Fikile Mbalula warns interim Prasa board over 'dismal' audit results

Fikile Mbalula told MPs on Tuesday that the appointment of Prasa's full-time board is at an advanced stage.
Fikile Mbalula told MPs on Tuesday that the appointment of Prasa's full-time board is at an advanced stage.
Image: IHSAAN HAFFEJEE

Transport minister Fikile Mbalula has asked members of the interim Passenger Rail Agency of SA (Prasa) board to explain why they should remain in office.

Mbalula made this revelation in the National Assembly on Tuesday, when ministers in the cabinet's economic cluster responded to questions from MPs.

Answering a question from ANC MP Mirriam Ramadwa, Mbalula said he had recently requested Prasa's interim board of non-executive directors to furnish him with reasons  why they should continue to serve the agency. This is after they received the worst audit outcome from the auditor-general: a disclaimer.

Ramadwa wanted Mbalula to explain what he was doing to stabilise the Prasa board and management to ensure that they delivered a professional and reliable service to public.

Auditor-general Kimi Makwetu slapped the struggling association with a disclaimer of opinion in October, describing the rail agency's finances as too chaotic and unreliable.

He also slammed Prasa's loss of billions of rands in its controversial procurement of locomotives - which turned out to be not usable on the South African rail network - in a deal that was marred by serious allegations of corruption and mismanagement.

Mbalula said that while the process of appointing a full-time Prasa board was "at an advanced stage", they were seeking answers from the interim board on how the utility obtained the poor audit results under their watch.

"We'll subject prospective members to an interview process before confirming their membership of the board," said Mbalula.

"We've began implementing a robust consequence-management system, where we hold the board accountable for delivery on the targets we agreed to in the shareholder compact and the outcomes of the audit by the auditor-general.

"To this end, following a dismal audit outcome of a disclaimer in the 2018/2019 financial year, I've written to the board [asking them] to give me reasons why I should not take action against them for failure to comply with their fiduciary obligations and duties in terms of the Public Finance Management Act.

"Once I've evaluated their representations, I will make a determination on the correct course of action."

Turning to the outstanding appointment of a full-time Prasa general CEO and other top executives, Mbalula said the interim board would be completing the process in due course.

He warned that the "long arm of the law" would soon catch-up with those linked to corruption and looting at Prasa, adding that the Hawks and the Special Investigating Unit  were quietly making progress in probing commercial crimes at Prasa.

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