THE NEW SOUTH AFRICA OR THE EMERGING ZIMBABWE

The Durban public bus service was run and operated efficiently by the Durban City Council from 1912 until 2007. The bus service has now gone insolvent and has had to close down, leaving thousands of daily commuters with no way to get to work and back.

How on earth did that happen?

In 2007 the City Council (now ANC controlled) decided the bus service had to be run and operated privately by someone from the previously disadvantaged community. The City then sold the public bus service to a BEE (Black Economic Empowerment, also known as affirmative action) company, Remnant Alton (Pty) Ltd for R70 million. This sum included the route operating licenses, all the vehicles, equipment and buildings in Alice Street where the buses were garaged, serviced and repaired.

Remnant Alton (Pty) Ltd immediately sold off the buses, (mostly new vehicles), one by one, to independent BEE "owner-operators" contracted to Remnant Alton. An owner-operator would drive their bus over their allocated routes, collect the fares and use the bus garage in Alice Street as a facility for maintaining the bus.

Less than two years later at the end of 2008, most of the buses were in such a poor condition they were unsafe to drive. This degraded the service to commuters to a shambles. To overcome this problem, Remnant Alton (Pty) Ltd approached the City Council for help in March 2009, and the City Council lent them R40 million at a very low interest rate to restore the bus service.

Less than a month later at the beginning of April 2009, Remnant Alton (Pty) Ltd went into liquidation and ceased all operations. The R40 million was "gone", so the City Council seized the company.

The 1,500 "owner-operators" who had failed to maintain their buses and therefore the bus service to the public, then took the Council - as the new owners of the business - to the labour court for loss of income at R8,000 per month each for the four months left on their contracts, and won their case. The total, R48 million, comes from Council revenue, paid by the ratepayers of Durban.

Now the Council, spends a fortune on buying new buses and restoring the bus service to its former state. Nobody yet knows what this has cost - the bills are still coming in. It is estimated to be in excess of R100 million.

But suddenly there is a "whoops".

The Council can't run the buses, because it sold the licenses to operate the routes to Remnant Alton (Pty) Ltd. No problem. Just buy them back. There is however a teensy weeny problem, Remnant Alton (Pty) Ltd had sold the licenses to its Managing Director, Mr J Singh. After negotiations the council beat Mr J Singh down to R45 million. Yes, that's right. R45 million.

Final Reckoning.

OK. On the income side, the ratepayers scored R70 million when the bus company was originally sold.

Now, on the debit side;
they have an unrecoverable loan of R40 million.
the cost of restoring the company to a good operating standard - say another R100 million.
the cost of buying the route licenses back - R45 million.
the cost of recompensing the owner-operators R48 million.

So the total cost to ratepayers is R233 million less R70 million = R163 million.

Now here is the real kicker.

The Council says it doesn't have the capacity to operate the bus company, so it will be looking for a privatecompany to operate it in the future - and they have found the perfect candidate.Yep. You guessed it. They are GIVING it away, lock, stock and barrel, completely FREE, to.....

Wait for it......

Remnant Alton (Pty) Ltd.

I kid you not.

Now, the Durban Council is overwhelmingly ANC, and they got VERY upset when an opposition Democratic Alliance Councillor asked if they knew that the Managing Director of Remnant Alton (Pty) Ltd had in the past been found guilty of fraud and served jail time.The response? No, we didn't know that.

After more questions - Well, actually, the City Manager did know, but itwas some time ago, and the "gentleman" concerned had served his time and paid his debt to society, so we didn't think it was important....

Meanwhile, the buses haven't begun running yet. Nobody has a clue when they will operate again.

But the citizens of Durban can take solace in learning the new and unpronounceable street names as they walk to and from work, hoping they won't step in the turds and filth, or get mugged. They may even see their City Manager sweep by in his fancy luxury car, with a cavalcade of body guards, as he makes his way to his new luxury penthouse, valued at several million, at the Point Waterfront - smiling as he goes because the area has been declared, BY HIM, as a rates-free zone until 2014.

Effectively he is totally unaffected by this huge cock-up. He doesn't even have to pay his share in his rates bill.

Isn't Africa wonderful? Why don't you rush back here.....