Prasa board told to apply minds to turnaround
• Mbalula calls for lifestyle audits at the rail agency
Transport minister Fikile Mbalula told the board of the embattled Passenger Rail Agency of SA (Prasa) on Monday to focus on turning around the ailing rail operator and not to fight over tenders.
Transport minister Fikile Mbalula told the board of the embattled Passenger Rail Agency of SA (Prasa) on Monday to focus on turning around the rail operator, not to fight over tenders and that lifestyle audits should be considered to root out those lining their pockets.
Mbalula told the launch of Prasa’s “people’s responsibility” programme in Cape Town on Monday that he would hold a workshop with the board at the weekend, focusing on corporate governance.
Mbalula said if legislation prevented the board from achieving its goal, “you must amend it if it is not straightforward, that’s your responsibility as a board.
“If you are busy with contracts and fighting the CEO [Zolani Matthews] for tenders, then the board will lose sight because you will not be doing what we have appointed you to do: to think and give direction,” he said.
The minister told the board that he did not expect it to “employ people who are lining their pockets. You must introduce lifestyle audits, starting with yourselves. There are executives who are owning Prasa properties ... arrest those thieves, please. Why do you have 17 properties when you work at Prasa, how did you acquire these properties?”
The programme will see ordinary citizens volunteer to work with law enforcement officers to protect railway infrastructure.
Mbalula dissolved Prasa’s interim board and placed the agency under administration in December 2019. At the time he said Prasa’s challenges related to internal systems and controls that had collapsed, dysfunctional supply chain management processes, hollowed-out project management capability and “a business model that requires urgent review”.
He said at the time that the downward spiral of Prasa was self-inflicted as a result of poor and indecisive leadership, which allowed a culture of impunity to prevail.
‘BROKEN ORGANISATION’
The state-owned enterprise, which 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.
Prasa is one of the country’s parastatals that have 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 auditorgeneral, 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.
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.
Last October, Mbalula appointed a new board for Prasa after a ruling by the high court in Cape Town that the minister should appoint a new board within 60 days.
Judge Nathan Erasmus ruled that Mbalula’s failure to appoint a board for the rail operator and his decision to appoint Bongisizwe Mpondo as the administrator instead of a full board was unlawful, and set it aside.
The new board includes Smanga Sethene, Matodzi Mukhuba, Boitumelo Mokgoko, Dinkwanyane Mohuba, Alison Lewis, Nosizwe NokweMacamo, Thinavhuyo Mpye and one representative each from the department of transport, department of finance, and the SA Local Government Association (Salga).
On Monday, a fired-up Mbalula — speaking off the cuff — said he wanted a “strong” board and “Covid-19 or no Covid-19, by the end of 2021, there must be progress at Prasa”.
In a recent interview with Business Day, chair Leonard Ramatlakane said the mission to bring Prasa back to its former glory would cost billions of rand. He said the aim was for Prasa to be fully functional by September/October.
Mbalula called on Matthews to stop all the irregularities taking place at Prasa, saying the government had given a directive to him to “run Prasa like a business”. Mbalula said they were “going to have to work very hard” from now on.