Picture: GALLO IMAGES/RAPPORT/DEON RAATH
Picture: GALLO IMAGES/RAPPORT/DEON RAATH

The Passenger Rail Agency of SA (Prasa) was on the verge of financial collapse at the end of the last financial year when it made a previously undisclosed loss of R1.7bn.

The accumulated loss at the end of March 2017 was R4.4bn.

This has emerged from a leaked report of the auditor-general related to the 2016-17 financial statements, details of which were disclosed by DA transport spokesperson Manny de Freitas and police spokesperson Zakhele Mbhele at a media briefing on Tuesday.

Prasa has still not tabled its annual report for the 2016-17 financial year, even though it was required to do so by end-September 2017 in terms of the Public Finance Management Act (PFMA). It is now about 318 days overdue.

The agency has been wracked by allegations of corruption related to the procurement of rolling stock.

According to the auditor-general, Prasa did not have an adequate system for identifying and disclosing all irregular, fruitless and wasteful expenditure, and he noted that there was a lack of consequence management for those liable for such expenditure.

The auditor-general also noted that the majority of tenders went through a system that "is not fair, equitable, transparent, competitive and cost-effective". He analysed a sample of 36 Prasa tenders in 2016-17 and found:

• They all had irregularities related to the method of selection of a service provider and all had questionable bid processes.

• In 92% of the cases, internal processes or regulations were not adhered to.

• In 33% of the cases, tender requirements were ignored, and in 39%, tender amounts exceeded permissible limits.

• In five tenders, the highest scoring bidder did not receive the tender.

• In five cases, service providers were appointed without contracts.

• In two cases, the incorrect service providers were appointed.

The report also stated that some executives received remuneration illegally or incorrectly. Furthermore, declarations of interest were not submitted by suppliers, members of accounting authorities, or employees.

De Freitas said the DA would lay criminal charges under the PFMA against the interim and current Prasa board, which he said were responsible for the irregularities. He will also be writing to Transport Minister Blade Nzimande requesting the urgent release of the Prasa annual report, as well as the Treasury reports on Prasa commissioned by Public Protector Busisiwe Mkhwebane. He wants the transport minister to release an action plan that must include what consequences will be faced by those Prasa executives implicated in the allegations of wrongdoing.

De Freitas has also called on parliament’s transport committee to immediately begin its inquiry into Prasa.

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