Transport Minister Fikile Mbalula’s railway “war room” made its first big move on Monday when he dissolved the interim board of the Passenger Rail Agency of South Africa (Prasa), and promptly put the troubled entity under administration for a year.
In a media briefing at Prasa, Mbalula said that the rail agency had the worst audit outcomes in the last two financial years and added that affairs had not improved, but have instead regressed since the appointment of the interim board led by businesswoman Khanyisile Kweyama as chairperson.
According to Business Report, Mbalula said this period was also characterised by tensions between the board and management.
“I have therefore decided to dissolve the interim board and place Prasa under administration with immediate effect,” Mbalula said.
“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.”
AUDIT: Fikile Mbalula says Prasa has gotten worse
Mbalula said this intervention will continue for 12 months, after which a permanent board will be appointed to run Prasa.
The minister also withdrew the secondment of Prasa’s acting group chief executive, Dr Nkosinathi Sishi, with immediate effect.
He said the role of the Group CEO will be integrated into the role of the Administrator.
Mbalula said the majority of the irregular, fruitless and wasteful expenditure disclosed in the financial statements - amounting to a whopping R4.5billion - was caused by non-compliance with supply chain management prescripts, as well as payments made, where the value derived could not be justified.