MPs frustrated at perennial inability of Prasa to put its budget to good use

MPs have expressed unhappiness over the SA Passenger Rail Agency’s (Prasa's) inability to fully spend its allocated budget.

Prasa, a perennial underspender, blamed lack of skills and capacity for the failure to put its money to good use. The agency is projecting that it will spend only about 24% of its budget in the 2021/22 financial year.

A presentation to parliament’s standing committee on appropriations showed a downward trend in terms of expenditure for the past six years. The last time Prasa spent more than 50% of its budget was in the 2016/17 financial year when it spent R7.9bn of its R14.6bn budget that year, amounting to 54%.

The underexpenditure has been gradually increasing over the years and spending  significantly dipped in 2019/20 when only R2.4bn (24%) of the budgeted R10bn was spent.

Acting CEO Hishaam Emeran told MPs on Wednesday that Prasa's spending on the capital programme has significantly improved in the current financial year as at the end of the first quarter the agency had exceeded its quarterly target of R1.6bn by 1% compared to only spending 12% of its budget during the same period in 2021/22.

Emeran said the critical issue that needed urgent attention in addressing underexpenditure were the bottlenecks related to supply chain management [SCM].

“We need to address the ability and the agility in the SCM. We have seen a huge backlog of projects within the SCM space and the turnaround times have seen significant delays,” he said.

Another issue was lack of capacity to execute the capital programme. This too was due to lack of capacity at the SCM level and at the technical level including in engineering, technical expertise and project management skills.

“If one looks at the extent of the capital projects this year at R12.6bn, increasing through the medium-term expenditure framework (R13.5bn in 2024/25), you need to have the requisite level of capacity to be able to execute that programme.

“That is a challenge and it’s one of the major issues we will be addressing to make sure we can timeously execute the capital programme,” said Emeran.

The funds are meant for the refurbishment of coaches, the rolling stock fleet renewal programme, signalling and other capital projects which include security of the rail infrastructure.

Prasa chair Leonard Ramatlakane said that when he arrived at the rail agency, it took a minimum of two to two-and-a-half years to get procurement done from the start to the end. This was because of the lack of skills and capacity which led to underspending.

Due to corruption at the agency in the past, officials and staff were reluctant to work on procurement. Ramatlakane said no-one was willing to look at procurement and take decisions. People were frightened, he added.

Leadership stability is another challenge, especially in terms of the group CEO. The agency has had 10 CEOs in the past seven years. This has had a negative affect on projects as stability ensures there are no delays or rethinking around some of these.

ANC MP Dipuo Peters, a former transport minister, expressed disappointment that Prasa was projecting a possible underexpenditure of 24% for 2021/22.

“It’s really worrying,” she said. “It does seem that the perennial problem of underexpenditure is not being looked at in a very serious way.”

She registered disappointment at Ramatlakane, a former MP who served in the transport portfolio committee and “knew” of Prasa’s underspending challenge, for failing to address the matter.

“I would have believed that he would have been of great assistance to the minister to deal with this challenge,” she said.

Committee chair Sfiso Buthelezi said the underspending was a red flag that went with underperformance.

“The picture presented to us doesn’t inspire confidence, to say the least.”