Prasa is to resume operations only at lockdown level 3
The embattled rail agency has lost R199m due to the Covid-19 lockdown so far
Struggling transport utility Passenger Rail Agency of SA (Prasa) says it has lost R199m since the enforcement of the national lockdown to curb the spread of Covid-19.
Prasa administrator Bongisizwe Mpondo said the loss has resulted in further cash constraints on its already strained financial situation. The projected revenue loss for the year, at this stage, is R757m.
Mpondo revealed the figures on Thursday when he briefed the media on the progress his team has made in its drive to turn the company around since he took over as administrator on December 9 last year.
Prasa has terminated all services during levels 5 and 4 of the lockdown, in line with the Disaster Management Act regulations.
Mpondo said the lockdown also severely affected Prasa’s planned critical maintenance work due to the continued shortage of required commodities, as key suppliers to Prasa were closed during the lockdown.
He said Prasa is also looking at offering voluntary severance packages (VSPs) to about 2,000 of its employees, who are nearing retirement age, to address the cash crunch.
He has addressed a letter to the unions requesting consultations on the VSPs, citing the deteriorating financial position at Prasa, which has been further worsened by Covid-19.
The administrator is meeting organised labour on Thursday, Friday and next week to discuss this, among other issues bedevilling the utility.
Mpondo said the loss in revenue has had a big effect as the operating subsidy from the department cannot cover Prasa costs. His team is working on initiatives aimed at improving revenue over time and also reducing other costs, including overtime, allowances, travel and accommodation.
He said it has become an accepted practice at Prasa over the years to budget for a deficit, and said the plans he has for Prasa look to change this unacceptable budgeting culture.
A semblance of order
Mpondo said train operations will resume under level 3 of the lockdown, adding that Prasa has put precautions in place to limit community transmission and outbreaks.
He said there will be screening and testing at stations in collaboration with the department of health. Crowd management and social-distancing will be practised, while sanitation booths are being sourced for stations. A deep-cleaning and disinfection programme has commenced for depots and stations.
“In January, I characterised Prasa as a broken business. I made a commitment that I will bring a semblance of order to this organisation. We are registering steady progress,” said Mpondo.
Since coming to Prasa, Mpondo said his team has set up a robust executive committee structure, which has been meeting every two weeks since January. This structure is supported by five sub-committees, which meet twice a week.
Mpondo said Prasa has instituted charges and suspended 12 senior members implicated in a number of investigation reports at Prasa.
“Where instances of possible corruption arise, these will be promptly handed over to the National Prosecuting Authority (NPA) for processing.”
He said there are still a number of matters being processed by Prasa, the Special Investigating Unit and the Hawks. “Announcements will be made as progress is registered on these matters.”