determination on the outcome of the arbitration.”
Speaking on the R21.6bn debt, Kaunda said the big chunk of this was rates and most of the government departments paid these annually.
“We expect the situation (debt) to improve in the coming months. We are not folding our hands, we are shutting off our services to those who owe.”
