Amid a failure to deal with corruption amongst its employees and getting the third disclaimer on its financial statement, the Passenger Rail Agency of South Africa (PRASA) is in financial dire straits.
Transport Minister Fikile Mbalula said in the Annual Report of the PRASA released Tuesday reflects improvement in performance against predetermined objectives.
“However, an improvement of 11% from 18% to 29% is a far cry from where we should be and remains unacceptably low,” Mbalula told Parliament’s financial watchdog SCOPA hearings.
Mbalula further painted a bleak picture of the future of PRASA.
He stated that PRASA was in a dire financial position as it is not generating sufficient revenue to cover its operating costs.
PRASA posted a loss of R1.9 billion for the year under review. Its operating costs remain high and increased marginally to R15.5 billion in 2020/21.
“This is against the backdrop of fare revenue which declined by R900 million mostly due to network and train unavailability due to Covid-19 restrictions and infrastructure damage,” explains Mbalula.
“As a consequence, PRASA has become dependent on the subsidy in the form of Operational and Capital grants. “
He added that PRASA’s audit outcomes have stagnated over the last three years.
The entity has once again received a disclaimer from the Auditor-General.
“This is an untenable situation that is receiving our urgent attention,” said Mbalula.
Special Investigation Unit (SIU) recommendations
Furthermore, the SIU identified 44 employees against whom disciplinary action should be taken by PRASA.
About 33 of the 44 are still in the employ of PRASA.
All these employees have been placed on precautionary suspension and their disciplinary cases are at various stages. While others have disciplinary cases pending.
While PRASA is dragging its feet in implementing SIU recommendations, irregular expenditure remains at the state-owned entity.
“While we have noted a significant decline from R3 billion to R1.3 billion, the quantum of the irregular expenditure remains unacceptably high,” said Mbalula.
In the same vein, Mbalula said he has committed to 100% elimination of fruitless and wasteful expenditure by 2024.
In the year under review, fruitless and wasteful expenditure incurred stood at R48 million at PRASA.
“Our target is to reduce this type of expenditure to zero,” Mbalula told SCOPA.
