The United National Transport Union (UNTU) is shocked to learn that the Passenger Rail Service of SA (PRASA) owes Transnet and municipalities some R796 million on accounts that have been outstanding for more than 30 days.

Steve Harris, General Secretary of UNTU, says it is extremely disturbing that PRASA is not sure when it will be able to settle its dept.

“There is no doubt that PRASA’s non-payment will affect Transnet’s and the municipalities ability to perform its operational requirements. As a UNION representing members in PRASA and Transnet we cannot tolerate one employer mismanagement of funds to hamper the others ability to fulfil its functions. Transnet is self-funded and does not receive subsidies from the Government,” says Harris.

According to Transnet Annual Financial Statements for 2016 PRASA owed Transnet R1,1 billion at 31 March 2015 and services provided during the year amounted to of the Group are disclosed in note 31 to the annual R968 million. The amount outstanding at 31 March 2016 financial statements was R768 million.

In a response to a question in Parliament Transport Minister Dipuo Peters gave a breakdown of PRASA’s debt of which R317 million has been outstanding for more than 180 days. Peters warned that PRASA would not be able to pay as long as its cash flow problems continued.

“This situation is becoming unbearable. It is clear that PRASA’s acting Chief Executive Officer Collins Letsoalo is not able to turnaround the embattled agency. In August PRASA management announced at a media briefing that it is set to inject R172 billion in an attempt to revitalise operations by the end of October. I am afraid that the situation has since gotten worse and UNTU doesn’t see a light at the end of this tunnel,” says Harris.

UNTU therefor demand that the Minister approach the South Gauteng High Court and ask that the court appoint a special administrator to manage PRASA before there is more financial losses. Last year PRASA mismanagement led to the loss of R2.65 billion, through the acquisition of Spanish Afro 4000 trains which were unsuitable for South African rails. The Afro 4000 requires 4.14 meters of clearance, too high for SA rail infrastructure at 3.965m.

Last week UNTU requested the newly appointed Public Protector, Busisiwe Mkhwebane, to immediately investigate the latest shocking allegations that the son of SAA chair Dudu Myeni and other politically-connected stakeholders in PRASA tender contracts cashed in on their shares before a single new train had been built. UNTU is awaiting a response from the office of the Public Protector.

Issued by UNTU