Prasa and Sanral given January deadline for turnaround plan

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25/10/2024
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Bizcommunity.com
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The Portfolio Committee on Transport has issued a firm deadline to the Passenger Rail Agency of South Africa (Prasa) and the South African National Roads Agency Limited (Sanral) to address key financial and governance issues. By the end of January 2025, both entities are expected to submit comprehensive action plans to tackle concerns raised by the Auditor General (AG) regarding their financial performance.

Chairperson of the committee, Donald Selamolela, raised concerns about the potential liquidity challenges faced by Prasa and Sanral if their funding models and legislative impediments are not resolved.

He noted the importance of these entities in delivering essential infrastructure services to South Africans.

“These jewels of infrastructure projects give meaning to service delivery for our people and cannot afford to limp in any way or form,” he said.

“Vandalism of the infrastructure remains more pronounced, particularly in rail. On roads, we suffered massively during the recent floods that hit KwaZulu Natal, Eastern Cape, and parts of Gauteng and the North West.”

While the committee expressed satisfaction with the overall performance of the transport portfolio, unresolved issues of audits, governance, and vacancies persist within some entities.

These challenges, if not addressed, could undermine the delivery of services.

Swift action

Selamolela raised a point of the need for swift action to repair and maintain infrastructure to prevent further backlogs.

He specifically called for Prasa to provide regular updates on its progress in preparing to serve as the nucleus of the forthcoming Transport Economic Regulation.

“The effectiveness we want to see at Prasa is the same as with Sanral,” he said.

“These entities should co-operate with the department on funding plans to ensure financial sustainability.”

He also stressed the urgency of addressing the roads affected by recent floods, particularly in KwaZulu Natal, and ensuring that stalled tenders are addressed promptly.

“Roads affected by floods, especially in KZN, require urgent intervention, and tenders that are being stalled should be reported on quarterly,” added Selamolela.

“The same reporting approach should be extended to strategies that will be implemented to improve the financial health status.”

Comprehensive funding plan

The portfolio committee has adopted its budgetary review and recommendations report, highlighting the importance of developing a comprehensive funding plan for all transport entities.

This plan, once in place, will help ensure the financial sustainability of Prasa, Sanral, and other entities.

The committee further recommended that all transport entities address supply chain management processes and reskill employees on financial management functions.

As part of this effort, the agencies will be required to meet with the AG to ensure compliance with accounting standards used in performance audits.

Transparency and accountability

Selamolela concluded by reiterating the importance of transparency and accountability.

“The entities must each submit a comprehensive action plan to address the AG’s findings and recommendations to the committee by the end of January 2025.”

This report serves as a critical mid-year review of the financial needs and performance of transport entities, ensuring that they remain on track to meet their obligations.