THE government’s failure to pay R92 million in passenger subsidies to the Golden Arrow Bus Company despite a court order to that effect will undermine the development of an affordable public transport system, says the Cape Town Regional Chamber of Commerce and Industry.

“The inevitable result is that the bus company will be reluctant to make further investments in new busses and training if it has no confidence that the national and provincial departments of transport will meet their obligations in terms of their contracts with Golden Arrow,” said Mr Albert Schuitmaker, Director of the Chamber.

He said it was important to understand that the money was a subsidy for the clip cards used to provide low cost transport for commuters. “It is not a subsidy for the bus operator but for the passengers from the poorer section on the community. In effect the bus company has advanced the money and now stands to lose R92 million if the Government does not pay up.”

To make matters worse there was a similar situation in the other major cities of the country and it was estimated that the outstanding amount totalled about R1.2 billion.

Confidence was also undermined by the fact that the Golden Arrow company had operated without the security of long-term contracts for several years and it had been difficult to take decisions to buy new buses. The new development would make these decisions even more difficult.

“Building up reliable public transport services in all our major cities is essential if we are to meet our 2010 commitments and for the economic welfare of the country in the long term,” said Mr Schuitmaker.

“Whatever the rights and wrongs of the present dispute, it is clear that confidence in the system has been damaged and this is a serious setback for the public transport industry,” Mr Schuitmaker said.