Is PRASA bankrupt?, asks Premier Alan Winde | Western Cape Government


Is PRASA bankrupt?, asks Premier Alan Winde

7 November 2019

The Passenger Rail Agency of South Africa (PRASA) is in financial ICU, says Premier Alan Winde, who has committed to making high-level interventions.

Electricity was scheduled to be cut on several major PRASA lines across South Africa yesterday, including in the Western Cape, due to its multi million rand bills not being paid over a substantial period of time. Despite the potential stranding of thousands of passengers, PRASA was unable to act.

“Upon receiving this alert, which would have affected the commute home for thousands of residents, I was forced to intervene at a very high level to save PRASA’s skin, for now”, said Winde. 

Winde continued: “Intervening in this way gave me no joy. In fact, I fully support the strong action taken by Eskom, which has allegedly spent months trying to get PRASA to agree to a payment plan and issued them with a 7 day shut down warning last week. The fact is, Eskom will never get their own finances in order if their invoices are ignored. They are duty bound to take action against non-payment. Using electricity and refusing to pay for it is tantamount to theft.”

In this case, however, cutting electricity to major lines would have had a dire impact on the residents and economy of this and other provinces, a fate our fragile country can ill afford. President Cyril Ramaphosa and Public Enterprises Minister Pravin Gordhan agreed with our assessment and intervened. They showed strong and decisive leadership in this respect, for which credit is due.

“My plea is for the President to not leave it there, but to have a thorough look at PRASA on an urgent basis to understand its financial and management position. I believe that they are bankrupt”, said Winde.

Looking at the state of our rail system and the constant delays on lines, it is clear that PRASA is barely able to manage its core business of keeping the trains running on a day to day basis. If it cannot manage its finances on top of this, then rail should be managed by an entity which can.

In both the 2017/18 and 2018/19 financial years, Western Cape Government departments paid on average 99.4% of all invoices for goods and services within 30 days – a better outcome than any other province.

If the Western Cape Government were afforded an opportunity to run the trains in our province, we would not only ensure that its bills were paid on time, we would also ensure that commuters were afforded a safe and well-scheduled service. 

“It is time for the national government to open the door to discussions on giving us this mandate, and I will be pushing very hard to achieve this. I will today be writing to the Chairperson of PRASA’s board, Ms Khanyisile Kweyama, to request an engagement on PRASA’s role in our economy and getting it right. We are willing to help in the interests of our residents”, said Winde.


Media Enquiries: 

Bianca Capazorio

Spokesperson for Premier Alan Winde

Tel: 021 483 5004

Cell: 072 372 7044