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Questions surround Prasa’s financial sustainability

MPs have been told Prasa has a liquidity problem because it has a R1.8bn liability in operational expenditure.

FILE: Prasa's head office next to Park Station at Umjantshi House on Wolmarans Street, Braamfontein. Picture: Google Earth.

CAPE TOWN - Parliamentarians have questioned the Passenger Rail Agency of South Africa’s (Prasa) financial sustainability.

Prasa executives, including board chairperson Popo Molefe, briefed Parliament's standing committee on public accounts on Wednesday on the company's R14 billion in irregular expenditure identified by the Auditor-General Kimi Makwetu.

They also confirmed contracts valued at R24 billion are under investigation over possible irregularities.

Members of Parliament (MPs) have been told Prasa has a liquidity problem because it has a R1.8 billion liability in operational expenditure.

Group acting CEO Collins Letsoalo says the trend started about five years ago.

“Those losses are now sitting at operation expenditure and it’s evident that we’re not in a position to pay our creditors.”

Committee chair Themba Godi has warned those responsible for the agency's financial crisis should not be absolved from responsibility.

He says the Transport Department should ensure accountability.

(Edited by Shimoney Regter)