Prasa announces a loss of R928m, maintains balance sheet is 'healthy'
Pretoria - The board of the Passenger Rail Agency of South Africa (Prasa) on Thursday presented its 2016/17 financial statement, indicating a comprehensive loss of R928 million - up from R554 million recorded the in 2015/16 financial year.
Group CEO Sibusiso Sithole said they are presiding over an entity that is "broken" and struggling to survive.
"In Prasa, we have inherited not just a broken organisation, but an organisation that is in ICU. For all intents and purposes, we are really an organisation that is struggling to survive. This is manifested at various levels, largely at governance issues. We have inherited an organisation where fundamentally internal controls have been broken," said Sithole.
The state-owned enterprise recorded financial results which are 68 percent worse than the previous year of 2015/16, as well as a reduction in revenue by 12 percent to R2,9 billion, compared to R3,3 billion in 2015/16.
Fare revenue has declined by 14 percent, from R2,7 billion in the previous year to R2,3 billion - a decline of 389 million.
Operating expenditure increased by 15 percent [R1,4 billion] from R9,2 billion to R10,6 billion as a result of the reinstatement of 700 employees by the Labour Appeals Court, resulting in a R635 million liability, as well as an increase in insurance claims by 94 percent [R235 million].
Despite this dismal performance, Prasa said its balance sheet is "healthy, as the asset base increased by 21 percent, from 55,4 billion to R67 billion. During the period under review, Prasa received nine new trains from Gibela at a cost of R1,3 billion.
Prasa board chairperson Khanyisile Kweyama said the current board, appointed by Transport Minister Blade Nzimande around April, is cognisant of the grave challenges derailing the organisation.
"We came into an organisation that is broken. We are here to fix a broken organisation. This means that staff, executives, regular commuters and passengers - all have to come together in ensuring that we do deliver," she said.
The Prasa annual general meeting should have taken place in September 2017, but did not happen due to the instability in leadership.
African News Agency (ANA)