JABULANI SIKHAKHANE: State funding fails to get Prasa back on track
The rail agency neglects to invest in infrastructure but lends big portions of government money to banks
The Passenger Rail Agency of SA (Prasa), which is a huge crime scene, is a good example of what’s wrong with the SA fiscal system. It receives more than R20bn from the government primarily to run commuter trains, a task that in recent years it has failed miserably to perform.
But the agency has become a money lender, lending to banks substantial portions of what it receives from the government to subsidise its operations and pay for capital expenditure. I describe the agency as a money lender because when you place your funds with a bank, those funds are a liability on the bank’s books. The banks transform that liability into an asset by lending the funds on to other customers...
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