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Administrator’s Brief to the Media

 

15 January 2019

 

Thank you Minister Mbalula for this opportunity to address the media, and the public at large about the status of PRASA and our Turnaround Plan. Let me also acknowledge the presence of the Deputy Minister, Mme Dikeledi Magadzi and the Director General, Mr. Alec Moemi.

 

Good morning to our media colleagues who are here today. You are all welcome to our premises here at the Braamfontein Depot which happens to be the largest of our depots at PRASA.    

 

Since I accepted the task to lead the turn-around of PRASA, beginning on 9 December 2019, I have been fully engaged and have not had a chance to take a break. Having concluded the SLA with the Minister about a month ago, this then is an opportune moment to bring the public up to speed with regards to:

  • What I have established thus far;
  • My approach to the turnaround of PRASA;

 

Before I do so though, allow me to set the scene by sharing the following observations:

 

CONTEXT

  • The reality we’re faced with, is that PRASA is a Broken Business;
  • The business has experienced Systematic Erosion of value, which has taken place over a number of years; 
  • This, I must say, is at odds with our stated intention to Provide Value to our commuters;
  • It is rather sad to note that the commuters we are meant to serve do not have a Choice and we are therefore failing them;
  • Flowing from this Minister, it is fairly obvious that we as PRASA officials, also do not have a choice but to bring a Semblance of Order to this important institution whilst striving to deliver Value to our customers.

 

MANDATE

On the 09th of December 2019, the Minister elaborated on my given mandate as the Administrator as he has also done earlier, safe to say that we have integrated it into our institutional structures at EXCO.

 

So… How Have I Approached This Task?

Since assuming duty on the 9th of December 2019, I immediately got down to the task at hand in the following manner:

  • I conducted a Rapid Assessment of the Business to establish the Status Quo;
  • In doing so, I held extensive engagements with Key Internal Stakeholders i.e. EXCO & Staff Members;
  • I undertook visits to all our Regions in Durban, Cape Town, East London & Gauteng;
    • Here I engaged with all Regional Managers & Management;
    • I have visited all our key Depots as well as the Gauteng Nerve Centre (GNC) in Kempton Park & the Western Cape Central Control Centre (WC-CCC) in Belville (Cape Town);
  • I have also instituted some management changes at Divisional & Subsidiary level, so as to strengthen management in the following areas: 
    • PRASA Tech
    • PRASA Rail
    • Autopax

     

    Now…What have I established since I assumed office on 9 December 2019. I will deal with these observations in turn, clustered under a few headings. Let me hasten to highlight here that these are largely informed by my engagements with the staff of PRASA.  

     

    Beginning with Leadership & Management…

    • I have earlier stated that we’re saddled with a broken institution with no order, which therefore means there is disorder; 
    • There have been Numerous Board Changes to the point of an interim Board for the better part of 2019;
    • The organisation has seen countless changes at CEO level since 2015;
    • These changes are by design a key enabler for instability;
      • Put slightly differently, PRASA is fertile ground for Non-Performers and Wrong Doers
    • It’s important to note that Questionable Decisions have been taken by Leadership with disastrous consequences;
      • One telling example is that towards the end of last year, the Interim Board in its wisdom cancelled the security contracts without a contingency plan in place;
      • This has led to untold damage to our infrastructure and rolling stock;
      • This vandalism practically means that parts of our coaches are stripped;
      • Live electrical cables are stolen leading to our railway lines not being usable;
      • We are losing train sets daily as the vandals target primarily the copper cables;
    • I am highlighting this because this surge in vandalism, is a major contributor to the service and schedule disruptions we experience on a daily basis;

     

    • Lastly on this topic, there is Little or No consequence management at PRASA;
      • Where Suspensions are effected, they are not resolved speedily;

    With regards to Systems & Controls…

    • There is No proper record keeping at PRASA. In some instances, there are no records at all;
      • Some Board recordings, minutes and resolutions are not available;
      • Recently, to my alarm, we realised that some Investigation files are missing;
        • These are meant to be kept in strong rooms but there is no record of movement of these files;
        • This renders it difficult to implement consequence management for those fingered in these investigations;
        • I have instituted an internal investigation to trace these files with the intention of recovering them so that we can implement consequences; 
    • There is no adequate back up system;
      • Important company information resides in staff member’s computers with the risk that it could be lost forever;
    • Operating systems are not fully deployed whilst in some cases they are non-existent;
        • Autopax for instance is run manually save for the bus tracking system;
        • The scheduling of buses is done manually on a spreadsheet;
    • Policies and Standard Operating Procedures are either non-existent or outdated; This creates a serious loophole thus rendering the day-to-day operations rudderless;
    • Inadequate SCM processes have contributed to hampering the procurement of goods and services; For an example…
      • The Capital and modernisation programme has been delayed;
      • Components & Material have not been available when needed at the depots with low or no stock;
      • The General Overhaul (GO) programme has been delayed;

    On Irregular Expenditure & Malfeasance…

    • Irregular expenditure is very high running close to R30bn in 2018/19;
    • A number of cases are being investigated by the Hawks and the Zondo Commission and we’re fully supportive of these efforts;
    • The SIU secondment team that was at PRASA last year recommended 42 cases where consequence management should be implemented in November 2019. We’re working with the SIU on these;
    • We have in the past few weeks been reviewing the Investigation Reports that were compiled by Werkmans;
    • So far, we have managed to assess 25 of these and they identify irregular contracts to the value of R1.57 bn;

    Consequence Management on the roughly 52 current & former employees implicated in these files will be implemented

     

    Turning to our Service Levels…

    • Our network is not secure, meaning we have an Open Network;
      • Our access controls are very weak;
      • Some depots are porous which leads to vandalism of parked coaches. This Depot is a case in point and has been on the receiving end of such vandalism;
      • Our Security response is also inadequate;
      • This is crucial as one of the preconditions of an efficient transport service is to ensure the safety of the network and by extension revenue;
    • As indicated earlier, there is continued vandalism and arson to PRASA’s assets and infrastructure;
    • Resulting in the Paralysis of passenger rail services owing to overhead and signal cable theft;
    • We have rising Fare Evasion which can ben witnessed by the overcrowded trains;
    • Our Commuters and Staff are also faced with a constant safety threat;

    Our Rolling Stock & Infrastructure Status is as follows…

    • We’re losing trainsets daily due to a number of reasons including;
      • Poor planning from our side largely attributable to inadequate components and materials at our maintenance depots;  
      • The General Overhaul programme has been delayed and as such coaches that are due for overhaul have to be parked;
      • Coaches are vandalised due to inadequate security provision;
    • Our locos for Shosholoza Meyl are extremely unreliable owing to previous procurement bungles;
    • Our rail infrastructure is in a very poor state due to:
      • Encroachment;
      • Inadequate maintenance;
      • Vandalism;
    • There is very poor implementation and spend on the Capital Programme;
      • Capital budget 2019 / 20                        -        R12,5bn;
      • Spend to Date (November 2019)                  -        R1.26bn (±10%);
      • Bulk of spend attributable to Train renewal and signalling programmes (65%);
    • The Key reasons for the lack of implementation relate to;
      • Many projects stalled in SCM processes;
      • We lack adequate Technical Capacity;
      • Fragmentation of functions and responsibilities;
      • Lack of effective Programme Management;
      • External factors such as crime;

    Lastly our Business Operating Model…

    • Is not suited to the operations of PRASA;
      • For instance, duplications are abound, the Capital Programme being a case in point;
      • No proper shared services structure;  
    • The Divisions and Regions have been relatively weakened;

    As you can possibly pick up, a lot of our challenges have been self-inflicted….

    How then our responding to these malaise?
     
    Executive Alignment/Strengthening

    • We have taken cognisance and reviewed the work of the War Room which completed its work on 31 December 2019 as outlined by the Minister earlier;
    • I acknowledge that the War Room was able to bring much needed energy into the workings of PRASA; 
    • We have therefore begun its orderly wind down and are transitioning it in two ways;
      • Absorbing it’s three Work streams into EXCO Sub-Committees;
      • Restructuring of the EPMO function under the Office of the Administrator;
    • As such, in our efforts to strengthen EXCO, we have set up five Sub-Committees as follows:
        • Revenue Enhancement & Cost Containment;
        • Governance;
        • Service Recovery;
        • Safety Management;
        • Capital & Modernisation Programme Acceleration;
      • I have appointed the Chairpersons of these Committees and they have begun their work in earnest;
    • This will bring much needed integration into the workings of the Executive Team as well as seek to foster joint accountability. 

     

    • Other interventions relate to the…
      • Consolidation of the Capital Programme Function which is fragmented;
      • Strengthening Communication & Interactions with all our Stakeholders;
    • We will be moving to effect permanent appointments where there are critical vacancies at Senior Levels in the organisation; 
    • I will also be strengthening the office of the Administrator through a combination of secondments from Government Departments & Entities as well fixed term appointments.

     


     

    PLAN FOR THE TURNAROUND

    Lastly ladies and gentlemen, I have decided to structure this Turnaround Intervention into three execution periods, with rallying themes that we as EXCO and the rest of the organisation will converge around and these are;

     

    In line with these execution periods, some of the KEY PROGRAMMES that the EXCO Sub-Committees have identified are as follows…


    For the STABILITY & ORDER period – January to March;  

    • New Operating Model and Organisational Structure to be developed by an in-house team;
    • Conclude Vetting and Screening of Executives and Critical Departments;
    • Conduct Lifestyle Audits on all employees in finance, supply chain and the top 300 of PRASA Management Employees;
    • Update all Company Policies;
    • Implement Controls through the activation of dormant SAP modules;
    • Ensure consequence management is instituted; 
    • Track and attend to audit findings in particular repeat findings;
    • Delivery of Critical Components & Materials;
    • Source uniform clothing for our security;
    • Enter into new security contracts;  
    • National Station Upgrades;
      • CT Station Tenant Installation Project;
    • Rolling Stock Renewal Programme;
      • 5 – 6 New Trains Provisionally Accepted (cumulative from January);

    EXECUTION – January to June;   

    • Implement cashless ticketing;
    • Automatic Fare Collection;
    • Performance management system (PMS) strictly adhered to;
    • Renegotiate ESKOM tariffs;
    • Implement the Shared Service Model;
    • Employee recognition and Reward programme;
    • Discussions between Transnet and PRASA to unlock blockages;
    • Implement a Document Management System;
    • Recovery of key Corridors;
      • Western Cape – Central Line;
      • Gauteng – Mabopane – Johannesburg Line;
      • KwaZulu Natal – Umlazi – KwaMashu Line;
    • Integration of Rail and Bus Services;
    • Improved and Predictable Time Table for our train service;
    • Construction of modern control rooms;
    • Implementation of security measures (fencing + technology) at priority corridors / hot-spots.
    • Consolidation of Engineering & Technical Functions
    • Capacity support and Programme / project management tools
    • New Service provided on:
      • Pretoria – Ring Rail line (East Corridor, Tshwane Metrorail)
      • Cape Town – Heathfield line (Southern Corridor, Western Cape)

    COMMISSIONING, CONTINUITY & HANDOVER – January to December

    • Consolidation of Intersite and PRASA CRES;
    • Divisionalisation of Autopax;
    • Improved Cleanliness and Availability of Key Facilities (Ablution and Ticket Offices);
    • Re-fleeting of MLPS through the procurement of Locomotives;
    • Finalize the GO tender;
    • Finalise Security Tender;
    • Infrastructure Rehabilitation;
      • OHTE Rehabilitation;
      • Central & Mabopane Lines;
    • Construction of a Temporary Platform at Pienaarspoort Station;
    • New Service to be provided on:
      • Cape Town – Simons Town line (Southern Corridor, Western Cape);
    • Finalise Signalling Programme for Gauteng, Western Cape & KwaZulu-Natal;

    In CONCLUSION ladies and gentlemen…

    • As you can tell, most of our problems are self-inflicted;

     

    • We will however bring a semblance of order to PRASA;
    • In so doing, we will set the foundation for the sustainability of the business…and deliver value to our commuters;
    • Consequence management is being implemented as per recommendations of the SIU Secondment Report as well as the Werkmans reports referred to earlier – I will be making announcements in this regard soon;

     

    • I must say here that during my internal engagements, I have come across some very skilled and committed personnel at PRASA, who need a stable environment to exercise their craft; We will as EXCO strive to create this enabling environment;
    • It would be amiss of me not to take this opportunity to apologise to our commuters for the service lapses they have been subjected to. We’re committed to delivering a much improved service to you in the not so distant future;

     

    • We urge patience from all of our stakeholders as we set about fixing what has been broken over a period of time. It will not be overnight but we’re fully committed. 

     

    In closing, let me assure you that the Turnaround of PRASA is possible and it will be done!

    Let us get the trains moving!


    I thank you!

 



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