Prasa set to clash with angry unions over plan to cut jobs

Bongisizwe Mpondo, administrator of troubled Passenger Rail Agency of SA (Prasa), will meet disgruntled trade unions on Friday over the transport utility proposal to retrench workers.

Prasa is facing a “debilitating cash flow crunch” brought about by many years of looting and mismanagement.

The unions have accused Mpondo of acting in bad faith in trying to address the state-owned rail and bus operator’s challenges, saying he contributed to its financial woes. Mpondo was appointed by transport minister Fikile Mbalula in December 2019 to fix the ailing state-owned business.

This week Prasa, which failed to pay R23m to employees’ retirement fund benefits in the past two months, announced it was considering implementing job cuts through voluntary severance packages. The state-owned enterprise has an estimated 17,000 workforce.

Prasa spokesperson Makhosini Mgitywa told Business Day the proposal to reduce the headcount was informed by revenues that had been declining even before the national lockdown began in March. He said  these had since worsened.

“In the past several years, Prasa has been having budget deficits and labour costs that are above half of the operational expenditure budget. This has put pressure on cash flow and made it difficult for the agency to pay creditors and suppliers,” said Mgitywa.

Prasa admitted in March that it was going through a “debilitating cash flow crunch” that had depleted its operational budget and led to it failing to pay suppliers and creditors.

“How many new appointments has he made do date? Mpondo contributed to the cash flow problem after he appointed his panel of technical advisers for his 12-month tenure on 5 February 2020,” said Sonja Carstens, spokesperson of the United National Transport Union (Untu), the majority union at Prasa.

On April 25, Untu laid complaints of alleged fraud, theft and contravention of the Transnet Pension Fund Act against Mpondo in his capacity as the Prasa administrator, after the agency withheld R23m in pension-fund contributions amounting for its employees in the Metrorail division.

Carstens said the turnaround plan Mpondo shared with unions during a meeting in January did not look convincing. “Untu told him that his plan looked like a ‘cut and paste’ piece, [with] some [of] wording precisely the same as some of his five predecessors,” she said.

Prasa has had five turnaround strategies since its inception, and has been dogged by governance failures, irregular expenditure, and allegations of state capture.

The other issues Untu hoped to raise at Friday’s meeting were  that  “the now disbanded board of Prasa had decided to suspend the services of 20 security companies at the end of October 2019 without putting an alternative in place”, said Carstens.

“To date, Mpondo has not appointed new security companies to replace them. This led to the huge and destructive vandalism of the railway infrastructure nationwide, not only affecting Prasa’s ability to run its service, but also affecting Transnet Freight Rail’s services severely,” Carstens said.

SA Transport Allied Workers Union (Satawu) national sector co-ordinator, Lubabalo Tinzi, said: “Mpondo is disgusting with the attitude he is adopting against labour. He is not presenting anything tangible to persuade unions to consider his proposal to reduce the headcount.”

mkentanel@businesslive.co.za