The Passenger Rail Agency of South Africa (Prasa) is facing another year of losses, according to its recently appointed interim chief executive, Cromet Molepo.
But the group’s financial situation could be turned around within two years if the company were bold enough to implement plans to grow revenue other than passenger rail fares and reduce the agency’s reliance on the fiscus, he said.
His appointment last week, which has been questioned by unions and civil society, has come at a critical time for the beleaguered company. He will be the third interim chief executive this year, taking over from Lindikhaya Zide, formerly the group’s company secretary. The agency has been weighed down by long-standing allegations of corruption, besides battling service disruptions in its rail division.
Although the agency has yet to table its financial results in Parliament, the losses are likely to be about R1.4-billion, he said. This was unsurprising because Prasa had failed to fully exploit its wider asset base, such as its extensive real estate and property portfolio, said Molepo. He has undertaken to change this.
Prasa’s primary mandate under law is to provide commuter rail, long-haul passenger rail and bus services. Its secondary mandate is to generate income from its assets. Molepo was previously the chief executive of Intersite, the subsidiary which is responsible for carrying out the secondary mandate.
Part of this strategy includes plans to turn the rail agency into an independent power producer by installing solar panels on Prasa’s properties, starting with its more than 600 railway stations.
“This will amount to thousands of square kilometres and we believe we will be able generate enough electricity to meet all our requirements,” he said.
Electricity is the agency’s second-largest expenditure item, amounting to about R1-billion, according to Molepo.
He is also adamant that Prasa, which is offering a social service and so cannot charge market-related prices, should not be burdened with additional costs, particularly security.
“We believe we deserve better protection [from the South African Police Service],” said Molepo, adding that budgetary allocations should be made for railway police.
The country’s railways should be protected in the same way that its airports are, he said, especially given that Prasa transports three million passengers a day — more than the country’s airports.
The organisation is losing an average of 80 coaches a month to vandalism and arson, and it is battling the theft and destruction of its rail network infrastructure, which severely disrupts services.
“We are an organisation under siege,” Molepo said.
This week, its subsidiary Metrorail suspended services on its central line in Cape Town until further notice because of what it said was months of sustained vandalism and copper cable theft. The line covers areas such as Khayelitsha, Mitchells Plain and Langa.
But Prasa also faces many allegations of corruption, including a series of investigations stemming from a report by the public protector and spearheaded by Prasa’s previous board chairperson, Popo Molefe. It has also been the subject of extensive forensic investigations by the treasury into 216 Prasa contracts.
Molepo’s appointment, under the auspices of Prasa’s interim board, which was itself only appointed in October, has been questioned by both unions and civil society organisations. The civil society coalition #UniteBehind, which runs a campaign to monitor Metrorail, has questioned the legality of the board’s appointment. It also claims Zide’s axing was aimed at shutting down the wider corruption investigations. The organisation is threatening to take legal action against the board.
The South African Transport and Allied Workers Union also remains sceptical about the appointment of another interim chief executive and it has questioned Transport Minister Joe Maswanganyi’s appointment of only four members to the board.
But Molepo appeared unfazed by the furore. “I am used to it,” he said, adding that he would be holding discussions with the unions, which are important stakeholders in Prasa’s sustainability. He referred questions about the state of the investigations to the board.
The board did not respond to the questions but said it would release a statement to address these issues.
Ishmael Mnisi, the spokesperson for the minister, said Maswanganyi was consulted about Molepo’s appointment and agreed to the changing of the acting chief executive “in the spirit of rotation”.
Mnisi also said the appointment of the interim board was never aimed at quashing the corruption investigations, and the minister would not obstruct any of them, including those identified in the public protector’s and the treasury’s reports. The minister had “full confidence in the board and in the manner they are conducting the affairs of Prasa”.
Despite his interim appointment, Molepo said he had no intention of being an armchair chief executive and would be combating the “cartels and cliques” that had developed in the organisation. Resistance was to be expected but “the desire to serve must be stronger than self-preservation”, he said.