Prasa owes millions to suppliers, service providers


Pretoria, 3 September 2015 - Embattled rail agency Prasa has promised to implement the public protector's recommendations.

CAPE TOWN - 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, and is not sure when it will be able to settle.

This was according to a response from Transport Minister Dipuo Peters to Democratic Alliance MP Manny de Freitas published on Tuesday.

Her answer gave a breakdown of the debt in question, with the table showing that of that amount R317-million has been outstanding for more than 180 days.

Peters said it was not clear when the rail agency could pay, and warned that this would remain the case for as long Prasa’s cash flow problems continued.

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“At this stage Prasa is unable to give a firm undertaking as to when the outstanding amounts will be settled, however, Prasa is working tirelessly to ensure that it meets its obligations to its creditors.

“As long as Prasa has a cash flow problem, we will be unable to pay service providers on time,” she said.

“The contributory factors of the cash flow challenges include the tough economic climate, the unfunded mandate of Shosholoza Meyl, operational challenges such as the many coaches out of service, train burnings, major service disruptions, fare evasion and vandalism of infrastructure.”

Prasa racked up nearly R14-billion in irregular expenditure during the tenure of former CEO Lucky Montana, with almost of it lost to a controversial contract with Swifambo that would have seen it acquire Spanish locomotives that turned out to be unsuitable for local rail lines.

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