Questions around Mpondo’s appointment emerge as Mbalula paddles Prasa out of trouble

The Passenger Rail Agency of South Africa (Prasa) has appeared before parliament’s Standing Committee on Public Accounts (Scopa) to brief the entity on developments at Prasa.

Transport Minister Fikile Mbalula plans to explain measures in place to steer Prasa from troubled waters, which includes financial management and expenditure.

Prasa administrator Bongisizwe Mpondo admitted that the utility was a broken business, but said he had developed a turnaround strategy.

He voiced the entity’s urgent need to bring about stability by March, with executive interventions by June.

As Mbalula tables a plan of action to Scopa, civil movement UniteBehind has filed papers in court against Mbalula seeking to have his decision to appoint Mpondo as administrator set aside.

In December 2019, Mbalula dissolved Prasa’s interim board and placed the struggling state-owned entity under administration. Mpondo was appointed with immediate effect.

UniteBehind has filed papers seeking to declare Mpondo’s appointment unlawful. In a statement, issued on Tuesday, the organisation challenged Mbalula’s power to appoint Mpondo into the role of administrator, arguing that “doing so is not captured in law, and is in fact in contravention of the legal succession to the South African Transport Services Act and the Public Finance Management Act”.

UniteBehind seeks an order declaring Mbalula’s decision unlawful while ensuring that a board is appointed within the next three months.

“Without a permanent board filled with people with experience and commitment, we cannot hope to extricate ourselves from this crisis.”

While Mbalula in a tweet said many measures were put in place to address the challenges faced by the entity on Wednesday, Scopa ridiculed Prasa in November last year.

In a hearing to review Prasa’s 2018/2019 financial statements, it was highlighted that the Prasa board had failed to account on why the agency did not maintain complete governance of records, including minutes of the board, its subcommittees and the executive committee.

Scopa, in a statement, said: “The lack of these records has had a negative impact across the audit, as resolutions and other decisions taken could not be confirmed, including those taken subsequent to year-end. This is particularly unfortunate since the board members were remunerated for attending those meetings while there are no minutes, resolutions and any record of decisions that were taken during those 10 board meetings.

“It also became apparent that the board is distancing itself from the problems that led to the 2018 – 2019 audit opinion even though they were present at that time. It is concerning that the board failed to account and explain what led to these problems.

“Scopa also expects the speedy finalisation of the appointment of a permanent board at Prasa. The committee believes that that will assist in stabilising the agency and contribute towards turning things around.”

“According to the committee, the only way out of this predicament for Prasa is for the agency to convince the public by ensuring that those who are responsible are held accountable, and are removed to root out corruption.”

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