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Prasa board gives itself a high five amid collapsing train services and deserting customers

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Nkosinathi Sishi is the seventh chief executive appointment since Lucky Montana was forced to resign by a series of corruption scandals in 2015. It is under Sishi’s guidance, also under the supervision of interim chairman Khanyisile Kweyama’s board, that Prasa has finally been brought to its knees.

The document singing the train operator’s praises looked as amateurish as the chief executive getting lost in his own office, where he’d been reporting to work for six months. Yet the interim board of the Passenger Rail Agency of South Africa (Prasa) would not miss the occasion of the annual general meeting and the board’s final meeting to give itself a high five for a job well done.

The board’s term expired today, Monday 30 September 2019, and transport minister Fikile Mbalula has not indicated when a properly constituted board will be appointed.

Neither has he clearly stated any reasons why the largest transporter of workers in urban centres has been operating without a board of directors since 2017. The company has also been operating without a licence for a year.

In the AGM held on 26 September, and breaching prescripts of the Public Finance Management Act (PFMA), the board presented to the deputy minister of transport a document titled “Highlights of Board Achievements in the 2018/9 Financial Year” in which it sang its own praises, patting itself on the back for what it said were its achievements: to “implement measures much needed to bring about stability in the organisation, including adherence to strict governance and implementing control measures”.

Except, on the ground, at the train stations and depots, not much stability can be observed as an increasing number of scheduled trains fail to arrive or depart on time. In the Western Cape, only 29% of planned train departures and arrivals moved as scheduled in the period ending July 2019, according to Prasa’s own admission in a presentation to Parliament in August.

In other words, a staggering 71% of planned train movements did not materialise. Nationally, only 42% of planned operations succeeded, said Prasa in the same presentation. That’s less than half of all core operations happening as planned.

Hardly a success to gloat about.

According to the PFMA, the AGM should have taken place in August, within five months of the financial year-end, which was 31 March. And the financials must be announced to Parliament and the public before the end of September.

Small matter, it seems.

So Prasa’s interim board went ahead and told Dikeledi Magadzi, the deputy minister of transport, that it had implemented and resolved such matters as the implementation of a supply chain management policy as dictated by the Public Protector in 2016, reviewed and approved the implementation of the train operator’s policies on “sexual harassment, employment equity, recruitment and selection and IT (information technology).”

Lower the standards!

Transport minister Fikile Mbalula, the shareholder representative, did not attend the meeting as he was out of the country.

The interim board went on and told the deputy minister it was busy processing policies on “disciplinary code and procedure, human capital development, performance management and development”. It was also beginning the process of filling permanent positions, including at executive management levels.

In July 2019, Mbalula lambasted the board for achieving only 31% of the targets it had set itself. Even these, said Mbalula, were “softer targets that had no impact on the operations”.

When the company finally reports its results for the year ended 31 March 2019, hopefully this week, it will tell the public that the Auditor General has signed off its accounts with a disclaimer as the Chapter Nine institution could not make head or tail of the documentation and found a total collapse of controls at the rail operator.

Prasa has for the past year been operating without an operating licence, which was suspended in October by the Rail Safety Regulator after a series of train accidents caused by faulty signalling on its railway infrastructure. In one of the major accidents, more than 320 people were injured when two trains collided at Van Riebeeck Park station in Kempton Park in October, prompting the regulator to suspend Prasa’s operating licence.

Despite the suspension, the regulator allowed Prasa to continue operating trains, which would have legal implications should insurance claims arise as a result of further accidents. Prasa is the single largest people-mover in the country. It carries more than 2.5 million passengers to and from work every day.

The escalating series of disasters has also left the passenger railway operator exposed to another calamity as at least one major insurance house cancelled its risk protection cover earlier in 2019. Early in September Daily Maverick revealed that Emerald Africa, a subsidiary of JSE-listed short-term insurance business Santam, had cancelled its risk cover after Prasa failed to implement risk mitigation measures for some of its assets.

Left exposed without insurance are passengers and workers, as well as train station infrastructure, some depots in Gauteng and in the Western Cape. Including two new trains acquired at a cost of R146-million each, infrastructure valued at at least R3-billion has been without risk cover since the beginning of the financial year in April 2019, said Emerald Africa in its letter terminating the insurance cover.

This has not dissuaded Prasa’s outgoing board from claiming achievements, even on this measure.

Safety and protection of people, assets and infrastructure has been the focus of this board as is evident in the work carried out by the SHEQ (safety, health, environment and quality) Committee in developing and approving the security strategy, the SHEQ policy, improving the relationship between Prasa and the Rail Safety Regulator, as well as the conclusion of an MoU (memorandum of understanding) with the Western Cape government resulting in the successful curbing of crime and related incidents,” said Prasa in the document prepared for the AGM.

This would be work attributed to Mandisa Mokwena, the spy who was employed as head of security without any contract until Daily Maverick asked questions about the irregularity in August.

In case anyone still needed any convincing about the lack of controls raised by the Auditor General…

When Mbalula finally appoints a board for Prasa, that board’s priority should be to hire a permanent chief executive officer, which would bring to an end a series of disastrous appointments in the position.

Since Lucky Montana was forced to resign by a series of corruption scandals in 2015, Prasa has had six acting chief executives, with each and every one falling victim to one corruption scandal after another. The incumbent, Nkosinathi Sishi, is the seventh chief executive appointment since. It is under his guidance, under the supervision of interim chairman Khanyisile Kweyama’s board, that Prasa has finally been brought to its knees.

While the taxpayer continues to cough up billions of rand in operating subsidies to the utility, its passenger numbers have plummeted from the 608-million passenger trips it carried in financial 2010 to the 208-million paying passengers who still used Prasa’s services in the year ended March 2018.

When the financial report for 2019 finally comes out, it will show a further steep decline in passenger numbers as the blue-collar workers who used to rely on Prasa’s affordable train services have been forced to find other means of transport to report for work on time.

Indirectly, this may have an effect on the cost of doing business as workers will seek to recoup the higher costs of travel from their employees through steeper wage increase demands.

The R5.2-billion operating subsidy paid by the public in 2018 will also have escalated further, to replace the lost revenue of passengers who have migrated to other forms of transport.

And many on this inept board are hoping Mbalula will return them to their lucrative positions for a further period of three years in a newly constituted board. DM

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