Metrobus loses R100m due to fare shortages

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Johannesburg - The City of Joburg revealed Metrobus lost R100 million due to bus cash shortages in the past three years, and warned the issue should be tackled urgently to cut any loopholes. Metrobus’ audit committee told the city council to introduce an intervention that would lead to streamlined and strengthened processes and controls in order to eliminate any loopholes and implement an automated fare collection system. Documents seen by The Sunday Independent show Metrobus had a deficit of R58.2m in 2017/18 compared to R19m in the previous financial year. “The major drive for this deficit is attributable to the shortfall in revenue collections in the current financial year which stood at R62m,” the documents said. The audit committee, previously chaired by chartered accountant Zodwa Manase, recommended to the city council that “an automated fare collection system is implemented without delay and that all bank accounts should be reconciled daily and any corrective actions implemented immediately”.

It found that “over the last three years, the city has lost approximately R100m as a result of bus cash shortages”.

Metrobus admitted the shortfall was a result of the outdated technology it used to collect bus fares.

The city council gave Metrobus a subsidy that was not increased despite an increase in the costs needed to operate the business.

Metrobus was hit by unprotected strikes that crippled its operations as well as changes in some of the routes, which had an impact on its revenue collection.

Metrobus, which operates 486 buses of which 421 are operational on 363 routes across South Africa’s economic hub, spent R663m of its budget of R671m.

Metrobus transports about 10million passengers a year.

It also missed its target of ferrying an average of 51000 passengers while it finalised a contract to rent buses - transporting 38693 passengers.

It said its revenue for the 2017/18 financial year was R614m while its target was R672m.

A strike by the Democratic Municipal and Allied Workers Union of South Africa members over salary disparities, internal company issues such as investigating employees for corruptly paying allowances to drivers, favouritism and suspending workers without following disciplinary processes, ended up at the Commission for Conciliation, Mediation and Arbitration last year.

Sunday Independent