Payment plan talks between Prasa, City of Cape Town put on hold
Share this article:
Cape Town - A crucial meeting between the City and Prasa planned for on Thursday was postponed to allow the rail agency to work out payment plans to avert a shutdown of electrical supply and services to stations.
Deputy mayor and finance mayoral committee member Ian Neilson said the situation remained the same.
“Water and electricity disconnections are being effected to offices and minor train stations and it should have a minimal impact.”
Neilson said it did not affect the power for train traction, which is supplied directly from Eskom to Prasa.
“This is as a result of Prasa repeatedly failing to pay municipal rates and services debts of approximately R114 million to the City, of which R98m is the arrears amount,” he said.
However, Metrorail spokesperson Riana Scott said Prasa paid R22m to the City as part the payment owed for rates and services.
Neilson said although Prasa made a payment of R86.7m at the beginning of February, against their previous arrears of R168m, no firm payment arrangement for the outstanding arrears amount was made.
“It was indicated that a part payment of R22m would be made by Monday, March 9, but it appears that the money has not been paid and is not sufficient in any case to avoid the disconnections,” he said.
Neilson said on request, the City submitted a list of more than 800 Prasa accounts with debit and credit balances to Prasa.
“The City has been engaging with Prasa on the debt for many years so Prasa should be aware of the accounts and the debt owing,” he said.
The City continued to engage directly with Prasa and awaited details on payment plans and accounts.
On Monday, Prasa spokesperson Makhosini Mgitywa said they would be meeting the City on Thursday.
However, on Thursday Mgitywa said: “The meeting was deferred for a later date to allow Prasa to formulate and propose payment terms that the two parties can negotiate over.”
Eskom recently took a hardline with Prasa, cutting the electricity supply which powers the trains over a R6.5m debt which was paid at the 11th hour. Neilson said the City had to make provision for bad debt in its budget, which means that fewer services were delivered.