File picture: Independent Media
Cape Town - The Passenger Rail Agency of South Africa (Prasa) on Tuesday said it was in dire straits and had a R1.8 billion deficit that would be carried over to the next financial year.

Prasa said the situation could lead to non-payment of current salaries.

The United National Transport Union (Untu) spokesperson Sonja Carstens said they had no other option but to ask their members to embark on an indefinite strike to the detriment of millions of commuters, after Prasa refused to increase their final wage offer of 6percent.

“Prasa’s final offer is an insult to its employees. There has been no movement from Prasa's management since the start of the salary negotiations in February, when the employer put a 3 percent salary increase on the table.

“Prasa is also not prepared to increase any of the allowances labour demanded. These allowances have not been increased in years,” said general secretary of Untu, Steve Harris.

Read also: Axed Prasa boss comes up smelling of roses

Prasa suffered a blow this week when the high court in Pretoria ruled that the agency needed to reinstate its axed board in a ruling that also said its former acting chief executive Collins Letsoalo was entitled to a 350 percent salary increase.

No resolution

Untu said that a commissioner at the Commission for Conciliation, Mediation and Arbitration had issued a certificate of non-resolution yesterday after Prasa's management came back to the conciliation without a new mandate.

Prasa has been given two weeks to get a new mandate amidst the transport minister being fired and their board being dissolved.

Harris said Prasa employees were yet to feel the devastating effect of the country’s downgrade to junk status.

He said Prasa management should have stayed within the budget guidelines, adding that Untu would now embark on a process of getting a mandate from their members.