Embattled Passenger Rail Agency of SA (Prasa) said it expects to increase its capital spend to R50bn over the medium-term expenditure framework (MTEF) as it embarks on an ambitious programme to modernise its infrastructure that was stripped bare, vandalised and looted during the height of the Covid-19 lockdown.
The project is seen as having the potential to create thousands of jobs and grow the struggling economy dogged by the rising cost of living, high interest rates and load-shedding.
During her budget vote in May, transport minister Sindisiwe Chikunga said Prasa’s capital expenditure was expected to increase from R12.5bn to R12.9bn, while operational expenditure was expected to increase from R7.2bn to R7.6bn in 2023/24 financial year.
Addressing the association’s two-day conference in Midrand on Tuesday, Prasa group CEO and vice-president of the Southern Railways Association Hishaam Emeran said the troubled agency exceeded the allocated R12.9bn capital budget by spending “R13.5bn for the first time in over a decade”.
“We have increased our capital spending due to the reopening of some of key corridors. Now we plan on spending R50bn from this financial year and over the next three years to support the modernisation of the passenger rail network and the implementation of our turnaround plans,” Emeran said.
Prasa is one of the many state-owned enterprises that have been hollowed out by years of corruption and mismanagement linked to state capture. It announced in May 2020 that it was facing a debilitating cash-flow crunch after failing to pay R23m to employees’ retirement fund benefits for two months.
In 2022, the auditor-general issued a disclaimer on the parastatal’s financial statements for a third consecutive year. A disclaimer signifies that the company’s accounts cannot be relied on and often suggests the company is in a serious financial state.
In 2022, the Prasa board said the rail agency’s dire financial situation could have been made worse by payments it made to 3,000 (20% of the workforce) ghost workers it uncovered earlier in the year.
Emeran said Prasa was making “significant strides” in recovering its passenger rail network, which has seen shacks built on rail tracks in Cape Town, while a pedestrian bridge collapsed on rail tracks at Julies Street in Joburg on October 4.
“To date, 26 of the 40 corridors have been recovered, with over 19-million passengers using the services ... Just on the corridor recovery we have spent R3.6bn to date in this financial year, with more than 6,000 jobs created. This investment will go a long way in contributing to the growth of the economy,” he said.
“We are not just rebuilding the passenger rail network, we are modernising the entire network, and this is an ambitious and bold plan, and we intend to use the allocated budget to turn this vision into a reality.”
Projects under the capital programme over the MTEF include rolling stock modernisation, depot modernisation, walling, station modernisation, perway infrastructure, electrical infrastructure, signalling and telecommunications and digitisation of systems, Emeran said.
“Measures have been put in place to ensure that we increase our capital spend, including addressing challenges within supply change management and capital projects capacity challenges,” the Prasa CEO said.
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.