Gauteng transport department ordered to pay Putco R154.4m
· Citizen
The Gauteng Department of Roads and Transport has been ordered to pay commuter bus company Putco R154.4 million for its operated scheduled kilometres, within five court days. It was also issued with a punitive court cost order for failing to comply with its obligations.
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Putco claimed payment from the department in terms of various contracts it entered into with the department on 30 June 2023, for the provision of subsidised bus services in both Gauteng and Mpumalanga.
Putco approaches High Court
In this urgent application, Putco sought an order for payment for services provided during February and part of March 2026.
The urgent order was issued by the High Court in Pretoria and is one of several judgments related to long-running disputes between the department and Putco.
Judge Anthony Millar highlighted the contracts between Putco and the department are for the provision of transport to about 130 000 people daily.
“The people making use of this subsidised transport do so to make their way to work, to schools, to hospitals and to attend to their daily lives. The consequence of a disruption, besides being financial for Putco, would likely be devastating to those dependent on the transport provided,” he said.
Department unable to pay Putco
Millar added the department has made much of the fact in the present matter that its budget and discretionary transport allocations were insufficient to meet its obligations to Putco.
But he stressed the contracts were concluded in June 2023 – almost three years ago – and budgets are negotiated annually.
The judge said this contention may have had merit in 2023, but there is no explanation why, in the subsequent two budget cycles, no provision has been made so that the budget and the discretionary transport allocations were sufficient to meet the existing obligations of the department to both Putco and all the people dependent on the service.
Millar said the court papers are silent on this aspect and instead Putco has been forced repeatedly to approach this court to compel compliance by the department with its obligations.
No alternative
Millar said every time Putco has approached the court, it has been forced to do so, whereas if the department had complied, this would have been avoided, including the costs Putco has been forced to incur.
“It is simply unacceptable that Gauteng Transport adopts the supine attitude that it has with regards to its budget, despite being aware of its obligations to Putco.
“None of the reasons proffered by Gauteng Transport for failing to comply with its obligations are meritorious and there is no reason that Putco should bear any of the costs associated with the present application.
“It is for this reason that I granted the punitive order for costs against Gauteng Transport.”
Millar said this in reasons provided on Friday to an order he had issued on 13 May 2026 in the Pretoria High Court to an urgent application launched by Putco.
Court favours bus company
The order directed the head of the Gauteng Department of Roads and Transport and member of the executive council (MEC) of Gauteng for roads and transport (Kedibone Diale-Tlabela) to pay Putco the outstanding R154.4 million. (The original outstanding amount claimed by Putco was reduced from R162.24 million to R154.44 million after it received a payment of R7.84 million from Gauteng Transport).
However, Millar said that following payment of this outstanding amount, nothing in his order prevents the department from raising a dispute by following the contractual dispute-resolution mechanisms provided for in the June 2023 contracts, subject to any defences Putco may raise regarding the number of buses used to render services in terms of the Mpumalanga negotiated contract.
Further payments due
Millar said the court was informed there were said to be two further payments totalling about R52.96 million, which had been made by the department and which Putco was expected to receive on 16 May 2026.
This resulted in the debate in court concerning the R101.44 million that would be outstanding after those two payments.
Millar said the first defence put forward by the department was that it was unable to pay due to budgetary limitations and the insufficiency of the discretionary grants it used to supplement its budgetary shortfall.
Contract still valid
He said this defence is of no assistance to the department because the contract between it and Putco still exists, and the department is to be held to it for so long as it remains so.
“Liability in terms of the contract is separate and distinct from execution. The alleged inability of Gauteng Transport to pay is not a matter which this court, approached to order payment in terms of a valid contract, needs concern itself.
“Whether or not in fact Gauteng Transport is actually unable to pay, is something more properly to be determined consequent upon execution in the event of non-compliance with the order of this court.
“The mere say so of Gauteng Transport that it cannot pay, when it has pending proceedings which it has elected not to prosecute diligently and which may have offered it succour, cannot be accepted,” he said.
Payment will be made after verification
Millar said the second defence raised by the department was that there was a question mark over whether the R101.44 million was indeed due in terms of the contract.
But Millar said in terms of the June 2023 contracts, Putco is required to submit its invoices for the number of kilometres it has operated and once the invoice has been verified, payment is to be made within 30 days.
He said it is not in issue that the invoices for R162.24 million had been submitted and accepted, or that payment was not made within the 30-day period it should have been.
He said the department’s defence in this regard was based on the fact that while it had in its records a list of 490 buses, which were operated by Putco on the Moloto route, the claims submitted and which were accepted were for 526 buses.
Millar said it is this alleged discrepancy which was put up as a justification for querying and non-payment but it “is of no moment and a red herring”.
“Putco delivered that which it had contracted to deliver, and it is in respect of this that an order was sought for Gauteng Transport to pay it,” he said.
Millar added the finding by MTM Management and Services that Putco had in fact travelled 99.96% of its subsidised trips and its invoices for those trips had been approved resolves this issue.
“It is for these reasons that I was persuaded that Putco was entitled to the order for payment sought by it and I was unpersuaded that Gauteng Transport had any defence in law, which would entitle it to an order dismissing the claim for payment made by Putco,” he said.
This article was republished from Moneyweb. Read the original here.