Making do in new RSA…

February 3, 2010


In the new South Africa, to qualify as a Doctor, you are required to
study and pass exams for five years and then do a two-year internship at
a hospital. You are then fully qualified, but you still cannot practise
because the Medical Council will not grant you a license until you have
completed two years "community service" in one of the state hospitals.
The Department of Health decides where you should be posted for your two
years of community service – it can be to any state hospital in the
country. The reason for this is that there is a critical shortage of
doctors in South Africa, particularly in the rural areas. These trained
and qualified doctors earn just over R7,000 per month, before deductions
– about R2000 a month less than a police constable with three weeks

The Doctors went on strike because the Department of Health promised
them an "Occupation Specific Dispensation", which would have effectively
doubled their salaries, just over two years ago. Unfortunately they have
still not received the "Occupation Specific Dispensation" after two
years because the Department of Health can’t figure out how to implement
the administration of it…

Meanwhile, despite the chronic shortage of Doctors, the thousands of
them that went on strike to voice their dissatisfaction have all been
fired. They are now in a catch 22 situation. They cannot get a license
to practise, because they haven’t completed two years internship, and
they can’t complete their internship because they have been fired.
Naturally they do what any sane doctor would do under the circumstances
– they leave the country and practise happily as good, well-trained,
productive doctors in some foreign land – where they earn a salary
commensurate with their qualifications.

Meanwhile, at the other end of the spectrum, the public bus service in
Durban has closed down, leaving thousands of daily commuters with no way
to get to work or home again. It has closed because it is insolvent. How
on earth did that happen?

The public bus service was run and operated by the city municipality
from 1912 until 2007. It did receive subsidies from the City, but these
recovered from the Government and not from the ratepayers. In essence
the public transport system ran at a profit sufficient for it to replace
its own vehicles as needed.

In 2007 the City Council decided that it was illegal for them to
operate the public transport under the new Constitution – it had to be
run and operated privately by someone from the previously disadvantaged
community. The City Manager, Dr Mike Sutcliffe, then sold the public
operation to a private company named Remnant Alton (Pty) Ltd for R70
million. This sum also included the route operating licenses and all the
vehicles, equipment and buildings in Alice Street where the buses were
garaged, serviced and repaired. So far so good.

Remnant Alton (Pty) Ltd immediately sold off the buses, (mostly new
vehicles), one by one, to independent "owner-operators" contracted to
Remnant Alton. An owner-operator would drive their bus over allocated
routes, collect the fares and use the bus garage in Alice Street as a
facility for maintaining the bus. They would also buy their spares and
diesel from Remnant Alton (Pty) Ltd.

By the end of 2008 most of the buses were in such poor condition they
were unsafe. Broken down buses were the order of the day, and the
service to commuters was a shambles. Remnant Alton (Pty) Ltd approached
the City Council for help, and the City Council lent them R40 million at
a very low interest rate to restore the bus service. This was in March

At the beginning of April 2009 Remnant Alton (Pty) Ltd went into
liquidation and ceased all operations. The R40 million was "gone", so
the City Council seized the company. The 1,500 "owner-operators" then
took the Council – as the new owners of the business – to the labour
court, and won their case.
The Council was ordered to compensate them with the same income they
would have received had the service continued operating until the end of
their contracts. Naturally the R40 million "loan" plus the award to the
owner-operators comes out of Council revenue, paid by the ratepayers of

Now the Council, who suddenly decide that it is NOT illegal to operate
the bus company, spends a fortune on buying new buses and restoring the
transport service to its former state. Nobody yet knows what this has
cost – the bills are still coming in. But suddenly there is a "whoops".
The Council can’t run the buses, because it sold the licenses to operate
over the routes to Remnant Alton (Pty) Ltd. No problem. Just buy them
back. Remnant Alton was willing to sell them back to the council, and
the council was willing to buy them back. The only teensy weeny problem
is that Remnant Alton (Pty) Ltd had sold them to its Managing Director,

Mr J Singh, and he wanted slightly more for them
than what Remnant Alton had originally paid. After tough negotiations
the council beat him down to a lower price and bought the route licenses
back for R45 million. Yes, that’s right. R45 million.

OK. On the income side, the ratepayers scored R70 million when the bus
company was originally sold.

Now, on the debit side, they have an unrecoverable loan of R40 million,
written off Plus the cost of restoring the company to a good operating
standard – say another R100 million Plus the cost of buying the route
licenses back – R45 million Plus the cost of recompensing the
owner-operators – 1,500 of them, for four months at R8,000 per month
= R48 million (note: more than a doctor

So the total cost to ratepayers is R233 million less R70 million = R163

Well, its a lot of money, but at least we will have a working bus
service back.

Now here is the real kicker. The Council says it doesn’t have the
capacity to operate the bus company, so it will be looking for a private
company to operate it in the future – and they have found the perfect

Yep. You guessed it. They are GIVING it away, lock, stock and barrel,
completely FREE, to…..

Wait for it……

Remnant Alton (Pty) Ltd.

I kid you not.

Now, the Durban (Etekwini) Metro Council is overwhelmingly ANC, and they
got VERY upset when a Democratic Alliance Councillor asked if they knew
that the Managing Director of Remnant Alton (Pty) Ltd had at some stage
in the past been found guilty of fraud, and served time for that

The response? No, we didn’t know that.
After more questions – Well, actually, the City Manager did know, but is
was some time ago, and the "gentleman" concerned had served his time and
paid his debt to society, so we didn’t think it was important….

Meanwhile, the buses haven’t begun running yet. Nobody has a clue when
they will operate again.

But the citizens of Durban can take solace in learning the new and
unpronounceable street names as they walk to and from work, hoping they
won’t step in the turds and filth, or get mugged. They may even see our
City Manager sweep by in his fancy luxury car, with a cavalcade of body
guards, as he makes his way to his new luxury penthouse, valued at
several million, at the Point Waterfront – smiling as he goes because
the area has been declared, BY HIM, as a rates-free zone until 2014.
Effectively he is totally unaffected by this huge cock-up. He doesn’t
even have to pay his share in his rates bill.

Isn’t Africa wonderful?


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