One More SOE Hits a R6 Billion Financial Wall

Dear Editor

A functional rail system is crucial for revitalising our sluggish economy. Unfortunately, South Africa’s rail infrastructure is rapidly deteriorating, and both the Department of Transport and Prasa have demonstrated their incompetence in utilising rail transport as a key driver of economic growth for both freight and passenger services.

This was evident during the briefing to Parliament’s portfolio committee on transport, where the Prasa board and management disclosed that the Passenger Rail Agency of South Africa (Prasa) requires R5 billion to R6 billion in operational funding over the next five years to fully restore its damaged infrastructure, which has rendered it unable to provide train services to millions of passengers annually. Prasa has also faced allegations of irregularities, including paying for security services on assets that have already been vandalised and has received a qualified audit report.

During the previous financial year ending on March 31, 2023, Prasa exceeded its allocated R12.6 billion capital expenditure by 8% to restore corridors that were vandalized during the Covid-19 lockdowns. In the past eight years, Prasa has experienced a staggering 97% decline in passenger numbers, with commuter figures dropping from around 500 million a decade ago to a mere 15 million today. Despite a R13.5 billion capital expenditure and over R900 million in overspending this year, Prasa has little to show for it.

Commuters and businesses are burdened with high transport costs due to skyrocketing fuel prices and the collapse of the passenger rail system. We urgently require practical solutions to shield commuters from this dire failure, and one potential remedy is to delegate public transport management to competent municipalities, as agreed by the minister last year. The devolution of rail networks is a step in the right direction to ensure safe and affordable travel.

In April 2022, the City of Cape Town received approval to conduct a comprehensive feasibility study on the metropolitan rail function, a move supported by Minister of Finance, Enoch Godongwana.

Therefore, we call on the Minister of Transport and the government to expedite the devolution of rail services to capable metropolitan areas, establishing a functional rail system that will significantly reduce transportation costs in the passenger services sector and provide diverse and affordable transportation options for more South Africans.

The DA has consistently advocated for the necessary unbundling of Prasa from exclusive government funding. This would enable the entity to access financial markets, raise capital, and become more competitive.

Regards

Thamsanqa Bhekokwakhe Mabhena
DA Shadow Deputy Minister of Transport