Minister to mediate in Prasa fallout

170715 Former PRASA CEO Lucky Mntana at the press conference in Rosebank North of Johannesburg.photo by Simphiwe Mbokazi 1

170715 Former PRASA CEO Lucky Mntana at the press conference in Rosebank North of Johannesburg.photo by Simphiwe Mbokazi 1

Published Jul 20, 2015

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Johannesburg - Transport Minister Dipuo Peters will this week be involved in last minute attempts to save the embattled Passenger Rail Agency of South Africa (Prasa) from a fallout that resulted in the axing of the agency’s chief executive Lucky Montana.

In an unprecedented move, Peters met with the Prasa board on Friday evening to demand a report on what has happened at the agency and led to Montana’s sacking on Thursday. Peters is also planning to meet with Montana to find an amicable solution to the breakdown that has once again thrown the spotlight on endemic feuds between the boards of directors and executives, who are supposed to run parastatals.

Peters had earlier instructed both Montana and board chairman Popo Molefe to cancel their scheduled briefings to shed light on Montana’s unceremonious sacking.

Intervention

Montana indicated on Friday that he was awaiting a political resolution to his stand-off with Molefe and was willing to sit back for this week to allow the intervention to take place.

“I know that something really unfair and unjust happened,” said Montana. “I will never accept it, but I made a commitment to allow the leadership to ponder over it over the week and deal with it.”

Yesterday, two senior ANC leaders told Business Report that the ruling party was worried about the developments in state-owned enterprises, particularly Prasa, national airliner SAA and power utility Eskom.

The leaders, who spoke on condition of anonymity, said there was no clear distinction of powers between the boards, who are supposed to represent the government and executives who are supposed to run the parastatals.

“In most instances the boards interfere with executive decisions and when the executives remind them of their oversight role, there is always a breakdown of relations,” said one. “You cannot have a situation where the executives operate at the mercy of the boards. It is unheard of.”

Peters is understood to be unhappy with the developments and has since tried to crisscross between Montana and Molefe after senior ANC leaders instructed her to do so.

This week, Peters is to once again meeting with Montana to find a resolution that could see the embattled Prasa boss leave possibly in December. Peters’s spokesman Tiyani Rikhotso confirmed that the minister had met with the board on Friday evening but could not be drawn on the outcome of the meeting.

“As the representative of the stakeholder, the minister expects a comprehensive report from the board so we can move forward and the agency can focus on the core mandate of providing rail transport to South Africans,” said Rikhotso.

Another ANC leader pointed to what he called chaos at Eskom that led to the suspension of four senior executives in March, only for them to be cleared of any wrongdoing last week. The leader said the suspensions that saw former Eskom chief executive Tshediso Matona leaving the power utility with a golden handshake was a miscalculation of the board’s mandate.

Hurting economy

“Clearly something went wrong between Matona and (former board chairman Zola) Tsotsi and the result is that Eskom is still trying to find its foot amid ongoing power cuts in the country. These are hurting the economy and cast aspersions on how our cadres are deployed in the parastatals. If we trust them to turn around these institutions, we need to clarify the operational expectations of the boards and the executives.”

Thus far, only acting Eskom chief executive Brian Molefe appears to have the complete backing of the utility’s board.

On Thursday, the board extended Molefe’s contract by a further three months and played a crucial role in assisting him to get Transnet chief financial officer Anoj Singh to join in an acting capacity for six months, and to assist Molefe in turning the parastatal around and managing its R250 billion funding plan.

Eskom board acting chairman Ben Ngubane has made his wishes public about having Molefe appointed permanently to lead the power utility. Eskom insiders say Molefe and Singh’s appointments are all but permanent and both have been given a clear mandate to craft the utility’s long-term plans.

Molefe himself last month made it clear that he would personally lead Eskom’s borrowing plans from the market. He told the National Energy Regulator of South Africa that he was confident that Eskom could turn its woes around.

“You will remember that the reasons for the downgrade of Eskom was not largely because of financial performance on its balance sheet, it was a combination of corporate governance, maintenance backlogs and so on and so forth,” said Molefe. “Are we able to raise additional borrowing in the market? Yes we are. We continue to participate in the domestic capital market, we issued a bond for $125bn in January of this year in the US and we intend to go back to the international capital markets during this year.”

SAA is expected to announce its decision on the new executive team, and reports claim that general manager for operations Zukiswa Ramasia would assume the helm, albeit on an acting capacity.

Business Report

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