Autopax employees to get rest of salaries on Thursday, Prasa says

Employees of cash-strapped Autopax, which operates intercity buses Translux and City to City, will get the balance of their salaries on Thursday, after the operator received a R20.9m loan from its troubled parent company the Passenger Rail Agency of SA (Prasa).

The loan was issued after 1,071 Autopax employees were paid only 25% of their salaries at the end of February, highlighting the company's cash flow crisis and raising questions about its turnaround strategy’s efficiency.

“The bus company’s staff members can expect the balance of their salaries in their bank accounts on or before Thursday March 5 2020. Prasa apologises to Autopax employees for the inconvenience they have suffered as a result of incomplete salaries being paid,” Prasa spokesperson Makhosini Mgitywa said.

“Furthermore, Prasa will make every effort to ensure that in future salaries of Autopax employees are paid in full and at the contractually agreed date.”

Autopax spends about R28m per month on staff salaries. In 2019 the company’s losses increased to R442m from R345m in the previous year. It is in the process of making representations to Prasa with a view to finding a “lasting solution to their cash flow crisis and many other problems facing the bus company”,  said Mgitywa.

The losses were due in part to declines in fare and luggage revenue, which saw passenger volumes tumbling to 1.8-million in 2018 from the 2.5-million recorded in 2016.

“Autopax has had serious operational challenges for about four years. [The] buses are old — they were bought in 2010. As a result of the age of the buses and poor maintenance many buses are off the road,” he said.

“This has led to a steady decline in revenues causing major financial challenges, which have resulted in a serious cash flow challenges wherein Autopax can’t meet its financial obligations as they become due and payable.”

Mgitywa said Autopax, with support from Prasa and the transport department, had developed a turnaround strategy that included getting buses back on the road, refurbishing depots for proper maintenance of the fleet and improving information and communications technology (ICT) systems to protect revenues, among others.

It is hoped the plan will result in Autopax being “a modern business that will be run in a prudent and sustainable manner”.

Prasa was placed under administrator Bongisizwe Mpondo in December to try to turn it into a sustainable business.

On Wednesday, Mgitywa said Mpondo had instructed the group’s finance department to “immediately release funds” to Autopax to pay the remainder of the salaries. He said the process to transfer the funds to Autopax and to employees’ bank accounts was under way.

“All the 1,071 employees were affected, it was across the board. We don't expect there should be any problems on Thursday, I think they will pay. This was embarrassing for them,” SA Transport and Allied Workers Union (Satawu) national spokesperson Zanele Sabela said.

Prasa, which has implemented five turnaround strategies since its creation, is among state-owned enterprises dogged by governance, operational and financial challenges, due to state capture which cost SA an estimated R500bn.

In February, Prasa and Autopax were referred to the Competition Tribunal for abusing its dominance at Johannesburg’s Park Station, following an investigation by the Competition Commission into complaints by long-distance bus operators.

The Competition Commission found that Prasa was charging bus operators excessive prices for the use of Park Station. It found that the state-owned rail company favoured Autopax in space allocation and restricted or denied access to bus operators, who were competitors.

Park Station serves as a transport hub in Johannesburg and plays a pivotal role in the integration of transport modes in connecting inner-city and inter-city services. It is the central railway and bus station in Johannesburg and is the largest railway station in Africa. The southern terminus of the Gautrain rapid-rail service is located underground, adjacent to the existing main-line station.

The Competition Commission sought an administrative penalty against Prasa not exceeding 10% of its annual turnover, as well as an order directing it to stop abusing its monopoly of Park Station.

However, on Wednesday, Mgitywa said the application was dismissed by the Competition Tribunal, noting: “This judgment will assist [Prasa] in collecting the access fees and barring those bus operators who are using the competition law remedies to deal with contractual issues.”

mkentanel@businesslive.co.za