Fixing Prasa ‘will cost billions’
• Board chair says repairing broken state-owned rail agency would be like ‘fixing an aeroplane while flying’ but it is unclear where funds will come from
The board chair of the struggling Passenger Rail Agency of SA (Prasa) says it will take billions of rand of taxpayers’ money to bring the “broken” rail operator back to its former glory. Leonard Ramatlakane said there was a “lot of work ahead” to get Prasa on track, and likened repairing the broken state-owned rail agency to “fixing an aeroplane while it is flying”.
The board chair of the struggling Passenger Rail Agency of SA (Prasa) says it will take billions of rand of taxpayers’ money to bring the “broken” rail operator back to its former glory.
In an interview with Business Day, Leonard Ramatlakane said there was a “lot of work ahead” to get Prasa on track, and likened repairing the broken stateowned rail agency to “fixing an aeroplane while it is flying”.
“We want to make sure that rail services are provided, and that work has already begun,” he said. One of the priorities was to replace the stolen cables, an exercise he said would not come cheap. “There are billions of rand involved,” he said, adding that the board wanted Prasa to be fully functional by September/ October 2021.
It was not clear where the money would come from. In the Budget Review 2021, the Treasury said Prasa faces significant financial imbalances.
It said persistent capital budget underspending and growing operational deficits as a result of vandalism of rail infrastructure, alongside a decline in passenger ridership, “mean the agency has large cash balances for infrastructure with insufficient funds to run reliable services”.
“As a result, capital transfers are reduced by R5.4bn over the medium term to allow the use of existing capital funds,” according to the Budget Review.
Prasa is one of the country’s state-owned enterprises (SOEs) that has been riddled with systemic corruption linked to state capture during former president Jacob Zuma’s term in office.
The rail agency, which has had five turnaround strategies implemented since its creation in 2009, is said to have lost about R200m since the start of the Covid-19 lockdown about a year ago.
In 2020, it received a disclaimer from the auditor-general, the worst possible audit outcome. Prasa also received a disclaimer for 2018/2019 — the financial year in which it registered irregular expenditure of
R27.2bn — and a qualified audit the year before.
The SOE, which transport minister Fikile Mbalula has described as a broken organisation where the culture of impunity was rife, has been crippled by widespread vandalism and cable theft said to have cost about R4bn in the past few years.
In February. the auditorgeneral’s office called for an urgent intervention to save Prasa after it achieved only 17.5% of its planned targets for the 2019/2020 financial year — its lowest achievement over the past eight years.
In 2020, Prasa recorded irregular expenditure of R28.6bn and fruitless and wasteful expenditure amounting to R432m.
Ramatlakane said the board was not happy with achieving 17.5% of its targets in 2019/2020. Prasa’s workforce of 17,000 could have done more to meet targets, “so we are not happy”.
Ramatlakane is a former chair of parliament’s transport portfolio committee. Mbalula appointed him in October 2020 to chair the Prasa board and bring much-needed stability. This was after the Western Cape high court set aside Mbalula’s decision to appoint Bongisizwe Mpondo as administrator.
Regarding the recent labour court judgment against Prasa, Ramatlakane said lawyers were busy with an appeal.
This was after the labour court last week set aside Prasa’s termination of employment contracts for two senior executives and a manager and ruled that they must be reinstated with immediate effect.
Prasa argued that the officials, who were employed for a period not exceeding five years, took advantage of instability at board level and stayed unlawfully for longer in their positions.
Ramatlakane said the judgment was “flawed in law” and an appeal would be made against it.
SA Transport and Allied Workers Union (Satawu) national co-ordinator at Prasa, Lubabalo Tinzi, said: “Inasmuch as Satawu respects the right of the employer by showing [the] intention to appeal against the judgment, it is our considered view that such steps smack [of] arrogance, stubbornness and further rub salt into the wound as once more taxpayers money would be wasted on a straightforward matter.”
THE RAIL AGENCY IS SAID TO HAVE LOST ABOUT R200M SINCE THE COVID-19 LOCKDOWN STARTED A YEAR AGO