Gauteng Transport faces legal action over delayed payments to Putco regarding subsidised trips.
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The Gauteng High Court, Pretoria has ordered the Gauteng Department of Roads and Transport to pay more than R154 million to bus operator Putco for the provision of subsidised bus services in Gauteng and Mpumalanga.
This is the third time Putco had to resort to legal proceedings to be paid in terms of the 2023 contracts it had concluded with the department to deliver this bus service.
The contracts between Putco and Gauteng Transport are for the provision of subsidised transport to about 130 000 people daily. They make use of this transport to travel to work, to schools, to hospitals and to attend to their daily lives.
Judge Anthony Millar noted that the consequence of a disruption, besides being financial for Putco would likely be devastating to those dependent on the transport provided.
Putco turned to the court on an urgent basis and Judge Millar earlier ordered the payment of R154 million. He has now supplied his reasons for this order. In the present application, an order was sought for payment for services rendered during February and part of March this year.
In October 2024, the court handed down a judgment relating to a dispute regarding the contracts and it was ordered that pending the conclusion of arbitration proceedings relating the contracts would remain fully extant and enforceable. The arbitration proceedings are still pending.
Putco has on at least two further occasions approached the court to enforce payment in terms of the contracts. In each instance, however, unlike the present, the orders that were sought, were made by agreement.
Judge Millar noted that Putco’s ability to render subsidised transport to the community on an uninterrupted basis is dependent upon timeous payment by Gauteng Transport of what is due in terms of the contracts.
The transport department asserted that certain payments - about R7.8m had been made towards the outstanding amount and said it would make further payments. But this still left more than R154m to be outstanding at the time this court order was made.
The department defended the urgent application by arguing that it was unable to pay due to budgetary limitations and the insufficiency of the discretionary grants which it used to supplement its budgetary shortfall.
But Judge Millar said the inability of the department to pay is not a matter with which this court needs to concern itself as the contracts remained in place.
The department also questioned the outstanding amount and in this regard the judge pointed out that Putco is required to submit its invoices for the number of kilometres it has operated. Once the invoice has been verified, payment is to be made within 30 days. It is not in issue that the invoices in question had been submitted and accepted, yet no payments were forthcoming.
Gauteng Transport further argued that it had in its records a list of 490 buses (which were operated by Putco on the Moloto Route), yet claims were submitted for 526 buses. It is this alleged discrepancy which was put up as a justification for querying and non-payment.
In also rejecting this defence, Judge Millar said he is not persuaded that there is any merit to the suggestion that Putco had incorrectly invoiced or done so in respect of the incorrect number of buses.
“Whether the buses utilised by Putco were characterised as registered, installed or utilised, is of no moment and a red herring. Putco delivered that which it had contracted to deliver, and it is in respect of this that an order was sought for Gauteng Transport to pay it,” the judge said.
He, however, stated that the order for payment did not preclude Gauteng Transport from exercising any of its rights in terms of the contract should there be a genuine and proper basis for doing so.