Inoperative board could trigger withholding of Prasa funding

The Department of Transport has threatened to withhold up to R1bn in monthly funding to the Passenger Rail Agency of SA (Prasa) because its board is unable to submit approved financial statements.

Transport acting directorgeneral Mathabatha Mokonyane has written a letter, which Business Day has seen, detailing how the department has requested written assurance from the rail agency that it will be able to submit approved financial statements before the department signs off on funds.

The letter, dated July 14, notes continued irregular spending at the agency, adding: “The state of service of Prasa’s public transport provision has ... collapsed, resulting in continuous declines in passenger numbers, and increases in operational costs.”

A person familiar with the matter, who declined to be named, said the Department of Transport had received five letters in the past four months raising the issue of the board’s challenges in reaching a quorum, but these had been ignored.

The board’s governance committee had approved Prasa’s annual financial results for 2016-17, but as the board could not be quorate, this was not acceptable to the auditorgeneral, the person said. Following resignations, the board only has four members.

It has written to Transport Minister Joe Maswanganyi requesting five appointments to be made, according to correspondence seen by Business Day. The board needs two more members to be quorate.

Prasa receives between R700m and R1bn a month in funding from the department.

Prasa said it could not immediately comment. The Department of Transport did not immediately respond to requests for comment.

DA transport spokesman Manny de Freitas said the party had received information that funding to Prasa was being threatened, potentially prejudicing millions of commuters and raising questions about Maswanganyi’s compliance with his fiduciary duties.