Prasa’s ghost riders on the rails

The passenger rail agency is still in a financial mess and makes more money on interest on unspent capital than on fares.

The tide is turning at the Passenger Rail Agency of SA (Prasa), Transport Minister Fikile Mbalula told parliament this week, but the passenger rail agency is still in a financial mess with its capital budget mostly unspent in spite of the need to replace trains and infrastructure.

Appearing before the standing committee on public accounts (Scopa), Mbalula insisted that Prasa had turned the corner, defending the work of Bongisizwe Mpondo, the recently dismissed “administrator”, whose appointment by Mbalula was declared unlawful by the Western Cape High Court.

However, the picture presented to Scopa suggested a sea of problems to come.

In her presentation to the committee, newly appointed acting group chief executive Thandeka Mabija described the causes of the poor audit performance found by the auditor-general (AG) for the 2019-20 financial year: inadequate oversight, leadership instability, poor record-keeping, lack of compliance monitoring and enforcement, poor financial management and a general lack of effort.

Mabija said that since the period under audit, Prasa had appointed a number of people to key leadership positions and was in the process of finding a suitable permanent group CEO.

Scopa was told that the Special Investigating Unit (SIU) had seconded four members to Prasa to probe issues raised by the AG and by the public protector in her 2015 report, Derailed.

The SIU would complete its work by the end of March 2021.

Mabija told parliament Prasa had an out-of-date fi xed asset register, meaning that the rail agency does not know what it owns.

Steps were being taken to change this, said Mabija.

Irregular expenditure was R1.3 billion for 2019-20, down from R3 billion in the previous year. More than half the irregular expenditure was because no competitive bidding was held on tenders.

Scopa was told a number of employees had been fired for misconduct.

According to Mabija, Prasa could not take delivery of the blue “People’s Trains” made by Gibela, as its major depots were at capacity and had not been upgraded.

In a briefing to the standing committee on appropriations later in the day, Leonard Ramatlakane, chair of the newly appointed board, said the agency hoped to resolve this crisis within six months.

Group chief financial officer Krishna Govender’s description of Prasa’s financial state raised worries among some committee members.

Fare revenue declined by half a billion rand to just over R1 billion. In 2015, Prasa’s fare revenue was R2.9 billion.

Now, Prasa’s largest source of revenue is the about R1.5 billion it receives in interest from its unspent capital budget – about R23 billion.