Rail agency newspaper advert, a plea for money: DA

CAPE TOWN - An advert responding to allegations of cash flow problems at the Passenger Rail Agency of South Africa is “a powerful plea” to the Minister of Transport for more money, a Democratic Alliance MP said on Tuesday.

Manny de Freitas said the half page advert appearing in the Business Day signed by Prasa chief executive Lucky Montana, sets out “in some detail” the massive financial burden facing the parastatal.

“What Mr Motana had managed to achieve, under the guise of a response to the Democratic Alliance, is a methodical and quite powerful plea to the Minister of Transport for more money,” De Freitas said.

“It would be most interesting to hear the Minister’s response to the letter and the inherent, desperate plea it contains.”

De Freitas said the advert was a response to a statement he issued last week alluding to cash-flow problems that Metrorail and its parent company, Prasa, were currently experiencing.

Montana explained in the advert that as a result of sustained under-funding Prasa found itself in dire financial straits.

One of the reasons for the financial problems was no approval had been granted for Metrorail to increase fares, making services uneconomical.

A due-diligence report on Shosholoza Meyl revealed that Prasa would require about R1.4-billion per annum to run its business effectively, but that only R450-million per annum was provided to run this service.

The increase in electricity prices would cost Prasa between R210-million and R340-million against a budget of R248-million.

“What Mr Montana is saying, in a nutshell, is that... the fundamental nature of the problem means they are operating on the red line every day and that situation is not something Prasa itself can control.”

- Sapa