Transport minister Fikile Mbalula has revealed the extent of the rot at the Passenger Rail Agency of SA (Prasa), telling MPs on Tuesday that the company has had as many as 3,000 “ghost workers” — nearly 20% of the workforce.
The imaginary workers had been illegally drawing salaries from the struggling company from 2020 until as recently as December, with evidence suggesting this was the result of “corruption in the system”.
“We have Operation Ziveze [or show yourself]. It uncovered 3,000 ghost workers in the system at Prasa,” Mbalula told parliament’s public finance watchdog, the standing committee on public accounts.
Though he did not say how much the scam had cost Prasa, because forensic investigations were continuing, it is a fresh blow to an entity that has been engulfed by allegations of corruption and mismanagement.
Mbalula said salary payments to the ghost workers were stopped in December and the absence of any challenge to the decision is clear evidence of corruption.
“No-one has [come] forward to claim [the salary payments] were stopped unfairly. There is a system of corruption within the human resources management ... somebody has orchestrated a scam to steal money from the organisation,” Mbalula said.
Prasa is responsible for delivering rail services, a key ingredient in boosting productivity and stimulating economic growth.
“That’s how broken Prasa is ... In a normal company, you can’t afford to have one ghost worker. We have 3,000 and since December, a stoppage was done on paying those people,” he said.
Prasa has about 17,000 employees, and Mbalula could not say whether any of the workers were directly involved in the scam that potentially cost the company millions of rand. Forensic investigations were continuing, which include tracing the owners of the bank accounts into which the salaries were paid, he said.
The beleaguered rail agency, which had revenue of almost R2bn in the form of fares and rental income in the financial year ending March 2021, is one of many state-owned entities that are struggling to stay afloat, posing a major risk to the state’s finances.
Mbalula has been on a drive to fix the entity, with a new board chaired by former ANC MP Leonard Ramatlakane appointed in 2020. But all indications are that the company is far from stable. In Prasa’s latest annual report, belatedly tabled in parliament earlier in March, the auditor-general issued a disclaimer — the worst possible outcome — on the parastatal’s financial statements for the third consecutive year.
Among other irregularities uncovered, the auditor-general was unable to determine the full extent of fruitless and wasteful expenditure, stated at R385m. Some of the goods, works or services were not procured following the requirements of the Public Finance Management Act. Some of the contracts and quotations were awarded to bidders that did not score the highest points in the evaluation process, as required by the Preferential Procurement Policy Framework Act and its regulations.
Mbalula told MPs that one of the reasons Prasa remains unstable is the vacancy rate in critical positions, such as the CEO post. It has a vacancy rate of 19%, with a number of critical positions unfilled.
“This is 9% more than reasonably acceptable standards. Key executive positions are not filled due to legal processes that were under way, while others are not filled due to the current review of the organisational structures process,” Mbalula said. He partly blamed the previous board led by Khanyisile Kweyama for the crisis at the company, saying “it did not live up to its fiduciary obligations”.
“The organisation is in a process of filling six key positions, the request to fill the positions was approved and funding allocated, the recruitment processes are under way and we hope to fill these vacancies between April and June 2022.”
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