Africa-Press – South-Africa. The Passenger Rail Agency of South Africa (Prasa) has underspent consistently on capital projects for six years, with severe underspending on capital projects since 2019. But Transport Minister Fikile Mbalula is confident its new capital investment strategy means it will soon turn a corner.
Mbalula told Parliament’s Standing Committee on Appropriations on Wednesday that the embattled entity’s current management was determined to halt the deficiency in its tracks.
State-owned Prasa is responsible for most of the country’s rail services. But it has faced a host of problems impacting its service delivery – and it spent just a quarter of its allocated budget in 2020 – a total of R2.4 billion out of R10 billion.
In May, the government released its draft White Paper on National Rail Policy, containing a commitment to concession passenger rail lines in support of strategic objectives to move passengers from road to rail. Two months later, in July, Mbalula said Prasa was on track with its plans to revive 10 key rail corridors, recover funds lost through dodgy contracts, and invest in locomotives to service passengers.
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Mbalula acknowledged South Africa’s rail infrastructure was in a major state of disrepair as Prasa battled with capital spending due to the hollowing out of project management and engineering capacity.
Early in September, for example, rail infrastructure projects on the Central line in the Western Cape were suspended after disruptions due to violence and intimidation. Prasa is one of four entities working together to thwart costly ongoing economic sabotage.
But Mbalula said competitiveness was still in the pipeline for Prasa thanks to concessions allowed by the draft White Paper.
“Prasa’s spending on the capital programme has significantly improved from the previous year. As at the end of the first quarter, Prasa exceeded its target of R1.6 billion, compared to 12% spending of its budget of R96 million, year-on-year.
“The gap between the Prasa operating revenues and operating expenditure has been larger than the operating subsidy provided by the government. This gap has continued to grow since 2019/20. To bridge this shortfall, Prasa has used capital subsidy to fund its operation rather than using it to invest in new capital assets,” he said.
Capital transfers to passenger rail would increase from R12.6 billion in 2022/23 to R13.5 billion in 2024/25, he added. These are funds meant for the refurbishment of coaches, rolling stock, fleet renewal, signalling and other capital projects, which include security of the rail infrastructure.
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Prasa acting group head of technical Hishaam Emeran said Prasa’s underspending had reached a low of 24% of the allocated budget in 2020.
But in the first quarter of 2022/23, Emeran said, Prasa had a R1.6 billion budget with spending at R1.7 billion, exceeding the budget by 2%. He said Prasa needed to ensure that this trend remained consistent for the remaining three quarters of the financial year.
He said Prasa forecasts spending of R2.2 billion for corridor revival, R2.9 billion in the medium-term for the KwaZulu-Natal flood recovery programme, R10 billion in the medium-term for depot modernisation, and R59 billion for rolling stock renewal.
Mbalula said the board was introducing measures to bolster Prasa’s ability to spend infrastructure more efficiently. He said the recovery of rail services will require cooperation with other organs of the state.
Due to the sheer size of some project, procurement becomes cumbersome and takes time, he said.
“This, therefore, requires better planning that will enable effective delivery of projects on time, within scope, and on budget,” Mbalula said.
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