Cape Town - Transport Minister Fikile Mbalula says the appointment of Passenger Rail Agency of South Africa (Prasa) administrator Bongisizwe Mpondo has followed due legal processes.
Briefing the transport portfolio committee on Tuesday, Mbalula recounted how the entity had deteriorated over the years with both its financial and operational performance declining and the Auditor-General making adverse findings on its management of finances, among other things.
He said the then interim board had failed to answer key questions to the Standing Committee on Public Accounts in November last year.
Mbalula told MPs that he had written to President Cyril Ramaphosa appraising him of the crisis at Prasa, and of the board’s failure to carry out its fiduciary duties.
"I further briefed the president on the importance of dissolving the board and sought political guidance, leadership and counsel from him on the matter."
Mbalula said he had also written to Finance Minister Tito Mboweni outlining the crisis at the entity and its board of control’s failure to carry out its fiduciary duties.
"Having applied my mind on the leadership and management challenges at Prasa, I served the individual members of the board with notices of my intention to dissolve the board and invited them to make representation on why they should not be dismissed.
"The board collectively made representations to me. Having considered their collective representations, I concluded that the representation did not justify the continued existence of the board, and I subsequently terminated the board," he said.
Mbalula also said as part of the process to seek cabinet approval for the intervention, a cabinet committee considered the cabinet memorandum on the matter of Prasa and approved his recommendation to be tabled before cabinet on the dissolution of the board of Prasa and to place the entity under administration.
"Cabinet subsequently approved the recommendations and Prasa was then placed under administration, and an administrator appointed," he said.
He insisted that due legal processes were followed in appointing Mpondo, who he said was first appointed in terms of the Public Service Act and then seconded to Prasa acting group CEO.
Mbalula also said National Treasury has since granted approval for Mpondo's appointment in terms of the Public Finance Management Act for him to be the accounting authority for a period of 12 months.