Prasa has denied that it owes the money.
A last-gaps court bid staved off the sheriff from attaching the assets of the Passenger Rail Agency of SA (Prasa) as it denied owing R22million to a service provider.
On Friday at Umjantshi House, Prasa’s offices in the Joburg CBD, the sheriff arrived to execute a warrant of attachment to seize the entity’s assets following the parastatal losing its appeal application at the South Gauteng High Court on Wednesday.
The sheriff arrived moments before Prasa was set to hold a media briefing to deny that its assets, including trains, would be attached following The Star’s report on Thursday. The state-owned entity had filed papers in the Supreme Court of Appeal (SCA) on Thursday to halt the seizure of its assets.
This related to roughly R22m owed Mbita Consulting, where R1m was payable immediately according to a September court order, after the service provider was awarded a default judgment in July.
The R22m, which includes an annual 10% interest rate since November 2015, is for the cleaning services that Mbita provided for more than two dozen Prasa-owned train stations, which were taken care of from November 2012 to July 2017. However, Prasa head of legal Benedict Khumalo denied on Friday that the state-owned entity owed Mbita R22m in unpaid invoices.
When reminded by The Star of the July judgment against Prasa, Khumalo said that Prasa were reviewing that decision to set it aside.
“That (July ruling) was a default judgment. The service provider had launched an application on an urgent basis, and we were unable to find the papers on time to defend the claim.
“We have now located those papers and have filed the necessary papers for the rescission of that default judgment. The matter will be heard in March,” Khumalo said.
Prasa is in a precarious cash position following the release of its 2016/17 financials, which were revealed a year later than expected, showing that it suffered a staggering loss of R928m.
This dire financial position could be exacerbated after Prasa announced that it was stopping the services of its Main Line Passenger Services (or the long-distance Shosholoza Meyl) following a directive from the Rail Safety Regulator (RSR).
Prasa spokesperson Makhosini Mgitywa said on Friday that the entity had an “intervention plan” that it submitted to the RSR on Friday.
“The plan addresses the immediate risks associated with manual train authorisations, driver behaviour, and underlying issues of security and infrastructure,” Mgitywa said.