Tue, 26 Jan 2021

The Passenger Rail Agency of South Africa told Parliament's Standing Committee on Public Accounts on Tuesday that management was turning things around at the passenger rail entity, despite instances of plunder and financial ructions.

Prasa has been at the centre of investigations into allegations of mismanagement since 2015, when then-Public Protector Thuli Madonsela investigated the state-owned entity and compiled a report entitled "Derailed" into corruption at the company under former CEO Lucky Montana.

A year ago, Minister of Finance Fikile Mbalula removed the Prasa board and management, after which Bongisizwe Mpondo was appointed as the agency's administrator, only for his appointment to be set aside by the Western Cape High Court in August.

The late Auditor General Kimi Makwetu gave Prasa a disclaimer audit opinion with findings for the 2019/20 financial year, pointing to inadequate governance records, instability in key positions, poor financial management and record keeping and poor consequence management.

Special Investigating Unit head, Advocate Andy Mothibi, said dismissed officials who left Prasa under a cloud of impropriety could still be criminally pursued if there was evidence of their culpability.

"Total value of matters under investigation have been quantified to about R7 billion. The two dismissed officials, once the employer-employee relationship has been terminated, does not mean that we will not pursue them evidence of criminal conduct on their part exists," said Mothibi.

Prasa board member Advocate Smanga Sethene said more clarity will be provided to the board on legal proceedings regarding the Public Protector's 2015 report.

Prasa head of human capital Thandeka Mabija said Prasa saw a decline in irregular expenditure for the current year at R1.3 billion, down from R3 billion in 2019.

"There is an asset register at Prasa, but during Covid-19, a structure was needed to ensure the continuous updating of the asset register. We have developed key performance indicators like the CFO officer to ensure that irregularities are investigated," said Mabija.

Mabija said fruitless and wasteful expenditure at Prasa stood at R48 million, down from R51 million in 2019. She said this was due to long outstanding debt contributes to contractual interest.

Regarding the auction of seven locomotive for R95 million that Vossloh sold to Stadler Rail, Mabija said Prasa was discussing the matter with liquidators and Stadler Rail and the agency was confident that it would be in a position to recover them. She said Swifambo was paid over R2 billion by Prasa for manufacturing the locomotives.

Prasa has held formal engagements with Stadler Rail to reintroduce the locomotives, according to a City Press report.

Mabija said once the trains are recovered, they could still be of use to Prasa on its extensive rail network.

"They can be utilised where we have the 5KV specification. There is a tripartite team that has been put in place to ensure that once the locomotive have been returned, there won't be any challenges on the curtain wire," Mabija said.

Prasa CFO Krishna Govender said Prasa had longstanding debt which has seen the entity incurring interest for failure to pay within 30 days, which hampered its performance in its audit report.

"Covid-19 has exacerbated our understanding of business continuity and that is a challenge that we continue to deal with. But we are working on addressing the impact of the pandemic and ensuring solid business continuity in any event," said Govender.

SCOPA chair Mkhuleko Hlengwa asked the Prasa delegation to provide updates on legal matters affecting Prasa as well as efforts to recover lost funds.

Democratic Alliance MP Alf Lees said Prasa's submission was cold comfort for the legislature after the years of financial trouble Prasa had been plunged in since 2015.

Source: News24

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