Durban denies owing Tansat R132m

Durban City has denied it owes its bus operator R132 million - and instead claimed Tansnat has not fulfilled its own obligations concerning their settlement agreement.

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Durban - Durban City has denied it owes its bus operator R132 million - and instead claimed Tansnat cannot insist on this payment when its boss has shown “little enthusiasm” for complying with its own obligations concerning their settlement agreement.

The eThekwini Municipality and Tansnat boss Mandla Gcaba are at loggerheads again, resulting in Tansnat’s counter application against the municipality for R132m.

Durban High Court Judge Peter Olsen heard on Wednesday that both parties would be approaching the senior civil judge for an early date on the opposed court roll.

Gcaba filed an urgent application last week claiming the municipality owed his company more than R132m for subsidies it has not paid for the bus service.

However, in court papers, Mlungisi Wosiyana, the city’s deputy head of public transport, said except for October 2015, the amount Tansnat owed the city for vehicle lease payments always exceeded the amount of the subsidy.

Wosiyana said this is what led to the city filing court papers to have Tansnat liquidated.

Both parties had signed a settlement agreement on March 1. An intervention team and a ring-fenced account were set up. The city wanted to liquidate Tansnat, alleging Gcaba was using the business account as his own.

According to Gcaba’s affidavit, the city was not being transparent about why it withheld these subsidies, and suggested the city would, in their opposing papers, accuse him of “shielding” money and not depositing all income into this new account.

He explained that R329 000, money from bus hires, was not paid into this account because it was instead used to help employees for death and funeral expenses, pending payment from the provident fund.

He also said a R7m refund from Shell also had not been paid into this account, but was being used to “augment an existing guarantee” for Shell to supply diesel on credit.

In opposing papers, Wosiyana said Gcaba was claiming subsidies allegedly due from July 2015 to April 2016, but argued the ring-fenced account was only opened in February 2016. The intervention team, he said, was also established in February.

At this time, he said there were no outstanding subsidy payments due to Tansnat.

He admitted that an amount of about R52m, subsidy payments due from February to June 2016, had not been paid into this account.

“Since the inception of the ring-fenced account, (Tansnat) has shown a distinct lack of interest in paying amounts which it has collected, into that account,” he said, referring to the R329 000 special hire money and the R7m from Shell.

Wosiyana said Tansnat should not have made a private arrangement with Shell. This should have been done by the intervention team instead.

He also referred to other examples where Tansnat had not complied with the provisions of the Settlement Agreement.

Wosiyana said Tansnat had failed to produce a budget.

“This budget was central to the whole intervention operation. The Intervention Team had to know what the financial requirements of the company were. Without that budget, matters would simply limp along as they had done previously,” he said.

He said the city was concerned that if it also paid subsidies into this account without first setting off the amounts due for vehicle leases, it could end up in a situation where the vehicle leases were not paid.

He also pointed out that there would be “little point in forcing” the city to pay disputed amounts into this account when it would have to be liquidated “within less than three weeks”.

noelene.barbeau@inl.co.za

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