Mbalula dissolves interim Prasa board
SHOCKING reports over crippled operations at the Passenger Rail Agency of SA (Prasa) left Transport Minister Fikile Mbalula with no choice but to dissolve an interim board almost two years after it was appointed.
Mbalula yesterday announced that Prasa would be placed under administration for the next 12 months and that businessman Bongisizwe Mpondo would act as its administrator.
His action follows the outcomes of a report compiled by the Government Technical Advisory Centre and an audit conducted by the auditor-general.
“Since the interim board’s appointment, the affairs of the entity have not improved, but have regressed instead as evidenced by the disclaimer (audit outcome),” Mbalula said.
The dissolved board was appointed last year by former transport minister Blade Nzimande for a 12-month term, which was extended twice this year until April 2020.
“Over the last few weeks, we have conducted a review on the performance of the board and of the entity as a whole.
“This assessment followed the Government Technical Advisory Centre assessment report, which was compiled after engagement with a number of managers.
“Based on this report and other considerations, we arrived at a conclusion that Prasa has deep-rooted challenges that require decisive interventions.”
The embattled state-owned entity has been limping from crisis to crisis due to mismanagement over recent years, leading to financial losses that amounted to billions.
Prasa has also become notorious for failing to maintain or repair rail infrastructure which has resulted in a number of dysfunctional trains which has left commuters stranded.
Mbalula said, since its establishment a decade ago, the parastatal had been riddled with mismanagement and governance collapse, which he said, contributed to the decline of the quality of service provided by the entity to the public.
“This period was also characterised by dissonance at the highest level of the organisation, characterised by tensions between the board and management. The public protector also released a report on Prasa titled ‘Derailed’ which highlighted serious lapses of corporate governance. As a consequence, the National Treasury instituted a forensic investigation.”
He highlighted that in the 2017/18 financial year, Prasa was so unstable that it had four boards in a single financial year.
“Irregular expenditure stood at R23.4 billion. And increase from R19.6bn the previous year. Similarly, fruitless and wasteful expenditure escalated to R1bn, up from R988m the previous year. Once again the auditor-general sharply raised the concern about the instability at Prasa.”
He also indicated that the administrator, Mpondo, would act as the de facto board, with the position of the chief executive also integrated into his role.
He pointed out that there was no pressure in appointing a permanent board to oversee the organisation.
Mpondo said: “Going through some of the reports thus far, one gets a very clear sense that there have been serious challenges, particularly around governance. So governance is going to be quite a key focus in terms of bringing a semblance of order.”