Scorpio Analysis

Off the rails: Two years on, Prasa is still without a board of directors

By Sikonathi Mantshantsha 30 August 2019
Caption
The departure of Prasa’s Dries van der Walt makes him the fifth senior executive to leave the stricken passenger rail operator this year.

When Cyril Ramaphosa became president in February 2018, he promised to unlock the bottlenecks suffocating economic growth. Two years later, the single biggest people-mover, the passenger train service, has almost ground to a halt. Ramaphosa’s transport minister, Fikile Mbalula, has still not appointed a board of directors to restore capacity to the operation.

After two years without a permanent board of directors, and over a period that has seen train operations deteriorating to less than half on-time performance, the minister of transport seems to be in no hurry to appoint a permanent board of directors for the embattled Passenger Rail Agency of South Africa (Prasa).

Not only has Prasa been without a permanent board since 2017, it last had a properly appointed permanent chief executive officer in 2015, when Lucky Montana quit in the midst of corruption scandals that cost the passenger operator billions. Since then, there has been a great deal of instability at the management levels of the organisation. Ten of the 14 executive committee members who run Prasa’s operating divisions have been out of work for most of the past two years, either placed on special leave, suspended or fired.

This has crippled the operations, with urban passenger train service Metrorail the most severely affected, operating with less than half its scheduled trains departing or arriving on time. While the millions of train commuters who rely on this service pay upfront for their rides, they are often forced to find alternative forms of transport to get to their workplaces, ultimately costing them millions of rand.

Asked why Prasa has not had a permanent board for two years, Transport Minister Fikile Mbalula remained vague and declined to provide specific answers.

The minister is currently following the due legislated process of appointing the board for Prasa. There has previously been litigation between the previous board of Prasa and the previous minister that has delayed the finalisation of the appointment of a permanent board,” said Mbalula, through spokesman Ayanda Allie-Paine.

There has been no litigation between the board and the transport minister since March 2017, when the Prasa board took the then-transport minister Dipuo Peters to court after she suddenly dissolved the Popo Molefe-led board. The high court agreed and reinstated the board, whose term was set to expire three months later.

Prasa last had a board in May 2017, when the three-year term of the board led by Molefe expired. The utility operated without any form of board oversight for three months until Joe Maswanganyi, the then-transport minister, appointed an interim board in October 2017, led by Tintswalo Makhubele. She resigned six months later when she was appointed as a judge of the high court.

Makhubele was replaced by current chairman Khanyisile Kweyama, who has been acting in an interim capacity since her arrival at Prasa in 2018. The term of the current interim board was further extended in September 2018 and set at 12 months, which expires next month.

Asked when a new board will be appointed, Mbalula said he is following “the due legislated process of appointing the board of Prasa.” He wouldn’t answer questions as to why this has been delayed for two years.

Prasa has also been operating without a properly appointed chief executive since 2015. In that period, seven acting chief executives have been appointed, including Nkosinathi Sishi, the current boss, who has been in the position since March. Sishi has no railway experience, other than being a member of the board for six months prior to his current position.

There has also been no chief financial officer, a key accounting responsibility, for more than two years.

Staff say the organisation has been on autopilot as they allege some executives have been hounded out to create room for some of the board members to run Prasa and dish out contracts to politically connected parties. They point at the proposed appointment of the Development Bank of Southern Africa (DBSA) as the implementing agent of Prasa’s R5-billion infrastructure investment programme, which avoided all regulatory and compliance scrutiny.

Prasa said it had asked four state-owned entities to tender for the contract.

The deal awaits the minister’s approval.

While it is the responsibility of the minister to appoint a board, the board will then have to make a recommendation to the minister who the new CEO should be. Asked when this will happen, Mbalula said the board that will be appointed “in due course will finalise the appointment of the CEO and also fill other key vacancies”.

The interim board has filled some of these key vacancies in the past few weeks, including the appointment of a chief financial officer, a group human resources executive and chief procurement officer.

However, the names will be announced when each of the individuals give notices of resignation to their current employers, said Kweyama on 16 August.

While the instability at Prasa head office has been festering unchecked, the organisation’s operations have deteriorated to only about a third of capacity.

In July Mbalula berated Prasa for achieving only 31% of its operational targets, according to a letter seen by Daily Maverick.

The minister is fully aware that Prasa is experiencing challenges to meet its obligations,” said Mbalula’s spokesman in an email to Daily Maverick.

It is for this reason that he has taken notice that the entity will have to insource the necessary capacity to be able to meet its obligations of immediate, whilst simultaneously addressing its shortcomings to build such sufficient capacity for the future.”

Among other interventions to address these shortcomings, Mbalula said Prasa had launched what it calls the War Room to tackle urgent operational problems. However, the current chief executive Nkosinathi Sishi admitted to Talk Radio 702 the War Room was only a WhatsApp group for Prasa executives.

The minister is determined to bring stability to the entity and also to [stay] focused on the task to build sufficient capacity for the entity,” said Allie-Paine. DM

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