Transport Minister Fikile Mbalula has announced that he had decided to place state-owned Passenger Rail Agency South Africa (Prasa) under administration with immediate effect.
At a press briefing, Mbalula also came to a decision to dissolve the interim Prasa board, a decision based on issues within Prasa.
This was informed by experience as the challenges were deep-rooted, he said, and replacing an interim board with a permanent one would not solve the problem.
Bongisizwe Mpondo, managing director and founder of transport company Safiri, was appointed as the administrator of Prasa.
Among the administrator’s key priorities will be addressing all matters raised in the auditor-general’s report to ensure that there are no repeat findings.
Mpondo is an entrepreneur who has experience in corporate governance as well as working with public institutions to improve operational efficiencies. He has served on the boards of many public entities.
Meanwhile President Cyril Ramaphosa said he would take “drastic” steps if needed to prevent foundering state-owned companies from failing, as the government appointed an independent advisor to manage the country’s passenger rail firm.
Cash-strapped and heavily indebted, state companies including South African Airways (SAA), power utility Eskom, defence firm Denel and Passenger Rail Agency South Africa (Prasa) have become a major headache for President Cyril Ramaphosa.