Plans by the government to privatise parts of the embattled Passenger Rail Agency of SA (Prasa) have been roundly criticised by stakeholders, with analysts saying it will lead to a spike in train fares and more job losses.
President Cyril Ramaphosa announced in parliament on Thursday, when he was tabling his economic recovery plan, that the government would promote “greater private sector participation in rail, including through granting third-party access to the core rail network and the revitalisation of branch lines”.
Prasa is among state-owned enterprises (SOEs) that have been ravaged by years of corruption and mismanagement due to state capture, which has cost SA about R500bn.
In his state of the nation address (Sona) in February, Ramaphosa admitted that several SOEs were in distress and emphasised that the government would in 2020 “repurpose them to support growth and development”.
Transport minister Fikile Mbalula’s spokesperson Ayanda Allie-Paine said the issue about the privatisation of Prasa “will be addressed by the minister [Mbalula] at a media briefing this week”.
Efficient Group chief economist Dawie Roodt said: “If you privatise, it doesn’t matter what you privatise, there will be an increase in prices.
“Private sector guys want [a financial] cushion hence they will increase prices in order to have a profitable track record so that financial institutions will be able to fund them.”
If Prasa is privatised, Roodt said unions will protest against higher train fares and cost cuts will result in job losses.
Economists.co.za chief economist Mike Schussler said: “How do you privatise something that has no history of [making] profits? There’s nothing left [at Prasa], it is a mess. In fact, [what is happening there] is treason against the working class.”
Schussler said it would be very difficult for government to privatise Prasa: “I would like to know how you can sell a house after you’ve burnt it down.”
Sizwe Pamla, national spokesperson of Cosatu, a key ally of the ANC, said they won’t entertain the idea of privatising Prasa, calling it a “half-baked idea”.
“We are still dealing with the mess of privatisation of Telkom where SA engineers are being replaced by Chinese engineers,” said Pamla.
“The privatisation of Prasa is a non-starter, it’s out of question because 8-million people in SA use trains to get to work.”
“The research we have done shows that on average a worker spends 25% of their income on transport, because the apartheid spatial planning meant black people stayed far from their places of work,” Pamla said.
Steve Harris, general secretary of the United National Transport Union, an affiliate of the Federation of Unions of SA (Fedusa), said privatising Prasa, which Mbalula has described as a broken organisation, will not assist the government’s goal of alleviating poverty by providing safe and affordable transport to workers.
He said any private company that will be investing in commuter trains in SA will be “throwing their money into a black hole”.
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