Daily Maverick reported on Friday morning that the declining performance of the Passenger Rail Agency of South Africa is not only endangering its own future, but also that of contractor businesses, with the risk of job cuts and even closure.
Wictra Holdings and two other businesses told Daily Maverick that Prasa indicated that it could not continue contracting work from them for much longer. Wictra has conducted refurbishment and maintenance for Prasa for over 20 years, according to Daily Maverick.
Daily Maverick reported that the cash-strapped Wictra Holdings was waiting anxiously for PRASA interim CEO Nkosinathi Sishi to award the business a fresh contract as it battled to hang on to its staff.
Fixing the past
Fin24 asked PRASA spokesperson Nana Zenani about the termination of security, refurbishment and maintenance contracts.
Zenani said any contract terminations which occurred at the end of October were not meant to target a specific company but were likely in reaction to findings of alleged irregularities by Public Protector Busisiwe Mkhwebane.
"There was a report that was done by the Public Protector. They found that all of the security contracts we have were irregular. We had to make a decision on that basis. It is not directed at (a) company in particular. It is past actions that the interim board is fixing," said Zenani.
Cutting ties with long-term suppliers could not have come at a worse time for PRASA. According to PRASA's annual report for the financial year ended at March 2019.
"Coaches out of service awaiting components due to non-availability of long-term national supply of material and components refurbishment contracts," the PRASA report said.
Regarding the bus subsidiary, the PRASA annual report said bus availability has been reduced to 35% impacting revenue and service quality.
"Key to the long-term strategy is the refurbishment and potential acquisition of new buses to remain competitive and offer safe, reliable services," the PRASA report said.