PRASA 2020/21 Annual Performance Plan & interventions by Administrator; with Ministry

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Transport

11 May 2020
Chairperson: Mr M Zwane (ANC)
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Meeting Summary

Video: Portfolio Committee on Transport,11 May 2020

Annual Performance Plan (APP) of Government Departments & Entities 20/2021

The Portfolio Committee on Transport met with the Minister and Deputy of Transport and the PRASA Administrator to receive a presentation on the entity’s 2020/2021 Performance Plan and the Administrator’s plans to effect change within the period of his 12-month contract. It was the first meeting of the Committee and the Administrator and Committee Members and even those Members who had opposed the appointment of an administrator, were pleasantly surprised by the detail and practicality of the turnaround plan.

The Minister noted that processes were underway in respect of the appointment of a new board and assured the Committee that he and his team were allowing themselves sufficient time for a thorough appointment process as the previous boards had played a significant role in the poor state of affairs at PRASA. The Administrator had been appointed for a period of 12 months. He was there with a certain mission: to clean out; to put certain things in place; to bring stability. Cost containment was a critical part of the turnaround process that had to be quick so that the entity could reach the point of no return to corruption, maladministration, malfeasance, lack of corporate governance and/or financial misappropriation.

The Administrator reported that partnerships had been built with Transnet, Eskom and the South African Police Service, which was also looking at designating certain PRASA properties as National Key Points. In line with the President’s announcement at the State of the Nation Address in 2020, Corridor Recovery Programmes had been developed for the Central Rail Line from Khayelitsha and the Mabopane Rail Line. The programmes had been revised in the light of the Covid-19 lockdown. The Covid-19 lockdown had created an estimated revenue loss of R199 million for April/ May 2020 when trains had to cease running during Level 5 and Level 4 of the lockdown. Addressing the response to the virus, the Administrator noted that in conjunction with the Department of Health, screening could take place and PRASA would control access to trains to between 30% and 50% of the capacity on a train. The Administrator recommended that relevant role players and service providers ready themselves for the roll-out of PRASA’s capital programme of R7 billion after the lockdown which would boost the local economy and reduce the rate of unemployment as it revitalised the local rail-related industry.

Members appreciated the comprehensive plans but had many questions. Members asked whether all the issues in the “Derailed” report of Adv Thuli Madonsela had been addressed. When would the 49 cases at the labour court and 58 cases at the CCMA be finalised? Was the skills audit going to look at qualifications and what was going to happen to those who were not qualified to do the work? How far was PRASA in terms of compliance with the Rail Safety Regulator findings on safety and had the issue of used brake pads been addressed? Why was the target for black-owned and women-owned suppliers so unacceptably low?

Members asked how mainline passenger services would be stabilised. What methodology was being put into place to stop the torching of trains, especially in Cape Town and Gauteng? How was security to be managed?  Was it not possible to start a railway police college?  Would new buses be bought by Autopax and would the buses be retained to stabilise rail services? What was the long term viability of a bus service given the infrastructure needs?

The budget remained a concern for Members. Why had the operational expenditure increased by a sharp 22.5% from 2020 to 2021 but the revenue was not increasing by as much? When would the Administrator be revising his plans and budget in the light of Covid-19, as well as the losses that he had projected? One Member asked if the Administrator was a member, or associated with, a family that was enriching itself with the money that was meant to help the poorest of the poor.

Meeting report

Opening Remarks
The Chairperson welcomed Members, the Minister of Transport, Mr Fikile Mbalula, the Deputy Minister of Transport, Ms Dikeledi Magadzi, the Minister’s team and the members of PRASA, as well as stakeholders. The Committee was keen to get to know the Administrator and to hear what he was doing and how it could assist if there were any problems. The meeting would deal with the Annual Performance Plan and would enable the Committee to get to know the Administrator, Bongisizwe Mpondo.

The Chairperson requested the Minister to introduce the Administrator and to address the meeting on the Annual Performance Plan.

Remarks by the Minister of Transport
The Minister was pleased to be afforded the opportunity to present the PRASA turnaround plan. He had dismissed the board and appointed Mr Mpondo for a period of 12 months to bring normalcy to PRASA. That did not mean that everything would be working 100% by the end of the 12 months. The turnaround plan had been was based on the PRASA corporate plan which would allow it to institutionalise the interventions and quickly normalise the entity.

The Minister stated that he was under no illusion about the role that PRASA played in moving millions of people across the country. It catered for the poor and working class and so should be brought back into a position of stability. He was pleased that Mr Mpondo had brought back into focus the five key priority areas to place PRASA Passenger Rail on a sound footing. The five priority areas were: service recovery; safety and security; capital programme and modernisation, governance and revenue, and cost containment. Cost containment was critical because PRASA had been bleeding and when he had placed it under administration, cost containment was crucial to the entity’s plans. When he had placed PRASA on a turnaround strategy, it was with that in mind. There had to be a quick process. The entity had to reach the point of no return to corruption, maladministration, malfeasance, lack of corporate governance and/or financial misappropriation. Progress had been made but many challenges remained. The state of finances was a cause for serious concern. Over the last decade, PRASA had experienced a steady decline in fare revenue. That was an important area for Mr Mpondo.

He reminded Committee Members that the President had announced in the State of the Nation address (SONA) that PRASA would focus on recovering the two main rail corridors but Covid-19 had caught it in the process of implementing that programme. R1.1 billion had been ring-fenced for the Central Line and R1 billion for the Mabopane Line. PRASA had terminated all services during lockdown levels 5 and 4 in line with regulations. As a consequence, the estimated revenue loss was R199 million resulting in further cash constraints in the already constrained financial situation. The estimated revenue loss for the year was R757 million. Train services would resume under level 3 and PRASA was putting measures in place to limit community transmission once services resumed under what one could characterise as “the new normal”. As with other industries such as the Gautrain and the taxi industry, “the new normal” had kicked in. PRASA would make a presentation covering the Covid-19 impact and recovery plan.

The Chairperson thanked the Minister and reminded Members about the protocol for microphones.

Briefing by PRASA
Mr Bongisizwe Mpondo, Administrator, PRASA, presented the 2020/2021 Performance Plan. He noted that a number of arrests had been made in respect of the vandalisation of PRASA property. The arrests had included employees at PRASA.

Mr Mpondo touched on his mandate as the Administrator and the key actions taken in the time that he had been at PRASA, noting that it was just five months. His mandate includes addressing all matters raised in the Auditor-General’s report and ensure that there are no repeat findings; accelerating interventions aimed at improving operational performance; expedite implementation of the modernization programme, with priority focus on fencing, signaling, perway and station upgrades; security interventions across all corridors and undertake a review of PRASA’s organizational design and business model.

He was particularly proud of his eminent advisory team and partnerships that had been built with Transnet, Eskom and SAPS that would create a force multiplier. SAPS was looking at designating certain PRASA properties as National Key Points. He was also working on filling key management posts. He was re-looking at the budget as PRASA had been budgeting for a loss over many years.

Over the past 10 years, PRASA had seen a steady and sharp decline in fare revenue which has necessitated an increase in the operating subsidy. On the other hand, expenses have increased unabated.

Over the last couple of years, PRASA has not delivered on its own capital programme for a myriad of reasons. This has had a detrimental impact on PRASA operations as well as the industry that services the organization, resulting in a lose-lose situation. We have been working to package and repackage these projects where required in order for us to release these tenders to go to market. This will serve a number of important objectives:

  • Improve PRASA operations
  • Stimulate the industry
  • Contribute to boosting an ailing economy

He presented the Priority Programme Update. In line with the President’s announcement at the State of the Nation Address, Mr Mpondo reported on progress on the Corridor Recovery Programmes for the Central Rail Line and the Mabopane Rail Line. The programmes had been revised in the light of the Covid-19 lockdown and milestones had been delayed by two to three months but he was confident that the programme would succeed as a great deal of preparatory work had been done.

The Administrator reported on the impact of the Covid-19 lockdown when trains had to cease running during Level 5 and Level 4 of the lockdown. That had created an estimated revenue loss of R199 million for April/ May 2020. He spoke of the readiness of PRASA to manage social distances and other requirements for addressing the virus, noting that it was a porous network but he believed that, in conjunction with the Department of Health, screening could take place although PRASA would have to control access to trains as there were frequently over 250 passengers on a train.

Mr Mpondo recommended that relevant role players and service providers ready themselves for the roll-out of PRASA’s capital programme of R7 billion which would boost the local economy and reduce the rate of unemployment as it revitalised the local rail-related industry.

Discussion               

The Chairperson appreciated the detailed report but noted that the Minister and the presenter had taken an hour and a half. However, the Committee was giving a new presenter all the time he needed.

Mr C Hunsinger (DA) appreciated the comprehensive report and explanation. The Committee had been anxious to engage with Mr Mpondo but he was glad that the meeting was taking place at that stage as Members could look at the progress he had made since he had been, controversially, appointed, hence all the court cases.

Mr Hunsinger said he had been exposed to numerous turnaround plans, Annual Performance plans, etc. for six years. As Mr Mpondo had mentioned, PRASA should be increasing passenger numbers, revenue, creating jobs and promoting economic growth, but it was not. PRASA should be addressing the declining transport asset system and increasing customer confidence, but it was not. What PRASA did have was a lot of people in offices and no one in the technical workshops. PRASA had a lot of unprotected assets and a lot of passengers who did not feel protected. It had been said that PRASA had no regard for passengers and no regard for the budget. It had been a controversial decision to appoint an administrator because such an appointment would normally be related to insolvency or bankruptcy. It had been a harsh decision that had been challenged in court although he did not know what had happened after the case had been postponed to 21 April 2020.

This is the eighth turnaround plan that he had seen but it was the first plan with a framework, measurable content, a timeframe, and a real expression of needs. It was a proper plan with a proper governance structure and an attempt to establish systems that could convert into implementable content. After eight years, and listening to him for nearly two hours, Mr Mpondo had his attention. He had lifted his spirit because he had a big heart for rail. He was looking forward to the implementation of the plan and he would focus on how it unfolded in the next six months, which would probably be the last of Mr Mpondo’s initial 12-month appointment.

Mr Hunsinger proposed that Mr Mpondo consider using the rail reserve for a dedicated bus service as there would always be rail service interruption. The rail corridor had been an under-used asset.

He asked about the 12 suspensions of employees and the unfinished business of the “Derailed” report of Adv Thuli Madonsela. The Committee needed to see PRASA re-establish the confidence of passengers and the public by addressing everything that was mentioned in the Derailed Report. He was surprised to see the repurposing of Autopax as the Committee had received presentations on the lack of viability of Autopax. He would like to know Mr Mpondo’s opinion on the long term viability of a bus service, given the infrastructure requirements.

Mr Hunsinger wished Mr Mpondo luck and informed the Minister that he withdrew his objections to the appointment of Mr Mpondo as he seemed to have done a great job, at least in establishing a framework and that had triggered a lot of attention from his side.

Mr L Mangcu (ANC) said that he had battled to accept the word “administrator” but he would call Mr Mpondo Administrator. The last comments of Mr Hunsinger had resonated with Mr him. He had never doubted the decision of the Minister but he had raised concerns about the terminology. It was encouraging to see results. He agreed that the Minister had taken a bold decision and he commended him for the bold decision to fire the board and, despite the court cases, the Committee was wishing for the best results for SA. He commended the Minister.

Mr Mangcu informed Mr Mpondo that he was not happy with the targets for procurement, i.e. 9% for black-owned companies and 6% for women-owned companies. Maybe Mr Mpondo could explain, but those targets were very, very low, especially for post-Covid-19. Before Mr Mpondo’s arrival, the Committee had been told that there was no capacity within PRASA and therefore the Development Bank of South Africa (DBSA) had been appointed to roll out the infrastructure. He requested an update on the situation.

Mr Mangcu commended the Minister on his announcement that he was going full steam ahead with advertising for the appointment of new board members. The Committee supported that action 110%. He commended the creation of divisions for Autopax and other sections. That was the right direction to go. When would Mr Mpondo be revising his plans and budget in the light of Covid-19, as well as the losses that he had projected so that the Committee was ready to look at that going forward?

Ms N Nolutshungu (EFF) appreciated the comprehensive presentation and the work done but she wanted to see a comprehensive budget in one place and not scattered across the presentation. She wanted to see the line items, especially for consultants. She did not want to wait till the end of his term for updates. The presentation was outstanding but the test would be in the implementation. She wished Mr Mpondo luck.

Mr M Chabangu (EFF) thanked the Minister and Deputy Minister for availing themselves. He noted that in English it was said that straight talk did not break friendships. Therefore, he asked if Mr Mpondo was a member of the august organisation. If he was, was the country not shooting itself in the foot again by appointing someone who was associated with a family that was enriching itself with the money that was meant to help the poorest of the poor? Mr Mpondo had alluded to the fact that the generation of revenue was the second key mandate of PRASA. How was he going to increase the revenue? Were there plans in place? If yes, he requested him to send them to the Committee within a short space of time.

Mr Chabangu asked what methodology was being put into place to stop the torching of trains, especially in Cape Town and Gauteng. That was retarding the progress of PRASA. When it came to job creation and internships, was Mr Mpondo going to extend his hand to rural areas where the poorest of the poor were based, Apartheid homelands and to those people living with disabilities? Was Mr Mpondo intending to adopt a policy of zero tolerance for non-compliance or was he going to be lenient and give employees the benefit of the doubt, i.e. innocent until proven guilty?

Mr T Mabhena (DA) noted that the Committee had been keen to engage with the Administrator in the first quarter, which had come to an abrupt end. He referred to slide 16 which related to operational expenditure. Mr Mpondo had correctly characterised PRASA as a broken business in its current form but that did not take away his concerns regarding the fiscus. In the next three financial years of the Medium Term Expenditure Framework (MTEF), the operating expenditure kept increasing. For instance, from 2020 to 2021, the operational expenditure increased by a sharp 22.5% but the revenue was not increasing by as much. There was a similar trend over the following couple of years. He welcomed the plans that he was putting in place but he had been hoping that operational expenditure would eventually be less than revenue.

Mr Mabhena referred to slide 30 which stated: “No proper record keeping at PRASA. In some instances, there are no records at all.” That defined Autopax in a nutshell. In Autopax, there had been absolutely no recordkeeping.

He welcomed the Exco structure and hoped that it would assist in getting the business into gear. He was glad that he was moving full steam ahead with appointing senior managers (Slide 34) as that allowed Mr Mpondo the opportunity to stabilise the business at the top.

Mr Mabhena was glad that there were investigations by law enforcement (Slide 46) but when one got to the situation where there were 49 cases at the labour court and 58 cases at the CCMA, it was a problem, although he realized that it was out of the hands of PRASA. He hoped more people would be identified and prosecuted. He was pleased that a supply chain management (SCM) policy was being put in place as there had not been one. He wanted sight of the SCM policy and the automated fare collection system that Mpondo wanted to benchmark with Gautrain. He also wanted to see the system for preventing people from accessing the platform illegally.

Lastly, on the vetting processes (slide 52), Mr Mabhena asked if that included a qualifications audit. In a question and answer session in Parliament, Members had been advised by the Minister that 39% of PRASA managers did not have the qualifications that they claimed and the skills audit had not been concluded.  Was the skills audit going to look at qualifications and what was Mr Mpondo going to do with those who were not qualified to do the work?

In terms of preparedness for the running of trains under Lockdown Level 3 (Slide 63), he was glad that there would be simulations but given the fact that rail in SA was an overcrowded space, especially because people could access the platform from illegal entry points, how would Mr Mpondo ensure that people would be properly sanitised? Which stations would be the testing stations for running simulations of social distancing and sanitisation?

Mr L McDonald (ANC) thanked the Minister and Mr Mpondo for trying to stabilise the ship. In 2008, PRASA had provided rail services to 3.8 million mainline passengers. That had declined over the years to about 370 000 passengers. One of the reasons for the decline over the years was that PRASA was battling because it did not have income but that was because PRASA did not have trains. Trains had reduced from 6 750 trains a year to 1 800 trains a year. If one reduced the number of trains, one would reduce one’s income. How would mainline passenger services be stabilised?

Mr McDonald noted that security companies whose services had been terminated had not received payment and hence employees of those companies had not been remunerated because of the non-payment by PRASA. What was going to be done about that?

Referring to slide 54 which spoke to the use of buses to service the Central Line and the Mabopane Line in the interim, he noted that 80 buses would be used on each line but currently Autopax had only 130 buses. Would new buses be bought and would the buses be retained to stabilise rail services?

There was a lot of talk about retrenchments in media, something like 1700 employees. At the same time, there was talk of employment creation. Was there no way of keeping those people on, even in the shorter term jobs during a time of extreme poverty and joblessness?

He asked Mr Mpondo how far PRASA was in terms of compliance with the Rail Safety Regulator (RSR) findings on safety and whether the issue of used brake pads been addressed.

Mr McDonald noted the tender specifications for SAP IT modules. What was the cost of software per year and why was PRASA paying SAP, a European company, for an IT system instead of developing its own IT system? He pointed out that PRASA could not write off the R86 million for rentals during the Covid-19 lockdown. PRASA had to negotiate a payment plan for those renting premises.

The target of 9% black-owned suppliers and 6% women-owned suppliers was unacceptably low in a R7 billion budget. That had to be re-looked at. In respect of the rail servitude, he asked if the Western Cape Government could not be pressurised into giving land to the people living in the rail servitude. It was a land issue.

Mr K Sithole (IFP) noted that slide 70 referred to a programme of youth employment. Was there a development programme for youth? What about a programme for women and disabled people? There was nothing on that in the report.

Mr Sithole noted that the Administrator had motivated for funding for internal security but nothing seemed to have happened. Why was there a delay?  Irregular expenditure remained high. How was PRASA going to deal with it? There was a lot of repeat irregular expenditure and nothing was being done.

Referring to t protective equipment, Mr Sithole asked if there was enough of this and whether there was enough equipment for sanitisation of PRASA infrastructure. How many security officers had been trained as marshals? Had PRASA checked which employees had chronic illnesses? The Auditor-General had stated that PRASA had not been doing well and it had received a disclaimer on its last Financial Statement. What systems did PRASA have in place to address those matters identified by the Auditor-General? What were the consequences for officials who were involved in corruption and how many had gone to court? How many had been released without going to court?

Ms M Ramadwa (ANC) noted that the Administrator and his team had identified challenges and had established a programme of action to address Auditor-General’s concern. Now they had to implement what had been presented. She wished them all the best. The Administrator had indicated that there would be a roll-out of a passenger service charter. Was the charter written in all 12 official languages?

Mr P Mey (FF+) noted that a reason for the decrease in passengers was the lack of safety of passengers on trains. Without passengers numbers and protection of infrastructure, PRASA would never make a profit. PRASA was employing security firms to deal with security but security officials did not have the authority of a policeman. Was it not possible to start a railway police college?  It would be job creation. SAPS was being engaged to assist PRASA but senior officers had said that SAPS was too understaffed to assist PRASA. One could not compare a security guard to a policeman. He wished the Administrator well.

The Chairperson stated that it was exactly a year since the Members had been elected to Parliament and that Committee. He told the Minister that the Committee would support him and he commended the fact that the Minister took Committee meetings seriously. The Committee had been divided over Mr Mpondo but he wanted to commend Mr Mpondo who had consolidated the subsidiaries, thereby facilitating accounting and reporting. It was a brilliant approach.

He was interested in knowing how far Mr Mpondo was with the irregular appointment of Werksman’s law firm. Mr Mpondo had also mentioned a lot of secondments. When did he envisage having a full team working on a permanent basis? He asked for a breakdown of those suspended – men/ women/ African/ Whites. Although some processes were with other government entities, Mr Mpondo had to deal with things that he could manage. Were those people who had been suspended still being paid as it was fruitless expenditure to pay others to do the work that they were being paid for?

The Chairperson did not accept the aim of 9% for B-BBEE suppliers. That was not transformation. It was unacceptable to the Committee and had to be beefed up to at least 20%, taking into consideration that the people who were suffering were largely Blacks. The Committee was confident and supportive but now wanted to see action.

The Chairperson informed Mr Mpondo that what he could not respond to immediately, he could submit to the Committee in writing.

Response by PRASA

Mr Mpondo indicated that he would respond to key areas and other input he would take back with him. He would accept some of the comments.

He had looked at the issue of rail reserves in the medium- to long-term for use by Autopax buses and branch lines to service the rural areas. The rail reserves were constrained in the urban areas and so the road-based service for the Central Line would be on the road network. It was an innovative idea.

Regarding suspensions, where charges had been preferred and where staff would interfere with critical investigations, it was better not to hamper the investigations.  Some charges had been around for a while and PRASA was attempting to roll those out. Charges had been drafted together with the SIU and PRASA was ready to take those through the processes. Those processes had been interrupted by Covid-19. Corruption cases were being handled by the SIU and PRASA would use the newly established Tribunal to recoup monies.

In the short term, PRASA needed to turn Autopax around and stabilise the Division and then consider how to make it sustainable down the line.

In responding to the target concerns, Mr Mpondo explained that the targets for SMMEs and Qualifying Small Enterprises (QSEs) were minimum targets and the targets would differ according to the project but the point was taken especially regarding women-owned companies and PRASA certainly intended to use more women-owned suppliers for the Central Line Programme. PRASA would submit new targets, more acceptable targets, to the Committee through the Department of Transport.

Mr Mpondo indicated that he could not respond to the questions about DBSA as that issue had been dealt with prior to his arrival. DBSA not currently involved with PRASA. The panels being set up were to ensure orchestration of the projects while rolling out the capital expenditure programme.

Regarding the plans and the budget, Mr Mpondo pointed out that expenditure kept rising and the team had been looking into the budget, including expenditure plans, over the past four weeks. There was a budget deficit of R3.9 billion but interest on capex would be R1.1million, which would drop the deficit to R1.8 million. Exco had been working on reducing the budget deficit and PRASA would present the revised budget to the DG of the Department of Transport in two days’ time. That was work on the go but he was expecting good outcomes. The detailed budget would be presented to the Committee and PRASA would indicate where cuts had been made and would give regular updates on the budget.

He had not understood some of Mr Chabangu’s issues but maybe they had not been directed at him. PRASA generated income from rail fare, bus fare revenue, rentals and interest. PRASA was working on ensuring that there were components to get trains back on track, etc. PRASA was ensuring that security was in place and lines were not compromised, elements of which spoke to the generation of revenue. The security of trains was tricky but PRASA was working with the Western Cape Government, the Rail Enforcement Unit and SAPS, especially for hotspot areas. It was not about petty crime but about organised crime that required the assistance of the organised crime unit.

PRASA had to be realistic in respect of challenges, be responsible for employees and responsible for the company. It was a balancing act. The majority of interventions were in the urban area and that was where the focus was. A key issue was around ensuring universal access.

In terms of irregular expenditure, PRASA was looking at root causes and setting up systems. That was in place. Where non-compliance was picked up, it would be dealt with. That was part of the plan. There would be zero tolerance in respect of non-compliance. He had presented a lot of what had happened in the past and was no longer happening.

He would get the latest update on expenditure from colleagues the following day. One issue that was key was an optimal funding model for PRASA. That was almost complete. What was the optimal funding model for PRASA? How much revenue should be generated? The team had been working on that since January and had almost completed it. In respect of the recordkeeping issue, the team was working on the manual systems in Autopax but funding was an issue.

Cases in the labour court was problematic and the team was working on expediting the cases and, in particular, was re-looking at frivolous cases where there was little chance of success as that would be a waste of resources. A tracker had been developed to keep track of the cases.

Vetting dealt with skills and a qualifications audit. The HR department was looking at qualifications because PRASA could not wait for the Security Agency to complete the vetting process as that took time.  Fraudulent declarations would be dealt with differently from those who required upskilling. Fraudulent declarations or qualifications would not be tolerated.

Simulations would take place before trains started running. PRASA would look for assistance with the budget for Covid-19 precautions, including for an increased number of marshals, especially at the ends of platforms where most illegal passengers entered the platform. Social distancing would be observed and trains would carry 30% to 50%. “Sanitation stations” were in the process of being installed and would be largely at the main stations. Smaller stations would have hand sanitisers and passengers would be sprayed as they came into the station. Piloting would be at the Pienaarspoort to Pretoria line, the Cape Town Southern line and the Port Elizabeth and East London lines. He would present the state of readiness, line by line, to the Minister in a couple of days.

He told Mr McDonald that the reduced number trains had been the result of the lack of components in stores and the teams were working on that. He admitted that the absence of reliable locomotives on the main lines was a problem, especially as there had been several breakdowns during the high peak period in December. Regarding the non-payment of creditors, Mr Mpondo stated that it was not only security companies that had not been paid but R4.6 billion had been owed to creditors by the time that he arrived. Funds would be converted from the capex budget that had not been used. However, National Treasury wanted to see the proposed budget first. The team was working on that. PRASA was looking to re-capitalise Autopax and retain the additional buses in the fleet.

Regarding retrenchments and job creation, Mr Mpondo explained that he had requested to meet with unions to start conversations around severance packages, especially for older employees and those that might not be employed in critical areas. The business was challenged and the management and labour had to consider the possibilities. It was work in progress and all interests, those of employees and the business, had to be taken into account. It was a sensitive and tricky area.

The Rail Safety Regulator had extended PRASA’s licence as it had complied thus far, but more work had to be done to further comply. The mainline services licence had been returned as PRASA had taken remedial actions. He noted that he had replied to the question on brake shoes in writing and was developing a SCM policy to manage parts. He did not have software costs available, but he explained that the SAP IT modules were not a new purchase for software as PRASA currently had a SAP licence.

The Minister of Transport had led a process with the Minister of Human Settlements, the Western Cape Department of Human Settlements and the Western Cape government and 60 acres of land had been identified to resettle the illegal settlers. A task team was working on that. He would provide an update.

Regarding the development programmes for youth and women, Mr Mpondo promised to present the detail but the plan was linked to the capital expenditure programme and looked to bring in youth, women, and disabled people. Covid-19 had delayed matters but PRASA was looking at starting a limited train service. As far as sanitisers were concerned, PRASA was obtaining the necessary equipment. The state of readiness of each line was dependent on having the necessary sanitisation equipment.

The Passenger Service Charter was being converted into all official languages and in a manner that was easy to understand. It was a very important document for a passenger rail system. PRASA was attempting to access some of SAPS’s reservists as training of people who had had reservist training would be quicker. He took the point regarding the security on trains and crowd control very seriously.

Mr Mpondo responded to the Chairperson’s questions. The appointment of Werksman’s had been irregular but the firm was no longer being given briefs by PRASA. A new legal panel had been established. Issues related to irregular appointments were being handled with the SIU and they were getting to address all the issues but there was no further use of Werksman’s by PRASA. Five positions in the Executive team would be finalised soon and an additional position would be filled by June to ensure a full team. In the course of May 2020, PRASA would make announcements for the following positions: PRASA Rail CEO, PRASA Tech CEO, Autopax CEO, Chief Information Officer and Company Secretary. Staff who were suspended on pay where charges had been preferred were being paid to stay away because of the possible influence they could have on the process. He would provide details of those charged.

Closing remarks by the Minister of Transport

Minister Mbalula welcomed the goodwill from the Committee at the first appearance of the Administrator. PRASA had a long way to go but was on track. Checks and balances, which included the Committee, were in place.

He would be advertising the board appointments as he wanted stability for PRASA so the appointment for the board had to be rigorous.  Appointing a board was easy but he was not going to be in a hurry because most of the problems at PRASA had been caused by the boards. The boards had been faced with different challenges: some tried their best but some were in conflict with the management of PRASA or the political principals, such as the Minister. That place was broken and needed stability. Intervention was different from business as usual. A board would have to meet and do certain things but Mr Mpondo was there with a certain mission: to clean out; to put certain things in place; to bring stability.

The Minister thanked the Chairperson for the support for the process. He was happy that the report had seen the light of day with the Committee as it was a very critical Committee. He thanked the Committee for the goodwill.

Closing remarks on the discussion

The Chairperson thanked the Minister and his team for the good work. The Committee would be there to require updates as that was part of its work.

The Chairperson asked the Minister to inform the national Covid-19 team that the Committee was fully behind the team but the people were beginning to starve because the Covid-19 team had taken a decision that before anyone could eat, one had to pay extra for a scooter to bring the food, even when one was close to the shop. That did not make sense to him. But he wished the Minister the best.

Mr Hunsinger reminded the Minister that truckers on the road needed food.

The Minister assured him that he was fixing that.

Committee matters

The Chairperson informed the Committee that it had been arranged that the Committee would receive a presentation from the South African National Roads Agency (SANRAL) and the Airports Company of South Africa (ACSA) the following week but SANRAL would not be ready as it had submitted its Annual Performance Plan late so the Committee could call another entity. Which entity should the Committee call?

Mr McDonald suggested that the Committee call an entity that was severely affected by Covid-19. He suggested that the South African Civil Aviation Authority be requested to present. Civil Aviation would complement ACSA and the Committee could ask how they were dealing with Covid-19.

Mr Hunsinger supported the suggestion.

The Chairperson asked Mr McDonald to thank the Committee, which he did.

The meeting was adjourned.

Audio

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