'City entitled to disconnect Prasa’s services due to repeated failure to pay'

The City has threatened to disconnect some Passenger Rail Agency of SA (Prasa) services on Monday if the struggling parastatal does not pay. File picture: Thobile Mathonsi/African News Agency (ANA) Archives

The City has threatened to disconnect some Passenger Rail Agency of SA (Prasa) services on Monday if the struggling parastatal does not pay. File picture: Thobile Mathonsi/African News Agency (ANA) Archives

Published Mar 6, 2020

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Cape Town - The City has threatened to disconnect some Passenger Rail Agency of SA (Prasa) services on Monday if the struggling parastatal does not pay its municipal rates and services debts of approximately R114 million today.

Deputy mayor Ian Neilson said Prasa was R98m in arrears, but added that disconnecting the services should not affect commuters and clarified that it would only affect Prasa’s offices and facilities “and would not impact on the running of the trains”.

He said that in terms of its debt collection policy, the City was entitled to disconnect services due to Prasa’s repeated failure to pay.

“It must be noted that this decision has not been taken lightly and it has come after many years of engagement. Furthermore, Prasa is not paying their monthly current accounts,” Neilson said, adding that the city needed to be managed in a sustainable manner for the good of all residents.

“Even some of the most vulnerable residents in our city make an effort to pay what they can and we cannot excuse Prasa for non-payment of services that have been received,” he said.

This comes a week after Eskom

disconnected some of Prasa’s train operations for non-payment of R6.5m in debt, leaving passengers stranded and no trains operating.

Neilson said that although Prasa had made a payment of R86.7m at the beginning of February against previous arrears of R168m, “no firm payment arrangement for the outstanding arrears amount has been made and no indication has been given of future payments”.

Prasa spokesperson Makhosini Mgitywa said the company was still negotiating with the City regarding payments for services to Prasa

Corporate Real Estate Solutions (Cres), a division of Prasa responsible for its corporate real estate.

Mgitywa confirmed that Prasa made payment of R77m to the City in February and said “the City is claiming a further R63m”.

“We have to reconcile our transaction history to determine if the amount the City claims corresponds with our own records. At any rate, Prasa Cres will be making another payment of R22m by March 15.”

He said Prasa was optimistic that it would arrive at an amicable solution with the City that would keep its lights on.

“It is, however, important to clarify that the affected account is not with Eskom, which supplies power to Prasa Rail.

“This means that in the unlikely event that power is switched off, it will not directly affect the movement of the trains. However, a power cut would only affect stations, which would mean that there would not be sufficient lighting.”

Good party secretary-general Brett Herron said the City must keep the lights on so that train commutes were no more dangerous than they already were.

“I’ve said before that Prasa needs a stable management structure. One administrator cannot be the board and the chief executive,” Herron said.

He said Transport Minister Fikile Mbalula must stabilise Prasa management.

“Prasa has had a revolving door of acting chief executives for the last few years.

“That is not a responsible way to manage a massive public service, and has created a chaotic environment with non-payment of lawyers, non- payment of Eskom, and now the City claiming arrears accounts.”

@SISONKE_MD

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Cape Argus

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