For Prasa, late buses and trains are not uncommon.
Autopax has been bleeding money for years, with attempts to fix its finances falling by the wayside. (Delwyn Verasamy/M&G)
It’s a workday morning and Park Station in Johannesburg is bustling with activity. People carrying different sizes of luggage are rushing around, trying to find their bus so they can head to some other part of the country. I am one of those people.
The people in the queue for my bus — a short trip to the capital — are a mix of ages. The children play happily while they wait, but there is a sense of desperation and frustration on the adults’ faces. It’s 9.20am. I ask the woman next to me when her bus is arriving. She arrived at the station at 6.30am for her 8am City to City bus, she says, but was still waiting.
Although she has been waiting for hours, her face lights up as she tells me that she prefers to use the City to City bus, which, according to her, is never late and doesn’t take as long as other buses to get to her home in Venda. “They never stop it on the road. I think it’s because it’s run by the government,” she says.
I nod my head. It’s now 9.25am and her bus still hasn’t arrived. “[But] it’s comfortable, unlike using a taxi where you are cramped for hours,” the woman continues.
Our conversation is cut off — her bus is here, just 90 minutes late.
I continue to patiently wait for my bus. Greyhound, Intercape and Africa People Mover (APM) buses come in and out of the station, picking up their customers while my bus is still a no-show. These buses look well-kept and luxurious. The City to City bus that picked up the Venda-bound woman looked old.
The sales manager comes over to explain that our bus is on the way. A man standing next to me, with a downcast face, says Autopax has problems. The bus company is a subsidiary of the Passenger Rail Agency of South Africa (Prasa). It operates Translux — a luxury, long-distance inter-city service — and City to City regional services to various destinations in South Africa and Mozambique.
Autopax’s parent company has since been put under business administration. The man talks with the knowledge of someone who has been following the saga: “These [Autopax] workers are not paid,” he says.
Cash-flow shortages
That news became public in January, when Autopax’s acting chief executive, Tiro Holele, issued a staff notice warning that the company was facing financial and operational challenges, which have resulted in “serious financial and cash-flow shortages. But they have managed to collect some funds from the fare revenue to pay you 50% of what is due to you.”
This meant that cleaners, who get paid R36.68 an hour, and worked for eight hours a day during the month of January, would receive only half of their monthly salary of R5868.08. But after unions twisted the company’s arm, workers were paid the remainder of the money a couple of days after receiving the notice.
Autopax’s 1 000 employees, including people in management (making it the majority union), confirmed that salaries were paid. But in a subsequent statement, the union said that it was not guaranteed that workers would be paid their February salaries.
The man standing next to me shares some of this information, venting about the company that has now delayed his journey. But he doesn’t want to spend long hours driving alone in his car, especially after he almost had an accident when he nearly fell asleep at the wheel.
I leave the queue to go sit down. The toddlers are still running around playing, making their wait worthwhile. Some adults are opting to eat. Hot pizza and Chicken Licken fill their mouths. I go talk to the sales manager and he cites “operational issues” — the bus I am waiting for didn’t have petrol so it had to be refuelled.
This apparently took an hour and fourteen minutes, because my 9.30am bus pulls in only at 10.44am. For Prasa, late buses and trains are not uncommon.
Autopax has been bleeding money for years, with attempts to fix its finances falling by the wayside. Professor Jackie Walters, director of the department of transport and supply-chain management at the University of Johannesburg (UJ), says the company shouldn’t be in the market in the first place.
“You have a state-owned entity, where the government sees a role for it in the long-distance passenger road transport market, but it has to compete with the private sector companies, that are just more effective and efficient,” he says.
The company’s financial problems go as far back as the early 2000s. In a Business Report article in 2013, Autopax was quoted as saying that it “has not made a profit in the past 10 years and has accumulated losses of R45-million since 2010 after its recapitalisation by the government”.
Last October, the portfolio committee on transport presented Autopax’s 2018 and 2019 finances in Parliament. Its presentation showed that the company had more years when it made a loss than a profit, with more than a billion rand in losses from 2016 to 2019.
Growing losses
Autopax’s losses for the 2019 financial year have increased to R442-million, from R345-million in 2018. This follows severe declines in fare and luggage revenue as passenger volumes declined from 2.5-million in 2016 to 1.8-million in 2018.
The portfolio committee on transport explained that a decrease in fleet availability had made it difficult for Autopax to meet its daily operational requirements. There are also problems with fleet maintenance, with the committee saying: “Due to cash flow challenges in the business, the company is unable to implement and execute an effective fleet maintenance regime.”
Despite broken buses and poor maintenance, the committee said the company still operates a service schedule that assumes that 100% of its 570 buses are working.
In addition to these problems, Autopax does not currently have any board members.
And, to make matters worse, the company has not been receiving money from its parent company Prasa, although this is an issue Prasa says it is working to address.
Hlulani Mokwena, a transport economist at North-West University, says: “The economic conditions in our country are quite conducive for long-distance passenger transport services. It is a rapidly growing market, but the service offerings of City to City and particularly Translux are not consistent with the market segments they are attempting to serve.”
Mokwena says other operators, such as Eldo Coaches and APM, are penetrating the City to City segment and that Translux is trying to compete with Intercape and Greyhound, both of which have a better value chain and newer fleets.
Walters says that in the case of Autopax, you have a state-owned, long-distance bus operator trying to compete with the private sector and minibus taxis. “It’s very difficult to compete against those companies as a state-owned entity,” he notes.
Walters says the private sector has a profit motive: if businesses do not make money, they go under. There is no cross-funding for the private sector, which Autopax can (theoretically) get from Prasa.
“The imperative for the private sector is to make sure you run your business as lean and as slim as possible while servicing the market. And you often do not have that in state-owned entities because they have this other mandate — [a] development mandate — [and] political interference, which the private sector does not have”, he says.
For me, and the other would-be passengers, this means delays, long queues and travelling in buses that aren’t as reliable or snazzy as those of the competition.
Prasa found to abuse its dominance
The Competition Commission on Monday recommended that the Passenger Rail Agency of South Africa (Prasa) pay 10% of its annual turnover as a penalty after it found that it was abusing its dominance at Park Station in Johannesburg.
The commission’s investigation found that Prasa, which is the sole owner and manager of Park Station, was giving preferential treatment to its subsidiary Autopax, which operates City to City and Translux buses.
The inquiry comes after other long-distance bus services, which compete on the same routes as Autopax, complained.
The commission found that Prasa had introduced a pay-on-use system together with the hourly access fees, which it charges buses for using the facility. It said “the system significantly increased the bus operators’ costs of access to Park Station, thus threatening their sustainability and expansion”.
Prasa also allocates a large, exclusive area to Autopax at Park Station, while not providing access to loading bays to several other long-distance bus operators that have applied for access.
The commission found that Prasa did not compel Autopax to pay for the bus access fee and the rent for leasing office space at Park Station despite Autopax being in default. However, Prasa intends to evict other interprovincial bus operators that have defaulted.
Besides the financial penalty, the commission says Prasa must stop abusing its monopoly at Park Station.
Tshegofatso Mathe is an Adamela Trust business reporter at the Mail & Guardian