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Prasa placed under administration

Transport Minister Fikile Mbalula made the announcement at a press briefing on Monday morning.

Transport Minister Fikile Mbalula addresses Prasa employees and the media at the state-owned entity's headquarters. Picture: @MbalulaFikile/Twitter.

JOHANNESBURG - Transport Minister Fikile Mbalula has announced that the Passenger Rail Agency of South Africa (Prasa) has been placed under administration.

Mbalula made the announcement at a press briefing on Monday morning.

Mbalula also dissolved Prasa’s interim board with immediate effect, saying the rail agency had deep-rooted problems and merely replacing the interim board with a permanent one would not solve its challenges.

He also announced the appointment of Bongisizwe Mpondo as the new administrator at Prasa with immediate effect.

“I have therefore decided to dissolve the interim board and place Prasa under administration with immediate effect. The administrator will run the affairs of Prasa as a de facto board of control as envisaged in the Prasa founding law and as an accounting authority in terms of the Public Finance Management Act,” he said.

This announcement came as Auditor-General Kimi Makwetu recently announced that Prasa regressed in its audit outcomes and moved from a qualified audit in 2017/2018 to a disclaimer of the audit opinion. Makwetu singled Prasa out as one of the top offenders when it came to irregular expenditure in the public sector.

Mbalula said the reason for the drastic step was because there was no time to waste to turn the parastatal around.

The minister also announced that the secondment of the acting Prasa group CEO Dr Nkosinathi Sishi would be withdrawn with immediate effect.

“The role of the Group CEO will be integrated into the role of the administrator as an integral part of the intervention. Thank you Dr Sishi for your contribution and efforts in addressing challenges at Prasa.

“This intervention will continue for 12 months, after which a permanent board will be appointed to run the affairs of Prasa. We will ensure that the process to recruit a permanent board is initiated at least 6 months into the tenure of the administrator to ensure a seamless transition at the end of the intervention,” he said.