POLOKWANE – Great North Transport (GNT) could face a directive to stop operating or be placed under business rescue if it fails to present a convincing turnaround plan to the Companies and Intellectual Property Commission (CIPC) by the end of August.

The deadline comes as the financially distressed provincial bus operator seeks a further R198.8 million in bridge financing, despite having received almost R1 billion in taxpayer-funded support since 2016/17.

CIPC questions GNT’s continued operations

According to the DA in Limpopo, CIPC has questioned GNT’s continued operations under circumstances it says are prohibited by the Companies Act.

GNT has until August 31 to present a plan to address the concerns. The entity has reportedly described the CIPC intervention as its biggest immediate threat.

DA demands scrutiny of bailout

The DA says it will not support the additional funding unless the proposed bailout and GNT’s ongoing Section 189 retrenchment consultation process form part of a credible turnaround plan that is independently verified and fully scrutinised.

The party’s concerns come after GNT and the Limpopo Economic Development Agency (LEDA) told the Limpopo Standing Committee on Public Accounts (SCOPA) that the company’s turnaround was progressing and that additional funding was needed to achieve long-term financial sustainability.

Internal problems identified

However, the DA points to GNT’s own assessment of its financial and operational problems, which identifies:

• Technical deficiencies
• Weak internal controls
• A lack of operational capacity
• Difficulties recruiting critical skills

The assessment also raises concerns about the possible theft of spare parts and diesel, as well as problems with workplace culture.

The party argues that these issues indicate problems beyond a lack of funding.

R1 billion in support since 2016

GNT has received provincial funding over the years for buses, maintenance and repairs, employee costs, severance packages, statutory obligations and historical debts.

According to the DA, GNT acknowledges that this funding has not resolved its financial difficulties.

The latest request for R198.848 million is intended as bridge financing, with GNT warning that it could collapse before reaching break-even without the additional money.

DA: ‘No blank-cheque bailouts’

DA Limpopo leader Jacques Smalle said the party would not support what he described as another “blank-cheque bailout”.

He said GNT provides an essential public transport service and that its collapse would have serious consequences for commuters and employees, but argued that continued funding should not be used to preserve what the party regards as an unsustainable operating model.

The DA has called for any turnaround plan to be independently verified and subjected to legislative scrutiny before further taxpayer funding is approved.