Minister of Transport Fikile Mbalula told Parliament's Portfolio Committee on Transport that the appointment of an administrator at the Passenger Rail Agency South Africa was compliant with legislation regulating the management of state-owned entities.
In the department's first meeting with the portfolio committee since Mpondo's appointment, Mbalula told the committee that the decision to dissolve PRASA's board and place the entity under administration was not made lightly, but was in the interest of improving its position.
"The appointment of the Administrator followed due legal processes, as he was first appointed in terms of the Public Service Act and subsequently seconded to PRASA as Acting Group CEO," said Mbalula.
Mbalula said the Public Finance Management Act allowed for Treasury, in exceptional circumstances, to instruct that another functionary of a public entity should be the accounting authority for that entity.
"The National Treasury has since granted approval in terms of Section 49 (3) of PFMA that the Group CEO of PRASA or a person Acting in that position, be the accounting authority for a period of twelve months," Mbalula said.
Mbalula said PRASA had informed the office of the Auditor General of this approval, in line with the Public Finance Management Act. State companies cling to cash as financial challenges bite, Treasury warns
Meanwhile, concerns were also raised over PRASA's ability to service commuters, and that this, in turn, posed safety risks to customers.
Transport director general Alec Moemi said too few of the entity's fleet passenger carriers were in use by commuters and that those in operation were not enough to meet the ever-growing demand.
"About 38% of [the] fleet [is available] as at the ten-year spend for use. This risks passenger safety and life if you put them in service. The safest thing to do is to decommission them and place them in a yard and as a result, you get less trains in service and the occurrence of people on top of moving trains," said Moemi.
Moemi told the committee that there were not enough coaches available to service the demand and, as a result, there had been increases in fatalities.