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Prasa’s new acting CEO makes asset exploitation a priority

Dec 17 2017 06:01
Lesetja Malope

Johannesburg - Many people were unimpressed at this week’s announcement by the Passenger Rail Agency of SA (Prasa) that it had appointed a new acting group CEO.

The appointment of Cromet Molepo to head up the troubled parastatal was met with a fair amount of scepticism, mainly because he is the third acting CEO to take up the post in two years.

Also, he was drafted from within the group instead of being an outside hire.

City Press interviewed Molepo at his office at Intersite, a subsidiary of Prasa, located in Sandton. He seemed unfazed by public scepticism.

Molepo will relinquish his post as CEO of investment company Intersite temporarily while he runs Prasa.

When he was offered the chance to lead the embattled state-owned company, Molepo said he consulted extensively and thought long and hard before accepting the responsibility.

“I had to decide if it was about me or my country,” he said, adding that he was "keen to take up the position on a permanent basis”.

Molepo said that, in his discussions with the board, he had made it clear that he was not a stooge.

“One of the things I said is that it must be very clear that I am not a hangman. Issues pertaining to the board must be handled by the board, while practical issues – in terms of legislation, which is my domain – will be my responsibility. All I need is the support of those people who are giving me the mandate. That is all I need – the guts and experience I already have.”

Top of Molepo’s list of priorities when it comes to fixing the ailing parastatal is staff rotation. That’s because, according to the new CEO, Prasa currently comprises “hardworking people and people who were brought into the system who are not adding any value”.

“Secondly, we have to speed up the infrastructure improvement programme,” he said.

Molepo’s third priority will be to focus on curbing the company’s rolling stock losses.

According to Molepo, Prasa is currently losing 80 coaches a month through vandalism and arson.

“The real success of Prasa depends on the successful exploitation of assets, not on selling tickets,” he said, highlighting the need to turn the company’s fortunes around fast.

Prasa is currently more than R1bn in the red.

“Those who were heading up Prasa neglected the business side, opting to focus more on the subsidised part of the business. However, Prasa is a social service which comes with a massive opportunity to generate revenue,” said Molepo.

Singling out Airports Company SA (ACSA) as a good model for how Prasa could turn train stations into commercial hubs, Molepo said the airport management company operated eight airports.

Comparing this with Prasa’s oversight of more than 600 stations across the country – 40 of those being major ones – Molepo said ACSA still generated considerably more revenue.

Among the plans in the pipeline for Prasa, he added, was one that would convert Johannesburg Park Station – located between the central business district and Braamfontein – into a large commercial hub and ensure that it remained the biggest station on the continent. Expansion plans would include spillover into Braamfontein.

Funding by the Development Bank of Southern Africa for solar panel roofing for Prasa’s stations has been approved to the tune of R38m. A mass rollout of Wi-Fi at the train stations, as well as inside buses, is also on the cards.

One of Molepo’s predecessors, Collins Letsoalo, made headlines when he allegedly demanded a 350% raise – despite being an acting CEO.

Molepo pointed out that he would be getting a legitimate acting CEO allowance, in line with the company’s policies. “There is an acting allowance and I will be getting that.”

Another issue hanging over Prasa is its costly agreement with Werksmans Attorneys to probe mismanagement and irregular contracts. The rail agency has already paid in excess of R100m in service fees, which include forensic investigations.

The contract caused an uproar among members of Parliament’s portfolio committee on transport, who expressed concern at the open-ended nature of the probe and the attorneys’ failure to produce tangible results in the form of prosecutions or refunds from alleged culprits.

“They will deliver their final report at the end of July and it will be considered by the board,” said Molepo, adding that the matter was a governance issue and would be dealt with at board level.

Molepo said the board, which is also an interim structure, would comment on investigations, still ongoing, by the Public Protector, the Auditor-General and National Treasury once they were completed.

Following the announcement of Molepo’s appointment as acting CEO, the Federation of Unions of SA (Fedusa) said they had no confidence in him as he was compromised already.

“We do not have confidence even in the board of Prasa,” said Fedusa’s general secretary, Dennis George.

The SA Transport and Allied Workers’ Union said it was puzzled by the decision to appoint yet another acting CEO.

“If the board believes Molepo is the right person to take the parastatal into the future, it should appoint him permanently,” it said.

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prasa  |  state owned enterprises  |  transport
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