Association Says R7.6 Billion PRASA Contract Cancellation Will Bleed Jobs, South Africans React

• Mesela Nhlapo warned against the PassengerRail Agency of South Africa cancelling train refurbishment contracts
• PRASA spent billions refurbishing trains that are not in use or have been discarded
• The CEO of a rail association said the cancellation of the contracts would have a severe impact on the economy

With 10 years of experience, Tebogo Mokwena, a Briefly News current affairs journalist, has provided insights into infrastructure challenges and state-owned enterprises in South Africa, having worked at Daily Sun and Vutivi Business News.

JOHANNESBURG — A rail industry association warned that the economy could be devastatingly impacted by the Passenger Rail Agency of South Africa's (PRASA) possible decision to cancel contracts to refurbish trains.

Association warns PRASA

According to eNCA, Mesela Nhlapo, the CEO of the African Rail Industry Association, commented on the possibility of PRASA cancelling the contracts that it issued for refurbishing trains. PRASA has spent over R2 billion refurbishing trains, many of which remain unused and discarded.

Nhlapo said that companies, mostly black-owned, will be closed in large numbers. The cancellation of these contracts will also cause a skills bleed. She said that as an industry, the association is against the cancellation of these contracts.

She said that if PRASA did proceed to cancel the contracts, the companies affected should use the available channels to hold the state-owned enterprise accountable.

What went wrong?

According to Nhlapo, PRASA, which spent R7.5 billion overhauling trains, committed a financial misstep. She said that the contract for the general overhaul was issued and experienced hiccups. Nhlsapo said this resulted in many companies being liquidated because of the constant contract issues.

Nhlapo said that due to delays in PRASA and a flurry of executives joining and leaving PRASA, many companies suffered. She said that the infrastructure was vandalised because security contracts to protect trains were cancelled.

PRASA-related news

PRASA's former head of engineering, Daniel Mthimkulu, was sentenced to 10 years' imprisonment for faking his qualifications. He was also sentenced for fabricating a letter from a German company, which he used to bid for a salary increase.

In 2024, the Special Investigating Unit revealed that it was investigating PRASA's 1,200 ghost employees. The employees were still receiving salaries despite being absent from the payroll.

South Africans react

Netizens commenting on Facebook discussed the contract's possible cancellation.

Thanyiseni Molaudzi said:

"Divide this money and give the work to more contractors, not just one contractor."

Mokone L Komane said:

"South Africa doesn't need foreign aid, but is being mismanaged by comrades. The Prada contracts were signed during the dunderheads."

Lyn Maxwell said:

"More bad news from idiots who can't run the country properly."

Mgsbile Zukile said:

"This is getting out of hand."

MK Party accuses PRASA of sabotage

In a related article, Briefly News reported that the MK Party accused PRASA of sabotaging them. The spokesperson, Nhlamulo Ndhlela, accused PRASA of not honouring a contract it had with the MK Party.

He said the party paid for trains to ferry supporters across Durban, KwaZulu-Natal, to their birthday celebration at the Moses Mabhida Stadium. However, he accused PRASA of cancelling at the last minute.

Source: Briefly News