JOHANNESBURG – Transport Minister Fikile Mbalula said his decision to place Passenger Rail Agency of South Africa (Prasa) under administration with immediate effect will allow for rapid action to get the parastatal back on track.
Mbalula made the surprise announcement at a briefing in Braamfontein on Monday shortly after informing staff about the decision, which includes the sacking of the interim board.
“The administrator will run the affairs of Prasa as a de facto board of control as envisaged in the Prasa founding law and as an accounting authority in terms of the Public Finance Management Act. In his latest report, the Auditor-General found the state company’s irregular expenditure ballooned to more than R27 billion, largely as a result of contracts that failed to comply with the law.”
The Auditor-General’s latest damning assessment on Prasa was the final nail in the administration coffin, which has led to the axing of the interim board.
Mbalula said the state of affairs only regressed under the interim board’s management, but he believes simply replacing it with a new board won’t be enough.
Bongisizwe Mpondo will take up the task as the administrator to run the business for a period of a year.
The aim is to appoint a permanent board after this period when Prasa is stabilised.
Mbalula said he was confident Mpondo had the right skills to turn the state company around in the next year.
The minister said in the coming days, Mpondo would sign a contract outlining the terms of reference for the tough job ahead over the next 12 months.
Mpondo will also be able to appoint teams to execute his turnaround strategy.
Mbalula said part of his responsibilities include improving operational performance and review the state company’s organisational design and business model.
The administrator will also be tasked with implementing the latest recommendations of the Auditor-General.