Culture of impunity was rife at Prasa, Fikile Mbalula says
Transport minister and administrator of the passenger rail agency say it is broken
Transport minister Fikile Mbalula has said a culture of impunity contributed to the malaise at the Passenger Rail Agency of SA (Prasa) and the utility’s governance problems were self-inflicted, largely because of poor and indecisive leadership.
The state-owned enterprise (SOE), which has had five turnaround strategies since its creation in 2009, has been dogged by governance failures, financial challenges and allegations of state capture. It received a disclaimer from the auditor-general last year.
Mbalula dissolved Prasa’s interim board and placed the agency under administrator Bongisizwe Mpondo in December.
“The downward spiral of Prasa was self-inflicted as a result of poor and indecisive leadership, which allowed a culture of impunity to prevail,” the minister said.
“Prasa has suffered blows from many years of mismanagement and deteriorating corporate governance. Today it is [a] broken organisation and I use that word not guardedly, simply as it is.
“We are dealing with a broken organisation, struggling to provide an efficient and committed passenger rail service,” said Mbalula. He was briefing the media on the findings of an investigation into Prasa and the way forward for the organisation.
“Overcrowded trains, ageing infrastructure, old rolling stock, rampant crime, poor internal control and other ills are the order of the day in this particular organisation. In 2018/2019 financial year the auditor-general flagged irregular expenditure, which has escalated to R27.2bn.”
The “war-room”, as Mbalula called the investigation into the agency, focused on ramping up Prasa’s services and getting operations back on track at all levels.
It “unearthed many landmines”, which Mbalula said were driven by both internal dynamics and external factors. “In over two years, almost R1bn has been lost due to either train burnings, vandalism of power stations, public disorder, train collisions or floods.”
Mbalula noted that Prasa’s challenges related to internal systems and controls that had collapsed, dysfunctional supply chain management processes, hollowed-out project management capability and “a business model that requires urgent review”.
“This place is on autopilot. There are people here who are prepared to work, but they are not directed ... You’ve got human beings who ... have shown that they are able to deliver, but there is no leadership. Many people here are on suspension, and others are acting.”
He said: “Prasa is broken and the work done by the war room helped us understand the extent of the challenges. While Prasa may be broken, we have a robust plan to turn it around.”
Mpondo is now in the process of “facilitating an orderly winding down of the war room” and this would “entail incorporating its targets into the work of the management under his leadership”.
Mpondo confirmed Mbalula’s claims that Prasa is “a broken business” that has experienced a “systemic erosion of value ... over a number of years”.
“It is fairly obvious that we as Prasa officials also do not have a choice but to bring a semblance of order to this important institution while striving to deliver value to our customers,” said Mpondo.
He pointed out that there was “little or no consequence management” at Prasa and lashed out at “questionable decisions” that had been taken by the leadership with “disastrous consequences”.
“One telling example is that towards the end of last year, the interim board in its wisdom cancelled the security contracts without a contingency plan in place.”
He said there was no proper record-keeping at Prasa, and in some instances no records at all were kept. In some cases the minutes and resolutions of board meetings were not recorded.
“Recently, to my alarm, we realised that some investigation files are missing. These are meant to be kept in strongrooms but there is no record of movement of these files. This renders it difficult to implement consequence management for those fingered in ... investigations,” Mpondo said.
“There is no adequate backup system; important company information resides in staff members’ computers with the risk that it could be lost forever; operating systems are not fully deployed while in some cases they are non-existent.”