Finance Minister Enoch Godongwana has announced R5.8 billion for the Passenger Rail Agency of South Africa (PRASA) rolling stock renewal programme.
Image: Armand Hough/Independent Newspapers
Finance Minister Enoch Godongwana has announced R5.8 billion for the Passenger Rail Agency of South Africa (Prasa) rolling stock renewal programme.
The Minister said during his budget speech on Wednesday that the funding is part of efforts to modernise Prasa’s fleet and improve commuter rail services. The programme aims to increase annual passenger trips from 77 million to between 250 and 450 million over the medium term.
He added that part of the special appropriation includes R1.8 billion linked to Prasa to ensure the agency meets its contractual obligations under an agreement with Gibela, which requires a minimum order of 35 locomotives per annum.
"The special appropriation to attend the inquiry of 8.5 million, they looked at 1.8 billion from Prasa, if I may explain to you how that is required. Prasa has set a contract with Gibela; they've got to order a minimum of 35 locomotives per annum," he said.
The Minister also said that if Prasa fails to meet the minimum order, it would constitute a breach of contract, which could delay the entire fleet renewal programme. He emphasised that part of the funding will also cover a substitution payment of about R1 million to the World Bank to ensure all obligations are met.
"If you failed to order 35, it's a breach of contract. So we've got to make sure that Prasa continues with its contractual obligations. We've got to pay for a substitution to the World Bank, which we've got to pay for, for about a million rand".
He also announced that the government will be providing R700 million to the Department of Communications and Digital Technology.
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