The board chair of the struggling Passenger Rail Agency of SA (Prasa), Leonard Ramatlakane, 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, Ramatlakane said there was a “lot of work ahead” to get Prasa on the track, and likened repairing the broken state-owned 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.
Ramatlakane 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 they want 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 significant 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 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 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 auditor-general’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 their 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 their 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, among other things.
In a statement released last week, Ramatlakane said the judgment would be appealed because it was “flawed in law”.
SA Transport and Allied Workers Union (Satawu) Prasa national co-ordinator 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.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.