Business

State eyes Prasa cash to boost Sanral

2019-07-07 22:53

Instead of helping the beleaguered rail agency, government is diverting billions of its funds to the roads agency in a desperate bid to plug e-toll debt.

The government is choosing to reallocate funds from rail services in desperate need of improvement, and used by poor urban commuters, to roads that are used mainly by middle class people as well as truck and taxi drivers.

This week, the state flagged plans to divert funds meant for the beleaguered Passenger Rail Agency of SA (Prasa) to plug a gaping hole that e-tolls nonpayment has left in SA National Roads Agency’s (Sanral’s) books.

Prasa’s key assets include passenger rail operators Metrorail and Shosholoza Meyl.

Sanral looks after 22 000km of the country’s tar roads – 3 000km of toll roads and 19 000km of roads not tolled.

Since 2011, Sanral has been the target of popular resentment related to its introduction of tolled highways in Gauteng.

As a result, only about 30% of motorists are paying their e-tolls, Sanral told City Press’ sister publication, Rapport, on Friday.

Transport economist Joachim Vermooten said it appeared as if government was increasingly applying crisis management measures and moving money to where it was needed most.

“There is clearly a lack of planning over the medium term,” he said.

“However, it is imperative for government to focus on Prasa’s problems and rebuild the agency on a project-by-project basis. There is no reason why we cannot have a world-class railway network.”

Rapport sent questions to both the department of transport and Prasa about how the reallocation of funds to Sanral would affect Prasa.

Sam Monareng, spokesperson for the transport department, said the department was not aware of R2 billion that would be moved in this financial year from Prasa to Sanral.

Prasa spokesperson Nana Zenani said that: “The department of transport and National Treasury had not engaged with Prasa on reallocating its budget.”

A bill that would make provision for R2 billion of Prasa’s budget to be shifted to Sanral was discussed this week by Parliament’s standing committee on appropriations. However, it even drew opposition from ANC MPs.

In last year’s medium-term budget policy statement, R3 billion of Prasa’s funding was moved to Sanral.

Mampho Modise, the deputy director-general for public finance, informed the committee that money would be taken away from poor people, who are transported to work and back by Prasa, in order to benefit users of tolled roads.

“You have to ask yourself: Is that a reasonable budget policy?” she said.

In response, deputy minister of transport Dikeledi Magadzi said that National Treasury would have to reconsider the allocation.

“We cannot allow poor people to suffer as a result of such a decision.”

Former transport minister Dipuo Peters also objected. During her term in office, various allegations of irregularities and financial mismanagement at Prasa came to light.

The bill has not yet been finalised and National Treasury has indicated that it will be led by the committee on the issue.

The news of the proposed transfer comes while President Cyril Ramaphosa is dragging his feet with regard to scrapping the unpopular e-tolls, which have motorists’ debts to Sanral currently running at about R11 billion.

Finance Minister Tito Mboweni has weighed in on Twitter, contradicting the repeated calls by Gauteng premier David Makhura for e-tolls to be scrapped.

The United National Transport Union (Untu), the largest trade union with representation at Prasa, said that this is not the end of it.

Untu spokesperson Sonja Carstens said a senior official from the department of transport had said during a recent meeting of Nedlac – the consensus-seeking body comprising government, business, labour and civil society – that government planned to use R9 billion, originally meant for Prasa, at Sanral, over the next three years.

This is because Prasa does not appear to be spending the money it has. On Wednesday, the Prasa board admitted to Untu that the organisation had only managed to spend R3 billion of its R15 billion appropriation over the past five years, said Carstens.

It now appears that instead of helping Prasa with its expenditure, government has thrown in the towel.

Prasa itself admitted in its 2017/18 annual report that its trains ran on time only 68.3% of the time. On average, it said, 13% of trains were cancelled and the average delay was longer than half an hour.

In that year, Prasa supplied 269 million paid passenger trips – a sharp decline from 543 million in 2013/14.

According to Untu, verbal authorisations given to train drivers – an emergency procedure when electronic signals are not working – are currently the norm. But this practice creates fertile ground for human error; seven serious accidents in Gauteng over the past three years occurred as a result of such errors.

Eight commuters were killed in these accidents and more than 800 were injured, said Carstens.

Untu is planning to hold nationwide protests on July 26 to focus attention on the precarious situation at Prasa.

The union wants Ramaphosa to move Prasa from the department of transport to that of public enterprises.

The benefit of such a move would be that Transnet, which owns rail infrastructure, and Prasa, which manages it in urban areas, would report to the same political head.

On Friday, Sanral told Rapport that it had moved R5.75 billion of its non-toll portfolio to the toll portfolio in the previous financial year, in order to help fill the e-toll hole. In the current year, it will be about R2.53 billion.

In the previous book year, 143 projects had been influenced by the outflow of funds. The Prasa money is meant to make up for that and will be used to complete projects delayed because of a lack of funds.

Sanral further said that it was at an advanced stage of finalising a loan agreement with development financiers in order to fund its new capital projects and to refinance its existing debt, as it becomes due.

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July 21 2019