PRASA: NEW FINANCIAL MODEL NEEDED
Posted on 01 December 2009
One of the biggest challenges facing the Passenger Rail Agency of South Africa (Prasa) is the developing of a new financial model. “It is critically important,” CEO Lucky Montana told Beeld’s James-Brent Styan, “that a plan be developed between the national treasury and the Department of Transport, to make it possible to realise capital aims for the next five years. The present model is no longer adequate to meet passenger train service growth requirements.”
Prasa’s existing sources of revenue are mainly ticket sales (R1.3 billion) and government subsidy (R2.5 billion). However, operating expenses this year were R5.17 billion. In the end, Prasa ran at a loss of R1.05 billion – up from R513 million in 2008. Montana would like the government to permit raising of funds inn the market. “We believe we can raise 35% of our financial needs in the private sector but the state would have to provide guarantees.”
According to Montana, personnel and electricity account for the greater part of Prasa’s expenditure. At present, 2.2 million commuters use Metrorail trains daily – a figure that grew 9.2% in the most recent financial year.
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