Prasa on the skids

If the Competition Commission gets its way, the days of the beleaguered Passenger Rail Agency of SA (Prasa) are numbered, Roelof Botha, an economist from the Optimum Investment Group, has said.

If the commission’s far-reaching recommendations are carried out, Prasa will only retain its technical division and its long-distance train service, Shosholoza Meyl.

But, to add insult to injury, it has been reported that the Shosholoza Meyl service was suspended by the Railway Safety Regulator on Friday following an earlier accident.

At a news conference in Pretoria, Competition Commission commissioner Tembinkosi Bonakele said the Autopax bus service, Prasa’s property company Prasa Cres and Metrorail should be unbundled from the agency.

Prasa has been on its knees for some time, and Transport Minister Fikile Mbalula placed it under administration in December in an attempt to get it back on track.

However, little seems to have come of this. The Star reported last week that the Sheriff can attach Prasa’s trains. This comes after a successful court action against Prasa by one of its creditors.

According to Mike Schussler, an economist at economists.co.za, the number of passenger rail trips per month has plummeted by 76% since 2009, from 53.2 million to 12.6 million.

Metrorail coaches in Braamfontein. Picture: Muntu Vilakazi

The commission’s provisional recommendations come after a thorough investigation into the public transport market in South Africa, which included road and rail transport.

Those with a stake in the matter have until the end of next month to comment.

Prasa subsidiary Autopax runs two long-distance bus services – Translux and City to City.

Prasa is a vertically integrated transport group that also has terminal and transport hubs, which are managed by Prasa Cres. These include Park Station in Johannesburg, as well as main stations in major cities across the country. Access to these terminals and hubs are of critical importance to transport operators.

However, operators have accused Prasa Cres of favouring Autopax. The bus operator has long enjoyed exclusive access to loading facilities at Park Station and pays no terminal fees.

According to its competitors, Autopax is a serial defaulter when it comes to making payments to Prasa Cres, but does not get pressured to pay up the way others that are defaulting do.

If Prasa Cres even begins to think about taking steps against Autopax, Prasa management allegedly intervenes or gives the service a lifeline. Despite Prasa’s denials, the commission found that there was truth in these allegations.

The commission said Autopax was inefficient, the manner in which Prasa protected it could not be justified, and that it impacts competition and skews the market.

To prevent this, Autopax must become an independent state-owned enterprise.

The same goes for Prasa Cres, which must manage transport hubs and passenger pick-up points alongside municipalities, said the commission.

In respect of Metrorail, transport planning and management must take place at the lowest applicable level of government, rather than in Prasa’s national head office, the report recommends. The commission also said the department of transport needed to develop a strategy to implement this within 12 months.

This would be in keeping with international trends and has been government policy for some time.

According to the commission, this means that a metro council or provincial council must take over Metrorail in its region so that all transport can be planned and managed in an integrated manner and in the interests of local needs.

Metrorail currently operates in Gauteng, the Western Cape, the Eastern Cape and KwaZulu-Natal.

The Cape Town metro has been asking to take over from Prasa for some time, and has even published a tender for expert assistance with the project.

The Metrorail system in the Western Cape stretches to Worcester, and therefore includes other municipalities.

Electricity supply to four Prasa sub-stations in the Western Cape was cut off on Thursday due to non-payment, leaving thousands of  commuters stranded.

Mbalula said Eskom had cited an overdue payment of R4 million from Prasa.

The commission is of the opinion that Cape Town has the ability to take over from Metrorail and manage the service alongside the other municipalities that are involved.

Additionally, the Gauteng Transport Authority is the ideal institution to do the same in cooperation with the Johannesburg, Tshwane and Ekurhuleni metros.

The commission is convinced that Gautrain and Metrorail should be integrated. It said the current separation of working-class and middle-class passengers exacerbated inequalities in South Africa’s society. The commission also believes that it was unacceptable that Gautrain received a greater subsidy than Metrorail.

Schussler said the total subsidy for a single passenger who travels to work and back on the Gautrain amounts to R6 606 a month, compared with R3 178 on Metrorail.

However, the commission found that the Eastern Cape and KwaZulu-Natal did not presently have the ability to take over the Metrorail service, and would first have to build up skills and learn from the Western Cape and Gauteng.

Botha is of the opinion that the commission is on the right track with its recommendations regarding Prasa.

He said Prasa was pathetically managed, and that the recommendations were pragmatic and would advance competitiveness and effectiveness in the market.

If these recommendations were executed, Prasa would, for all intents and purposes, cease to exist, and a private operator could provide the remaining long-distance train services on a concession basis, he said.

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