In this virtual meeting, the Committee was briefed by the Passenger Rail Agency of South Africa (PRASA) on the issues resulting in its perennial underspending on capital infrastructure. The Minister and Deputy Minister of Transport were in attendance.
The Committee Chairperson expressed the Committee’s concerns about the inability of PRASA to fully spend its given budget. The issue of underspending has been a problem for PRASA for years. The Committee wanted to know what the problems are and how can they be fixed. If institutions are not spending their money, then money should be shifted to where money is needed, as the competition for resources is already big.
The Minister attributed the underspending problem to the entity’s project management and engineering capacity, which has been depleted over the years. Corruption has worsened the problems that are already existing. Capital transfers to the passenger rail will increase from R12.6 billion in 2020-2023, to R13.5 billion in 2024-2025. Some capital projects are very large, and their procurement processes can take very long. To work on these issues, better planning that will result in the effective delivery of projects is needed. Projects must be delivered on time and within the budget. PRASA remains on track to resume services by December 2022.
The entity conceded that its current cost structure cannot be sustained, as the business is simply pushing itself deeper and deeper into debt that it cannot pay. In order to address this, PRASA needs to clearly articulate what its future looks like and how it will run trains within its budget. This will include developing a funding model that suits the operational and capital subsidy received; rationalising the business so that its costs are within budget, and the operational subsidy is available to fund the running of trains; developing a dynamic pricing model for fare revenue that better represents the cost of running rail but still makes a significant contribution economically; growing income from the secondary mandate to support the primary mandate above.
Members pointed out that the challenge of PRASA underspending has been happening for years now, and a possible under-expenditure of 24% is projected for the year 2021-2022. This is worrisome because it seems that the issue of underspending is not taken seriously.
Consequence management was another concern amongst Members. Seeing that underspending has been an issue for years now, something must be wrong because this is happening over and over. People responsible for these wrongdoings need to be identified so that the issues can be corrected. Corrective measures should be in place, and they should be implemented successfully. The board must be accountable for the underspending. The Committee wanted to know what exactly the problem is. Can the Deputy Minister please share how many Group CEOs PRASA has had in the past 10 years? This is important, as it directly impacts the stability and performance of PRASA. When was the last time that PRASA had a qualifying audit? What was PRASA’s best revenue year?
How many of the black-owned, youth-owned, and women-owned businesses have benefitted from being suppliers to this company? PRASA spoke about skills development. Is there a relationship between training institutions in South Africa and PRASA, especially looking at bursaries? Every workplace should be a training ground. It is important to know whether there is a training component of skills in this company, and whether graduates can do training there. This includes all graduates – those on the Gibela Programme, and those whose means test disqualified them because their household income is more than the threshold. Is Gibela using an international training institution to gain international skills?
The Chairperson opened the virtual meeting, welcoming the Members, support staff as well as delegates from the Department of Transport and its entity, led by the Minister and Deputy Minister. This was a very important meeting with the PRASA (Passenger Rail Agency South Africa) Board.
PRASA played a big role in the lives of the people of South Africa when it comes to transport. The main concern is that every year a budget is allocated to PRASA to be spent but it is always underspent. What are the problems, and how can they be fixed? The budget is already tight coming from Parliament, so those who are receiving money should use the money properly and show the impact that the money has made. If it was said that the money is going to be used to benefit commuters, who are part of the poorest in the community, then the money should be used in that way. The money is given so that the economy can start to grow again. However, when it is put in the bank, it cannot help grow the economy. The President identified infrastructure as a very important way to grow the economy, as it can help young people get jobs.
Money is allocated to the Economic Recovery Reconstruction Plan (ERRP) to help grow the economy, with the hope that it will grow the economy and not negatively affect economic growth. Small businesses and black-owned businesses and companies should be benefiting and generating jobs, but this is not happening. If institutions and committees are not spending their money, then money should be shifted to where money is needed, as the competition for resources is already big.
Mr Fikile Mbalula, Minister of Transport, explained that the rail infrastructure is in a very broken state because of theft and vandalism that negatively affected the recovery interventions. There have been problems because of spending. This problem is because of the project management and engineering capacity that became worse over the years. Corruption has worsened the problems that are already existing. Capital transfers to the passenger rail will increase from R12.6 billion in 2020-2023, to R13.5 billion in 2024-2025. These funds will be used to renovate coaches, rolling stock, fleet-renewal programme, signalling, and other capital projects that include the security of the rail infrastructure.
The board was asked to put measures in place, which will aim to increase the capacity for PRASA – for it to spend more on the capital programme. This takes priority in the shareholders compact. It is expected that the board account for critical projects such as signalling as well as the overall programme. Work done to the station, depot, and all other renovations will increase spending, and it will deliver the desired outcomes of a modern rail environment. To recover passenger rail services, PRASA will work with other organs of the state to achieve a quicker change and a committed capital budget.
Some capital projects are very large, and their procurement processes can take very long. To work on these issues, better planning that will result in the effective delivery of projects is needed. Projects must be delivered on time and within the budget. PRASA remains on track to resume services by December 2022. The challenge of illegal settlements on the railways in Langa, Nyanga, and Phillipi is being addressed. The manufacturing plant at Dunnottar in Ekurhuleni has produced an excess of 100 new train sets. Many of these trains were sent to networks, and the remaining are at the Wolmerton Depot, while infrastructure upgrades are taking place. PRASA’s spending on the capital programme has improved a lot compared to the previous year.
At the end of the first quarter, PRASA exceeded its quarterly target of R1.6 billion, compared to the 12% spending of its budget of R96 million in the previous year. The gap between PRASA’s operating revenues and operating expenditures has been larger than the operating subsidy provided by the government. This gap has continued to grow since 2019 and 2020. To prevent this shortfall, PRASA used capital subsidies to fund its operations rather than using them to invest in new capital assets. The Minister recounted that Cabinet has approved the White Paper on National Rail Policy, which was then taken to Parliament. The policy addresses passenger rail capacity challenges, and concessions are introduced on the lines not run by PRASA. Alternative provisions for commuter rail in terms of mobility, funding, and competitiveness of commuter rail systems are being worked on. For PRASA to become competitive to meet future demands, the investment in its capital programme becomes a key enabler. Through its capital programme, PRASA must become a catalyst in enabling better access from rural communities, increased mobility, more job creation, and contribution to economic development. Money must be spent. Treasury has also intervened because of a lack of spending on major infrastructure projects. These issues can be addressed by the board.
The Chairperson added that project management skills should be focused on. Project management is about planning, and it can become a big problem. Contract management is another aspect that needs to be focused on so that parties involved can be held accountable, and budgets can be more accurate. Budgets must also be planned and not done after budget speeches.
Briefing by PRASA on its Capital Infrastructure Underspending
Mr Leonard Ramatlakane, Chairperson, PRASA Board, remarked that the board is always listening and ready to account for everything. The board is trying hard to change the image of PRASA – of being corrupt and not having any consequence management. The board is making sure that consequence management is being implemented when people are doing wrong.
The presentation was on PRASA’s capital infrastructure underspending, and it was presented by Mr Hishaam Emeran, Acting Group CEO of PRASA. The presentation included the reason for expenditure. The reasons included leader instability and procurement policies.
The financial analysis in the presentation starts off by depicting the losses generated from train operations over the last five years. The overall operational losses include the non-cash items, which have been removed to arrive at the actual cash loss incurred by the business of running trains. In terms of the entity’s capital commitment over the medium-term strategic framework (MTSF), the headline total over R36bn is effectively committed. Spending for 2022/23 is expected to be in order of between R16bn – R20bn (subject to GIBELA advance payment). The rebuild programme will cost R2.3bn, with R1.6bn being allocated for Gauteng corridors. Walling Programme could come to a cost of at least R8bn, within the MTEF. The Kwazulu-Natal Flood Recovery Programme is estimated at least R2.9bn within the current MTEF. It is important to note that PRASA would need more capital for the recovery more than what is provided on the MTEF, especially on capital that is not ring-fenced.
It is clear that PRASA’s current cost structure cannot be sustained, as the business is simply pushing itself deeper and deeper into debt that it cannot pay. In order to address this, PRASA needs to clearly articulate what its future looks like and how it will run trains within its budget. This will include developing a funding model that suits the operational and capital subsidy received; rationalising the business so that its costs are within budget, and the operational subsidy is available to fund the running of trains; developing a dynamic pricing model for fare revenue that better represents the cost of running rail but still makes a significant contribution economically; growing income from the secondary mandate to support the primary mandate above.
Various programmes found to be irregular by the AGSA had to be stopped. These include the Station Modernisation Programme, General Overhaul (GO) Programme for Metrorail and Shosholoza Meyl coaches and Ad-Hoc Maintenance for the rolling stock fleet. These programmes had to be halted, and the procurement process started afresh.
On the Rolling Stock GO programme, PRASA undertook under the instruction of the Board an extensive probity process to ensure that this programme does not become irregular expenditure again. The entity was cancelling tenders prior to the appointment of the contractor or suppliers for various reasons, including probity identifying shortcomings in the procurement process and other tenders found to be non-responsive. Projects affected include: Wolmerton Depot Upgrade, Braamfontein and Salt River Depot Upgrades amongst others.
[See presentation document for more details]
Mr E Marais (DA) welcomed the presentation and said that he found it very informative. South Africa is in an economic down spiral. Spending should be pushed on capital programmes. That will be a stimulus for the economy and for the labour market. All the projects presented are good, but PRASA must go ahead and get them done. Other departments desperately want additional funding, and money should be given where it is needed and will be spent.
Mr Z Mlenzana (ANC) said that he expected the presentation to be filled with more detail on progress made by PRASA so far, and what the entity is planning to do, going forward. The challenge of underspending is an ongoing issue in PRASA. How is it being dealt with?
Ms M Dikgale (ANC) welcomed the presentation, as it was informative. The issue of underspending is not pleasing, and it happens in other departments as well. The Minister should assist and make sure that the money that is given to them is used and managed well. Ms Dikgale was so surprised when she found out that even the National Treasury does not use the money that is given to them.
On the 10 priority corridors that are said to be refurbished: Timelines, of when these projects will be completed, were given. How far is PRASA on these developments now? Does PRASA think they will meet the deadline? Can clarity be given on whether the project will be done in September?
KwaZulu-Natal, Western Cape, and Gauteng are working very well on their systems. She said that, when she was younger, there was a train that passed her area of residence, and it assisted people from the area to get to town and back home. That train was then stopped. She cannot recall hearing of the reason why the train stopped. Now that there are plans of buying new trains, such clarity is needed on this. The blue train passes the area, and there is a station. The villages are now closer to the railway, but there is no train.
Ms D Peters (ANC) pointed out that the challenge of PRASA underspending has been happening for years now, and a possible under-expenditure of 24% is projected for the year 2021-2022. This is worrisome because it seems that the issue of underspending is not taken seriously. She said that she is disappointed that the board chairperson, who was also previously a Member of Parliament, serving on the Transport Committee, is not of great assistance – especially because he was aware of the challenges of expenditure before being chairperson.
The issues raised about COVID-19 and its impacts are heard, but it is surprising that, when the hard lockdown was introduced, the issue of security of the infrastructure of PRASA was not seen as an essential service. There is now a lot of damage done to the infrastructure, and there has been some theft as well. It is worrisome because these issues are causing a delay in the recovery and modernisation of the infrastructure and depots of PRASA. The new trains will not be able to operate because the rail tracks have been stolen in some areas.
Between Transnet, PRASA and the Rail Safety Regulator, what progress has been made on the issuing of the railway police? Some action has been taken in Cape Town, but the work done is claimed by the Western Cape and the City of Cape Town. What is PRASA doing about the Railway Safety Police, because it would have been very useful in preventing theft of infrastructure? Sometimes, it is found that theft happens when people know exactly where the networks have been laid, and where the traps have been set for them. What is the input of PRASA in the scrap-metal industry dealing with the challenge of metal infrastructure? Legislation is in the process, but it is long overdue.
Reading news about rail tracks being stolen, and rail tracks being loaded into trucks going to neighbouring countries, shows that even border management is not fully briefed about the challenges faced. With the advancement of technology, the infrastructure of PRASA could be barcoded, and trackers can also be installed to avoid and deal with the theft of infrastructure.
On the old train stations and the long-distance trains, why were they not leased to government departments and other companies that need infrastructure for offices and other operational centres? It would have prevented a lot of vandalism and damage. An example of such development can be seen in Bridge City, Durban.
On Gibela, the focus of this major investment by the country was on the revival of the rail industry. The presentation showed that some of the suppliers are black in South Africa, but a story was heard that French companies were being recruited to be a part of this development. It is so easy for anyone to come to South Africa and say they want to be a part of the developments. What is in place to make sure that foreign companies are not part of the developments?
How many of the black-owned, youth-owned, and women-owned businesses have benefitted from being suppliers to this company? PRASA spoke about skills development. Is there a relationship between training institutions in South Africa and PRASA, especially looking at bursaries? Every workplace should be a training ground. It is important to know whether there is a training component of skills in this company, and whether graduates can do training there. This includes all graduates – those on the Gibela Programme, and those whose means test disqualified them because their household income is more than the threshold. Is Gibela using an international training institution to gain international skills? The Minister of Higher Education once said that it would be a problem to recognise qualifications from foreign institutions. There were people trained by the United Nations Institute and other foreign institutions, but they were not accredited. Is the company still committed to the initiative of skills development?
Are the women in rail initiative still in place and is it growing? What is PRASA doing that companies owned by all women are benefiting from the initiative? There was an initiative called the STEM programme that was making it possible for young women to participate and be aware of the need to study math and science. Other than Gibela, are there more training initiatives?
Clarity is needed on whether 34 to 36 train sets will be ready at the end of the year. How are the subsidiaries of PRASA performing? Is there any progress in Kings Williamstown and East London?
Ms N Ntlangwini (EFF) raised a concern about localisation. In the slides, the performance in terms of local performance targets is discussed. What is the remedial action that PRASA is going to put in place to ensure that the 70% target in terms of local procurement is met? There is a tendency of procuring trains outside of the country, assembling them in South Africa, and then deeming them to be locally procured. This is not the case, because these are not locally procured; they are locally assembled. ‘Locally assembled’ and ‘locally procured’ must be differentiated.
What is PRASA doing to make sure that targets of local procurement are met? The wasteful expenditure of PRASA is concerning. There are no necessary steps in place to make sure that it does not occur. There should be consequent management in place with PRASA. If the challenge of irregular expenditure occurs every year, then the Committee should know what the problem is, and who is not doing their job properly. The Committee’s main job is to see where the money goes, and it wants to see where the money goes in PRASA.
Mr X Qayiso (ANC) welcomed the presentation, noting that it focused on what is going to be done but it does not focus on the issues about underspending. This is a problem for the Committee, as Members expected a response on the underspending issues. He was surprised that PRASA is now looking for more funds for their projects to take place, but they did not spend the money that was already given to them. Why is PRASA wanting more funds? How many employees are there at PRASA? The task of the boards is to ensure that spending takes place. It was expected that the board would speak more about the issues of underspending. It was expected that PRASA could identify the problem because underspending is happening. The Committee does not only want to hear about the future, but they want PRASA to account for their present situation.
Consequence management is another concern. Seeing that underspending has been an issue for years now, something must be wrong because this is happening over and over. People responsible for these wrongdoings need to be identified so that the issues can be corrected. Corrective measures should be in place, and they should be implemented successfully. The board must be accountable for the underspending. The Committee wants to know what exactly the problem is. The presentation shows a much better future, but how many central lines are in operation in the country? Are the trains running?
The Chairperson welcomed the presentation and commented that what is presented does not take a good picture. Other Members are unhappy about the underperformance and underspending, and it is concerning. Underperformance has been below 30%. Last year, it was worse because it was 19%. Better performance should be worked on to ensure that the outcomes is better. The performance shown in the presentation is not balancing. Parliament gives money to PRASA, and the country is already at a deficit. Money is borrowed to grow the economy, and it cannot be kept at the bank. Can a quick calculation be done on how much interest percentage is earned from that money in the bank? Money is being lost. Annual achievements cannot be 19%, as a lot of money is spent on PRASA. When was the last time that PRASA had a qualified audit? What is the target of income from PRASA, and what is done to achieve it? What is happening at Autopax, and what has been the best year in terms of revenue at Autopax?
Can the Deputy Minister please share how many Group CEOs PRASA has had in the past 10 years? This is important, as it directly impacts the stability and performance of PRASA. When was the last time that PRASA had a qualifying audit? What was PRASA’s best revenue year?
All the reasons why underspending is happening are related to internal problems. These should be resolved and not be brought forward to the Committee. PRASA must get its management in order, as money is given to the entity. In the end, the money is going to be lost without services being delivered. The reasons presented should not be reasons why PRASA is appearing before the Committee.
The Gibela tender was the biggest award of its kind, and the country had a lot of ways in which it wanted to benefit from it, including localisation and the new railway infrastructure. Can an audit be given on what is going to be done for the people of South Africa and what has been delivered so far? How well have contracts been managed What is the return of South Africa’s investment?
Economic transformation is another concern. How much has been done for black workers, and what progress has the BBBEE done to make sure that they give back to South Africa?
Underperformance is related to instability, and it showed in the presentation. When is stability going to be achieved? Every time new management comes in, new changes and adjustments are made. Stability is needed at PRASA, so that it can result in performance.
What is the progress on the new trains and the new depots? What is done to maintain the new trains and depots? What is being done with the Autopax, and what is the progress? Autopax was responsible to transport all the teams that participated in the 2010 FIFA World Cup, and all the teams arrived on time – so, it is a very important organisation in PRASA.
What are the updates on the Shosholoza Train? What progress has been made?
The targets are set by PRASA, but it is still not met as it was under 30%. This is unacceptable.
Who is involved in the supplier pack? How are black-owned companies benefiting from it? How are young people benefiting from it?
Many stations were closed. A lot of economic activity takes place at stations. Is PRASA aware of the lives that were impacted by the closing of their stations? Vendors use the station as a place to sell their goods. What happened to them? Were they considered?
What progress has been made on Women in Rail? Rail employment is usually a male-dominated industry. To prove otherwise, PRASA introduced women in rail. For example, the Orlando station was built by a women-owned company, and there were no problems with it – proving that women can do what men can do. A company in Cape Town that is also involved with PRASA is also women-owned, and it deals with the issues of women being marginalised in society.
All the business plans of PRASA include corridor plans. What is happening there, and what are the updates on it?
Ms Peter asked about the PRASA Property Management Group. It was heard that the PRASA was left in Pretoria, and that the entity is now operating somewhere else. Why is the facility of PRASA in Pretoria being wasted? The property management group had said that it was going to work with the Department of Transport for office accommodation. What was the result of this arrangement? The skills audit that PRASA delivered only included the Gibela Programme; it should be broader.
Mr Ramatlakane responded to the question about the PRASA House. He said that it was an inherited decision. The PRASA House was at a big building in Pretoria, and at another one in Johannesburg. PRASA houses were only 50% occupied. The board then decided that this is a waste, as they could be leased out. The house in Gauteng was chosen for use, and the PRASA house in Pretoria was identified as a way of income. The lease has not been finalised yet, but it is in the making. PRASA will indeed lease out the house in Pretoria.
The Committee Chairperson interjected and asked how long PRASA has been out of its house in Pretoria. The entity should also confirm if it is getting an income from the buildings now. Is PRASA paying rates for these buildings?
The CEO who deals with property did not communicate completely, and Mr Ramatlakane was not sure about the totals of rental income. The big decision was getting out of the PRASA House and getting an income from it. The university wanted to lease the building, but there was a problem with the rental amounts.
Mr Emeran confirmed that the relocation happened a year ago. He added that infrastructure must still be moved from the House. Once the infrastructure is moved then the office can be moved. Through the property division, the leasing of the building can be finalised.
Mt Ramatlakane said that, when the board was appointed, it joined an agreement to bring insight into Corporate Real Estate Solutions (CRES). PRASA has been busy doing that, and it has merged with CRES and has been providing that insight.
The Moloto Corridor Development has made a lot of development and non-development, at the same time. This matter has been with the DoT, and should be addressed by the Deputy Minister.
The GO was cancelled about eight years ago. There has been no general programme in the last eight years. The GO was only reinstated this year in April and is now working. Going forward, it will be seen how young people, women, and black people benefit from this programme. The issue of GO at the time was because of corruption.
There were women involved in rail, particularly in the Touwsriver, Western Cape, where repairs were done. The GO was stopped for so long that the Women in Rail Programme had a setback because nothing was happening around it. The revival of these programmes was discussed with the Deputy Minister. Hopefully, the programmes will be benefiting the youth, women, and black people soon.
Autopax was put on the business rescue by the board because all the company’s buses were not serviced properly, and they were breaking down during their trips. Autopax should still be considered for opportunities to make money. The company was put into divisions so that it can be part of PRASA and receive cross-subsidiary from PRASA, but it has a deficit that could push it to liquidation. Voluntary business rescue practitioners are busy looking at how to build Autopax better. Some of the buses that are broken and not profitable should be sold. These buses were new in 2010, but there was no service agreement for the buses. The board is taking a lot of interest to make sure that the revival of Autopax is a success.
The Group CEO was appointed but, in the eyes of evaluation, did not meet the validation. PRASA is in the labour court about this dispute. The position has been advertised because PRASA does need a permanent GCEO to lead the company. The interviews for GCEO will start soon.
A proper account should be given of what was promised by the Gibela Programme, and it will get done.
The passenger targets have been declining over the years, and they are very low. During the lockdown, the passenger rails were vandalised. With the recovery of the corridor, income will be generated. Autopax brought in more money than the passenger rail. The passenger target is very low, and it will not get PRASA out of its challenges. Targets at the time were 400 billion, but PRASA is very far from reaching this.
In the audit process, over the last five years, there have been implications with the audit – no clean audits. Last year, the entity received a disclaimer opinion because there was no asset register kept. If assets are not known, then it cannot be said that the company is a going concern. PRASA is working hard on what the Auditor-General has issued, and the entity is working on its management. The problem of the asset started when there was a separation of Transnet and PRASA. PRASA came out very weak in resources, and no assets were registered because PRASA could not afford them. The Auditor-General does not want to see the asset management manually, but rather technologically.
There is a big problem of underspending at PRASA. Underspending in programmes, such as capex, is because of skill and capacity. It takes a minimum of two or more years to get procurement start-up. PRASA has faced a lot of issues of corruption, and no one wanted to decide whether the procurement is correct. There have been many delays around this, including cancellations because people were very unsettled. The work that is currently been done by the executive is trying to revive this programme.
The executive positions were all advertised, and applicants were interviewed. Other positions must still be advertised. The process of evaluation was done to look at job creation. The structure of PRASA will be able to fix the issues of PRASA, as the management will be in a good structure – top heavy. All positions were not advertised yet because PRASA is still trying to figure out a proper structure of management.
Underspending has a lot of explanation. Programmes should be looked at and put on the market. The processes of these programmes have been lagging. Because of this, capital expenditure was put in the bank as a safety net. That interest is then used to make an income and make sure that salaries are paid.
The Gibela projects, including the Gibela trains that were spoken about, are developed and designed in South Africa. At the beginning of the procurement of trains, some were coming from Brazil, but that was the end. Gibela has developed its capacity in design, and manufacturing. An open invitation is extended to the Chairperson to go and see where the trains are manufactured locally. PRASA is working on Alstom and how it can benefit South Africa. In two weeks, some of the problems will be cleared. Black-owned companies are also initiatives that were not sustained because there was no one to issue contracts.
Rail police are pushed for. They are part of the South African Police Services (SAPS), and police stations were previously built near railway stations. Somehow, railways services have not been effective in doing what they are supposed to do, as stations were still vandalised. PRASA has been speaking to the police to build the capacity to push for safety services.
Training institutions do exist, but there is no one to give the training. Training also must be revived because it is very important. PRASA will have to elaborate with other institutions to revive this project. Skills such as engineering are lacking, Assistance was requested, but training and skills will further be worked on.
Mr Emeran responded to the question about priority corridors. This plan is tracked very closely, as PRASA wants it to be launched by the end of September. The work is underway, including electrical work and station repairs.
Mr Emeran said he did not know about the trains that Ms Dikgale was talking about, but the information can be used to follow up on the matter. The stations are being leased to PRASA by Transnet; they do not belong to PRASA. More details on the main lines can be gathered, and possible sub-leasing can be discussed. The minimum number of new train sets for the year is 34, which is made in this financial year. The King William’s Town to East London services has been discussed with the Department of Transport. There were certain key requirements for the services to take place between the towns, as well as technical requirements that must be looked at.
The issue of localisation will be part of the later responses to be provided by the Department. There are currently 70 200 workers employed by PRASA. The numbers of passenger rates are very low. In 2014-2015, over 500 million passengers were transported by annum. That number dropped to 200 million in 2019. In 2021, it was 20 million. This is because only a few corridors are operating, and only limited services are available. If the upgrades are done, more and better services can be offered. Recovery of corridors is also still happening, and it has a big impact on passenger numbers and the revenue coming from passenger trips. The operational funding requirements were shown in the presentation based on train operation. A loss of R900 million was recorded for this financial year.
PRASA wants to demonstrate that it can spend its allocated money. With commitments that are planned, PRASA wishes to gain trust and confidence that it is capable of spending properly, and increase the allocation of monies, going forward.
Ms Sindisiwe Chikunga, Deputy Minister of Transport, thanked the Committee Members for their inputs and advice. The issue of project management has been looked at. Contract management will ensure that the Gibela Programme delivers, to the people of South Africa, what it has promised to deliver. The Department must strengthen its contract management.
The Department is offering its support to PRASA and its mandate. Railway police remain in the unit of SAPS, under the command of the provincial commissioners. They have their challenges of capacity, but the Department is trying to make progress on railway police. The Gibela Factory is a manufacturing chain, and Members should visit the factory so that they can see what is happening at the sites.
The matter of women and the youth brings unhappiness to the Department as well. Those programmes are being revived and will reach their goals again. It is a government policy that women should be empowered, and so the sector cannot avoid it. Women need to be aware of the available opportunities.
In the last seven years, there have been seven Group CEOs. It is an indication of instability at a strategic level. To take over buildings, the Department of Public Works and Infrastructure (DPWI) has to be involved to look at specific requirements and issues. Looking at the specifications of the DPWI, it might not be possible.
In compliance with the public-private partnership, it has not yet been approved by Treasury. But the Department is waiting on approval for further development. The application was submitted.
The Department of Transport is very important in society. It is the backbone of poorer communities, and PRASA plays an important role in the economy as well. PRASA is applauded for commitments to reinstate programmes that are aimed at empowering women, and the programmes must be carried through. The Department has taken notes of all comments and advice given.
Ms Peters raises concern about the PRASA house. Is the PRASA board saying that they are presiding over wasteful expenditures? At PRASA House, they are paying rates and security. How can the board preside over an old decision? Ms Peters reckoned that PRASA should have prevented this wasteful expenditure because it is going to result in over-expenditure as well as waste. This matter must be attended to. The building should be in the possession of the Department of Transport. It is built next to the railway station, and an agency involved in the railway must be located there. It does not look good when a board presents wasteful expenditure.
Mr Ramatlakane says that this matter will be looked at, going forward. The previous board indeed made the resolution. When the current board arrived, the resolution was already in its implementation phase. The board has to re-evaluate this decision. It is worrisome that it is seen as a wasteful expenditure. Feedback will be provided on this matter.
Closing Remarks by the Chairperson
The Chairperson said they were working under very difficult conditions as other institutions are also wanting more funds. Disclaimers on audit outcomes are unacceptable because that gives no assurance to the Committee that money is used properly in line with law and policies. How was the money given to the different parties involved? Many times, there are black companies that are not getting anything, but knowing how the money is separated will help the Committee to assess.
The promises of the Gibela Programme have also been noted by the Committee. The programmes on women empowerment must be followed through to ensure that a difference is made. Women should be involved in all levels of development. The Moloto roads and railways must be followed up on. There have been many plans but very few outcomes. The loss in passengers means that more people are making use of alternative transport. Alternative transport is more expensive, and this does not have a good impact on the working class because they will be working for transport money. The number of passengers must improve. The express services at PRASA – is it still running?
Mr Emeran responded and said that the Chairperson is correct. There were express services, but they are not running now. The idea is to have those services back.
The Chairperson said that the express services were there for reasons. These services must be restored to the people. The company’s resources should not be limited.
Meeting minutes from previous meetings were considered and adopted.
The meeting was adjourned.
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