Golden Arrow expects delivery of 120 electric buses for Cape Town

Cape Town will soon be home to 120 electric buses after investment holding company Hosken Consolidated Investment (HCI) said it expected to take delivery of the electric buses before the end of this year.

HCI in its annual report published last week said it faced challenges in commencing the conversion of its fleet to electric buses.

“The homologation process to get approval from authorities for the bus we sought to buy took over a year to complete. In all that time we had to drive the bus around carrying bags of sand as a test and were unable to place any orders for such buses,” HCI CEO John Copelyn said in his letter to shareholders.

“In any event, we have now completed this phase and ordered the first 120 buses. We ought to be able to keep them charged by generating our own solar power. Delivery will commence from the end of this calendar year.”

HCI owns a controlling stake in an outfit called Frontier Transport, whose main asset is Golden Arrow Bus Services (GABS). Tracing its roots back to 1861, GABS has a fleet of 1,076 buses, serving more than 3,100 routes in metropolitan Cape Town.

The electric buses are being procured from BYD China.

Copelyn said the next challenge for the group’s bus company was the cession of its interim contract by the province to the City.

“The first of these is that the current contract is substantially underfunded. It is not permissible to cede such contracts to the municipality, and the national department of transport is first going to have to step up to the plate and honour the contract with GABS that it has underfunded for many years,” he said.

“The second is that before the City can take over the administration of this contract it will have to provide safeguards to protect the contract from being unfairly cannibalised. Realistically, this is going to have to involve the City committing to a fair allocation of phase 2 of the MyCiTi contracts between GABS and taxi operators.

“We definitely cannot have it allocating only 40% of the passengers we carry, as it insisted on doing in phase 1A. Fortunately, that debacle was eventually settled by a binding agreement which will have to guide all parties to the cession this time around.”

GABS had a solid financial year, reporting headline earnings of R321m, from R232m in 2023, due to an increase in passenger revenues and cost control measures implemented by the company.

Copelyn, a trade unionist turned business person, said the struggles of GABS to deal fairly with the across-the-board claims of the bargaining council agreement remain unresolved and subject to litigation.

“The heart of this debacle remains the refusal of all concerned to deal with the fact that it is not legitimate for competitors to connive to persistently impose larger increases on our subsidiary than they themselves pay. The opportunism of the unions in joining hands with these competitors is a shameful pretence that their members are agreeable to working for lower wages and with smaller increases at competitor establishments than they are prepared to accept at our subsidiary,” Copelyn said

“Worse, the unions simply refuse to deal with the fact that this will place GABS in an uncompetitive position in retaining its routes when these are eventually put out to tender (which they will be at some point). While competitors may gain unfairly from this, union members working for GABS will simply lose employment.”

khumalok@businesslive.co.za