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Johannesburg - The number of passengers travelling long-distance by train has dropped to below one million, Transport Minister Dipuo Peters said on Monday.
The number of MLPS [mainline passenger services] passengers has decreased from three million per annum in 2009/10 to below one million currently," she said in a speech prepared for delivery at the Passenger Rail Association of SA's annual general meeting in Pretoria.
"Concurrently, the number of operational trains decreased from 6 000 per annum to below 3000 currently. This decline in passengers resulted in a significant loss of R700m per annum."
The MLPS includes Prasa's Shosholoza Meyl operation.
"The effort of Prasa to turn around this dismal situation has been noted," she said.
Turn-around plan
"The department requests that Prasa submits quarterly detailed reports on the progress of the MLPS turn-around plan."
She said one of the problems with the provision of long-distance passenger rail was investment.
"The decision to terminate the operational subsidy for Shosholoza Meyl during the 2010/11 financial year puts Prasa in an untenable position. Financial support must be provided for long-distance passenger rail services to allow for its continuation," Peters said.
"The termination of [the] long-distance passenger rail service will result in severe and devastating socio-economic consequences regarding the livelihoods of many rural, migrant workers and the poor who depend on the services of Shosholoza Meyl for their mobility."
Dodgy contract
Peters also noted the auditor general's concerns over a contract of R3.5bn for the purchase of locomotives for Shosholoza Meyl.
"For this, Prasa is deemed to have contravened the supply chain management policy and section 51 of the PFMA [Public Finance Management Act]."
She said "fruitless and wasteful expenditure" was incurred to the value of R19m due to interest and penalties on late payments of creditors.
The entity also incurred irregular expenditures to the amount of R38m. Out of this amount, R9m was due to unauthorised contract extension.
"Going forward, the entity is expected to put in place internal control measures to address deficiencies in the procurement and financial management procedures," Peters said.
Corrective measures
"As per the PFMA requirements, the entity is expected to take correction actions to address any breach of the policy."
She said other annual report targets that Prasa did not achieve included Metrorail's passenger trips per annum target being missed by 5.4% and the delay and cancellation in train performance being five percent below the planned target of 85%. "We also note that due to vandalism and theft of rolling stock some 500 coaches were out of service."
She said out of a planned target of 50 learners in a signalling programme, none had been trained.
"The rolling stock skilling programme has also under-achieved by 36%," Peters said.
Training investments
"Since rolling stock and signalling are core technologies for the smooth functioning of any railway network, it is imperative that the entity should invest meaningfully in such training."
However, Prasa achieved 70% of its targets for 2013/14, Peters said.
"The annual report of 2013/14 indicates that Prasa has achieved 70% of its targets and of these 42% were over-achieved compared to planned targets."
She also commended the contract between Prasa and Gibela to supply 600 commuter trains.
The first 20 trains would be manufactured in Brazil, with South Africans involved in skills training. The remaining 580 would be built in South Africa, at a purpose-built factory in Dunnottar, on the East Rand.
Revenue increased by 21%
For the financial year ending 2013/14, the total revenue of the group increased by 21% to R10.2bn.
Peters said the operating revenue rose by 14.2% mainly due to an increase in fare revenue and in lease income.
Total assets increased by 13.4% in 2014 compared to the previous financial year. Total liabilities also increased by about 11.8%.
"We have observed that the entity posted a profit of R336m in 2013/14, which is an increase of 315% compared to last year's performance," Peters said.
"Regarding Prasa's capital programme, it is noted that around 92% of the capex or R6.8bn was spent on infrastructure investment."
