The City's bus company will have to consider closing down if the four-week long strike by employees is not ended soon, Metrobus has said.
METROBUS faced the spectre of liquidation if a strike that had crippled its services did not end soon, said the chairperson of the company's board, Zweli Mntambo.
Addressing the media on Tuesday, 19 May, Mntambo said the strike by the South African Municipal Workers' Union (Samwu) was likely to be protracted and drag Metrobus further into a financial quagmire, as negotiations with the union were deadlocked.
"[While] the strike continues Metrobus continues to lose money. The board will have to seriously consider liquidation," Mntambo said.
"We have reached a point where commuters should brace themselves for a protracted strike if Samwu does not come back to the negotiation table."
It was not too far off for Metrobus's board to consider liquidating the company, Mntambo said. "As to how long [before considering liquidation], I think we are reaching that point."
Metrobus is unable to meet salary increment structures as proposed by the Commission for Conciliation, Mediation and Arbitration facilitator, Meshack Ravuku. The proposal would see salary increases costing Metrobus R12-million a year. Samwu has accepted the proposal and refuses to negotiate with the transport services' provider.
"If we agree to that we would be putting the company into liquidation," Mntambo said.
He noted that a significant number of jobs would be lost if the company was to shut down. "Samwu is not only playing with the jobs of its members, but it is also playing with the future of this company."
Metrobus has offered R5,5-million, but is willing to settle for salary increments amounting to R8,5-million.
The main matter of disagreement is the scaling of salaries based on the number of years of employment. The company wants its employees to reach top salary bands after 20 years of service, but Samwu maintains they should be paid the highest salaries after working for 10 years.
Mntambo said the only option the company had, if it chose to accept Samwu's demand, was to hike bus fares "quite substantially" or approach the City of Johannesburg, the company's sole owner, to subsidise Metrobus with a larger portion of ratepayers' money. The two options could also be applied simultaneously.
However Metrobus wanted "to keep our fares at a minimum level that is fair" to commuters, Mntambo said.
Metrobus got 75 percent of its funds from the City, and only 25 percent from commuters' fares, Mntambo revealed. Salaries amounted to 35 percent of its expenses.
The company is already running at a loss of R6-million from the first financial quarter; Mntambo said it had forecast a loss of about R6,6-million this year.
The City budget, delivered by Executive Mayor Amos Masondo on Wednesday, 20 May, was not expected to include a major bailout for Metrobus, Mntambo said. While explaining there was a limit to the City's funding, he added, "I don't believe we should be running the business on the basis of bailouts."
Herman van Laar, Metrobus's managing director, said commuters were already acclimatising to alternative transport, which may make them choose to use it even after the strike was over.
Samwu's spokesperson, Dumisani Langa, has dismissed Mntambo's assertions that Metrobus may have to close down because of the strike. "Metrobus is owned by the City of Johannesburg. How can Mntambo, as a member of the board, talk about liquidation when the City is not saying anything about that?
"It is only the City that can liquidate Metrobus, through political means. They must get the nod from the national government to do so," asserted Langa.
Depending on the allocations Masondo made to Metrobus in his budget, Samwu may go back to negotiations, Langa said. "We expect the budget to give Metrobus a relief."
The union is also organising a mass strike in support of Metrobus employees on 28 May. It will involve Samwu members working for other City departments.
Bus strike drags into fourth week