Passenger Rail Agency of South Africa (Prasa), the South African National Roads Agency (Sanral) and Acsa came up as the black sheep of transport parastatals yesterday at the parliamentary portfolio committee on transport with an 81% rate of under-performance in their core mandate.
The Transport Portfolio’s overall irregular expenditure, largely attributed to the three, amounted to R1.7 billion from R1.6bn in the previous year, while fruitless expenditure ramped up to R291 million from R117m in the previous period.
Carla Ferreira, the acting senior manager responsible for Transport at the AG’s office, said, “Prasa, Acsa and Sanral are among the most non-compliant of the entities. They account for 84% of procurement processes not being transparent and competitive. Eleven percent of their processes are not equitable and fair.”
Prasa, which is responsible for most passenger rail services in south Africa, has received disclaimers from the Auditor General (AG) for its 2022 report, which relate to insufficient action to address previous red flags.
The disclaimers in this case relate to issues of procurement of its infamous fleet as well as the misalignment of the trains with the rail infrastructure, which calls for more funds.
Ferreira said, “There is a misalignment between the rolling stock and the infrastructure. Stockpiling trains that are not fully optimised. Prasa should focus on development of its infrastructure to accommodate the rolling stock.”
Ferreira said Prasa had received repeat disclaimers for non- compliance, adverse findings and material representations in the financial statements of previous periods.
A disclaimer is the worst possible audit outcome and signifies that a company’s accounts cannot be relied on and often indicates that the organisation is in serious financial trouble and poorly managed.
Sanral was pointed out by Ferreira and the Minister of Transport Fikile Mbalula as needing urgent intervention to solve its liquidity problem, which had hampered its capacity to execute projects.
Mbalula told Parliament the Department of Transport (DOT) was taking the fight for Administrative Adjudication of Road Traffic Offences (Aarto) to the Constitutional Court for review after the High Court in Pretoria had ruled that the toll system was unconstitutional in that it intruded on the executive and legislative powers of provincial and local governments.
“The Pretoria High Court judgement stalled our progress in the nationwide roll-out of Aarto, it affected the Road Traffic Infringement Agency (Rtia) performance. We have since launched an appeal to the constitutional court on this matter and will be guided by the outcome in advancing the national roll-out,” Mbalula said.
This has an impact on the government programme for e-tolls, which would have been a strong pillar of Sanral’s revenue generation.
“Revenue generating entities have been impacted by the Covid pandemic, but we expect to see a recovery globally. Sanral, though continues to face liquidity challenges largely due to toll fees resistance. This is compounded in the current year by the maturity of its debt in the current 12 months. There is a restriction on issuing new bonds so Sanral and the DOT need to drive the process of the liquidity problem. It is hampering Sanral from service delivery in the long term,” Ferreira said.
The Road Accident Fund (RAF) had also not submitted its financial report for presentation to Parliament following a bitter dispute it has with the AG of a disclaimer in its last financial statements.
This has led to litigation between the entity and the AG, which Mbalula said has been withdrawn after he prevailed on the RAF Board to seek alternative dispute resolution platforms.
Mbalula announced the end of January 2023 as the cut-off of the taxi recapitalisation programme to scrap illegally converted panel vans plying business as passenger taxis.
This is to give impetus to scrapping the unroadworthy vehicles and completion of the taxi revitalisation programme as an enabler of economic empowerment.
Ferreira said of the R41.8bn infrastructure spend budget, 84% had been allocated to Sanral and Prasa resulting in work on the upgrading of the Moloto Road and the Wynberg Interchange.
She said the audit noted that there were some delays, noting that Sanral did not do a proper commissioning evaluation, did not assess its procurement processes and had failed to properly engage with local communities which resulted in disruptions of work.
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