PRASA financial management and regression: follow-up meeting; with Minister & Administrator

Public Accounts (SCOPA)

05 February 2020
Chairperson: Mr M Hlengwa (IFP)
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Meeting Summary

The Committee held a follow-up meeting with PRASA to discuss the entity’s financial management and regression. The Minister of Transport was in attendance. SCOPA welcomed the Minister’s decision to remove the board and, in December 2019, to place PRASA under administration. The other aim of the meeting was for the Administrator and the team to take SCOPA through their plans and where things stood so that they could meet regularly to track progress and to ensure that things had turned around by the time the administrator came to the end of his tenure.

The Committee indicated that it would discuss with the parliamentary legal services the possibility of having members of the previous board or boards declared delinquent directors. SCOPA could not allow the board to be dismissed and that be the end of it. There needed to be far-reaching consequences to remind directors that they could not destroy an entity and that was the end of that. None of those directors should be allowed to become directors anywhere in future. Parliament needed to impose its authority. However, before taking legal action, the Committee would request permission to hold a parliamentary inquiry to determine the facts so that all previous boards and management implicated in wrongdoing could also be brought to book.

The Minister of Transport understood the challenges of PRASA quite succinctly and recognised that it required decisive action and a turnaround in record time. The Administrator’s timeframes of three months, six months and 12 months had to be implemented as if they were planning for FIFA World Cup 2010.He admitted that PRASA had been hard hit. He had been spending time in Cape Town with the Metro and the government of Western Cape in the spirit of cooperative governance. He would be meeting the MEC again as there were problems with MyCiti N2 Express and the Central rail line to Cape Town from Khayelitsha which was not working. He had 20 000 working class commuters who were unable to reach their work in town on a daily basis as there was no train and the MyCiti Express programme had been stalled.

The Administrator of PRASA informed the Committee of his mandate which included addressing all issues raised by the Auditor-General. He had spent the past two months meeting staff, unions and the Hawks and getting to understand the state of the business, which he described as simply “broken”. Most problems had been self-inflicted and were mostly internal. The instability had been ongoing since 2015, especially at management and board level. A compilation of the minutes of the board and its committees showed that 101 sets of minutes had not been approved, which was a serious non-adherence to governance. The financial situation was not good and 25% of the costs would not be covered as expenses were higher than revenue. Personnel costs were, proportionately, extremely high.

PRASA was working on consequence management with the Special Investigation Unit. Many disciplinary files were with a law firm that would not return them. PRASA had requested the SIU to retrieve the files and a subpoena had been issued for the return of the files. PRASA was dealing with 21 matters in conjunction with the Hawks. All cases were still under investigation but were anticipated to go to court shortly. The charges were mostly fraud, corruption and contravention of section 38(1) of the PFMA Act 1 of 1999. Disciplinary and grievance matters related largely to PRASA Rail where there had been, inter alia, 505 disciplinary hearings and 33 suspensions.

Issues to be addressed included strengthening the Group Exco and focussing it on resolving the challenges facing the business. Five sub-committees had been established to support the Group Exco: Revenue Enhancement and Cost Containment; Governance; Service Recovery; Safety Management, and Acceleration of Capital Programme. The Administrator presented a list of specific issues that would be addressed in the first three months, in three to six months and nine to twelve months to manage problems and systems that were broken. PRASA, as the shareholder of Autopax, had not capitalised the bus service over the years and was working with the Department of Transport to address issues at Autopax.

One Member expressed his deep concern about the endemic state of moral degeneration in the country and suggested that moral regeneration began with the jailing of corrupt politicians and officials. Another Member asked if the Administrator had done an analysis of the existing resources in the organisation because without the resources nothing could be done.  Why was PRASA using second hand brake pads on locomotives? It went to his question on resources if PRASA had to resort to second-hand brake pads.

Members noted that Cape Town had lost about 50 train sets worth about R400 million, and that was not taking into account KwaZulu-Natal and Gauteng. How many arrests had there been? If there had not been any arrests, had there been an internal investigation into security? How was the Administrator going to deal with the security companies that had gone to court and had won their cases? How was he going to deal with security in the stations?

Members asked why the Company Secretary, who had been at PRASA when the board was there, had not ensured that minutes were kept and signed. Why was there no record of resolutions? Was only the board register always signed simply so that people could get paid? Had the Company Secretary investigated the non-compliance regarding the minutes? Who had given the board and management the authority to act? Who had taken the decision to go to court and challenge the security companies if there were no minutes? Were they given instructions over the phone?

A Member noted that the head of the war room had said that there would be 191 train sets on track by the end of March. What had happened to the promise of 291 train sets by the end of December 2019? Had train lines with speed restrictions been reduced? What was the plan to build capacity within PRASA so that Metro trains could run on-time without building a dependency on an outsourced contractor? Did PRASA have good relations with other levels of government because it could use those resources for security?

Finally, Members asked whether PRASA was solvent. Was there money in the bank? What was the cost of consultants? Who were the consultants and what were they consulting for? What transfer of skills occurred at the end of a contract? How far PRASA had gone with the vetting of employees? Had the officials in the meeting completed the vetting process?

The Chairperson indicated that the Committee would pursue actions necessary to have the directors declared delinquent and would meet with PRASA in May 2020 and if necessary, before then.

Meeting report

Opening Remarks

The Chairperson welcomed everyone to the meeting. He explained that the meeting was a follow up with PRASA following the previous meeting in November 2019 which was an eye-opener and confirmed the reality of the findings of the Auditor-General that SCOPA was faced with a dismally failing board. He welcomed the Minister’s decision to remove that board. The action in December 2019 to place PRASA under administration was welcomed.

 

The Chairperson informed the administrator that things had to turn for the better. A board had been brought in to turn things around and the entity had regressed. SCOPA did not want a case of déjà vu where the hopes were of a turnaround and at the end of his one-year tenure, the Members found that things had either not moved or were back to square one. The introductory meeting was for the administrator and the team to take SCOPA through their plans and where things stood so that they could meet regularly to track progress and to make sure that the administrator did not come to the end of his tenure and things had not turned around.

 

He added that the audit outcomes had been a disclaimer. The Auditor-General had been very clear, succinct and blunt in his findings for the entity and that was the point of departure for SCOPA and for all the other historical matters to be sorted out. The Committee’s expectation was to see a PRASA that would benefit those South Africans who needed transportation to go about their daily business. He would much rather see the SAA bail-outs for the elite re-directed to this entity that served the majority of ordinary South Africans, although he was against bail-outs. PRASA had become a focus area for the Committee.

 

He told colleagues that they would have to discuss action against the former board. That they were dismissed was not sufficient and the Committee would discuss with parliamentary legal services, if necessary, there is a possibility of having them declared delinquent directors. SCOPA could not allow the board to be dismissed and that was the end of it. It needed to have far-reaching consequences to remind directors that they could not destroy an entity and that was the end of that. Parliament needed to impose its authority. The Committee would need to draft a resolution along those lines and consider it. He could not accept the dismissal of the board and that be the end because it was a good demonstration of how not to do things.

 

The Chairperson told the Minister that he appreciated the Minister’s attendance despite Parliament’s chaotic planning processes. He appreciated the fact that that the Minister readily committed to the meeting. He was aware that he had had other things to do but he himself had felt that the parliamentary process was important. It was very rare. Some Ministers had to be brought before the Committee kicking and screaming.

 

He would hand over to the Minister and the team to take the Committee through the comprehensive 55 page slide presentation and then colleagues would interact.

 

 

Minister of Transport’s Remarks

Mr Fikile Mbalula, Minister of Transport, appreciated the engagement as the business of PRASA was very important and he and the team could not take their foot off the pedal. He understood the challenges of PRASA quite succinctly and it required decisive action and a turnaround in record time. He had a presentation that he would circulate to Members. It was a shareholder’s agreement between himself and the Administrator and explained why he had decided on the decision. When he had appeared before the Committee previously, he had been cautious about taking the decision to put PRASA under administration but by midnight of that day, he had made the decision to do so and it had been implemented from the end of the previous year.He had been speaking to the Administrator and the timeframes of three months, six months and 12 months had to be implemented as if they were planning for the FIFA World Cup 2010. He was quite happy to present everything to SCOPA because that was how PRASA was going to achieve its targets. It would have its own turbulences as they had inherited a broken palace where monies of the state had been spent in a bottomless pit over the years.

 

The Minister said that he would not bore SCOPA with the account of irregular expenditure which ran into billions. He had lines in the corridors that were not operational. Money had been spent on upgrading the system but nothing pointed to that happening. He had Autopax which was on the verge of a turnaround and had people who had not been fully paid. He had capex projects that had not been fully paid and liabilities that the board had not addressed.

 

He had been a subject of attack since his decision but he was Razzmatazz so he understood that work. He had dealt with groups before. He respected people for who they were and the qualifications they had but he could not prevaricate. PRASA had been hard hit. He had been spending time in Cape Town with the Metro and the government of Western Cape in the spirit of cooperative governance. He would be meeting the MEC after the meeting as there were problems with MyCiti and the Central line was not working. There were 20 000 working class commuters who were unable to reach their work in town on a daily basis as there was no train from Khayelitsha and Mitchell’s Plain and the MyCiti Express programme had been stalled. All these bottlenecks were on his radar and he was working hard to turn things around.

 

His speech would be distributed to the media and if there were any questions to him as the Minister in relation to the decisions that he had taken, he would be there until the end to answer questions.

 

The team introduced themselves: Bongisizwe Mpondo, Administrator of PRASA, Chief Financial Officer Japhtalina Fosu, Head of Legal Services Martha Ngoye and Company Secretary Mapula Thebethe. The Chief Financial Officer had been at PRASA for four months and the Head of Legal Services had been with PRASA for almost 10 years. Ms Thebethe said that she had been serving as Company Secretary since August 2019.

 

The PRASA presentation had been updated from the one sent to Committee Members which caused some disquiet amongst Members, especially Mr B Hadebe (ANC).

 

Mr Mpondo informed the Committee of his mandate which included addressing all issues raised by the Auditor-General. He had spent the past two months meeting staff, unions and the Hawks and getting to understand the state of the business which he described as simply “broken”.

 

Presentation by PRASA

 

Mr Mpondo explained that most problems had been self-inflicted and were mostly internal. The instability had been ongoing since 2015, especially at management and board level. He had moved towards filling vacant posts. He had structured his turnaround plan of 12 months into segments. In the first three months, he would address stability and order; the following six months would be about accelerating execution of the plan; and the final three months would entail commissioning projects and ensuring that there was continuity in the business.

 

The Chairperson made a ruling that the Administrator should speak to the original presentation.

 

Mr Mpondo noted that SCOPA had expressed concern about the minutes of the PRASA board at the November 2019 meeting and so he presented a compilation of the minutes and showed which minutes had not been signed. The majority of the minutes, 101 sets of minutes, had not been approved which was a serious non-adherence to governance. However, he was unable to sign the minutes off as he had not attended those meetings.

 

The Auditor-General findings for the past three years had been noted and management was addressing all Auditor-General findings for 2018/19, 2017/18, 2016/17.

 

The financial situation was not good and 25% of the costs would not be covered as expenses were higher than revenue. The personnel costs were proportionately extremely high. Those costs included overtime. The matter of personnel costs would be attended to. A concern was that there was no contract unit at PRASA so that would have to be addressed as there was currently no check on contracts.

 

There were a number of serious disciplinary issues, and a challenge with consequence management at PRASA. The term of the legal panel that had worked on consequence management had expired and that had added to the challenges. A new legal panel had been engaged and, in the meantime, PRASA was working with the Special Investigation Unit. Many disciplinary files were with a law firm that would not return them. PRASA had requested the SIU to retrieve the files. A subpoena had been issued as the files had not been returned on request. The Administrator presented a list of 22 files that PRASA was currently working on in terms of consequence management. 60 employees were implicated in those investigations. He presented details of the numbers of employees suspended, charged and dismissed. Where there were issues of criminality, PRASA would be seeking to lay charges at the special court that had been set up. PRASA was also looking to recoup as much of the money as possible.

 

PRASA was dealing with 21 matters in conjunction with the Hawks. All cases were still under investigation but were anticipated to go to court soon. Charges were mostly contravention of section 38(1) of the PFMA Act 1 of 1999, fraud and corruption.

 

Disciplinary and grievance matters related largely to PRASA Rail where there had been 505 disciplinary hearings, 33 suspensions, 84 cases with the CCMA, and in 37 cases there had been a Labour Court or Constitutional Award.

 

Interventions included stocking spares depots to ensure speedy repair of trains. A large number of train windows had been stolen because the windows had metal embedded in them.

 

Issues to be addressed included strengthening the Group Exco and focusing it on resolving the challenges facing the business. In the short term, GExco would meet twice a month

Five sub-committees had been established to support the Group Exco:

  • Revenue Enhancement and Cost Containment
  • Governance
  • Service Recovery
  • Safety Management
  • Acceleration of Capital Programme.

 

The Administrator presented a list of specific issues that would be addressed in the next three months, three to six months and nine to twelve months to manage problems and systems that were broken.

 

PRASA, as the shareholder of Autopax, had not capitalised the bus service over the years but was working with the Department of Transport to address issues at Autopax.

 

Discussion

The Chairperson noted that there were 101 sets of minutes that had not been approved and that was a matter of serious concern because it spoke to the incompetence of the interim board. The people who should have adopted the minutes were no longer there. The matter would have to be factored into the roadmap.

 

Mr A Lees (DA) noted that World Cup 2010 had many problems from an infrastructure point of view but was built on time. The Chinese hospital that had been built in eight days was a more applicable example as the Coronavirus was more in line with the situation at PRASA than the Soccer World Cup. The importance put on the situation was good but it was not a game. It was a crisis. People’s lives were being disrupted. The Administrator had gone through the points of what was to be done in some detail. While he had only been there two months, the Chinese had built a 1000-bed hospital in eight days.  Mr Lees wanted to see a detailed plan with timeframes and resources. A big picture was important but the detailed planning with timeframes and resources was needed. The crunch would come in the resources because the country did not have much in the way of resources and was borrowing heavily. Had the Administrator done any analysis of the existing resources in the organisation because without the resources nothing could be done? The Chinese had the resources to build a hospital in eight days. Perhaps the Minister could share with the Committee as to whether PRASA had the resources.

Mr Lees had heard that PRASA was using second hand brake pads on locomotives. Was that true? It went to his question on resources if PRASA had to resort to second-hand brake pads. If the Administrator was going to bring back steam locomotives, Mr Lees was a qualified steam engine mechanic and he suggested that perhaps he could get a job on the locomotives!

As SCOPA was not engaged in a hearing, the Chairperson determined that he could take three sets of hands and still ensure that all questions were answered.

Ms B van Minnen (DA) thought that the World Cup analogy was a good one because Cape Town had lost about 50 trainsets since then, worth about R400 million, and that was just in Cape Town, not taking into account KwaZulu-Natal and Gauteng. How many arrests had there been? She knew of one in Cape Town and that was a minor. If there had not been any arrests, had there been an internal investigation into security? The kind of destruction at Cape Town Central Station could not have happened without somebody knowing something, so the question was whether there had been an internal investigation into PRASA security? What was PRASA doing about it as they were talking about very serious money and a situation that impacted on the working classes very directly?

Mr M Dirks (ANC) requested permission to make a general comment. The Administrator had spoken about the windows being broken so that the people could steal the aluminium embedded in the windows. That spoke directly to the moral degeneration in SA society. That needed to be addressed by politicians. It was not just about the train windows. If a truck broke down, people would not help the injured but would loot the goods that the truck was carrying. The state of moral degeneration was endemic. He did not like Americans but one thing that SAs could learn from them was their sense of patriotism. SAs were so unpatriotic that they woke up in the morning and wondered what they could do to cause harm to society or the environment.

The Chairperson agreed with his points as they were fundamental to the issue of public accounts. Whatever people broke and burnt, the government had to replace once it had been was destroyed. It was nonsense! It was like the current destruction at the University of KwaZulu-Natal, including the HIV Unit. What Mr Dirks was saying about moral degeneration was wholly relevant to SCOPA and needed to be discussed. It was about Rands and cents and public.  The Committee had to speak about instilling a culture of responsibility. People had to care for assets of the state as if they were their own. If the trains were burnt, it was SAs who would be unable to obtain transport. He assured Mr Dirks of his full backing.

Mr Dirks said that SAs should be more patriotic and it should start with MPs in the House who should start the moral regeneration of SA society. If the problem of moral degeneration and unpatriotic behaviour was not addressed, the problems facing SCOPA would never end. SCOPA Members found it easy to complain about people in supply chain management and entities who had not been vetted, but perhaps the time had come that Members of SCOPA had to be vetted. Members of Parliament had to be vetted and one would then see how many people would make it into Parliament. Some people would run away rather than face a vetting process.

Mr Dirks believed that it had been highly irresponsible for PRASA to cancel security contracts without a back-up plan. The beautiful Park Station in Johannesburg had been vandalised. He saw how properties had been vandalised because contracts had been cancelled. Many of the security companies had taken PRASA to court and won their cases. How was the Administrator going to deal with the security companies that had gone to court and had won their cases? How was he going to deal with security in the stations?

Secondly, he heard that the board was gone. It had been shocking that the board could not show SCOPA minutes at the last meeting. Maybe the board had gone back and made up the minutes because the board had written to the Chairperson that very same night saying what a disciplined board it was.

SCOPA had been tired and angry at that meeting in November 2019 and had told the Minister to fire the board or they would deal with him. The Minister had done the right thing and had fired the board. The Company Secretary had been at PRASA when the board was there and she should speak to the minutes as it was her job to deal with minutes. It was her responsibility. He wanted to hear from her why she had not taken the minutes to the board and seen that they were adopted.

Mr Dirks noted the investigations against employees and security officials, but no charges had been brought against the companies. The private sector was very, very dangerous as it corrupted officials and got away with it. He added that the cost of employees was really too high and had to be brought down.

The Chairperson asked the Company Secretary how long she had been at PRASA.

The Company Secretary said that she had started working at PRASA in August 2019.

The Chairperson said there was no record of resolutions. He wondered how people could keep working. The register was always signed so that people could get paid. That characterised the “I don’t care” outlook of the board. The 101 unsigned sets of minutes were a lot of minutes as they included the sub-committee minutes. There was merit to SCOPA instituting a process to deal with those people. The resolution would be drafted so that the Committee could debate it and so that Parliament entrenched its authority.  People had to be held accountable even if they had left the company. None of those directors should be allowed to become directors anywhere if they could not even deal with minutes. SCOPA had to engage with the parliamentary legal services and with the entity in terms of the information that they were providing. SCOPA needed a resolution of Parliament so that it could take court action against the directors. The administrator had been peeling the layers of the onion.

The Chairperson foresaw court action to have the directors declared delinquent so that a dismissal was not redemption so that one could go elsewhere. He told Minister that the point that he had raised in November was very important. There needed to be a far more rigorous and transparent process of appointing board members.

Responses by PRASA

Mr Mpondo agreed that the issue around resources was important. It was a mammoth task to rebuild PRASA so they had to stratify action plans. He had presented key milestones for each time period. He had done a comprehensive analysis of resources and had identified key technical skills required, especially around project management and engineering. In the short term, there was an integrated programme for the Central line and Mopani and there was an infrastructure line as well as a security stream and a service recovery stream in the project. Two engineers had been identified to drive the projects and the team would be built around them. It was an interim solution as well as what would happen in eight months. Some colleagues were not fully utilised in the organisation and they were being utilised. Where PRASA needed external skills, it would talk to relevant industry bodies. He was happy that to get the programme going.

In his office, he had begun to build a project team. His team was made up of qualified professionals and experts in finance, supply chain management, communications, legal and governance, engineering and rail operations. Of critical importance was developing a suitable operating model. He had also identified properly qualified and skilled colleagues and he was building an internal consulting team to build the operating model. He was certain that it was best to have internal people. They would analyse all inputs from consultants over the years. The team would report to him on a daily basis.

Regarding the second hand brake pads, Mr Mpondo could not comment as he had been to all depots across the country in December and that had not been brought to his attention. He could not confirm the statement but assured the Committee that PRASA had work to do but that it would not cut corners and do illegal things as that could lead to incidents on the network.

Turning to the fires in Cape Town, two young people had been arrested and were in custody. The young people were beginning to provide information but a private lawyer had stepped in and they were no longer permitted to divulge anything and they did not know for whom the lawyer was working. SAPS and Crime Intelligence were working on the case. It was a clear case of sabotage. PRASA had also appointed private investigators to assist. The policy of offering rewards had resulted in the two arrests in the Western Cape. A reward had also been offered in Gauteng.

Mr Mpondo had summoned all security managers to discuss the matter of the fires. It was incumbent upon PRASA to protect the assets of the state. He wanted to establish what could be done differently. They were stretched to meet security standards and did not meet the global standards for security numbers. PRASA had 2 400 security personnel plus 3 400 security personnel on contract. There were external acts of vandalism but there were internal members involved in security matters. They had been involved in theft, collusion with vandals, etc. Disciplinary action had been taken in KwaZulu-Natal, Western Cape and Gauteng, including against managers.

The security contracts had been cancelled without a back-up plan. The court had insisted that the security firms be given a month’s notice, even though the contracts had originally been irregular. The contracts had not been structured in the best interests of PRASA. That also spoke to the absence of a contracts management unit which made it difficult to get value from the contracts procured. The security firms had been given a month’s notice in January and National Treasury had given PRASA permission to use Eskom and ACSA’s panels for contracting security forms as those security personnel were performing a similar function of protecting assets against cable theft, etc. The evaluations based on those panels would ensure contracts were put into place in the next month.

Disciplinary measures were dual – PRASA was taking action and criminal action was being taken against the companies listed in his presentation so it was both employees and companies that were being prosecuted.

Ms Fosu agreed that personnel costs were extremely high and reminded the Committee that the administrator had raised that point in his presentation. Some of the findings were that there was a lot of non-performance but it was not managed and additional staff was hired and the person was moved to another position. Some services were outsourced but PRASA had staff on its books to perform those same functions. She was happy to hear an MP speaking about the reduction of staff. The operating model that PRASA was developing would identify duplicates and people could be redeployed and costs cut. The first point of departure in filling positions was to look internally, dependent on the expertise required. Using the budget for 2020/21, PRASA was looking at voluntary early retirement packages and other measures.

The Company Secretary stated that minutes had not been compiled when she had started work at PRASA in August 2019. She had begun compiling minutes from 2018 and so had shown in the slide on the minutes, the dates when these had been presented to the board. She had compiled a resolution register as there had not been one. The Administrator would decide what to do with the register of resolutions and the minutes that had not been signed.

Further Discussion

The Chairperson asked why no minutes had been complied as standard operating procedure. He would get the day’s minutes for SCOPA later that day. PRASA’s lack of board minutes was indicative of poor record management in the organisation.  He imagined that they would investigate why the minutes had not been done. Had she investigated the non-compliance regarding the minutes? The fundamental question was why. Prevention was better than cure. Had she investigated why the situation had occurred? The question that the Committee asked was: “What killed the patient?” so that it should not happen again.

Mr Dirks stated that when the board had appeared before PRASA, there were no minutes. But what had the Company Secretary done in the four months that she had been there from August? The board had many meetings between August and November 2019.

The Chairperson saw that according to the minutes schedule, from no 81, minutes had been completed but not presented.  Why were the minutes not presented?

Mr Dirks stated that he was not blaming the Company Secretary but trying to understand what had happened.

The Chairperson responded that she might have to take some responsibility for the four months that she worked with the board.

Mr Lees stated that the Administrator had given a good explanation of personnel resources but not of the financial resources, without which, nothing would happen.

Mr Hadebe noted that only special board meeting minutes were approved but not those of other board meetings and key committees, including the risk committee and finance committee. Who took the decision to cancel the security tender if there were no minutes? Where had PRASA been getting a mandate to act?

The Company Secretary said that she had started doing the minutes from 2018 and they had to be approved at quarterly meetings so they were presented at the first opportunity, which was in October, but they were not approved. The minutes were on the agenda for the October meeting. That spoke to what she had done. During that time, she had emailed minutes to the board as they were ready.

The Chairperson said that the Auditor-General 2018/19 audit outcome was explicit that minutes had to be done. PRASA was responding to Auditor-General and not to its own systems.

Mr S Somyo (ANC) appreciated the presentation generally but he was concerned about the appointment of the Administrator for only one year. The Administrator had spoken of restructuring of the capex budget, probably for liquidity purposes.  In the nature of things, where would that take him as he was robbing Peter to pay Paul? How were they going to ensure that the restructuring of finances did not take them away from where they needed to go after such adjustments?

Secondly, Mr Somyo asked about recoveries, maintenance and repairs to infrastructure to improve sustainability. He lived in Alice where there were no trains. In East London, trains were important but the big train centre there that had repaired trains had been closed. The outlook in terms of movement in the area was affected. How did they seek to deal with that? Maybe it had happened before the Administrator’s time, but now it was within his time.

He found it interesting that the Legal Executive had been there for ten years. So, what had happened regarding matters of governance? SCOPA might nail the Company Secretary but she had given the board all the minutes, but they had not been approved, yet the company had continued to operate. There seemed to be nothing to signal the areas of risk in PRASA and now the same person was in charge of risks. Could the Administrator take the company where he wanted to go with the Legal Executive in her position?

Mr N Paulsen (EFF) noted that the Minister had managed to stem some of the damage at PRASA. The Minister had a war room that in August had said it would improve on-time performance from 52% to 85% and increase train sets in operation from 157 to 291. Recently, the head of the war room said that it was on track to have 191 train sets on the tracks by the end of March. However, it should have been 291 by the end of December 2019. Train lines with speed restrictions would be reduced from 167km to 100km. How was that going? That was intended to be the response to the serious challenges for commuters out there.

Mr Paulsen stated that in terms of the number of people employed and the amount of work outsourced, Members spoke of moral regeneration and setting an example but the best way was to send immoral and corrupt politicians and officials to jail. That would scare people and deter people from damaging public property. The work outsourced was just an opportunity for wasting taxpayers’ money as there were skills within PRASA. They spoke of highly technical skills such as signalling etc., but if they could get it right, they could have an effective rail system.

In December, he had been in Madrid where there were 10 rails underground and a train ran every two minutes: there was always a train and the trains were never late. It reduced both traffic and accidents on the roads. The Minister had a most important portfolio for a developmental country but an effective rail system was only possible if capacity was built within PRASA. What was the plan to build capacity within PRASA so that Metro trains could run on-time without building a dependency on an outsourced contractor?

Mr Hadebe said that most issues had been captured. He thanked the Minister for his presentation. He welcomed the bold and decisive action in appointing the Administrator. It had become clear at the previous meeting that the last board was swimming in the river of confusion and SCOPA was fishing in a shower when Members asked questions, hence SCOPA had stopped the meeting.

He stated that Cape Town was the most congested city in SA. The Central line catered to the poor from Khayelitsha to town. There was also a problem with MyCiti Express. It could not be business as usual, given the issues.

Mr Hadebe was also concerned about inter-governmental relations in terms of the three levels of government. The Western Cape had launched the Rail Law Enforcement Unit when Dr Blade Nzimande had been the Minister. What had happened to the City of Cape Town systems of security? Did PRASA have good relations with other levels of government because it could use those resources for security? The vandalism was costing Rands and cents. 

He suggested that future meetings should be based on the timelines presented by the Administrator. SCOPA would call the Administrator back at the end of March to determine whether he had achieved the stability that he had promised. The Committee would call him back again at the end of June and before his term of office came to an end.

Mr Hadebe raised the issue of minutes. It spoke to good corporate governance. Over 100 meetings had taken place without the subsequent approval of minutes. Who had given the board and management the authority to act? Who had taken the decision to go to court and challenge the security companies if there were no minutes? Were they given instructions over the phone? There was nothing to support PRASA officials as they had acted without authority. The Administrator had to look into it. Perhaps SCOPA should also look into it. Something had to be done about the board. Why were only special meetings signed? Was it to do with contracts? Registers had been signed. Members had been told by the board that the staff were to blame for the errors in the minutes. Was that incorrect? Were they crucifying the wrong Jesus?

The Chairperson did not know where Mr Hadebe got the incorrect metaphors. It should not be lost on Members that instructions could have been given in a manner that was inconsistent with good governance and professionalism. He noted that the SAA-Emirates Codeshare Agreement had been canned via a WhatsApp message according to revelations before the court.

He noted that the average income per month at PRASA was R 687 million versus the average expenditure per month of R908 million which was a difference of R221 million per month. Accounts payable were R3.6 billion versus accounts receivable of R310 million. The difference was R3.3 billion. SAA had been generating R31 billion when expenses were R33 billion and that had led to the collapse that had occurred. Expenses versus income was a concern. Was PRASA solvent? Was there money in the bank?

The Chairperson recalled that in 2014, Cabinet had issued an instruction that all supply chain management staff in departments and entities had to be vetted. Was that done in PRASA? The CFO had referred to consultants. Was the cost of consultants included in the cost of employees or was that a separate cost unit? What was the cost of consultants? Who were the consultants and what were they consulting for? What transfer of skills occurred at the end of a contract? The absence of a contracts management unit was a concern. So, what was the status of the contracts at PRASA?

The reference to the efficiency of 2010 World Cup was interesting. At some stage he had been praising the efficiency of the country until he discovered that Medupi and Kusile had been planned to assist with electricity during the World Cup. In 2008, load shedding started. He found that Medupi and Kusile were planned over one year when they had required three years’ planning. He applauded the sense of urgency but he did not want PRASA to create problems for the future as Eskom had done. The urgency had to be balanced with proper planning and implementation.

Mr Hadebe saw that the legal panel to assist PRASA with consequence management had expired in 2011. There were allegations that PRASA was using an irregular law firm. Was that true? Which legal panel was the Administrator talking of? He required clarity on the details surrounding the legal panel dealing with consequence management.

The Chairperson said that, at the last meeting, there had been a great deal of confusion about the numbers of people involved in consequence management but now the Committee had specific figures.

Response by PRASA
The Administrator responded to the question of financial resources. There was a problem in the operating budget. There was a capex budget that had not been adequately spent. Only 10% of the R12 billion capex budget had been spent on infrastructure projects. There had been R20.8 billion in the capex budget at the end of December, including roll-overs. There was money in capex and if the money was sitting there, then things were not getting done. It was, in fact, in the operations that PRASA struggled. If capex was not spent, infrastructure was not getting built.

Capex and opex: there was not enough revenue to cover costs and the conversion had to be made as a stopgap measure. There were four revenue streams: rail fares, bus fares, leases from retail stores, etc., the operating subsidy. He had requested finance to develop an equilibrium funding structure.  What were optimal revenues? What were the optimal expenses to generate the optimal revenue? It would take longer than 12 months to resolve the issue but because it was a public transport system, there would always be a need for equilibrium funding. There might still be a need for a subsidy but he could not speak to it without figures.

Regarding maintenance, the Administrator explained that PRASA utilised Transnet facilities in East London where repairs were undertaken. Repairs were also undertaken at East London station. PRASA had not been able to activate repairs as the stores had not been adequately stocked. That was an issue that had been addressed. There was poor infrastructure and a need for refurbishment of coaches, known as ad hoc maintenance. That would now be carried out.

He asked Ms Ngoye to respond to the questions on risk. He noted the point raised. A new person would find people in positions and he had made some urgent changes in December, especially where people were in acting positions but there was also an opportunity to employ people as there were positions vacant at corporate level and divisional level and those positions would be filled in a month, but he was attending to weaknesses identified.

Targets had been set in the war room, such as on-time performance and speed restrictions. Mr Mpondo admitted that targets had not been met at the time because spares had not been available. On-time performance had been impacted by vandalism. Speed restrictions had been addressed as PRASA was tamping the lines in KwaZulu-Natal which would reduce speed restrictions. Punishing officials would take place soon. He would make relevant announcements on upgrades. PRASA did have the Gibela facility and some colleagues were being trained there. The main focus of safe and predictable transport of commuters was a sense of pride that had to be brought back in PRASA but he did not want to over-promise in a period of only 12 months.

The Administrator assured Members that the Central line to Cape Town was a focus and a priority programme, as he had indicated in his presentation. PRASA had engaged with commuters two weeks previously, and Mr Hadebe had been present, and another engagement would be held on Thursday to go over plans with commuters. Mopani was the other focus area. He had not had much time to engage with other levels of government but he had given colleagues instructions to engage with other levels of government. An example of good cooperation was the situation in Park Station where PRASA had security cameras but the operators could not communicate with personnel on the ground. They were being assisted in that regard by the Metro Police. He added that the Minister had been working with inter-governmental levels in the Western Cape. He would definitely take that on board.

Solvency danced around the issues of conversion of capex to opex. He admitted that the situation was bad. The Administrator assured Members that he was balancing proper planning with urgency. Fortunately, a lot of plans were in place but not implemented, so he was taking what was in the system, verifying and implementing where they should be implemented.

The CFO responded to the question on insolvency. The balance sheet of PRASA was not different from the last statement of 2018/19. At first glance it seemed solvent as liabilities did not exceed the money in the balance sheet but a lot of the money was reserved for capex and could not be used for opex so over R200 million per month was not being covered. Leakages had put PRASA in the difficult position. Where was the R200 million going? It was going to the liabilities. Through the initiative of tracking the capex, PRASA would be able to track maintenance and development. If fencing was not put up, the infrastructure was open and vulnerable so expenditure of the capex budget was critical. What did PRASA need in the short term? PRASA was engaging with the shareholder and National Treasury and it was not going to be an easy fix. The entity might even have to look at the current subsidy from the Department of Transport and determine how the deficit would be addressed in the short, medium and long term.

She added that personnel costs did not include project managers and consultants. Consultants were catered for under expenses. PRASA did need registered professionals in certain cases, e.g. civil engineers, but the entity would be looking at the duplication of skills between internal employees and consultants and would address the excess capacity. As with most government departments, there were ICT staff but also consultants. Once the analysis had been done, management would determine how to address it.

Ms Ngoye responded to the legal and risk management questions. On the question of risk management, it was a problem. The culture of risk in PRASA was non-existent. She had raised it for as long as she had been in PRASA. When doing the corporate planning, she had always insisted on a risk assessment. However, the decision to utilise that assessment did not rest with her but with the board. With regard to the problems, she had arranged risk management workshops with the previous boards as she had said that that risk rested with the board. She had reported and raised issues but nothing was done. Risk assessments had been done but the risk workshops were always cancelled. She could give many examples of where her team had identified risks. When the board cancelled the security contracts, she had raised the red flag but the board had ignored her and she had nowhere to go. Even at the point of the appeal stage, she had raised risks and proposed a different approach. The board had suggested that there was a different way to go from the way that she proposed. The board had briefed lawyers themselves because the members had not approved of the approach of the legal team. When the Administrator was appointed, the legal team immediately went to him and said that they could not continue with the appeal process against the security contracts and, at last, the Administrator agreed and said not to appeal. She could give many examples of where the legal team had not been listened to.

The legal team had gone to Minister Nzimande as soon as he had been appointed. They had explained to the Minister what was happening and how the board was signing contracts and cancelling contracts without the authority to do so. Subsequently, the legal team had been threatened with suspensions and several people had been removed. She had been removed a number of times because of issues that she had raised at PRASA. The previous day, she had asked that risk reporting be elevated to EXCO as, even though it had been on the agenda previously, risk management had not been addressed. If one looked at the third quarter performance, the risk management portfolio had met all its targets, although recommendations had not been implemented by the board.  

Ms Ngoye explained that in 2015/16, the legal panel of PRASA was found to be illegal. The panel had moved to Transnet when the split between Transnet and PRASA had happened. Several attempts had been made to replace the legal panel but it had not happened as the process had been scuppered. Werksmans had been on the old, irregular, panel. The Auditor-General had determined that the panel was irregular. PRASA had gone out on tender but a new panel had not been appointed and the Administrator was looking at a new approach. There were a lot of irregularities in legal processes because of the irregular panel. Every day there were legal matters but now no law firm could be instructed without the Administrator’s approval so that limited the chance of legal firms being used irregularly.

Ms Ngoye explained that the procurement process had been identified as a problem. Risk management had asked the PRASA board to put certain things into place and make certain decisions so that PRASA could continue to procure and to spend money on certain issues, but that was not supported and there were no approvals of supply chain policy until the huge tenders for security, etc. had to take place.

Ms Ngoye reported that it was the governance issues that had impacted so badly on the operations of PRASA. The number of months taken for decisions to be made had been frustrating for management. Her direct reporting was to the Company Secretary, even before the current Secretary. She understood that there were arguments every time that minutes were presented. To resolve the arguments, it had been suggested that the board go back to the tapes but the board had refused to do that. As another example of mismanagement by the board, she cited the fact that the audit committee had approved a resolution but then the Chairperson forgot that he had approved and wanted to stop staff from acting on the basis that the resolution had not been approved until she had shown him the document giving approval.

Further Discussion

The Chairperson said that Ms Ngoye had said a lot. SCOPA always adopted the hamba kahle approach and so SCOPA required the reports that she said had been prepared but ignored. Once the Committee had kickstarted its approach, it would engage further but her input had confirmed the approach that SCOPA was considering.

The Chairperson asked how far PRASA had gone with the vetting of employees.

The Administrator said that at his first meeting with EXCO on 7 January 2020, he had been told that vetting at PRASA had not been completed as forms were still outstanding and there were petty issues. EXCO vetting was not complete. He had instructed that it be completed.

The Chairperson asked if those present had completed the vetting process. Had the officials sitting in front of him completed the vetting process?

The Administrator admitted that some of the EXCO officials before PRASA had not completed their forms. He stated that PRASA would also be doing lifestyle audits of the top 300 members of staff and would require declarations of interest by them by the end March. PRASA would be assisted by the relevant state agency.

The Chairperson informed the Administrator that, by the following Wednesday, SCOPA wanted the full register of compliance of EXCO. He had considered asking each official before him to declare whether they had completed the forms.

Mr Lees asked about the R20 billion of capex. How much had been converted without authority and how much was left? What was the capex availability? How much had been used for opex and how much had been authorised for capex.

He informed the Administrator that on 22 January 2020, the Rail Safety Regulator (RSR) had sent a letter to PRASA regarding the brake pads. On inspection, the RSR had discovered that second hand brake pads were being used as new pads were not available.

Mr Somyo appreciated the responses by PRASA even though they simply compounded the situation. The Minister’s wisdom had prevailed when he had appointed the Administrator and now, as SCOPA dug deeper, it saw what was necessary for the Minister to do to turn things around. The one year period of the Administrator’s term of office came to an end in the middle of the next the audit period. He was trying to probe whether the Minister’s timeline was suitable.

Secondly, Mr Somyo asked about operations and capital expenditure. PRASA was on the path of robbing Peter to pay Paul if it had not defined the pathway. How were they going to deal with it coming from the four streams of income? Was it possible that the Committee could get a model of the financial structure? Could SCOPA see the path towards a solution as it was so important? The financial model had to be sound for SCOPA to accept that borrowing of money from capex. PRASA had to remember it served the downtrodden and the working class who had to reach their work on time.

Mr Somyo heard the account of risk management over the years and it was unfortunate that the account came when the board was no longer there. So much had been lost in that time. Here was an Executive crying foul. She had done her duty but those responsible for governance had denied her the right to do what had to be done and so had denied the institution. What else could be done? Officials had been denied execution of the acts. The Committee needed to look into what could be done. It was not a sudden failure but a systematic failure. He appreciated the legal advisor’s account as it was necessary that the Committee heard what had happened. Why did they employ a structure for risk management when the board had no intention of listening to it? The Risk Compliance unit was simply a case of malicious compliance.

Mr Somyo said points of success between the current time and when the Administrator left had to be indicated in specific timelines. Those things needed to be timed so that when the Chairperson called them again, which he should do, the Committee could check that the things had been achieved. PRASA had a huge responsibility to transport the working class. Economic activity was linked to the functionality of PRASA. There had to be a funding model to sustain the system.

Mr Hadebe said that if a risk management strategy and risk management register that detailed risks and measures had not been in place, had they completed a strategy and register since the Administrator had taken over? If there was a risk management strategy and risks had been identified but someone had decided to ignore the risks, then the implication of that action had to be measured and the people had to be held accountable, even if they had left PRASA. The Committee needed to measure the risk and what had happened and hold those people accountable.

Mr Hadebe raised the issue of the legal panel and the fact that PRASA was still using Werksman’s. What had informed the decision to continue using the firm if the legal panel had been declared irregular? Lastly, was PRASA and Exco not trading recklessly if it was operating on a deficit?

Mr Dirks wanted to reiterate the importance of the Company Secretary. Ultimately, the buck stopped with her. According to the King’s Report, she was the SG and not just a secretary. It was a major responsibility. She should look at section 88 of the Constitution as the buck stopped with her in the end. He was raising the issue because it was highly irresponsible and even criminal what the previous board had done. At one point, the Board Chairperson had flown down to Cape Town with her driver to drive her around Cape Town. How could one do such things? It was a good thing that SCOPA had decided to request that the board members be declared delinquent directors. Hearing from the Legal Advisor what had happened, he found it scary. It had to be reported to Parliament.

The Chairperson asked that responses be short and succinct so that he could determine the way forward.

Responses by PRASA

The Administrator responded to the issue about funding from capex. He had given the global picture and the CFO could provide details. On the brake pads, he would follow up with the responsible manager and take the necessary actions.

The Chairperson requested that the response to the issue about brake pads be submitted to SCOPA in writing within a week. That would bring the question to its logical conclusion.

The Administrator said that PRASA was working on the financial structure and would welcome direction from SCOPA but he was working towards setting a sustainable foundation beyond his 12 months with PRASA. Whatever the outcome regarding the board, they would have to look at all in the organisation who were participating at the time, both the board and those in management. He was now putting policies in place, filling critical vacancies and improving operations. Regarding the standard operating procedures, the appointment of contractors was happening and would imminently start doing work on the Central line and Mopani.

The CFO wanted to ensure that the Committee understood the issue of the conversion of capex to opex. She did not want to give the impression that the process had not been managed properly. PRASA could not convert capex to opex. National Treasury had to approve any conversions. To date, R1.6 billion had been approved by National Treasury and the Shareholder after a rigorous process. When capex was transferred to opex, management also evaluated the impact on the capex programme. They assessed the risk and did not transfer money if it jeopardised a capex programme. The mitigations were submitted to National Treasury and the Shareholder.

Mr Lees asked if any of the cash had been used without approval. How much was available for capex? Was the amount of R20 billion after the transfer of R1.6 billion?

The CFO replied that funds had been transferred from capex to opex without approval before her time at PRASA, but procedures had been put in place to plug that gap. They still had to replace R100 million and then the gap would be closed. R20.7 billion was available for capex after the conversion of the R1.6 billion.

She stated that PRASA was not trading recklessly as it was not trading when liabilities exceeded assets. PRASA was engaging with the shareholder. PRASA had been budgeting a deficit budget for a number of years. That should not have been allowed. The Public Finance Management Act (PFMA) was clear that one could not incur expenditure where there was not a budget but that was what had been happening. The money generated by PRASA was not enough to meet the expenses and the conversion of capex to opex was an interim solution. The financial model was intended to resolve that. PRASA was engaging with the shareholder and was detailing what was required to run a sustainable business. PRASA would be happy to present the model to SCOPA once the model had been completed and protocol followed.

Ms Ngoye stated that a strategic risk register and operational risk registers were available and she would submit them to SCOPA. The registers were in place, although they had not been implemented. Regarding Werksmans, the entire panel was irregular and that included Werksmans. The Werksmans’ issue was compounded by the investigation into disciplinary matters as ordered by the board. The matters that Werksmans was involved in were those matters that flowed from the investigation instituted by the board and that would continue to re-incur costs. PRASA had found that it was not cost-effective to appoint a different company to start again and the reality was that there was not another panel in place, so no other company could be appointed.

The Administrator pointed out that another company had been appointed first, before Werksmans, but then the work had been given to Werksmans. That issue had to be addressed. It was in Auditor-General’s report.

Chairperson’s closing remarks

The Chairperson welcomed the transparent responses. All that had been said sounded good. It seemed like light at the end of the tunnel but SCOPA had to be sure that it was not an oncoming train. There had been a total collapse of the governance structure at PRASA from which it had to emerge. Why were the state-owned enterprises not operating as businesses as they should do? They believed that the taxpayer would always be available to bail them out. That situation had to be avoided with PRASA at all costs as resources were not infinite. He believed that SCOPA had to make an example of PRASA to show that the nonsense had to end. PRASA was the arena in which SCOPA was going to demonstrate its resolve. He thanked the Minister for dissolving the board. It was decisive. He appreciated the willing compliance of the Minister and pleaded with him to encourage other Ministers to be as cooperative as he had been. The resistance of some Ministers to working with SCOPA did not augur well for the system of checks and balances.

He added that the following week, the Committee would receive the information regarding the vetting process. He warned the officials before him that their names should not appear on the list of those who had not completed the process. It would be discussed by the Committee so it would become public knowledge. There would be no chance to fudge the issue.

SCOPA did not want to be a player and a referee. PRASA had to present its financial modelling to the Portfolio Committee on Transport. PRASA had to present its Annual Performance Plan to the Portfolio Committee and its budget to Parliament. After the budget process, the Committee would see PRASA around May but would call the organisation prior to that, if necessary. SCOPA would interact with Hawks in the interim. On issue of the declaration of board members as delinquent, he proposed that the Committee move ahead with the intention but first hold a Parliamentary inquiry to establish the facts. It would not be a long-winded inquiry but it could not just be about the immediate previous board. The Committee would look at prior boards and rely on the Auditor-General and his audit outcomes and management reports. The Chairperson would contact parliamentary legal services.

Why was PRASA the institution that SCOPA had targeted? The Chairperson explained that it was   because the poor relied on effective transportation by PRASA. If SAA terminated that day, passengers could fly with another airline but there was no replacement for PRASA, so the Committee would move full steam ahead. There was a moral obligation for public representatives to safeguard the people. There should never be a repeat of the situation. He encouraged the Minister to have a transparent process for appointing the new board.

In conclusion, he pointed out to the Administrator that they might have had a pleasant meeting that day but the support of SCOPA had terms and conditions. If he did not do the right thing and remedy the situation, he would be thrown in the same basket as the others. He dare not fail as the people were dependent on PRASA.

SCOPA would interact with the Transport Committee and would recommend that the Committee prioritised the financial model. But it was best housed there. He invited the Minister to make closing remarks.

Minister’s closing remarks

The Minister said that the decision to put PRASA under administration had not been an easy decision. The Director-General of the Department of Transport had said at the last meeting with SCOPA that the only shortfall was that the Minister had to put the board under administration. By midnight that night, he had been clear about what he had to do and he had phoned the DG to say that he was right and that the board had to go.

The Minister was clear that they could have taken another process, such as appointing a new board, but he knew that PRASA was broken and rotten to the core. A mechanism was required to deal with the situation. The Administrator had told him that there was no back up of documents. As Secretary General of the Youth League, the Minister had not been able to leave a meeting without minutes. The auditors would ask him for the minutes. At that time, the ANC was not even in power and he did not know that not keeping records could land him in jail because he could not twist the arm of the auditors. One of the former board members had been an auditor of the Youth League at the time. He expected that educated people were running the board correctly, but when he listened to what had happened, it was horrific. The board had run a company worth billions of Rand but they had had no systems, no minutes. PRASA was supposed to be transporting people and a lot of money had been invested in PRASA. There would be something wrong if he had not acted on that.

He was committed to dealing with the new board properly. The people would be interviewed and interrogated. “Members of the big boards could not rock up in a small suit.” The boards of SAA and Eskom had never assisted the system. Fortunately, the system had checks and balances. Even if the Minister was asleep, SCOPA and the Committees could help. When a Committee called a Minister, he or she had to participate when called. The Minister might see that the board he had, was not operating as a board should operate. That was the exciting thing about SA’s democracy.

One of the things the Minister had said to the Administrator was that he had the power to act decisively. The Administrator was not going to reach June and not be able to show what had been achieved. He had to deal with people who did not act. If he did not, what was the point of having an administrator? If people did not implement what he required, he would have to act decisively against those people. The stories explained that boards did not act. The Administrator had brought in people from other authorities, including National Treasury. He was not running the show alone but he had people who would assist him to realise the task. As Minister, he would support the Administrator, but he would not be running the show. His ministry would go with PRASA to National Treasury. Within months, actions had to have been taken.

When he referred to the World Cup, he was just saying that SA had been able to build the stadiums, although Cape Town Stadium was running at a loss because of Sepp Blatter who had taken a helicopter trip and had decided that he wanted the stadium in Greenpoint. When he was in the Department of Sports, he had even considered how to demolish it. 

However, the Minister assured the Committee that there would be no reckless decisions. He had told the Administrator not to take reckless decisions. The Administrator had to say to the Minister that he could only achieve his goals if certain things happened.

He added that if a board lied to the Minister and undertook malicious compliance, the board had to be dealt with. However, he did not want to be Mr Razzmatazz and just dismiss people left, right and centre.

Finally, the Minister said that he needed to address the point of inter-governmental relations. He had met the Western Cape MEC about the transport issues in Cape Town and he was meeting him again on Tuesday. They would unlock the problem with the MyCiti N2 Express. The Central line had been demolished and PRASA had to answer to the City and everyone had, as city, province and national, to work together for the people. He had told them to work as a single government to do the best for the people of Cape Town. They would talk to CODETA, the taxi organisation, and other structures to bring some solution to the Central line crisis. Concessions and so on could be discussed as well. He had asked people to put all their ideas on the table. The people in Khayelitsha and Mitchell’s Plain could not reach town. People explained to him when he saw them in the streets that they were locked in the township because they could only afford the train fare but there was no train. He was committed to the process and was grateful to SCOPA for its assistance.

Closing

The Chairperson noted that he had just been informed that court papers had been filed against the appointment of the Administrator of PRASA. He asked the Minister to keep SCOPA abreast of issues related to the Administrator so that Parliament was aware of the law and its processes.

The Minister commented that he was not aware of papers against PRASA being filed in court but he would keep SCOPA abreast of any developments.

The Chairperson stated that the following week was SONA and that meetings would be held on only one day the following week because there would be a lockdown of the precinct. The Committee would deal with in-house matters on that day. The first post-SONA first meeting would be with SAA so that those matters could be brought to a logical conclusion.

The meeting was adjourned.

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