BL Premium reports that the Passenger Rail Agency of SA (Prasa) is facing collapse, with its expenses far outstripping its revenue.
This as it battles to recover from the Covid-19 national lockdowns and the theft and damage of infrastructure that have derailed its operations. The state-owned rail operator is also reeling from a huge salary bill, made worse by a large list of ghost workers uncovered recently. “Prasa is in a dire financial position as it is not generating sufficient revenue to cover its operating costs ... As a consequence, Prasa has become dependent on the government subsidy in the form of operational and capital grants,” transport minister Fikile Mbalula told parliament’s standing committee on public accounts (Scopa). He was leading a Prasa delegation on Tuesday to discuss the parastatal’s annual report for the year ending March 2021. Prasa, which is supposed to provide rail services that are crucial for productivity and economic growth, recorded an almost R2bn loss in the financial year ending March 2021. Covid-19 restricted travel while vandalism of its infrastructure further whacked its finances. The company’s woes are likely to have been worsened by the 3,000 imaginary workers — nearly 20% of the workforce — who were illegally drawing salaries until as recently as December, when Prasa moved to stop the disbursements. Mbalula suggested that Prasa’s financial woes meant it would depend more on the government to stay afloat. DA MP Benedicta van Minnen said Prasa had declined so badly that the majority of working-class South Africans who used the affordable service for transport have had to turn to more expensive modes of transport, usually in the private sphere.
- Read the full original of the report in the above regard by Bekezela Phakathi at BusinessLive (subscriber access only)
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