The departments of education and transport have placed scholar transport operators in a position where they have to bankroll them, owing to insufficient or late payments. The Southern African Bus Operators Association (SABOA) has found it necessary to step in and highlight their plight. The bulk of services are rendered in terms of contracts with the education or transport departments, over an average period of five years. However, when the departments breach these contracts, scholar transport operators find themselves under immense financial pressure, as their business operations become unsustainable, and they find it difficult to pay their suppliers.
School holidays are around the corner, but hardly a month later learners will be back at school. It is taken for granted that where bus transport for these learners is available and established, pick up and drop of will resume as per routine. However, the dynamics behind the scenes reveal that there are some fundamental obstacles for scholar transport operators to be able to render this valuable service.
According to SABOA, the main issues experienced by scholar transport operators are unsustainable remuneration rates of tenders; non-provision for any escalation to compensate the operator for inflationary costs; the late payment of their monthly claims; and the unpaid discrepancy between the 200-days school year and their 12-month business year.
There are various types of scholar transport services such as contracts that are concluded with bus operators by the provincial departments of education or transport – depending which department has been allocated the function. There are also arrangements between parents and bus operators to transport learners to school. The pinch is felt mostly by the scholar transport services that are rendered in terms of contracts with the government departments. Furthermore, the issues experienced in the various provinces are similar, revealing that this conduct is a norm for the government departments.
Unsustainable tender terms
The backbone of the problem is that the remuneration rate paid by contracting authorities is not sustainable. Tenders for scholar transport services are not price tenders as the rates are determined unilaterally by the contracting authority. Operators are therefore not allowed to submit their price for the rendering of scholar transport services. They are compelled to accept the price offered by the contracting authority.
Some contracting authorities remunerate scholar transport operators on a per learner per kilometre basis while others pay them on a per kilometre basis. In Gauteng for instance, scholar transport operators are remunerated at R1.40 per learner per kilometre. Learners do not pay for the services.
The contracts that are concluded with scholar transport operators do not make provision for any escalation to compensate the operator for inflationary costs. Scholar transport operators therefore have to render services for the duration of the contract (up to 5 years) at the same rate.
Diesel alone has increased by 26.6% since January 2018. As a result scholar transport operators are finding it hard to make ends meet. If remuneration rates are not increased soon, scholar transport operators will not be able pay for their diesel fuel and this will result in operators not being able to continue operating.
Transporting additional learners without being paid
Scholar transport operators are allocated routes and the number of learners per route by the contracting authority. If the number of learners increases, scholar transport operators have to apply to the contracting authority to increase their learner numbers. If it is a substantial increase, the operator will need to introduce another bus on the route. It is a very time-consuming process to obtain approval and in the meantime operators transport these learners without being paid.
While awaiting compensation for the increase in learner numbers, the practical option would be to leave these learners alongside the road but for safety reasons these additional learners are transported. In many instances, operators never receive an answer from the contracting authority, but despite this, they keep on transporting these learners. This results in vehicles being overloaded.
The impression is that contracting authorities don’t finalise these applications for additional learners as it would impact their budgets. In the meantime, they know that that learners are being transported to school as the bus operators would not leave them vulnerable and stranded. Effectively, the government departments are taking advantage of the practical predicament in which operators find themselves.
Late payments of monthly claims
Another problem is the late payment of scholar transport operators’ monthly claims. In terms of the Public Finance Management Act, these claims are to be paid within 30 days after receiving them, provided all the required documentation is submitted with the claims. On a regular basis, operators are being paid up to 3 months late. This has a major financial impact on operators as they are mostly SMME operators that do not have any financial reserves.
In addition, a school year is approximately 200 school days whilst operators’ expenses such as labour costs, vehicle instalments and insurance are spread over 12 months. Operators are only remunerated for the school days and are not paid during school holidays.
The ultimate beneficiaries of reliable transportation in this regard are the learners. The primary responsibility for their safe and secure transportation lies with the education and transport departments. As the middle-man providers of such transportation, scholar bus operators are in the sensitive position of ensuring that such a service is consistently provided. Without an equitable and sustainable remuneration structure, effectively the government is being bankrolled largely by SMME’s and the delivery by operators is being jeopardised.
About SABOA
The Southern African Bus Operators Association (SABOA) was formed in 1980 to represent the interests of the public transport industry at government level as well as among its stakeholders. SABOA represents about 920 bus operators who collectively operate approximately between 13 000 and 14 000 buses.
SABOA is the credible voice of an inclusive, efficient, sustainable and transforming bus and coach industry. It plays a pivotal role in an integrated transport system through safe, reliable and affordable bus and coach services that add value, and are attractive to stakeholders