About 350 employees at bus company Autopax, a subsidiary of Prasa, are set to be impacted by a divisionalisation process.
Autopax operates buses Translux and City-to-City. The entity early last year struggled to pay workers their full salaries, due to financial challenges linked to Prasa, Fin24 previously reported.
During a briefing on his first 100 days in office, Prasa CEO Zolani Matthews noted the need to review its bus operations.
“Notwithstanding the negative impact of [Covid-19] on the bus industry, Prasa had already taken a decision to divisionalise Autopax from a subsidiary,” said Matthews.
Prasa rail operations
According to Matthews, there is ongoing consultation with labour, which in some cases has approved or is in agreement with voluntary severance packages offered.
“Extensive consultation has commenced with labour as some of the plans involve reduction in employee numbers. Currently, the target is for reduction of 350 employees,” he said.
Prasa is looking to absorb some employees in other areas of its business, where vacancies are available.
“Ultimately, a new model and operations of Autopax will become possible once the divisionalisation process has been established. This would include a revised mandate on the operations of Autopax to support the primary mandate of Prasa on rail operations,” said Matthews.
Matthews also addressed employee increases – Prasa had entered into three-year multi-year financial commitments in 2020, but Covid-19 “made a bad situation worse”.
“We have engaged with labour about these challenges. We have engaged with the Department of Transport with the view of requesting assistance for Prasa to address this matter. We are waiting for a response,” he said.
Prasa has received complaints from managers who have not received any annual increases for the past three years, he added.
Matthews did not comment further on whether wage agreements would be paid, as this is subject to litigation. “The question will be addressed once judgment received from the court.”
Prasa is facing cash flow challenges, mainly due to the erosion of its revenue streams, he said. These include fare collected from rail operations, which has reduced due to non-availability of the product, Matthews said.
Rental income around stations has also been hit due to interruptions to train operations. Covid-19, in particular, has impacted Prasa’s business operations and that of its tenants, he said.