Statement by Minister Robin Carlisle on New Bus Subsidy System. | Western Cape Government


Statement by Minister Robin Carlisle on New Bus Subsidy System.

2 October 2009
The Western Cape Department of Transport and Public Works and Golden Arrow Bus Services (GABS) (Pty) Ltd have, on Wednesday 30 September, reached an agreement to change bus subsidy from a passenger to a kilometer based system - necessitated by a directive from National Treasury.

It is notable that the agreement was concluded within the exceedingly tight timeframe stipulated by the National Treasury and National Department of Transport.

Minister Robin Carlisle is upbeat: "This agreement means that the Western Cape is the first province to conclude this bus subsidy contract with a major bus operator and heralds a new era in the payment of subsidies. It brings much needed stability to over 250 000 City commuters."

Unlike in the past whereby the Department paid a subsidy to GABS based upon the number of clipcards sold, the payment will now be based on the number of kilometres travelled. "It is significant that GABS has agreed to ensure that the total cost to the Department will remain within the national budget allocation of R593m for the 2009/10 financial year.

Accordingly, the new agreement ushers financial stability for the province as it will be in a better financial position as it will not run out of funds. This will be augmented by the fact that the new service levels will be maintained in future."

Due to fiscal constraints, this subsidy is lower than what has been made previously available to GABS and will require GABS to reduce service levels by 6.5 per cent - mostly a case of reducing the frequency of buses on a particular route.

"I am concerned about any reduction in bus services but I am convinced that this result strikes the fairest possible balance between the commuters; the bus operator and the taxpayer. Any reduction in bus services will have to be made up elsewhere. Our goal is to grow public transport, not to shrink it. Accordingly, I have already been in discussions with Mr. Lucky Montana, CEO of Passenger Rail Service of SA, requesting additional Metro Rail train sets for the Province, and an extension of operating hours.

"The provision of affordable, accessible, safe, and reliable public transport is a key goal for this administration. The conclusion of this contract is but one tentative step on the journey towards that goal" concluded the Minister.

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