The two largest unions at the Passenger Rail Agency of SA (Prasa) have embarked on a mandate-seeking process after the troubled rail operator tabled a final revised offer of 5.5% for 2025/26.
This after the United National Transport Union (Untu) and rival SA Transport and Allied Workers Union (Satawu) rejected a 3% offer the employer tabled recently, labelling it an insult to workers.
SA’s inflation rate edged up from March’s 2.7% to 2.8% in April.
Prasa’s final offer comes after the unions recently signed a multiterm wage agreement for increases of 6% each year over a three-year period with Transnet. It also comes after labour declared a dispute in March, when Prasa’s management allegedly refused to formally table a wage offer.
This spurred the Commission for Conciliation, Mediation and Arbitration (CCMA) to give Prasa 30 days to table a “just and fair” wage offer to its workforce, a deadline the unions said Prasa missed on May 10.
Satawu and Untu’s consolidated wage demands include a 15% across-the-board wage increase. The unions are also demanding a R3,000 housing subsidy, a standby allowance of R50 an hour, a night shift allowance of R10 an hour, a moratorium on retrenchments and a medical aid subsidy with the employer contributing 70%.
Untu spokesperson Atenkosi Plaatjie said the union made it clear during a CCMA-facilitated process at the weekend that “a back payment is non-negotiable, considering the deliberate and unnecessary delay in concluding this process”.
“Additionally, labour told Prasa that the inclusion of a non-retrenchment clause for the duration of the agreement is non-negotiable, with the understanding that job security remains paramount as the government continues to push for private sector reforms at state-owned entities through the department of transport. In response, Prasa management agreed to include a non-retrenchment clause,” Plaatjie said.
“Untu raised the issue of Prasa continuing to advertise senior management vacancies, while the bloated top management structure has continued to go unchecked since 2021.
“We also raised the fact that Prasa cannot continue to advertise top management positions while continuing to offer VSPs [voluntary severance packages] to blue-collar employees, with a history of intimidation in this regard.”
Plaatjie said Prasa responded by committing to put a “moratorium on external vacancy advertisement, excluding the filling of critical vacancies”.
“Untu, representing the majority of the bargaining unit employees, will embark on a mandating process to determine if our members accept or reject Prasa’s final revised salary offer,” she said. Untu had 6,930 at Prasa. If parties do not find each other, labour has said it would be left with no option but to start the process of “drafting picketing rules”.
Satawu national spokesperson Amanda Tshemese said Prasa had “enough money to meet our demands”.
“Satawu will go back to its constituency to take a mandate from our members and workers on the new offer. It is also very important to emphasise that we remain committed to a non-retrenchment clause, and we will not sign the agreement if the employer fails to do the right thing,” she said.
Prasa had been approached for comment, which would be added once received.
During his third version of the budget speech in May, finance minister Enoch Godongwana announced that the financial allocation to Prasa for the upgrading of its automated signalling equipment had been cut by R7bn, as part of broader spending cuts triggered by a drop in projected revenue for the fiscal year.
Godongwana noted other proposed additions to spending allocated to Prasa over the medium term would be lowered, “in line with lower anticipated revenue”.
This followed the withdrawal of the one percentage point VAT increase that was initially proposed in the March 19 budget.
The allocations to signalling systems for Prasa have been revised down from R19.2bn in the March budget to R12.3bn in the May 21 budget. Over the medium term, however, Prasa has been allocated R63bn, which includes the R12.3bn and R18.2bn for the rolling stock fleet renewal programme.
The parastatal incurred irregular expenditure of R3.8bn in 2022/23, earning a qualified audit opinion from the SA auditor-general for the period. From 2018/19 to 2021/22, the auditor-general issued a disclaimer on Prasa’s financial statements. A disclaimer signifies the accounts cannot be relied on and often suggests the company is in a serious financial state.
Prasa received government subsidies from the transport department amounting to R7.2bn for operations and R12.3bn for capital expenditure in 2022/23.
The passenger rail operator generated revenue of R119m from fares, operating lease rental income of R620m, other income of R181m and interest received of R1.7bn.
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