CAPE TOWN – The newly appointed Passenger Rail Agency of South Africa (Prasa) administrator on Thursday said he found the parastatal in financial ruin.
Bongisizwe Mpondo said it was because of the financial mess that the state-owned company was struggling to operate the rail service. He was in Cape Town to assess Prasa’s Western Cape operations.
By the end of March 2019, Prasa had incurred a deficit in revenue of R1.7 billion. The previous financial year it had a R1.4 billion surplus.
In his 2019 report, the Auditor-General flagged this runaway expenditure and gave the rail agency a disclaimer opinion.
Mpondo said changes were coming to Prasa.
“When I make the point about a broken business, Prasa is not in a good financial state with regards to profits. That’s not a secret and it’s in the annual reports,” he said.
Mpondo said Prasa was undergoing a general overhaul of its rolling stock and there were plans to revamp train stations across the country.
Going forward, he said they would spend capital budget adequately, collect enough fare revenue, and keep operating expenses lower than revenue.