On 31 January 2022 the Public Protector issued a report in which she made findings concerning a contract between the Gauteng Department of Roads and Transport and Putco in terms of which Putco has provided public transport services over many years.
Putco received a letter from the Public Protector(PP) in July 2021. The letter sought to bring to our attention the allegations made by a member of the public about the manner in which bus contracts have been extended multiple times over the last two decades, and to extend to Putco the right of reply as an interested party to the contract under investigation – IC52/97.
The PP further stated that the investigation was levelled against the Gauteng Department of Roads and Transport (GDRT) which is an organ of state and NOT necessarily Putco. The final report did not make any findings of wrongdoing by Putco and the PP has directed the GDRT to implement remedial action in line with applicable legislation.
The National Land Transport Act requires integrated transport plans to be approved before existing bus contracts are placed on competitive tender. The lack of approved and funded integrated transport plans has resulted in bus contracts being continually extended over the last 20 years to ensure continued service delivery to bus commuters.
The bus contracts also contain specific provisions that these contracts must be extended until the authorities are able to implement tenders in terms of approved integrated transport plans. Until the current contracts are replaced in accordance with applicable legislation, they remain lawful and Putco shall continue to fulfil the terms of the contracts which have been lawfully entered into with the Department.
There is currently a legal challenge before the High Court in Johannesburg by bus operators throughout the country, represented by the Southern African Bus Operators Association (SABOA).There are 108 bus contracts throughout the country with similar conditions to the Putco bus contract, and therefore the conditions are not specific to Putco alone. The Public Protector requested the Competition Commission to look into the ongoing extensions of these contracts.
Putco supports the principle of competitive bidding because it is important for the transformation of the bus sector and will open opportunities for emerging, as well as small bus operators to partake in the subsidized bus contracts. It is however important that such tenders must comply with statutory prescripts and the existing contractual obligations of the GDRT.
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Matlakala Motloung
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matlakalam@larimar.co.za
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