The Committee convened virtually to be briefed by the Passenger Rail Agency of South Africa (PRASA) on the entity’s progress report regarding the refurbishment of railway infrastructure. The Deputy Minister was in attendance.
The Deputy Minister, in her opening remarks, stated that the Board of PRASA was appointed at the end of 2020 and the appointment signalled a break from that chaotic past, to a new beginning that places the centre of its focus the millions of South Africans who rely on PRASA services for their livelihood. The appointment of the Group CEO was a step further towards stabilising PRASA.
She said that through the shareholder compact between the Ministry and the shareholding of PRASA, the Department has strengthened oversight on PRASA. On a regular basis, the Department interrogates performance and provides guidance to PRASA where there is risk of missing targets. However, the Ministry is always mindful of exercising the oversight role with balance so as not to micromanage PRASA.
The Deputy Minister assured the Select Committee that the Department is working hard towards rehabilitating and replacing the infrastructure in order to resume services and deployment of new trains in the commuter rail environment.
PRASA presented the strategic outlook, which is focused on positioning rail as the backbone of public transportation and operating a transport network whilst delivering public value. The strategic outlook might not be realised due to high levels of vandalism across all regional Metrorail and Shosholoza Meyl services, which resulted in massive disruption to commuter services.
It was presented that the mass vandalism and destruction of PRASA infrastructure has resulted in vast sections of the infrastructure being closed due to lack of electrical lines. This, together with the on-going project of modernisation of stations and other related infrastructure, has forced Metrorail to severely scale back services, with some corridors completely closing in various regions. PRASA is also losing a lot of revenue through looting of its infrastructure. In 2019, R364 million was lost to looting and burning of trains along 22 000 kilometres. PRASA also presented that, out of the 24 PRASA corridors, 12 have been opened since 01 July 2020, and nine more would have been opened in October 2020.
Members were concerned with the fact that the presentation was mainly focused on interventions in three Provinces – Gauteng, Western Cape and KwaZulu-Natal – to the marginalisation of the other provinces. They emphasised the need for an equitable distribution of services to all provinces to ensure that they all develop at the same rate.
The Select Committee suggested that there be a prohibitive provision in legislation for the sale of scrap material such as copper and railway lines as a mechanism to address thefts of railway property. Members suggested that the same prohibitions that apply on possession and selling of uncut diamonds in the country should also apply in relation to scrap material. Members were in support of PRASA’s proposal on alternate technological methods of communication, such as fibres, to reduce the need to steal parts of rail infrastructure.
The Committee was interested in knowing of the interventions that PRASA is putting in place to deal with the plague of corruption in the entity. Members raised questions on whether the R28.6 billion classified by the Auditor-General as irregular expenditure had been properly accounted for.
Members raised concerns about the fact that the prices for the Gautrain are higher than normal trains, and expensive for the poor people of South Africa. The Select Committee was interested in hearing of the interventions that PRASA and the Department were going to take to ensure that the Gautrain is more affordable to an average South African.
Opening Remarks by Chairperson
The Chairperson opened the virtual meeting, welcoming the Deputy Minister, Director-General of the Department of Transport as well the delegation from the Passenger Rail Agency of South Africa (PRASA).
He indicated that the last time the Select Committee met with the PRASA team was in October 2020. Therefore, there was need for the Committee to get an update on the infrastructure pipeline that PRASA embarked on – particularly on the commitment that the President made on the central line and Mabopane. He recalled that, during the meeting held in October, there were challenges and issues of concerns that were identified particularly around vandalism and invasions of rail areas by illegal occupants. As a result, it was logical that the Select Community gets an update.
Opening Remarks by the Deputy Minister
The Deputy Minister (The DM), Ms Sindisiwe Chikunga, acknowledged the Chairperson and Members of the Select Committee, DG and the PRASA. The Deputy Minister indicated that it was proper to extend the Minister’s apology to the Portfolio Committee, for not being part of the meeting due to other pressing commitments. She stated that, although the team in the meeting was from one office of the Ministry, the team was representing the whole Ministry.
The DM said that, in 2020, the Select Committee afforded the Department of Transport as well as PRASA an opportunity to present the PRASA turnaround plan, and the presentation was motivated by the interventions that had been instituted at that time. Since that presentation, the Department has made numerous strides in terms of placing PRASA on a stable footing. She stated that the Board of PRASA was appointed at the end of 2020, and it signalled a break from that chaotic past to a new beginning that placed the centre of its focus the millions of South Africans who rely on PRASA services for their livelihoods.
The appointment of the Group CEO took the Department another step closer to stabilising PRASA. The Department is under no illusion that there is no luxury of time to take a long-winded approach in restoring the services that the people of South Africa are so desperately in need of. The Department is mindful of the fact that in order restore public confidence in rail services and to promote rail as a mode of choice. The Khauleza ITC, which makes things faster, must permeate everything that the Department will do.
She highlighted that the interventions did not suggest that the Department intends to cut corners; rather they show that the Department needs to be responsive and agile in expediting decision making. She said that, through the shareholder compact between the Ministry and the shareholding of PRASA, the Department has strengthened oversight on PRASA. On a regular basis, the Department interrogates performance and also provides guidance where there is risk of missing targets.
The Deputy Minister indicated that, to address all these challenges and to turnaround the business of PRASA, key strategic interventions have been prioritised and their implementation accelerated. These include a massive infrastructure rehabilitation programme as well as returning in-service of the upgraded central and Mabopane line, among others.
She stated that the Department has adopted a multi-pronged approach that targets the restoring of the services whilst simultaneously building a general capacity to ensure that the impact of the interventions is seen within a reasonable time. The devastating effects of the COVID-19 pandemic on transport services generally cannot be downplayed. The impact of the pandemic has been worse for PRASA, as the entity continues to lose millions in revenue. PRASA was already on a downslide even before the pandemic, due to a prolonged period where rail services were not operational. In addition, infrastructure fell victim to criminals who looted and destroyed rail infrastructure from stations, tracks, and sub-stations, to fencing. She emphasised that the situation was being further compounded by the illegal occupation of tracks and rail reserves in Cape Town.
The DM indicated that the challenges have not only increased the cost of restoring services but also affected the timelines that had been set to resume normal services on certain corridors. She assured the Select Committee that the Department was hard at work, in rehabilitating and replacing the infrastructure in order to resume services and deployment of new trains in the commuter rail environment.
She indicated that the Chairperson of PRASA was going to lead the presentation that will unpack the details of the interventions that have been adopted.
Briefing by Passenger Rail Agency of South Africa
The presentation was led by Mr Zolani Matthews, Group CEO of PRASA. He presented PRASA’s strategic outlook, which is focused on positioning rail as the backbone of public transportation and operating a transport network, whilst delivering public value. The strategic outlook might not be realised due to high levels of vandalism across all regional Metrorail and Shosholoza Meyl services, which resulted in massive disruption to commuter services.
It was presented that the mass vandalism and destruction of PRASA infrastructure have resulted in vast sections of the infrastructure being closed due to lack of electrical lines. This, together with the on-going project of modernisation of stations and other related infrastructure, has forced Metrorail to severely scale back services, with some corridors completely closing in various regions. PRASA is also losing a lot of revenue through looting of its infrastructure. In 2019, R364 million was lost to looting and burning of trains along 22 000 kilometres.
PRASA presented that, out of the 24 PRASA corridors, 12 have been opened since 01 July 2020, and nine more would have been opened in October 2020. PRASA obtained an eviction order for Langa settlement on 28 July 2021, and the latest estimates are for the removal of illegal settlements to begin in October 2021.
The Chairperson thanked the PRASA team for the comprehensive presentation on the unfolding programmes and projects across the country. He also acknowledged the emphasis that had been put by the presentation on Presidential projects.
The Chairperson then invited Members to engage with the presentation.
Mr T Brauteseth (DA, KZN) thanked PRASA for the presentation, and welcomed the view on alternate technological methods of communication that will reduce the need to steal parts of rail infrastructure. He said that Europe is using fibre for communication that is not worth anything outside the communications sector.
He referred to the part in the presentation on the railway lines in Durban, and asked if PRASA was aware of the inland railway lines that run up through the Queensberry Bay area towards Pietermaritzburg, where all aluminium conductors were stolen. He stated that, driving along the area, one would notice that there are aluminium conductors that are hanging and they are visible. He asked PRASA to give a comment on that.
He noted that the theft of railway lines is often theft of items that obviously go to scrap. He reminded the Committee that he once raised the issue of scrap yards. Mr Brauteseth said the problem is that, when the South African Police Services (SAPS) raided the scrap yards issue, people came up with all sorts of stories of where they had gotten the scrap from. The only way to sort the issue is to set up a system in which three or four companies are given exclusive rights to sell scrap, such as used copper, in the market; this can either be per metro or country level. The system will be such that there is competitive bidding before companies are awarded the licenses to sell, and if SAPS arrive at any other unauthorised scrap yard and there is copper, then the owners should be arrested and the copper confiscated for being in contravention of that provision.
He emphasised that only certain people should be allowed to have copper, just as how only a selected number of people are licensed to have uncut diamonds in South Africa. He also asked the following questions: is PRASA working on such a system? Is the Department of Transport working on such a system with the Departments of Police and Justice to come up with a system whereby only certain people are licensed to sell the items that are normally sold in terms of PRASA and other infrastructures?
Mr M Rayi (ANC, Eastern Cape) thanked the Deputy Minister for the opening remarks, and thanked PRASA for a comprehensive presentation. He reminded PRASA that the Select Committee represents provinces, and Members sometimes want to know what is happening in their provinces. However, listening to the presentation, he noted that the focus was mainly on three provinces, and these three provinces are always the focus of government and entities generally, at the marginalisation of all the other Provinces. As a result, people from the marginalised Provinces are forced to migrate to those provinces that are always getting the lion share from government and entities.
Mr Rayi said that for the Eastern Cape Provinces, particularly East London (where he comes from), there was only one line in the presentation that mentioned the issue of modernisation of the depots; even then, there are still negotiations between PRASA and Transnet on transfer of land. He said there was nothing in the presentation speaking to refurbishment of rail infrastructure, yet everyone is aware of the collapsing infrastructure. He reminded the Committee of the statement on News24 that was issued on the collapse of PRASA infrastructure in East London, especially the stations between East London and Berlin.
He reiterated that it is disappointing and demotivating that the focus is always on three provinces: Gauteng, Western Cape and KwaZulu-Natal – whether it is Transnet, PRASA, or SANRAL (South African National Roads Agency), which is now trying to involve other provinces. Mr Rayi said he was raising it to the Deputy Minister and not necessarily to the entities, so that the Minister and the Committee would check if these entities are delivering services in an equitable manner.
He said an equitable delivery of services is important to ensure that all the provinces benefit equally, instead of other provinces staying underdeveloped when others are reindustrialising. He was raising the issue so that the PRASA Board can ensure that there is equity in resource allocation. He emphasised that the private sector will not invest in the marginalised provinces until government and entities invest first. The private sector can then follow in terms of investment.
Mr Rayi asked how much has been budgeted for all these projects on refurbishment of rail infrastructure. He said that, from time to time, the Committee is briefed in terms of percentage of the work that has been done, without an indication in terms of the budget and the expenditure on the projects.
He recalled from the presentation that there is a meeting scheduled for 08 September 2021, between the Mayor of the City of Cape Town and the Chairperson of the PRASA Board. He indicated that there should be some collaboration between PRASA and communities along the railways so that they get involved to ensure that the train stations and other infrastructure do not get vandalised. He said that there is no guarantee that there will be no vandalism after refurbishment, in the future; it is important for local communities to take some responsibility in that regard.
Mr Rayi stated that he was not sure of the criteria that are used when deciding on priority corridors. He wanted to know if there was need to invite the President so that the President can assess the situation for himself in places like the Eastern Cape – so that the rail challenges can be incorporated in the presidential projects. He recalled of a time the President was stuck using rail passenger services. Mr Rayi said he suspected that the presidential projects were as a result of that situation, and reiterated that maybe there was need to invite the President to East London so that the President can use a train from East London to Berlin. He hoped that maybe after the ride, the East-London-Berlin line would also be incorporated in presidential projects.
Ms B Mathevula (EFF, Limpopo) associated herself with the observations of other Members on the issue of equity distribution of resources to Provinces. She indicated that her province, Limpopo, had not been mentioned throughout the presentation, and that was concerning.
She said the presentation did not mention any steps that the Department is taking to fight corruption, and she was interested in knowing whether there are specific cases that have been reported for corruption. If so, how many from those cases have been resolved?
She asked what the Department is doing to make sure that the Gautrain is cheaper like any other train, so that all the people of South Africa can be able to afford it. She pointed out that it currently seems like Gautrain is designed for rich people, because it is generally not affordable. She reiterated the question: what is the Department doing to make sure that the Gautrain is more affordable?
Ms S Boshoff (DA, Mpumalanga) stated that she was interested in knowing how much was lost and is still being lost as income on a daily basis due to the destroyed infrastructure on the various projects in the provinces that are currently being attended to.
Ms Boshoff said that she had read an article that stated that PRASA launched a programme called the Peoples’ Responsibility to Protect. She asked PRASA to give the Committee more detail on the programme. Is it voluntary in that people are going to be asked to protect railway lines that are along where they live, or will people be appointed and paid? She asked how many people are going to be appointed and paid. What will the expenditure be?
She indicated that there was an article that spoke of R28.6 billion in irregular expenditure and that PRASA had appointed legal firms through National Treasury to carry out investigations in that regard. She asked if PRASA could brief the Committee on how much has been done and how much has been recovered from the R28.6 billion. She emphasised that if PRASA can get some money back that would go a long way in assisting provinces that have not been receiving attention from the entity.
Mr M Dangor (ANC, Gauteng) raised the following question: when is progress going to be made in terms of the railway line from Springs to Randfontein? He said that the Soweto-Johannesburg railway line carries more than a million passengers who are, in most instances, poor people. He asked when is this going to get done.
The Chairperson noted from the presentation slides that there was reference made to the projects around Salt River, which were put on hold due to a court case. He asked for more detail on the case since the issue is all over media, and reports indicate that the project was interdicted. He said he was more interested in what is being said on the fact that the resolution will, one way or the other, lean forward to the interdict. He commented that in reading the reasons for the interdict, it seems the contention is on how the award for the tender was made – particularly the fact that the bid was not advertised. He asked if it was correct that the bid was not advertised.
He stated that for a resolution to take place, if indeed the award was interdicted because the bid was not advertised, then the resolution will entail re-advertising the bid so that the protracted case is unlocked. He indicated that if that is not done, then what it means is that the resolution will be in two part: part A being a resolution of the interdict, and part B being a reflection of the case – particularly whether or not the bid was fairly awarded.
The Chairperson highlighted that the Committee was informed in October 2020 that the Minister had embarked on a process of consultation with the Western Cap government to try and resolve the Langa issue. However, in the presentation, it had been stated that the Board will be meeting with the Mayor the following day. He asked if there was no resolution from the interaction between the Department of Human Settlement, the Western Cape Provincial government and the Department of Transport, as was reflected in the presentation made in October 2020.
He said the Deputy Minister would understand the complexities of the issue being raised by the Committee in the sense that the year is already in September, there is also a fallout of an eviction order issued during the COVID-19 environment, and all this is in light of the current level of local government preparation. He recounted that it was indicated last year that the Minister was leading an engagement process consisting of National Department of Transport and local government to try and resolve the issue of invasion of the central line by illegal settlements in the rail reserve, in Langa, Phillipi and Khayelitsha. Did that engagement yield any results?
He asked for an update on the issue of security. He reminded the Members that during last year’s engagement, there were a number of milestones identified around the finalising of the security tender. The key issues that were raised were on security, drones, and intelligence drone operations, and one of the challenges raised in the presentation was that PRASA was interdicted from advertising security tenders. He asked if the matter had been resolved or not.
He noted that in the presentation, it had been stated that PRASA was in the process of in-sourcing 3 100 protection officials. He asked for an update in terms of the process. He asked if the 3 100 officials were from the security company that was appointed, and whether the in-sourcing process was cleared. He raised the following questions: is the Agency comfortable that the security officials will do the work? With this number that has been presented and the challenges that are there around vandalising, is this the best option that could be done in terms of trying to beef up the upgrading of security?
Mr Alec Moemi, Director-General, Department of Transport, said that he had no comment.
Mr Leonard Ramatlakane, Chairperson of the PRASA Board, acknowledged that the Committee had raised an important point in respect of the prohibition of licenses to sell copper. He said it is a problem that PRASA is still grappling with because the railway lines that are being cut off are being sold at scrap yards. These scrap yards are buying the material, even though they fully understand that no one can just own a piece of railway line. These pieces of rail are being sold on the basis that the Constitution provides for scrap yards to participate in the economy of the country. He stated that the police used to frequently search through some of these scrap yards until they were interdicted from doing that on the basis that police officers spoil business for these scrap yards. The interdict indicated that, when the police frequently visit scrap yards, they end up chasing away customers.
He highlighted that there are people at scrap yards who are aware of the fact that they are selling property that belongs to PRASA, and that this is wrong, yet they do not want to be interrupted. He agreed that this was a situation that required a prohibition because the Act currently does not prohibit or make descriptions for terms that scrap yards should comply with, in terms of the licenses that they operate with. He emphasised that it was a situation that requires legislation to be amended to include specific provisions, and that PRASA needed to have a discussion with the Department in respect of the possible amendments.
He reiterated that at the moment, there is no legislation or provision. Each time PRASA goes to scrap yards to confront owners on railway line pieces, scrap yards always ask for some form of identification to prove that the railway line actually belongs to PRASA. Basically, scrap yards always fight back even though they are well aware that they are doing something wrong and that the railway lines they are selling either belong to PRASA or Transnet but the entities cannot prove it.
Mr Ramatlakane acknowledged that there is need for work in other provinces, and stated that the Board has been talking about accelerating work in all other regions. PRASA recently visited the East London-Berlin and agreed that there is a problem. He said that the train takes longer because of the system currently operating there. The manual authorisation programme and signal problems are affecting the line. He emphasised that PRASA was not being defensive, and reiterated that there is need for the entity to pay attention all the regions where there are rails and damages.
He agreed that the collapse of the rail system should be addressed throughout the country. He indicated that the presentation had not mentioned Limpopo because of the current rail system, and Limpopo is what PRASA has introduced in a corporate plan, that there is need for a rail, to the province, to transport people. Part of the discussion is on having a concession, because the state should not be working on a project to put railway lines from Johannesburg or Pretoria to Limpopo; there is need for a partner. As a result, PRASA has introduced that in the corporate plan; the next stage is finding a concessioner. He emphasised that the plan is broader than Limpopo, as it goes beyond the province in addressing the long rail passenger transport.
He agreed that the Gautrain prices are high. The challenge with this emanates from the fact that PRASA cannot intervene, as it is something that is in the purview of the Provincial Department of Transport (DoT) in Gauteng and not PRASA. He emphasised that PRASA does not have any competence in respect of the Gautrain, but the Board will try to raise the issue with the DoT in Gauteng. He said the Department and the Director-General (DG) can also consider engaging the Gauteng Provincial government in respect of this issue.
Mr Ramatlakane highlighted that there are a number of initiatives that PRASA has taken to make sure that the entity deals with corruption, and also recovers the money lost to corruption. PRASA is currently losing revenue as a result of the metro rail system that is not available because of what happened in the country during level five of lockdown. He said that many of the electrical cables were taken, and PRASA is thus unable to run the rail system. The Agency had planned to have 138 trips by the first quarter of the current financial year, but the entity is struggling to get to that number because, when a system runs on diesel, it cannot run so much on speed intervals; it has to be broken down to be able to transport people to and from work.
He indicated that PRASA lost much and is currently running something like 120 trips at the moment, which is not a full set of rails. PRASA was discussing how much the entity has lost, not only in terms of money but also ridership – which is the number of people who depend on the system. Cape Town central transports 60 percent of people who work in Cape Town. At the moment, the station is not working, and PRASA is losing income.
He reiterated that a lot of money has been lost, and that is why PRASA is working hard to make sure that the system is brought back. He indicated that PRASA is planning on doing a campaign so that passengers can come back to the rail system with the understanding that it is the cheapest. Safety is also an important consideration for PRASA because people need to feel safe as they walk into metros. As a result, PRASA is working on those factors so that passengers can begin to move from private cars and taxis, back to the rail system, because the entity will guarantee that the system is safe and cheap.
He highlighted that the Peoples’ Responsibility to Protect (PR2P) is a voluntary activity for communities in which they are a force-multiplier along the railway line they live. He said the people who break stuff live in those communities; if communities are mobilised to be involved, then they will be able to identify the perpetrators – just as how it is happening in Khayelitsha.
He said PR2P has not yet been fully implemented because there are a number of processes that PRASA has to follow to ensure that communities are trained and that they comply with the legislation in terms of training as patrol officers before they can be deployed. So, PRASA has slowed down the deployment process to ensure that the communities are trained first.
He indicated that the intention is for the patrol officer to be volunteers that get a stipend, just as what was happening with the expanded public works programme. He reiterated that the plan is in existence but has been slowed down due to the need for compliance, and that the plan was important because it provides for a sustainable way for PRASA to get a flow of information from communities.
Mr Ramatlakane highlighted that the R28.6 million in irregular expenditure does not mean the money was lost to corruption. There is a procedure that PRASA has to follow to determine whether the irregular expenditure was out of something that the entity benefitted from or not. The process started in October 2020, through National Treasury, to determine the benefit that was accrued to PRASA, if any. After the process, PRASA has to report back to National Treasury on the findings.
He indicated that, by 21 March 2021, a report had been submitted to National Treasury accounting for up to R11 billion from the irregular expenditure. The money was used to finance a project, and there is proof that goods were received for that R11 billion. The report suggested that Treasury considers reallocating that R11 billion from irregular expenditure, leaving a balance of around R17 billion. He assured the Committee that the PRASA team will continue to work on the remainder, because the intention at the end is for condonation to the effect that the money was not initially declared but has been confirmed to have achieved an assigned objective.
He stated that the information has already been communicated to Treasury, and PRASA is currently waiting for Treasury to conduct its own processes to determine the accuracy of the response submitted by PRASA. He reiterated that the PRASA team is working on the remainder, asking the Executive to look into what the project was for and if there are goods that were delivered for that amount. He emphasised that work was on-going to ensure that, at the end of the day, there is accountability on the whole amount classified as irregular expenditure. He made an undertaking, on behalf of PRASA, to do a report back to the Committee at the end of the year, in respect of the R17 billion.
Mr Ramatlakane said that PRASA prioritises lines that are most used to transport the majority of people; the Soweto and Naledi lines were also identified so that they may be revived. He indicated that Soweto and Naledi were not reflected in the presentation because of capacity constraints that PRASA faces. The Agency had to look into how the work can be spread over a long period of time, basically year after year. As a result, PRASA has taken a three-year approach on the basis that there is currently not enough money. So, ten main lines are scheduled for now, and the other for later.
He confirmed that the Minister had a meeting with the provincial and local government in 2020, and had explained to PRASA what had transpired – particularly the areas that needed a follow-up. He said the issue in Western Cape has been a moving target where it appears that progress has been made after a meeting; when the stakeholders reconvene, there is always that realisation that the assumed progress had gone back by two steps. PRASA went to the Provincial Legislature in Western Cape to give a report back on the work that had been done, and the factors that are seemingly slowing down the work – so that the Legislature can help, as a Standing Committee in the province, to engage the provincial government of the Western Cape on several commitments.
He explained that the provincial legislature helps identify land that has been the issue, but there is not much that PRASA can do because the entity has no business buying land. The last time PRASA requested for money to buy land from Treasury, the response from Treasury was that the mandate of the entity is to run trains, not to buy land – the latter is within the mandate of Local and Provincial government. As a result, there has been a struggle and a slow-down in identifying land to relocate illegal squatters that will be removed from rail reserves. He indicated that Public Works as well as the Department of Transport recently intervened at national level to ensure that the land is available.
He highlighted that the task was now to facilitate the removal of people from rails, which obviously is a struggle because there are a number of groupings that are coming forth to contest the relocation of squatters unless there is proper housing. He stated that there is a petition that is currently being run by communities adjacent to where the illegal squatters are supposed to move to, and the petition currently has 3 000 signatures. Petitioners are stating that these people must not be moved unless there are proper housing structures that have been built for them at the land and not shacks. He emphasised that the petition is outside the purview of PRASA, and the Board is worried that it might end up not making sufficient progress. The authority that exercises power on the land should help PRASA intervene, and the entity is still appealing to that authority, but the court order has already been given.
Mr Ramatlakane explained that Philippi and Khayelitsha are all part of PRASA’s plan, that people have to be relocated from rail reserves. PRASA had discussions with the City of Cape Town, and there is a possibility of moving the yard from Philippi to further down in Kaptains Cliff, which belongs to the City. Part of the discussion was for the city to give the land to PRASA in exchange of the land currently being occupied by the illegal squatters. He said that the process is going very slow, and PRASA is waiting for a response from the city, on whether they are on-board or not.
Mr Matthews indicated that security is a contested terrain, particularly in the PRASA environment. He said the Committee is well aware of the history that PRASA experienced since the termination of security contract, leading to the decision to have an in-house security team. The team is made up of 3 100 officers and the number still falls short of PRASA requirements, given the challenges that the entity always has to face in respect of vandalism and economic sabotages. He emphasised that the security team is not necessarily equipped to deal with such challenges in a comprehensive manner and the scale of network across South Africa escalates the challenge.
He noted that there is a judgment that was handed down by the Judge President of the Western Cape Division, precluding PRASA from going to the market until the entity satisfies the security companies that brought the case before the courts. PRASA has been complying with the judgment of the court but at a great cost.
He highlighted that PRASA is now at a position where Treasury gave the entity approval to utilise the ACSA and Eskom panels, which was problematic to Eskom because those contracts that existed had ended. As a result, PRASA is committed to using nine companies appointed through the tender process, on a short-term basis. The process was recently concluded, and PRASA is looking to appoint the identified companies for a twelve-month period to augment the 3 100 of security detail. In addition, PRASA is also in the process of a much bigger and broader tender process that will probably run towards the end of the year.
He indicated that the tender process is in relation to the fact that the entity’s requirements are far greater; the exposure that PRASA sits with in the process of rehabilitation and rebuilding of the infrastructure requires very comprehensive additional security personnel. He said that the new security structure will involve command and control and all the modern-day technologies that need to be utilised in furtherance of PRASA’s security objectives, and to deal with the challenges that are specific to the network. He assured the Select Committee that PRASA was giving the issue of security a substantial amount of attention to ensure that there is expertise. The entity has already outsourced technical expertise and additional competences to ensure that the outcome is best satisfactory.
Mr Matthews indicated that he was going to meet with the National Commissioner of Police, the following morning, to discuss areas that PRASA considers to have a need for joint efforts and collaboration. The challenge is that PRASA is not a police force per se and is therefore reliant on law enforcement for assistance. He said the meeting with the Commissioner had been postponed several times due to a number of challenges that the country had to experience in recent times. He stated that during the meeting, PRASA was going to raise the issue of whether or not SAPS will be willing to bring railway police back to life, because of the need for additional capacity to protect the network. He emphasised that PRASA attaches great significance to the issue of security, given the expenditure that the entity has had to make.
He reiterated that all the necessary building blocks are in place to bring the Langa case to a successful conclusion.
Mr Matthews said he did not wish to get into much detail about the GladAfrica Group case, as it is currently under review at the courts, and PRASA is actively engaged in the matter because it impacts the modernisation of depots. He stated that the tender was advertised, the process was followed and there was compliance with the Public Finance Management Act. One of the bidders was aggrieved, and the issue was in the media, laying out the details of the case in some degree of detail. He said it was unfortunate that PRASA sometimes finds itself in an unfortunate position and is caught in the middle. The entity always wants to appoint suppliers and have work done, but at times the tender process is very much contested, given the finances involved.
He emphasised that PRASA was satisfied with the methodology that was used, as proper procedures were followed. PRASA further sought an independent review of the process that was followed by the procurement team, and the outcome satisfies that proper procedures were followed.
He indicated that PRASA was quite comfortable with going to court to defend the position; whatever the court decides, PRASA is already coming with both plan A and B so that work continues and there are no interruptions.
Mr Matthews said that the Randburg and Soweto rail is also a function of expenses and capacity. However, PRASA is committed to bringing those lines back to life, as the entity has lost a substantial amount of revenue because of the fact that those lines have not been operational. He emphasised that PRASA was well aware of the fact that that, when the lines come back, they can be substantive revenue generators, particularly the Soweto line. The PRASA team is looking at doing an assessment, going to Randfontein and other areas to assess whether or not there can be limited use of those lines instead of just focusing on priority corridors. The strategy is to bring back those lines that are identified to be able to run with limited service, up to a certain capacity. He reiterated that PRASA is working towards identifying those lines that be operationalised in a short period of time without having too much impact on resources. He assured the Committee that work is underway and that PRASA intends to update the Committee about issue by the end of October.
He said that corruption is a major concern, and it has been a concern not only for the Committee but nationally, for the Department of Transport and for National Treasury. He said that PRASA is putting in place mechanisms that will ensure greater accountability. Daily, the Group CFO is leading PRASA’s engagements with the Auditor-General and the team from the Auditor-General’s office to ensure that PRASA is compliant, and that the issues that were highlighted in the so-called derail report, findings from the Auditor-General, are being addressed.
He stated that PRASA embarked on a very extensive asset verification exercise so that the team can identify the assets that the entity has and the project is still on-going, led by the Group CFO. He indicated that the exercise is complex but PRASA has to do it so that the team can be able to provide the Auditor-General with answers around the irregular expenditure that were raised. The exercise will also help PRASA attend to business in terms of financial controls that should be in place.
Mr Matthews highlighted that PRASA was proud of the assessment that is on-going. The team spent time in the Free State, and will be looking to visit Limpopo to find out if there can be some form of limited introduction of services so that rail services can be provided along the Musina line.
He indicated that PRASA was aware of the fact that there are some provinces that are not receiving the same measure of attention as other provinces, and that there are rail lines in those provinces that can be restored. PRASA intends to find where there can be public-private partnerships so that the entity can generate revenue through the utilisation of networks that have not been utilised previously. All these form part of the long-term strategy to rebuild and restore PRASA in totality.
Deputy Minister’s Responses
The Deputy Minister welcomed all the proposals and questions that had been put forward by the Select Committee, and stated that questions do assist in sharpening the Department’s thinking as well as actions.
She said the Department appreciates the comments that were made by Members in terms of the work and progress, no matter how minor or major the progress is. She reiterated that the intention is to revamp the rail passenger services in all the provinces – taking into account the capacity and resources that are required. She said the Department intends to modernise the passenger rail services in particular, and rail services generally – in all provinces of the country.
Deputy Minister Chikunga reiterated that the Gautrain project is under the purview of the Gauteng Province, because the Department uses a build, operate and transfer (BOT) model. To date, the Department is left with about five years towards transferring and the model has contractual obligations on stakeholders.
She indicated that the Department is working within timelines and monitoring is being done very closely but in a way that does not micromanage PRASA. The Department tries to give PRASA space to do work but holding the entity accountable so that timelines that would have been set are met.
The Deputy Minister highlighted that the Department had noted the issue raised on eviction regarding people that encroach on the railway lines, and she thanked the Select Committee for the interaction. She said the Department remains committed to subjecting work to the Select Committee for scrutiny and, by extension, to the scrutiny of the people of South Africa represented by Members of the Select Committee.
Deputy Minister Chikunga thanked the Director-General of the Department, the Board Chairperson and the Group CEO for the comprehensive presentations. She reiterated that the Department is committed to modernising railway services, particularly the passenger rail services in South Africa.
Chairperson’s closing remarks
The Chairperson thanked the Deputy Minister for the manner in which she led the team that was appearing before the Select Committee to make a reflection on the work that PRASA is doing to protect the public and instil confidence in respect of the corridor recovery plan and the maintenance of infrastructure. He said that PRASA was able to give the Committee an overview of the projects along with the execution plans.
The Chairperson emphasised that the programme is quite critical in conducting monitoring and evaluation. More than that, in respect of the progress that is being made on the Presidential Project, the take away is that progress on the Mabopane rail line is at 54%, and for the central line it is at 47%.
He said the Select Committee is comfortable with the gist and thrust of the presentation, and that Members are looking forward to the team taking into consideration the issues that the Committee raised.
The Chairperson indicated that it is critical to infuse confidence in the work that is being done, particularly in trying to have a free corrupt system. He said it is always a challenge when entities face disruptions as a result of criminal acts from land invasions, theft of cables and theft of copper cables when entities are running against timelines. However, the Committee was happy with the measures that are being put in place to try and reverse the tide with a view to ensure that PRASA is able to occupy the rightful place as part and parcel of the overall commitment to infrastructural development. There was need to consider how the available opportunity can be used to ensure that jobs are created, as a role that the Department plays towards economic reconstruction and recovery programme (ERRP).
He urged the Department to ensure that some of the structural constraints in the economy are addressed by putting some emphasis on SMMEs and cooperatives. He indicated that the expectation is that the youth and women be empowered as the Department develops the rail system.
The Chairperson thanked PRASA for the engagement.
Consideration and Adoption of Minutes
Members moved for the adoption of the minutes for the meeting that took place on 01 September 2021.
The minutes were adopted without any amendments.
He expressed a word of gratitude to Select Committee support staff for ensuring that Members process the agenda. He then thanked the Members for the engagements during the meeting. He said the Committee is now able to understand the position of the presidential projects and as well as the general rail system.
The meeting was adjourned.
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