Special Investigating Units and Special Tribunals Act: Referral of matters to existing special investigating unit and special tribunal: Passenger Rail Agency of South Africa SOC Limited (English / Afrikaans)
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Proclamation: SIU investigation into PRASA
PRASA 2018/19 Annual Report
PRASA 2017/18 Annual Report
PRASA 2016/17 Annual Report
The Portfolio Committee on Transport met with the Minister of Transport and the Director-General of Transport to receive a briefing on the appointment of the Administrator of PRASA.
The Minister of Transport informed the Committee that it was his decision to dissolve the board and to appoint the administrator at PRASA. When he had appeared before the Committee in 2019, the Minister had committed to move with speed to address the chronic challenges that were the root cause of PRASA’s inability to deliver on its core mandate. In doing so, he had taken an incisive look at the operational environment through the War Room intervention. PRASA’s dismal performance, having achieved only 26% of its annual predetermined objectives in 2018/19, had been cause for concern. The unacceptable state of affairs had required drastic action.
Similarly, PRASA’s financial performance over the years was another pressing challenge. Over a period of five years, PRASA’s revenue had declined by 48%, resulting in an untenable situation where its operating deficit reached unacceptable levels of R1.8 billion. Despite its infancy, PRASA’s operational performance continued to decline over the years with notable stagnation in 2015 and 2016 of its on-time performance, and its safety record plunging to unprecedented levels in 2016.
Equally, passenger numbers of the Mainline Passenger Services (MLPS), of which Shosholoza Meyl was part, declined from 3.8 million in 2008/09 to 387 500 in 2018/2019, largely due to the decline in locomotive reliability and availability. Autopax fleet availability had plummeted from 570 buses to an all-time low of 90 buses in 2018/19, with passenger numbers declining from 3.15 million in 2012/13 to 1.9 million in 2017/18.
The Minister informed the Committee that the appointment of the Administrator had followed due legal processes as he was first appointed in terms of the Public Service Act and subsequently seconded to PRASA as Acting Group CEO according to section 49 (3) of Public Finance Management Act. National Treasury had granted approval that the Group CEO of PRASA, or person Acting in that position, be the Accounting Authority for 12 months while a new board was being considered. PRASA had informed the Auditor General of that approval.
The Director-General of the Department of Transport agreed with the motivation for seconding a CEO and confirmed that the main challenge, the poor operational performances of Metrorail, had informed the decision to appoint the Administrator. He also spoke of the appointment of a technical advisory team to assist the Administrator. He noted that an entity that spent only 12% of its budget on maintenance was definitely heading for disaster. He assured the Committee that security would be upgraded and that the funds promised by the President in the State of the Nation address would be used to repair all aspects of the Mobapane and Cape Town Central train lines.
Members asked whether government had considered reviewing the unbundling of PRASA and Transnet and putting both entities back into a single entity that could be made profitable again. The entities were sharing signals and platforms and so on, so why were the two entities not put back together? What would the Minister define as success after 12 months, given all the issues? Had the Minister consulted National Treasury before appointing an administrator, and the appointment of that particular individual? In which public entity had the Administrator been a functionary prior to his appointment? How would the Minister change things around? Would the Minister ensure an alignment between strategic objectives and the Annual Performance Plans of PRASA?
A Member asked how people could ride on the top on the trains when PRASA said that there was security. Why had the Committee never ridden the trains when the President and Minister had done so? Was the vandalism organised, and an attempt to defocus PRASA from operating normally, by its business opponents?
Members asked why the PRASA Administrator had appeared before other parliamentary Committees but had not appeared before the Portfolio Committee on Transport. What was the relationship between the Administrator and the Group CEO: who was the accounting authority? Where had the Administrator previously been working? Lastly, they asked if the previous PRASA directors could be declared delinquent? Could PRASA follow the money?
The Chairperson welcomed Members, the Minister of Transport and others.
The Chairperson requested the Minister to address the meeting on the issue of the Administrator and plans to address challenges at level of PRASA.
Remarks by the Minister of Transport
Minister Fikile Mbalula indicated that he would deal with the decision to dissolve the board and to appoint the administrator at PRASA. The Director-General of the Department of Transport, Mr Alec Moemi would deal with plans to turnaround PRASA.
When he had appeared before the Committee in 2019, the he had committed to move with speed to address the chronic challenges that were the root cause of PRASA’s inability to deliver on its core mandate. In doing so, he had taken an incisive look at the operational environment through the War Room intervention.
The Minister read out his remarks
The Minister asked the DG to brief the Committee on the turnaround strategy and the service level agreement signed by the Administrator.
Briefing by the Department of Transport
Mr Moemi stated that the poor operational performances of Metrorail had informed the decision to appoint the Administrator. The unreliable schedule brought misery to the rail passengers. There had been an increase in the number of train cancellations as the fleet was being depleted. It was an old fleet and the staff was resigning so there was no capacity to have trains serviced and repaired.
The licencing conditions of PRASA required that a general overhaul be done on each coach every ten years. The coach had to be stripped to the metal and then refurnish. Only 23% of the PRASA fleet was within the ten-year timeframe. Other trains had been decommissioned because they were too dangerous. A standard train was a locomotive and 12 coaches but currently they were running with an engine and six coaches. There had also been an increase in passenger deaths.
At its peak, Autopax had 780 buses but now there were only about 10% of those buses available but 800 drivers were available. Each route had two drivers and 10% of drivers were on leave at any one time, but there was still a huge excess of drivers that PRASA had to pay, even when they were not generating an income. Hence Autopax had been unable to pay drivers. The Competition Commission had determined that PRASA could not cross-subsidise services. PRASA was appealing the decision.
Locomotives were unreliable. Trains that were supposedly too high for SA rails had been sold, although they had been in service at the time. Consequently, PRASA had to hire second hand locomotives and the break downs were exasperated by the fact that most rail lines were single lines and other locomotives could not pass if one broke down. The distance from a city determined how long it took to resolve the issue and re-open the line.
Financially, PRASA was healthy on paper but it was not financially healthy. There was money, but that money was not available for operations. In the last reporting cycle, PRASA had R8 billion but that was mostly capex funds and could not be used to pay for operational expenses. That was where the problem was – there was no money to replace staff who had resigned. Employee costs should be at 30%, because by its nature, PRASA should be 60% as it should be considered an engineering firm. The cost of security was high but the outcomes were poor. There was no security and people were riding the trains without paying. Professional fees should be 0.5% but it was above 3% because of the need to outsource services.
PRASA had to operate on economies of scale but the main rail corridors had been defined by the apartheid landscape and so the density of population catching the train was not as high as required. Taxis and buses could go where the commuters were located. The poorest of the poor had stuck with the trains because they had no choice
The Railway Safety Regulator(RSR) demanded the diamond standard for signalling and the country simply could not reach that standard. SA firms could not meet those standards and only the international companies could do the work. The policy framework for the RSR needed to be amended to take account of the fact that SA was not a first world country.
PRASA had weak support functions and had lost a number of cases in court. Corruption was a major issue and the Administrator had been instructed to ensure consequence management for everyone who had been involved in corruption. A proclamation had been issued by the President for the Special Investigative Unit (SIU) to investigate PRASA and the first report had been issued.
PRASA had approached National Treasury for a virement to use some of the capex money for operational matters and National Treasury had indicated that it was in favour of such a move. Staffing issues had been addressed and people were being used in the most appropriate positions.
The Auditor-General had recommended stronger systems of control to resist and manage corruption and, in the past three months, 17 new policies had been developed to improve internal controls.
To ensure safety, trains had to travel at 30km an hour on certain sections of particular lines where the condition of the rails were such that cables had to be replaced. So, in some instances, there could only be one train an hour instead of one every ten minutes. The reason for speed limits was the condition of the rails where cables had to be replaced. Too many trains were being produced for the railroads that were not in a good condition.
PRASA had closed the Pienaarspoort corridor to repair it. After that, PRASA would work on the Central line in Cape Town. However, power cables were being stolen and PRASA was patching all over the country. The Minister had determined to work on a single corridor at a time and to do all repairs and secure the lines behind fencing before beginning work on the next line. Buses would replace the trains but buses would offer passengers a station-to-station service only so that they did not compete with other buses.
PRASA would also upgrade security. After the court decision regarding the security contracts, PRASA had been exposed for six weeks and the vandalism had escalated, but now new security contracts were in place.
Where necessary, employees had been seconded to other entities and the Administrator had been seconded to PRASA. Section 49(2) of the Public Finance Management Act (PFMA) stated that where an entity did not have a board, the accounting officer assumed the duties of the board. The Administrator had been seconded in terms of the Public Services Act and therefore took on the functions of the board. The approval of National Treasury had also been requested for the secondment and had been approved but at the moment the matter was sub judice as an NGO had taken PRASA to court. DoT was confident that there was nothing wrong with the process. Calling the person an administrator had made people, mistakenly, think that it was Section 100 of the Constitution that had been imposed on PRASA.
Discussion Mr L McDonald (ANC) thanked the Minister for appointing the Administrator because the appointment was needed, maybe even earlier, but he had done it and he (Mr McDonald) believed that the mandate of the Administrator would serve the people of SA well.
Mr McDonald was a little confused about the DG’s comments on the lifespan of trains because the world standard was about 35 to 40 years on coaches. He agreed with the DG about spatial planning in SA but the declining passengers was due more to the lack of services by PRASA than anything else and that had caused problems in Johannesburg and Cape Town with additional taxis on the road that created congestion. He agreed with the DG’s strategic plan for PRASA, but he had to look at areas that were particularly congested. PRASA needed to get passengers back on the trains; that was the only way PRASA could pay for itself.
He added that it was necessary to look at re-joining PRASA and Transnet into one entity so that it could be made profitable again.
Mr C Hunsinger (DA) thanked the Minister and DG for the presentation. It was certainly a chronic challenge because it had been going on for years and one saw further regression daily. The Minister had spoken on the appointment of the Administrator and had alluded to certain objectives. 12 months was a limiting time period but what would the Minister define as success after 12 months, given that he had made that specific appointment and given the specific challenges, as underlined by the presentation?
Mr Hunsinger noted that the Minister had made the appointment in terms of the PFMA section 49(3) which stated clearly that the administrator should have been a functionary of another public entity. What public entity had the Administrator been a functionary of to qualify his appointment? In addition, National Treasury had to be part of the decision-making consideration process. Had the Minister consulted National Treasury before appointing an administrator and the appointment of that particular individual?
He asked the DG if, in terms of PFMA section 49(2), he could allude to the framework, in terms of design, functions and roles, for the Administrator as a controlling body and an accounting authority and whether the Administrator could adequately fulfil those roles.
Mr Hunsinger stated that the Minister had spoken of chronic challenges, and it had been coming on for years, and he had spoken of the operational ability which needed to be improved. In addition, the presentation had shown a track record of chronic issues with respect to PRASA. The Committee, of which he had been a Member of since 2014, had constantly raised the matter of target setting and key performance areas which had not been aligned to service delivery. The Committee had seen 80% and 90% of targets achieved. That related, quite obviously, to the handing out of bonuses and financial rewards on targets met, but the targets had never matched the requirements of the organisation. He had constantly raised the fact that targets were not aligned to service delivery. Soon strategic objectives and annual performance plans were due and, again, targets would not be aligned to operational service delivery provision. It was about the service delivery, over years, having been driven by wrong performance indicators. How would the Minister change things around? Would the Minister ensure an alignment between strategic objectives and the Annual Performance Plans (APPs)? Would they be aligned to what he envisaged the Administrator should fix? Would Members see a radical change?
The DG had spoken of the availability of coaches and locomotives. In his personal oversight visits to Braamfontein and Salt River, he had seen rows and rows and rows of coaches. They had needed brake blocks and basic spares that PRASA had run out of in its storerooms. With tears in his eyes, he had to see a technician showing him that they had to scratch in dirt bins to find brake blocks and pads to put on trains that passengers were transported in. He was also aware that Transnet and PRASA cross-invoiced each other for a billion Rand per year which the Minister could use to fix 500 km of rail track that year. The entities were sharing signals and platforms, etc., so why were the two entities not put back together? Why was the Minister still pondering the idea? Transnet still had some capacity and a track record in rail as well as some specialists in rail.
He noted that the Minister had said that there was an all-time low in the relationship between PRASA and Minister Peters, but now there was an all-time low in respect of the relationship with commuters and passengers. 40% of the total fleet had been neutralized – the trains were standing in yards in Braamfontein and Salt River, in need of spares.
Mr Hunsinger noted that the DG spoke about overhauls and the need to check door handles but he should not be concerned about door handles when current coaches that were running had doors that remained open. That was cause for concern. Trains were in service with brake pads that had been found in throwaway bins. The whole story about international standards and the critique that the DG had against the RSR was a concern. He was grateful for the RSR. Very recently there had been a report from RSR about the inability of PRASA to adhere to a directive that had imposed a speed limit of 30km and yet that limit had been exceeded. One could not blame RSR for imposing the limit when the equipment was such that one could not travel faster. PRASA had been unable to make sure that an accident would not happen and it had resulted in the death of people. PRASA could not manage and execute the directives from RSR. He was grateful that RSR was in existence.
Mr Hunsinger said that the DG had mentioned the fact that a lot of capacity had been depleted but, within weeks of the appointment of the Administrator, people were being suspended and put on compulsory leave even though they had many, many years of experience at PRASA. There had to be a good reason why those people were being put on compulsory leave. Ten executives were on suspension and there was no “next stage” in sight in which they would be accused of something or charged with something. In some cases, the people were suspended based on the 2015 Public Protector Report. It was strange that a new person was executing a mandate to put people on suspension so soon after starting at the institution.
Mr M Chabangu (EFF) asked how people could ride on the top on the trains when PRASA said that there was security. It had not happened in the past. There was a lack of communication between PRASA and the Committee. Why had the Committee never ridden the trains when the President and Minister had done so? He thought that the Administrator should improve the communication between PRASA and the Committee. Now that the board had been dissolved and the new Administrator was in place, he hoped to see many improvements. The Minister did not tell the Committee why the trains were full. Was it not the lack of visible policing? In the past there had been railway policemen. Was the vandalism organised, and trying to defocus PRASA from operating normally, by its business opponents?
Mr P Mey (FF+) agreed that the cheapest way to travel was by train. The lack of availability of trains was the reason why people preferred taxis. SA was building its own trains in Nigel. When would that manufacturer be in a position provide a specific number of trains to PRASA per year? That was the only solution. The DG had referred to better security contracts. Was PRASA going to do away with the railway police?
Mr T Mabhena (DA) stated that that the Committee was discussing the appointment of the Administrator, but the DG had indicated that the matter was in court. Should the outcome of the court process not be in favour of the Department, hypothetically speaking, what would happen to PRASA, the management and everything that had been done?
He noted that the Portfolio Committee on Transport that had oversight over PRASA, had not met the Administrator – he had been to other Committees in Parliament, but never to the Portfolio Committee on Transport. The Committee did not even know if he existed. Was he tall or short? Members did not know.
Mr Mabhena stated that the Committee had been on an oversight visit to PRASA the previous year and one of the issues that the Committee, he especially, had taken up with the board, was of the war room. Members had said that it would fail but were told that they were being harsh. Had there been any achievements by the war room before it was shut down?
Mr Mabhena noted that one reason cited for the dissolution of the board was the deteriorating financials. Section 49(3) of the PFMA stated that an accounting authority had to have been a functionary of a public entity. Apparently, the Administrator had been part of South African Airlines (SAA) and SA Express. He came from an entity that was failing. What experience did one hope that he would bring to PRASA to make it successful and profitable and add value to the fiscus?
In the Administrator’s plan of action, he had included the appointment of a technical advisory team (TAT), which included Dr Mathetha Mokonyama, who had been seconded from the Council for Scientific and Industrial Research (CSIR). Was he responsible for maintenance, although he came from CSIR, but had engineering capacity? He seemed to be the only one on the advisory panel that had engineering knowledge, but his experience was at CSIR.
It seemed to Mr Mabhena that there was hostility between the Railway Safety Regulator (RSR) and PRASA. Instead of complying with RSR regulations, the DoT was making an appeal against the rulings of RSR. RSR and PRASA had been involved in a court battle the previous year over RSR’s recommendations that some of PRASA’s trains be grounded. Why did PRASA not get its house in order rather than wishing the regulations away?
Mr Mabhena asked about the relationship between the Administrator and the Group CEO: who was the accounting authority? The report stated that the Group CEO would be integrated into the TAT. The previous year, the board had indicated that three proclamations had been made over the past year. What was the progress on those three proclamations?
He noted that the DG had said that if an entity was spending only 12% of its budget on maintenance, that was a recipe for disaster. That was why PRASA had received the directive from RSR. The Committee had requested a progress report from RSR in that regard.
Mr Mabhena asked about the relationship of the Minister’s political advisor, Bo Mbindwane, to Mr Mpondo. It appeared that Mr Mbindwane had strongly supported Mr Mpondo when he had applied for the position of CEO at PRASA. He had created a WhatsApp group that included the board Chairperson and in which he stated that Mr Mpondo was the Minister’s preferred candidate. When Mr Mpondo was not appointed, the Minister had pushed for a dissolution of the board, citing the findings of the Auditor-General. If that was the case, would the administrator be independent in his decisions? There was a push from the Minister to have Mr Mpondo appointed as CEO and that had been the downfall of the board.
Mr L Mangcu (ANC) said that, unlike other Members, he was of the view that the Committee had approved of the dissolution of the board, regardless of any WhatsApp group, as the Committee had seen the incompetence of the board and what had been exposed at SCOPA. The dissolution of the board was a step in the right direction.
Mr Mangcu noted that the Minister had said that the Administrator had been seconded in terms of the PSA. Where had he previously been working? The Minister had to align the language with the Acts in terms of which the Minister had appointed Mr Mpondo. If it was a secondment to the position of Acting Group CEO, that was what it should be called and that would eliminate much of the confusion. Although he admitted that Mr Mpondo was doing the work defined in a dictionary as that done by an administrator. It would be better to change his title than to be “boggled down” by everyone wanting an explanation of Mr Mpondo’s position.
He suggested that the “Acting Group CEO” should present his plans and commitments to the Committee which conducted oversight over PRASA. His plans would be on record and the Committee would then know what to expect from him. There would be no ambiguity.
Mr Mangcu appreciated the Minister’s input on the issue of security at PRASA as it had long been an issue. He understood that there was an internal section in PRASA called Protection Services. What was its role in what was happening in PRASA?
He added that the demands of Autopax were also well-documented. What worried him was that both Autopax and the trains were moving the most vulnerable of people, but both of them were going down. It was sad that there was no uptake from the Department or PRASA. The gaps in the routes that serviced the most vulnerable people could be closed by black businesses. Why could PRASA and the Department not give the contracts for discontinued routes, with no apology, to black emerging businesses so that the country could begin to see transformation in the space. There was no plan to plug the gaps. Black emerging companies should be brought on board to alleviate the plight of the vulnerable people while Autopax was being fixed.
Mr Mangcu stated that the issue of litigation against PRASA was well-documented. Werksmans had had a contract that had been declared irregular by the Auditor-General and yet PRASA was again interacting with the company. The Committee wanted a list of the litigation against PRASA. PRASA was continuing with a white company and killing black companies that were left to the dogs. He asked the Minister for a comprehensive list of who had taken PRASA to court and what the results were, and where PRASA had been forced to pay costs. Why were those things not being resolved?
Lastly, he noted that it seemed that no one had been taken to task for the wrong things. The board had failed in its fiduciary duties but nothing had happened. There was some evidence, so when would the Committee see someone pay for looting the state? Could the directors be declared delinquent? Could PRASA follow the money?
The Chairperson noted that Members had requested a briefing by the Administrator. He put the proposal to the Committee. All Members agreed that the Administrator be invited. The second proposal was that PRASA should provide an update as indicated by Mr Mangcu. All Members agreed. The Chairperson agreed to action the two resolutions.
The Chairperson stated that the time had come for the Committee to see changes. As long as he did that, the Committee would offer the Minister its full support.
Response by the Department of Transport
Mr Moemi explained that he had not had the time to go into detail about all the seven workstreams that PRASA was working on when he had presented. He had presented a high level report. He could present the full programmes in detail. He was willing to spend a whole day with the Committee and present full details of the Turnaround Strategy.
Mr Hunsinger spoke on a point of order. He stated that some of the questions raised by Members were complex because it was a last intervention to turn PRASA around. He requested that the responses that the DG could not respond to in the meeting be made in writing so that the Committee would be ready when it met the Administrator. The responses were important to Members.
The Chairperson agreed that any questions that the DG could not answer, should be provided in writing.
The DG replied that he was able to answer all questions. He was just explaining why he had not provided the detail initially, i.e. because of his concerns about time.
The train delays, especially of Shosholoza Meyl, was because PRASA did not have reliable locomotives. PRASA had bought locomotives from Swifambo Rail Leasing primarily to address the problem of long distance haulage. Electric/diesel dual locomotives would have ensured that a locomotive could change to diesel where there were no overhead electrical lines. Media reports had stated that the trains were too high, but they were not. RSR had instructed that the trains be tested and they had passed the test and were licenced to operate. People had forgotten that the trains had travelled by rail from Cape Town to the depot upcountry on the very same tracks that it was said were too low for the locomotives. The court had said that the trains had to be returned to Swifambo Rail to be auctioned off. PRASA was hoping to regain those funds. The trains had been in service when they were confiscated and had to be returned. PRASA was currently leasing locomotives for Shosholoza Meyl and other trains at exorbitant costs.
The Minister had announced the war room as an intervention from August to December 2019. It was clear from the onset that there was a specific duration to allow the Minister to get into the belly of the beast, to help troubleshoot blockages and to identify why it was so hard to turnaround PRASA. Shosholoza Meyl had had 18 routes but by late 2019, it had been down to four routes. In December 2019, the Minister had instructed that Shosholoza Meyl be ramped back up to 12 routes, including the Messina to Johannesburg route that had not been operational for more than four years. It was unfortunate if people thought that the war room had done nothing.
Underground signalling had been implemented in the Pienaarspoort corridor. The corridor had been fenced off. That line passed through rural, township and suburban areas. There had been an increase in revenue collection from 12% to 78%. The morning peak could operate and by December PRASA had applied for afternoon peak on that line. That had been approved. The lessons could be replicated elsewhere. The new security plan had been implemented on the trains and platforms by PRASA Protection Services.
The board had been identified by the war room as a stumbling block to PRASA. Getting decisions to purchase parts for trains would take eight to nine months because the board took that long to give approvals. A faster mechanism had been needed to bring trains out of the graveyards.
Mr Moemi said that a General Overhaul was necessary on the trains. There was regular maintenance but the RSR had proclaimed a legislative maintenance at ten years, no matter how often or how recently, PRASA had serviced a train. Only 23% of PRASA’s running fleet was within the ten-year period and did not require an immediate overhaul. The rest of the fleet provided an insurance risk and led to high insurance costs and it was a risk, but the poor people who caught the train had no alternative or they would not get to work. One could not have a board that was a stumbling block. The board had been taking nine months to go through its processes of approval.
The DG told Mr Chabangu that his Department and officials were not investigators but they saw a pattern in vandalism. In the past, trains that were burnt were those that were in operation but were late in arriving at a station. People had burned trains because they were angry. After the intervention of the war room with the National Treasury had allowed a deviation for PRASA to purchase from any manufacturer of rail components – there were only 23 rail companies in SA. National Treasury had allowed PRASA to go to all those companies and take delivery of all the spares that they were holding but what had happened was that there was an emerging pattern of people burning trains that were in yards waiting to be repaired. Why would people do that? One theory in the Cape was that a bus company had replenished its fleet because it had a contract with PRASA to transport passengers when there was no train. Why were trains that were about to be repaired and brought into service burnt? He left it to the Members to decide if there was a pattern.
On the suspension of employees, the DG stated that the Minister could not give the Administrator power over an entire organisation but not over its employees. There had to be due process but one could not assume that nothing should happen to people who had been with PRASA for many years. People could not be untouchable because they had worked for PRASA for years. Crooks had been with PRASA for a long time and they had to be rooted out and dealt with. However, all cases had to be finalised as soon as possible. He emphasised that the Administrator was not being malicious.
The mandate of the Administrator was to get PRASA out of the corrupt contracts but, unfortunately, the media and civil society tended to complain. The courts had already permitted PRASA to pull out of one irregular contract and the intention was to follow the same route with all irregular contracts. PRASA, DoT and the Minister had to remain resolute.
Railway police were operating under a Ministerial directive. A pilot was in place in Pienaarspoort. The plan was to ramp up internal capacity. There was a need to be serious about security but PRASA would always need additional security capacity. The DG mentioned that Adderley Street station, as busy as it was, was still not a national key point, which was not right. The experiences in London and Barcelona suggested that such a busy station should be protected.
The technical advisory panel had been drawn from different areas to provide a range of technical advice, be it legal, administration, engineering, etc and worked with the Administrator in reframing and reshaping PRASA. Some decisions at PRASA were not informed by the immediate needs; they were informed by “who was behind”. Buying trains would allow people to make a quick buck but fixing the lines did not allow that. How come some people had been at PRASA for so long and had not fixed the problems? It was for that reason that the Administrator needed fresh people who could advise on exactly what was needed at PRASA.
The DG assured Mr Mabhena and Mr Hunsinger that neither DoT nor PRASA wished the RSR regulations away. PRASA was regularly implementing directives of the RSR. The reports from RSR were relied upon. The Minister engaged with the RSR regularly to find out what else PRASA had to do. However, the tail should not wag the dog and policy had to be determined by the Minister and should not be developed by a public entity.
A policy that required Class 3 level of safety standards in respect of signalling was also a safety standard. Was it necessary for SA to implement the diamond standard of safety for signalling which meant that only international companies could work on the signals? PRASA had to implement the diamond standard in the absence of policy providing for a signalling standard that was more suitable for developing countries. Countries such as Brazil, India, Zambia did not have the diamond standard and yet they did not have accidents. However, PRASA was currently implementing RSR requirements.
In responding to the issue of SIU and the three proclamations, the DG indicated that SIU had been requested not to take a piecemeal approach and so they had combined the three proclamations and his updates covered the entire scope. SIU had also been asked to liaise with the Hawks and the National Prosecuting Office to ensure a unified approach.
The DG informed Mr Mangcu that Mr Mpondo had been appointed to the Minister’s Office via PSA and then seconded to PRASA.
Mr Hunsinger had referred to section 49(2) of the PFMA. Sections 50 to 56 of that same legislation covered clearly, without ambiguity, the responsibilities of a controlling authority and that was the scope of the work of the Administrator. The Legal Succession Act also gave guidance to the board of control as well as other legislation, e.g. the Health and Safety Act, etc. which contained details of the work of a CEO. The Administrator assumed all powers as provided for in all relevant legislation. The alignment of language, i.e. calling Mr Mpondo the acting GCE, would be easy to implement as that was the term used by DoT in its letter to PRASA’s Company Secretary. His letter of appointment said that he had been seconded into the position as Acting Group Executive. He wished that the matter was not before court as he could not show the letter to the Members, but he could show the Chairperson. That was the document that he would show the courts to prove that that the man had been correctly appointed.
The DG showed the Chairperson the document that he was referring to.
Mr Mabhena stated that it would be better if Members of the Portfolio Committee on Transport could have sight of the letter. He asked for all Members of the Committee to have sight of the letter. He did not want to go on the word of the Chairperson. It defeated the purpose. He needed to see it with his own two eyes.
The Chairperson asked the DG to complete his response to Members.
Mr Chabangu agreed with Mr Mabhena. He agreed that Members should be given a copy of the letter. The Committee could vote if necessary.
The Chairperson requested the DG to continue.
Mr Chabangu spoke on a point of order. The matter that he was raising was serious so he wanted to be taken seriously.
The Chairperson asked how he should take Mr Chabangu seriously.
Mr Chabangu replied that he had asked to see the letter.
The Chairperson stated that he had ruled and it made sense for the DG just to move on. The matter was sub judice and the people who were taking the Minister to court were in the room. It made sense to continue.
The DG explained to Mr Mangcu that the Legacy Act made it difficult to subcontract to other companies. That complicated the matter of Autopax as it was governed by the same law as PRASA. The jury was out – the law did not prohibit it but it did not enable it. Perhaps a test case would be good but he saw that the companies that had approached the Competition Commission wanted to “down” the company. It would certainly go to court. It was a question of whether there was the political will.
He would ask PRASA to provide a list of cases, covering the period that the Committee was interested in, that had gone to court over the past few years and how many cases had been won. That list would be provided to the Committee.
Response by the Minister of Transport
The Minister accentuated the point about the appearance of the Administrator before the Committee: it was proper that the people who had taken the decision should explain it first so that the Committee had clarity in that regard, especially in the light of things that had been said and actions that had been taken. There was no malice on the part of the Administrator or anyone else. He would make a presentation to the Committee and the bulk of the presentation would be about what was to be achieved in the next 12 months, and the Service Level Agreement between the Minister and the Administrator – he had already tabled that in public.
There had been no malice in the decisions that he had taken. He simply did not want to drag issues. He had been informed by the ineptitude and state of PRASA. The Auditor-General had given reports but they had never been good. There had been fighting between management, Board and Minister and the bulk of the money had been “chowed” by Lucky Montana when he was at the helm of PRASA. The things that they were dealing with dated back to 2012. The case of Siyangena, which had been in the court the previous day, showed how far back the rot went.
He had not yet finished a year as the Minister of Transport and already he had taken decisions. Closing the corridor on the Central line was academic - it had been done because of the crime and looting of the equipment on the line. The people of Khayelitsha asked daily about the lack of trains. They even joked about it on social media. One joke was that someone had wished to commit suicide but there were no trains.
As Minister of Transport, he had to transport 20 000 people, the poorest of the poor, who had been affected by the closure of the line. He did not need someone to tell him – he had been there at 3 a.m. and when provincial and local governments complained to him, he knew that it was not about politics but there were concerns. They had ideas but he had said that, firstly, they had to get the line going and then he could discuss those issues with the local and provincial governments. He had experienced the inconvenience of highway building in Gauteng so he knew about the inconveniences of repairing something thoroughly. He would rather be insulted by the communities for telling the truth than lying and fixing something today that would break the following day.
R1.4 billion had been allocated in the State of the Nation Address for the two lines that urgently needed fixing, the Central line and the Mabopane railway line. That was what they were going to do.
His biggest success would be dealing with malfeasance and the lack of corporate governance, which could not be done in a year but his thing was to bring some stability within a year. He had no qualms with people taking him to court. PRASA was a spooky place. People had stolen left and right. Where there were issues that could be settled, he was happy to settle them out of court. He was worried about going to court because of the resources that entailed. He wanted to appoint a board but it would be transparent. The candidates would be interviewed, etc. He had given the interim board the benefit of the doubt, but it had not worked and the situation had regressed. He would come back to the Committee and tell Members what he had done. People of integrity were appointed as board members, but they had ended up in court. He was not going to be like SAA, unable to take a decision. In ten years’ time, new MPs would ask why he had not done something at the time. The war room was not new people. It had consisted of people who were at PRASA and involved in the efforts to save PRASA.
The Minister and the President had got stuck on a train, which was the daily experience of the people. As a layman, he thought that the problem could easily be fixed. When the war room had explained the situation, he had realised it could not be fixed just like that. Many things had to be fixed. Money from government to fix things had been stolen! It was gone! The Auditor-General had told Parliament year in and year out that things were wrong. He had told people that he did not want to fight the thing but he needed support to get things fixed. He, as the Minister, could not account for other people’s WhatsApp groups. He could only account for his own WhatsApp group. If people promised each other things on the WhatsApp group, those were their discussions. He could not fulfil things said when he was not there.
When he had appointed Mr Mpondo, he had selected someone who understood the railways and had expertise. He understood what had to be done and how it could be done and that was why he had been appointed. Phraseology could be debated, but it was an intervention mechanism to deal with issues and bring stability to PRASA. He could have appointed another board, but it would not help. In fact, he had even recalled the person that he had appointed as Acting CEO at PRASA (Nkosi Sishi).
There were people who said that had not been paid but the contract that they held was an irregular contract, so they could not be paid. Many people came to him claiming billions but the contracts were irregular. His point was to clean the place and to bring stability. He could not achieve everything in 12 months but in ten years’ time, PRASA had to be a different organisation.
Government was considering a rail network strategy working with Transnet, including corporatisation of Transnet National Ports Authority (TNPA). It was taking place in the reconfiguration of government. But, in the immediate time period, he had to deal with the issues of trains because people relied on them for transport. He had to deal with MyCiti in Cape Town, with local government and provincial government, because people could not even come into town from Khayelitsha. But he also noted that people just went in and out and no one paid. He needed security on the train so that people could not just jump on the trains and pick pocket people. It was an affordable service and people had to pay for that service.
The Minister stated that there were railway police within SAPS, but they were static police. They did not jump on trains. PRASA Protection Services were limited. People had been arrested for the theft of copper cables. There was a lot of money in stealing copper. Copper cables were being smelted and exported via Mozambique to India but the syndicates were “deep in the pockets of law enforcement”. A specialised arrangement was required. The people who was stealing copper cables had to be charged with economic sabotage – it was in the law! Those who stole copper cables were charged with theft but, by the afternoon, they were gone, on bail or something else. It was better to charge them with economic sabotage. That sort of criminal had to be sent to jail. The law allowed for people to be charged with economic sabotage.
Who was the master behind kids burning trains in Cape Town at 3am? 3 am! And the kids had said that they were simply playing around! The Minister believed that he needed an intelligent police force. The NPA had to work with the police. The majority of people arrested by PRASA were PRASA employees! The guy who was transporting cables for PRASA had been taking them straight to the township. Management and controls were necessary or one would get companies coming in and claiming that they had a security company and demanding to be paid because they “had given services to PRASA”.
The Minister concluded that he had no appetite to be fighting in court. His fight was in PRASA. He knew that the people who had taken to court had wanted to speak to him at one stage but his intelligence had told him that they were going to court anyway, and they had done so. He had had no intention of fighting the case but because it was the law. He intended to get results at PRASA. If he did not get the financials right, PRASA could not come right and the opex was dead because there was no delivery to pay for the opex.
The Minister stated that if there were issues that he had not responded to, he was happy to respond in writing.
Final Comments by the Chairperson on PRASA
The Chairperson noted that the Committee would invite the Administrator, or the “seconded person”, to deal with the administrative issues. The Committee understood that it was necessary to follow the money and the bottomless pit would have to stop. The Committee would be supporting the Minister. He had not yet been in his position for a year. The Committee would work with the Auditor-General to do its oversight.
He added that one had to respect the right of anyone who wanted to take the Minister to court. That did not mean that the Minister should not do his work. He should not hesitate to change what needed to be changed. Where he was right, the Committee would stand behind him. The Committee was not interested in Mr Mpondo as a person but was concerned that there was someone who could address the matters. As long as the Minister had followed the processes correctly, the Committee would support him.
DoT Strategic Plan: Inputs from Members
The Chairperson reminded Committee Members that it had been agreed that Members would make inputs into the DoT Strategic Plan so that the Committee did not always react to the plan. The Department had given the Committee a little time, although it should be finalising its budget.
Mr Hunsinger reflected on the huge topic. He said that he could continue for the rest of the afternoon. It was not possible to address the huge topic in the few minutes left for that Committee meeting. The plan followed a trend and the Committee wanted to intervene and discuss it with the Department and, in fact, the KPIs and KPAs needed attention. He asked that a session be allocated as a matter of priority because the Department had to complete its plan.
The Chairperson stated that the DG would be in Parliament the following day. Members had to be ready as time would be limited.
Mr Mangcu stated that he had not seen the Strategic Plan so he would not be able to contribute.
The Chairperson replied that the Department had presented the strategic plan during the Committee’s strategic meeting and Members had agreed that they needed to give input into the budget documents. Members should go back to the documents of that strategic planning session and if they did not have the documents, the Department could forward a copy.
The Chairperson thanked members of #UniteBehind for attending the meeting. He looked forward to seeing them the following day.
Mr Hunsinger raised the difficulty of him attending Transport meetings on Wednesdays. The allocated day for Transport was Tuesday and he could not be available on a Wednesday as he had to attend other meetings.
The Chairperson said that the Committee could take a decision to meet only on Tuesday in the future and he would be comfortable with that but the meeting for the following day had been properly scheduled. He suggested that that matter and the minutes be dealt with on the following day.
He trusted that the Committee had not trampled on anyone’s toes during the meeting and he would appreciate feedback.
The Chairperson thanked the Minister for his attendance and informed him that the Committee appreciated working with him as he was always available despite his other commitments. He thanked the DG of DoT for his attendance.
The meeting was adjourned.
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