Founder: Turnaround Talk
When delivering the National Budget earlier this years, Finance Minister Enoch Godongwana made bold promise that Government would not be quick to bail out failing State Owned Entities. So far, Government has made good on this promise by telling Eskom that they need to resolve their own issues and informing Mango Airlines that it will be receiving less than what was promised to them. The life of a State Owned Entity is tough indeed.
This doesn’t mean that Government has not seen its fair share of suiters passing by its door hat-in-hand. State Owned entities have long benefitted from Governments generosity and feel that, as the company’s major shareholder, that Government should be doing more to tend to their needs.
The Passenger Rail Agency of South Africa (Prasa) is one such institution. It was a laughing stock a few years back when it ordered locomotives that were to large to fit onto our railway systems. The company has now informed government that it needs significant cash to address safety issues. This will again test Governments resolve
Subheadings and the final subsection were included by Turnaround Talk.
R3 billion to address security
On 22 June, Prasa told Government it needed R1 billion annually for security over the next three years to protect its infrastructure from vandalism.
The EWN article points out that it is also taking extraordinary measures to protect copper cable from being stolen and vandalised as it tries to get key corridors up and running again.
The embattled rail agency briefed Parliament about its plans to fix the ailing rail system.
Prasa said the passenger rail corridor recovery efforts were gaining momentum, so there was an urgent the need to protect the recovered assets until the service was fully operational.
It has seen its infrastructure completely damaged as syndicates target valuable copper cables.
The EWN article added that CEO David Mphelo told Parliament that one of the biggest challenges were security related.
“The biggest threat that we have for our infrastructure currently is security. Instead of just putting bodies and boots on the ground, we’re also technically looking at a solution and we’re taking those cables and covering them with concrete to make it a lot more difficult for people to take them out.”
Will this request from a State Owned Entity be one Government will bend the knee to?
Photo By: Prasa
Can a State Owned Entity return to normal
Prasa is traditionally a State Owned Entity that actually does function. However, with the economic crisis that the country currently finds itself in, the company has been hit by vandalism.
The EWN article points out that Prasa Board Chairperson Leonard Ramatlakane said corridors and trains in Gauteng and the Western Cape would be up and running by as early as next month.
It also said ‘hijacking’ of tenders by communities was hindering some of its efforts to get passenger rail up and running.
Mphelo told Parliament that one of the challenges in addressing the problems is “tender hijacking” by communities.
“We’ve also got issues of communities of tender hijacking. When we’re starting projects, one could argue that because of joblessness, people when they see these opportunities they also want to be involved.”
Ramatlakane said they were working day and night to fix the damage and to get passengers back on the trains.
“Riding a train from Cape Town to Nyanga should happen by July this year and then continuing to go to Khayelitsha in December and Mitchell’s Plain. So, that’s where we are, and we continue to work day and night.”
Photo By: News24
A State Owned Entity needs to move on
It will be interesting to see how Government deals with State Owned Entities in the future.
In March, insiders close to the ANC said that the ruling party was contemplating moving away from the State Owned Entity model as it was a dead duck. The party used the failing Post Office as evidence of this standpoint.
But Government cannot simply sever the umbilical cord and tell these entities that they need to fend of themselves. They have been dependent on Government for years and are in desperate need of independent business reviews to be carried out to identify inefficiencies. The splitting of Eskom into three separate operating units is an important step towards this. The sooner it takes place, the better.
