Monday, November 1, 2010

I am Back!

Its been a while but I am glad that I am back and I am sorry for not warning you about the dissappearance. While away, I read this story below and I thought it will be interesting for you. Happy readings

WHILE Transport Minister Sbu Ndebele continues to tout high-speed rail as the preferred mode of transport of the future, the reality is that SA’s long-distance passenger train service may soon be something of the past if action is not taken soon.

Most South Africans may support futuristic plans to link Durban and Johannesburg via a high- speed rail link but many doubt the government’s ability to implement these projects with any success when the management of the existing passenger train service has at best been dismal. The wheels at the Passenger Rail Agency of SA’s (Prasa’s) Shosholoza Meyl unit appear to have well and truly fallen off and if the government and the agency’s management don’t do something fast, long-distance train travel in SA will cease to be a reality.

Behind the slow collapse of the service is a protracted dispute with Transnet over a R1,3bn debt owed to the logistics group by Prasa for the transfer of Shosholoza Meyl to it last year.

The feud burst into the public domain in August, when Transnet refused to carry out any further maintenance until the debt had been settled, effectively halting all Shosholoza Meyl services.

Prasa was able to resume operations only after finding an alternative means of servicing its locomotives, and even now only about 50% of the routes have been restored.

But that row is just one small part of the problem.

Prasa appears not to have enough cash to continue operating for much longer and management is putting together a plan to prop up the business by disposing of its property assets.

But even if management finds the cash to continue operating, it will have a tough time coaxing passengers back to the service. With less than a third of the trains running on time, passengers have lost all faith in the service, with 23% fewer using Shosholoza Meyl in the 2009-10 financial year than they did in the previous year.

But who is to blame for this sorry mess?

Transnet must shoulder some of the blame. Former Transnet CEO Maria Ramos may have thought it a good idea to get shot of the underperforming passenger rail service and make it someone else’s problem. However, Prasa CEO Lucky Montana is certainly not likely to let Transnet off that easily. Mr Montana alleges in the latest Prasa annual report that Transnet handed over a neglected and poorly managed business plagued by weak internal and financial controls. Prasa will not pay up the R1,3bn it owes without putting up a fight.

The government must also be blamed. It should have never allowed Prasa to take over Shosholoza Meyl without providing the funds it needed to sustain and upgrade the service. Now while the government mulls further funding, Prasa continues to slide toward collapse.

Then the finger must also be pointed at Prasa. The auditor- general’s report on Prasa claims that “management of the Shosholoza Meyl division of Prasa did not exercise oversight responsibility over reporting, maintenance of adequate accounting records, and implementation and compliance with internal controls. Management also did not implement appropriate actions to mitigate risks identified.” It is clear that Prasa was slow in tackling the problem and has made a bad situation worse.

However, the blame game will not solve the problems at Prasa. The government cannot afford to spend any more time dreaming of the future. It must act now. And, until Prasa is back on a sound footing and able to provide a world-class service, do not burden it with future high-speed rail projects as proposed. Give that to private entities that have already proved they know how to operate trains on time and profitably.

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