Brian Hayward
[email protected]
PLANS to launch Nelson Mandela Bay’s already delayed and problem-fraught integrated public transport system (IPTS) in August have been dealt a further bitter blow with internal power struggles, court applications and dodgy financial statements threatening to derail the R2.5-billion project entirely.
The situation is so bad the municipality is considering calling on police and the SA Revenue Service to investigate possible fraud and mismanagement in the spending of R2-million “for running costs” which it handed to the co-operative set up to implement the IPTS, Laphum’ilanga, late last year.
The system to see dangerous minibus taxis removed from major routes in the city and replaced by state-of-the-art articulated buses was unveiled amid much fanfare by then Bay mayor Nondumiso Maphazi in 2007, but implementation talks between the municipality and the taxi industry have suffered numerous setbacks ever since.
The municipality has now halted payments to Laphum’ilanga amid auditors’ concerns the R2- million “was not spent according to proper financial procedures”, and Laphum’ilanga chairperson Albert Campher has called for the board to be dissolved with immediate effect.
According to Campher the board was illegitimate because the industry had failed to vote in new members within 18 months of forming, as required by the Co-operatives Act of 2005. He also claimed there was an internal power struggle for his position.
A senior municipal official close to the IPTS talks said: “Their audit was a mess. They have misappropriated R2-million and they haven’t even held an annual general meeting, so we are dealing with an illegitimate organisation.”
Municipal spokesman Ongama Mtimka said yesterday there was “an investigation based on the qualified audit report and the municipality is currently looking into this”. Funds to cover payments to a few of Laphum’ilanga’s creditors was being paid over for now, Mtimka said.
The IPTS, which was supposed to have launched shortly after last year’s soccer World Cup, has been constantly delayed and the latest hope of having it up and running by August appears to be in tatters.
In the meantime the 25 articulated buses which cost taxpayers R100-million are standing idle. An interdict preventing Laphum’ilanga and Algoa Bus from launching a joint venture to operate the new buses was obtained by the Port Elizabeth and Districts Taxi Association (Pedta) in March and is due to come before a judge today, after Pedta claimed it was sidelined in IPTS negotiations.
Laphum’ilanga, which represents the Bay’s 10 taxi organisations, is also partnered with Algoa Bus Company in the IPTS initiative. High Court Judge Ronnie Pillay is due to hear argument from Pedta and Laphum’ilanga on whether the interdict should be allowed to stand, or be dismissed
The municipality, also a respondent in the matter, has indicated it would abide by the decision of the court.
Creditors are also knocking at Laphum’ilanga’s doors, after it had exhausted the R2-million funding by February and the municipality refused to pay over any more until the co-operative could explain the irregularities in its spending, which were highlighted by auditors earlier this year.
This included the owners of the organisation’s headquarters in Kempston Road, B&E Properties, which are owed about R70000 in rent and have threatened to evict the co-operative.
The organisation’s long-standing operations chief and former chief executive, Trevan Chetty, has also resigned citing anger that payments from the municipality have halted.
“We have had nothing for the past five months,” he said.
His attorney, Paul Bester, said Chetty was owed R450000. Bester said he was preparing an application for Laphum’ilanga to be liquidated “as they are patently incapable of meeting their commitments and (are) objectively tested, insolvent”.
Things had to be speeded up soon, IPTS partners said.
“Millions of rands (about R1-billion to date) have been spent and there is growing attention from ordinary people.
“It’s tax money which has been spent and people are asking questions. We need to get on with it,” Algoa Bus chief executive Sicelo Duze said.
Mtimka said Laphum’ilanga had been paid by the municipality “as per agreement”, but the body had failed to hand in audited financial statements on a monthly basis.
“Recommendations have been made for the due involvement of a number of law enforcement agencies, including SARS and the SAPS, to ensure the matter is urgently resolved. The acting municipal manager (Elias Ntoba) will consider the matters and take the process further.”
He added: “Participation by all parties in the IPTS negotiations and plenary meetings is continuing while the financial administration matters are being addressed.”
High cost of top management
SENIOR provincial government and municipal officials, as well as Laphum’ilanga employees, have separately told The Herald about the high costs racked up by Laphum’ilanga in setting up the IPTS, including the salaries paid to its top brass. The money comes from a grant paid from the national government to the municipality, and from the municipality to Laphum’ilanga. The expenses include:
- R435000 paid to former chief executive, Mickey Nsangwe, for five months of work which ended in January. It is claimed he was also paid a “R247500 project manager fee” from a R20-million municipal contract to operate public transport during the Fifa World Cup;
- R87000 a month paid to former operations officer and chief executive Trevan Chetty; who resigned last month and wants Laphum’ilanga liquidated to pay its employees’ salaries – which he claimed were five months in arrears – including about R450000 due to him;
- R70000 a month paid to Gauteng-based public transport specialist Paul Browning, who is interim chief executive and has moved to the Bay for the time being; Browning was brought on board by the municipality in late 2009, and has since transferred to Laphum’ilanga;
- About R40000 a month set aside to cover the expenses of the board chairperson – Albert Campher at present – to attend about one board meeting a month and several “in council meetings” concerning IPTS;
- The enrolment at the start of the year of Bay taxi operator Greg Rockman – who is based in Gauteng – as a “consultant”, at R40000 a month. This was despite what some officials called a “conflict of interests” as he operates about 30 taxis in the city; Rockman, a founding member of the Police and Prison Civil Rights Union (Popcru) and a former ANC MP, denied the conflict and said he had declared his business interests to the board;
- At least R10000 claimed by each of the 10 board members – including a R6000 monthly meeting attendance fee as well as other “out of pocket costs”.
