PRASA: Public-Private Partnership needed after collapse of Shosholoza Meyl

The Democratic Alliance (DA) has received confirmation from a number of sources, including senior staff members within the Passenger Rail Agency of South Africa (PRASA) that Shosholoza Meyl train services have effectively collapsed - with only sixteen out of a hundred-and-thirty locomotives currently operational. The sources confirm that the reason for the termination of Shosholoza Meyl services is therefore not only a result of the refusal by Transnet Rail Engineering (TRE) to certify PRASA trains but also as a result of the fact that the majority of Shosholoza Meyl's rolling stock is in a state of dilapidation. I will be submitting a series of parliamentary questions to try and confirm these facts.

It is common cause that the problems faced by PRASA are as a result of serious under-funding from government, an issue that the leadership of PRASA have been aware of for some time and for which contingency plans should have been put in place. In an open letter by PRASA CEO Lucky Montana, addressed to me as early as February this year, he noted that: " The Due-Diligence Report on Shosholoza Meyl showed that PRASA would require about R1.4 billion per annum to run the business. However, only R450million per annum is provided to PRASA to run this service. The truth is that this business is grossly under-funded, and if not properly addressed, it will become a burden on PRASA's financial position."

Given that recognized lack of funding, admitted to by PRASA, PRASA continues to incur fruitless and wasteful expenditure:

• R584 810 on a Women's Day celebration in August 2009

• R10.8-million on World Cup tickets

• Self-congratulatory adverts in a number of leading publications

• On field billboards at Cape Town Stadium, during World Cup matches - the costs of which the DA will determine through parliamentary questions.

Thus, there are clearly two problems here impeding PRASA and fulfillment of its mandate. The first is a chronic lack of funding and the second is mismanagement of what little funds it does have. It is time to seek alternatives. The DA believe that the most likely solution to PRASA's under-resourcing is a public-private partnership deal whereby certain state-owned assets and operations, such as Shosholoza Meyl and Metrorail should be transferred to the private sector. PRASA can retain ownership of the physical components of the rail network (track, land lease, bridges, tunnels, signaling and communications) and furthermore be responsible for:

• Covering maintenance costs

• Safety.

• Funding capital investment from borrowings, retained earnings, third parties and state subsidies.

• Negotiating access agreements giving freight companies, private passenger companies, public private ventures or Local Government the right to run trains on the track, in exchange for access levies.

I shall be posing parliamentary questions to determine whether such a partnership deal is being explored and if not what alternatives the department has in place to somehow resurrect that ineffectual Agency. As well as the exact cost of advertising during the World Cup. This system is mostly utilized by South Africa's lower-income earners and they should not be deprived of an efficient transport service merely because the state is too stubborn to explore feasible alternatives.

Statement issued by Manny de Freitas, Democratic Alliance deputy shadow minister of transport, August 16 2010

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