Key Takeaways
- The North West Transport Investment (NTI) company is losing R23m a month in stolen ticket sales due to corruption and fraud.
- The company is under business rescue and has auctioned off its 410 buses, struggling to pay employees on time and defaulting on payments to its workers’ provident fund.
- The Gauteng province is considering pulling its subsidy due to poor service and frequent disruptions.
- There are allegations of massive fraud running into millions a month in ticket sales, with estimated R23m a month in cash revenue being "scaled" or skimmed.
- The company’s business plan highlights a collapsing entity due to corruption, high leasing costs, lack of modernization, and fraud in ticket sales.
Introduction to the Crisis
The North West Transport Investment (NTI) company, a state-owned bus company operating a critical commuter route between the North West and Gauteng, is facing a severe crisis marked by corruption and fraud. The company is losing a substantial amount of money, approximately R23m a month, in stolen ticket sales, which translates to around R354m annually. This has led to a significant burden on taxpayers, with the company receiving about R50m a month in subsidies from Gauteng. The situation has become so dire that the Gauteng province is considering pulling its subsidy, citing poor service and frequent disruptions.
Corruption and Fraud
The company’s business rescue practitioner, Mahier Tayob, has stated that the public purse needs to be safeguarded, as ticket sales are being usurped, and there is a lack of disclosure. The exact amount of defalcation is yet to be quantified, but it is estimated that R23m a month in cash revenue from bus ticket sales is being "scaled" or skimmed, leaving no trace. Thomas Samons, another business rescue practitioner, has also raised concerns about massive fraud running into millions a month in ticket sales. A whistleblower report has also highlighted widespread corruption and collusion within the company, raising questions about the sale of NTI’s buses.
The Sale of Buses
The sale of NTI’s buses has been shrouded in controversy, with allegations that the Paruk family’s Tansnat entity bought 80% of the fleet. However, Transnat director Suliman Paruk has denied these allegations, stating that they had been fair in their pricing and that the buses were in a horrible condition. The company’s business plan in 2020 highlighted that a large proportion of the NTI’s fleet was old, with some buses being 37 years old. A fleet replacement plan had not been introduced, leading to a collapse of the entity due to corruption, high leasing costs, lack of modernization, and fraud in ticket sales.
Impact on Employees and Commuters
The crisis has had a significant impact on employees and commuters, with workers owed 11 months of their salaries, forcing them to go on strike. The South African Transport and Allied Workers’ Union (Satawu) general secretary, Jack Mazibuko, has stated that the fight between the two business practitioners is negatively affecting the workers and services of NTI. Commuters, such as Clifford Matube, have also been affected, with the situation going from bad to worse. Matube, who commutes daily from Makapanstad in North West, has stated that the buses are not fully running, impacting commuters financially as they have to use taxis.
Government Response
The Gauteng road and transport MEC, Kedibone Diale-Tlabela, has stated that NTI needs to present its case to the province on why the contract should not be terminated. The issues have been escalated to the offices of Gauteng premier Panyaza Lesufi, transport minister Barbara Creecy, and labor unions. The province is considering imposing penalties for service not operated, as the bigger impact is on commuters who rely on the subsidized service and cannot afford alternative transport. The acting CEO of NTI, Dr. Ntlhopeng Dikobe, has stated that the entity is under two business rescue practitioners, who are working together to stabilize the entity. However, the situation remains dire, and a solution is yet to be found.