PRASA collapse:  DA calls for unbundling and rescue model

Issued by Thamsanqa Mabhena MP – DA Shadow Deputy Minister of Transport
07 Dec 2022 in News

The Passenger Rail Agency of South Africa (PRASA) during their presentation to the Portfolio Committee on Transport recently, conceded that the state-owned entity is in “ICU”.

This is a startling concession and the most honest admission yet that the entity will never actually recover under an ANC government.

Corporate governance has been eroded at the entity that has almost 20% of its total workforce unaccounted for. Recent news reports revealed that PRASA has 3 000 ghost employees. Yet, a ballooning wage bill is honoured monthly with no value for money.

In 2009 PRASA was moving almost four million passengers per annum, compared to a paltry twelve thousand passengers in 2021. Over the last 13 years PRASA has lost a frightening 99.5% of their passenger numbers.  PRASA is not financially viable nor in a position to recover cost let alone realise any significant revenue. Their chaotic business model ensured the entity’s total collapse, including a looting spree by ANC cadres and their benefactors and total corporate governance collapse.

In 2010 PRASA’s fare revenue collection stood at R228 million compared to a horrific R2.8 million in 2021. The railway agency remains a significant financial risk to the South African fiscus, particularly given our country’s rapidly shrinking tax revenue base.

To compound this dire situation, some of the PRASA train stations which are still operational have no ticket inspectors, leaving platforms open for anyone to access and board trains and the ticketing booking phone line (086 000 8888) resembles a loadshedding schedule, with significant down times. These are but some of the many revenue leakages that exist within the system.

The DA has been consistent in calling for the necessary unbundling of PRASA from being exclusively funded by government. This move will enable the entity to tap into the financial markets, raise capital, and become competitive. Furthermore, the appointment of the PRASA board can never be left to the discretion of the Minister, a more transparent process needs to be developed one which will also involve Parliament, similarly to the Section 13(8) of the Broadcasting Act, No 4 of 1999.

Furthermore, the DA calls for a public private partnership ownership and rescue business model to be developed that will enable the private sector to bring in expertise that can lead to the entity becoming financially viable. To this end, the DA also calls on the Minister of Transport to brief the Portfolio Committee on a tangible, measurable and bankable unbundling and rescue plan. The plan must have timelines as well as milestones that can be used to track and monitor progress but also aimed at holding the Board, Executive Management and the Minister of Transport accountable.