1. Income from practice fares has plummeted whereas the state subsidy has skyrocketed
Nothing fairly conveys the disastrous state of Prasa like graph 1 beneath. What it exhibits is that this: In 2008, PRASA collected R1.2 billion in fares (blue line). 13 years later, in 2021, it collected R178 million.
But over that interval Prasa’s authorities funding (inexperienced line) mushroomed. Its working subsidy ballooned from R2.6 billion to R8.8 billion. Its capital subsidy grew from R282 million to R2.9 billion (with a excessive of R4.3 billion in 2019/2020).
Within the graph, complete income seems to be wholesome. However Prasa contains the cash that it receives from the federal government as a subsidy in its income calculations – first, its operational subsidy after which, within the 2020/21 annual report, additionally its capital subsidy.
The regular climb within the operational subsidy – the inexperienced line – is mirrored by the miserable trajectory of the fare income.
Graph 1: Prasa’s sources of income. Supply: PRASA annual reviews
2. Curiosity on money reserves exceeds revenue from fares
Commuter rail is by nature a subsidised mode of transport. Taxes are used to scale back the price of a passenger’s journey. However within the subsequent graph we see how fares have shaped a smaller and smaller share of Prasa’s complete income.
By the tip of the 2019/2020 monetary yr, curiosity earned on its money reserves contributed extra to PRASA’s income than revenue from fares or from its rental properties.
We might interpret this as displaying a call by the federal government to scale back fares and wholly fund practice transport from taxes – like Spain just lately determined to do. However this isn’t the case. What we see is what occurs when passengers cannot take any trains.
Graph 2: Fares as a share of complete income. Supply: Prasa annual reviews
3. The variety of passenger journeys has plummeted
The graph beneath exhibits the collapse in passenger journeys.
The pink dashed line exhibits the entire passenger journeys throughout 1998, which is GroundUp’s calculation utilizing information from PRASA’s 2008/09 annual report. The blue line exhibits annual passenger journeys for annually from 2008.
The decline in passengers is basically the results of there being not sufficient trains. In line with Statistics South Africa’s Nationwide Family Journey Survey, 2020, the one greatest cause nationally why individuals are not utilizing trains
is that trains are merely not out there to them.
Between 1998/99 and 2008/09, there have been a mean of 43-million rail passenger journeys monthly. PRASA recorded its peak ridership in 2008/09, reporting a mean of 54-million passenger journeys monthly, in keeping with its annual report.
Covid-19 all-but collapsed commuter rail. StatsSA’s newest Land Transport Survey, launched on 19 September, exhibits that rail shouldn’t be recovering, regardless of all guarantees. The variety of passenger journeys recorded in June and July 2022 is decrease than the identical interval final yr.
Between January 2021 and July 2022, there have been a mean of 1.7 million rail passenger journeys monthly. That is 4% of the month-to-month common over the ten years between 1999 and 2008, and simply 3% of Prasa’s peak.
Graph 3: Change in passenger journeys on Metrorail trains. Varied sources
4. Prasa is unable to spend its capital
Within the graph beneath, utilizing nominal (not bearing in mind inflation) quantities from PRASA’s annual reviews, we see PRASA’s funding spending in pink, in comparison with its out there money reserves.
Earlier this month, the Division of Transport got here earlier than Parliament’s Standing Committee on Appropriations to elucidate the Passenger Rail Company of South Africa’s (Prasa’s) “perennial underspending on capital infrastructure”.
In line with the media assertion launched on behalf of Sfiso Buthelezi, the chairperson of the committee, “the unspent funds needs to be given to different departments which can be actively spending their budgets on service supply”. There’s an irony on this; Buthelezi himself was the chairperson of PRASA from 2008 and 2014.
In his assertion, Buthelezi expressed the committee’s “considerations with PRASA’s poor document on challenge and contract administration”. Once more, ironic, because the dodgy contracts from Buthelezi’s time as chair are a number one explanation for Prasa’s incapability to spend its capital price range.
Graph 4. Prasa fails to spend its money. Supply: Prasa annual reviews
5. Irregular expenditure has gone by the roof
The graph beneath exhibits the steadiness of irregular expenditure at Prasa. If irregular expenditure shouldn’t be pardoned by the Nationwide Treasury, recovered or written off, then it’s rolled over to the following monetary yr.
In 2020/21 Prasa reported R29 billion in irregular expenditure. Within the annual report for 2013/2014, Buthelezi’s final full yr as chairperson, simply R10.9 million in irregular expenditure was reported. However this determine was misleading.
Most of this irregular expenditure stems from a reevaluation carried out beneath the instruction of the board that changed Buthelezi’s board, led by Popo Molefe. As recorded within the 2015/16 annual report, R9.8 billion was found from the years when Buthelezi was chairperson. This determine was to extend as extra irregularities have been uncovered.
Earlier this yr, Chief Justice Raymond Zondo advisable that the Workplace of the Nationwide Director of Public Prosecutions take into account instituting a prosecution towards Buthelezi for the award of the Swifambo “tall trains” contract, in his State Seize Fee’s report into Prasa.
In 2005, Buthelezi was appointed to the board of PRASA’s predecessor, the South African Rail Commuter Company. Then, he was appointed as chairperson of PRASA’s board, from its inception in 2008 till 2014.
In his outgoing letter in Prasa’s 2013/24 annual report, Buthelezi boasts of an organization that’s “resilient” and “secure”. He stated that Prasa’s clear audit was a “testomony to the onerous work and focus of the Board in putting in controls and governance protocols”.
The very subsequent yr, the Prasa’s “clear” audit proved paper-thin, with the publication of the Public Protector’s Derailed report, and the years that adopted mocked the claims of stability and resilience in Buthelezi’s boasts.
Graph 5: Stability of irregular expenditure. Supply: PRASA annual reviews
6. Commuters pay extra for worse service
The graph beneath exhibits PrasaA’s common fare income per journey.
The blue line is calculated from Prasa annual report information whereas the pink line comes from StatsSA information from the 2020 and 2022 Land Transport Surveys.
The will increase seem roughly consistent with inflation till 2020, however then there is a large spike.
To make the calculation, we estimated the entire passenger journey numbers for 2020/2021. We initially thought that the spike from R8 in 2020 to R13 in 2021 was unrealistic. However StatSA’s estimates of fare per journey for these years was considerably larger, at R14 for 2020 and R29 for 2021.
After we take into consideration that since 2020 Prasa now solely points single tickets, as an alternative of discounted weekly and month-to-month tickets as prior to now, the rise in fare per journey is smart.
Graph 6. Fare income per journey. Information from Prasa and StatsSA
7. Value to Prasa per journey jumped in 2019 – after which skyrocketed in 2021
The graph beneath exhibits how a lot a single journey (one individual making one journey) prices, from totally different views.
The blue column, tax per journey, exhibits the sum of subsidies obtained in a yr, per passenger journey as declared within the revenue assertion. The pink column exhibits grants obtained from the federal government as declared within the money move assertion, per journey. The yellow column exhibits the price of operating rasa – the sum of all working expenditure – per journey. The inexperienced column exhibits working expenditure, much less the income obtained from fares and leases.
The rail company has mounted prices which can be troublesome to scale back, like workers bills, so when passenger numbers drop, as they did within the Covid years, you’ll count on the fee per journey to rise. However within the years earlier than Covid-19 hit, this price was already rising uncontrolled. From R10 per passenger journey in 2014/2015, it rose to R21 in 2016/2017, to R44 in 2018/2019, and R68 in 2019/2020 (years ending in March).
Graph 7. Value per journey from totally different views. Supply: Our calculations from PRASA annual reviews
8. Prasa operational prices dropped solely as a result of it has fewer trains
A superficial have a look at the graph beneath means that after years of rising operational prices, Prasa is getting these prices beneath management. However it is a mirage.
The pink line exhibits two consecutive years, 2019/2020 and 2020/2021, when operational prices declined. The decline shouldn’t be attributable to lowering workers prices, because the yellow line exhibits a gradual enhance after which stabilisation in workers prices.
The notes to the annual reviews present that the principle drivers of the decreased prices are attributable to a decline within the variety of trains operating. This leads to drops within the prices of gasoline, safety, and repairs and upkeep to trains and stations.
With out upkeep, there are merely not sufficient working trains to placed on the tracks.
In line with the 2020/2021 annual report, simply 83 practice units have been out there by the tip of the reporting interval. In 2019/2020, there have been 110 units out there, of which solely 45% have been on the regular size. In 2018/19, 183 units, with an analogous proportion operating quick. In 2013/14, by comparability, there have been 288 units out there.
Graph 8. Working bills versus worker prices. Supply: PRASA annual reviews
9. Prasa’s funding has elevated, but the worth of its property is dropping
Maybe this underspending and excessive price to the general public purse per journey may very well be forgiven if the general public may very well be assured that the spending was going in the direction of constructing railways infrastructure that might, finally, accommodate hundreds of thousands of passengers per day.
Since 2008, Prasa has spent a complete of R53 billion on property, plant and tools, in keeping with the annual reviews. However the complete worth of its property, plant and tools property has not elevated by that quantity. As a substitute, the worth of the core property of the corporate grew at a slower charge than the cash that was being invested.
Then, Prasa determined to cancel its safety contracts with out alternative in late 2019, and a catastrophic decline in property adopted.
The drop in worth for 2019/2020 and 2020/21 might be understated, as a result of PRASA would not really know the worth of its property.
In a word to the annual report for the 2020/2021 the Auditor-Normal states that there was not “ample acceptable audit proof that administration had correctly accounted for property, plant and tools”.
Extremely, Pr has asano mounted asset register, one thing which has been flagged by the Auditor-Normal for a few years. And not using a mounted asset register, PRASA is unaware of the property that it really has.
Graph 9. Worth of property versus funding in property. Supply: Our calculations from Prasa annual reviews
10. Minibus taxis are absorbing rail commuters
Within the following two graphs we see the variety of journeys on totally different modes of transport used within the provinces which have commuter rail providers, in 2013 and in 2020. (Automobiles should not included.) Minibus taxis have absorbed many rail commuters in Western Cape and Gauteng. The image within the Japanese Cape and KwaZulu-Natal is much less clear.
Graph 10a: How folks travelled in 2013. Information from StatsSA Nationwide Family Journey Survey, 2020.
Graph 10b: How folks travelled in 2020. Information from StatsSA Nationwide Family Journey Survey, 2020.
11. The shift away from rail comes at a excessive price for commuters
The graph beneath exhibits that this shift from rail to minibus taxi has come at a really excessive value. Within the Western Cape in 2020, the typical month-to-month price for a commuter on a minibus taxi was R636, in KwaZulu-Natal it was R731, whereas in Gauteng it was R1,198.
It’s unclear whether or not the comparatively excessive price of practice transport in Gauteng contains Gautrain fares, however however, the typical price monthly to the commuter is R407 much less for the practice person than the taxi person in that province. Within the Western Cape, the price of a practice monthly is simply over half of a month’s price of minibus taxi fares.
Parliament (and the Nationwide Treasury) may be contemplating pulling cash from PRASA, however fewer trains imply a poorer public. Prasa’s disaster is South Africa’s.
Graph 11: The price of journey by mode of transport. Information from StatsSA Nationwide Family Journey Survey, 2020.
The graphs and information used on this article can be found right here: PRASA over time.