Prasa has achieved its first unqualified audit opinion in nine years. (Delwyn Verasamy)
The Passenger Rail Agency of South Africa (Prasa) has achieved its first unqualified audit opinion in nine years — a major milestone in the state-owned entity’s governance and operational turnaround.
Prasa is among a growing list of state-owned enterprises (SOEs) showing signs of recovery after years of instability, mismanagement and financial losses. Eskom, SAA and Airports Company South Africa have all reported improvements in performance and governance, signalling cautious optimism for the broader SOE reform agenda.
After four years of disclaimer opinions (2019 to 2022) and two years of qualified opinions (2023 and last year), Prasa’s clean audit marks a turning point. It achieved 14 out of 15 targets in its medium-term development plan — a 93% performance rate — and generated R707.82 million in commercial revenue.
Last week, Eskom reported a R16 billion profit after eight years after a R55 billion loss last year which the power utility says was driven by a 12.74% tariff increase, a 14% reduction in primary energy costs, reduced diesel use and the suspension of the government debt relief programme.
Last year, SAA reported a net profit of R210 million after years of loss mismanagement, although it has regressed to a R354 million loss this year — which it attributes to currency volatility and the Ukraine-Russia and Israel-Palestine conflicts.
Airports Company South Africa, which operates the OR Tambo and Cape Town International airports, also reported a profit of R1 billion in August — which it attributed to aeronautical streams, lower management costs and tightened internal controls.
Although Prasa faces a R1.8 billion deficit, its leadership says the improved audit records will likely lead to profit in the coming years.
Board chairperson Nosizwe Nokwe-Macamo said the result reflected “rigorous oversight over the years” and stronger collaboration with the auditor general.
“Where governance is strong in an organisation, where internal controls are strong, the picture will always be green,” she said.
She noted that Prasa’s clean audit marked a remarkable turnaround for an entity once synonymous with dysfunction and corruption.
Group chief executive Hishaam Emeran said Prasa’s progress represented “a transformation story of recovery and renewal” after years of crisis. “Five years ago, headlines declared that ‘Prasa is broken’, following years of theft, vandalism and poor service,” he said.
The agency’s performance rose from 19% in 2022 to 59% in 2023 and 93% this year, compared with 21% in 2015.
Passenger rail use has also rebounded, with 74 million trips recorded this year — more than double the 35 million last year, though still below pre-collapse levels. Prasa aims to reach 160 million trips this year and 600 million by 2035.
Emeran said that commuter confidence was returning, with satisfaction levels up to 70% across 35 of its 40 rail lines.
By March, 268 new trains had been delivered, 60 of them in the past financial year, with more than 75% already deployed nationwide.
Through R21.2 billion in capital spending, Prasa has created 84 718 jobs, directly and indirectly, making it the fourth-largest SOE by asset base — valued at R100 billion. Since 2022, it has maintained annual capital expenditure of about R21 billion.
However, challenges remain in long-distance travel. During the reporting period, it transported 647 969 long-distance passengers, below its target, due to infrastructure and locomotive constraints.
Emeran said infrastructure recovery was progressing, with 35 of 40 operational corridors restored.
A key part of Prasa’s recovery lay in diversifying its revenue base through its property arm, Intersite Asset Investments.
Emeran said irregular expenditure had been reduced to R24 billion.