Prasa board under fire from minister

Transport Minister Dipuo Peters has warned the board of the Passenger Rail Agency of South Africa to get its house in order and has expressed her unhappiness with its poor performance under chairman Popo Molefe.

The Sunday Times has seen a scathing letter Peters wrote to Molefe in March, accusing the Prasa board of failing to turn around the ailing state-owned company.

It has been marred by instability since Molefe and his board removed group CEO Lucky Montana last year after claims of financial mismanagement.

Insiders claim a powerful ANC faction wants to oust Molefe and replace him with someone who would direct resources towards their faction.

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The letter is contained in a dossier that is doing the rounds in ANC circles, which Molefe's backers said was meant to drum up support for his removal and stop his investigations into multibillion-rand contracts.

Peters raised her unhappiness with a Prasa quarterly report submitted to her office in January.

"I have scrutinised this report and learnt, to my despair, that there has been a serious decline in the performance, governance oversight and financial management of Prasa," writes Peters.

"Prasa's performance indicates that of the 40 targets planned for in the period under review, a mere 13 or 32.5% has been achieved with 27 or 67.5% not achieved. This is serious disservice to me, to say the very least, however, more importantly, the rail commuting public of South Africa," said Peters.

The minister stops short of expressing her vote of no confidence in Molefe's board as she accuses it of failing to perform its oversight task.

"I am seriously concerned that the board has failed to turn the tide as the pace of irregular, fruitless and wasteful expenditure are increasing relentlessly, especially at Prasa Cres [the real estate division].

"I have raised the lack of response by the board relating to previous requests for information and reports to me.

"I urge the board to do everything in its power to ensure all outstanding reports and information are provided to me before the close of the 2015/16 financial year," Peters writes.

Prasa spokesman Victor Dlamini said Molefe had informed Peters that the board had put measures in place for the agency's recovery.

"He stated that there is a recovery plan to fix the performance and to improve signalling and to minimise the disruptions to passengers as Prasa upgrades and modernises the ageing infrastructure and rolling stock.

"The minister understands and accepts that the infrastructure and rolling stock are nearing their end of life term. But the modernisation programme and the new trains will significantly improve performance," said Dlamini.

The fare revenue system appears to be collapsing ... the daily focus of Prasa should be on operating a reliable and safe train service

He said Molefe was aware of the dossier and believed it was an attempt to collapse investigations being carried out by the board into major contracts.

The dossier contains internal reports that paint a bleak picture of the agency's finances.

One internal memo warns that the agency faces the risk of not being able to pay all of its operational obligations.

"The board noted the GCFO's [the group chief financial officer's] proposal that Prasa should notify National Treasury that Prasa is trading recklessly. The board advised management to first consult legal to verify and give proper context to the GCFO's proposal," reads the report.

"It has become critical for the government to make an urgent intervention and save Prasa by immediately restructuring the board and removing half of its current members," it adds.

In another internal document, Molefe himself raises concerns to the agency's executive council about Prasa's poor performance.

"Lack of on-time departures and late arrivals continue to inconvenience passengers. Trains stop without warning along journeys ... because of a shortage in rolling stock, there are also far fewer train trips available to passengers ...

"The fare revenue system appears to be collapsing ... the daily focus of Prasa should be on operating a reliable and safe train service," Molefe wrote in May.

Dlamini said: "All that the chairman has done is to ensure that the irregularities as raised by the AG [auditor-general] are investigated and it is surprising that there are those who are so opposed to these important and necessary investigations."

Peters's spokesman, Ishmael Mnisi, had not responded to written questions by the time of going to press.

This week, Prasa issued a summons to recover more than R2-billion from Swifambo Rail Leasing - the company that delivered the controversial Afro4000 locomotives.

The agency is also investigating a contract to install high-speed passenger gates, CCTV cameras and other security measures, awarded to Siyangena Technologies.

jikat@sundaytimes.co.za