City of Cape Town plans to cut Prasa's services over unpaid water and lights

2020-03-11 21:04
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The City of Cape Town plans to disconnect services to the Passenger Rail Agency of SA (Prasa) until the state-owned enterprise pays its R114 million rates bill, of which R98 million is in arrears.

However, by cutting off only water and electricity to Prasa's offices, commuters will not be stranded, as was the case when Eskom drew the line with Prasa over money owed last month and flipped the switch on train traction.

"It must be noted that the City's stance remains that it will act against debtors who have the means to pay but refuse to do so as unpaid debt means that there is less money available for service delivery," said Deputy Mayor Ian Neilson.

Neilson said that although Prasa paid R86.7 million at the beginning of February against previous arrears of R168 million, no firm payment arrangement has been made for the outstanding arrears.

The City expected a part payment of R22 million by Monday but it did not materialise. 

Prasa acknowledged its "cash flow crisis" and said it was planning to meet City officials on Thursday to sort everything out.

"The Prasa acting regional manager Raymond Maseko is scheduled to meet with the City on Thursday to discuss acceptable payment terms for both parties," Prasa spokesperson Makhosini Mgitywa told News24.

"As Prasa has consistently stated, we are facing a cash flow crisis which is making the company unable to pay our suppliers and creditors on time. We are optimistic that a more sustainable way forward will be charted at the meeting."

READ| Western Cape train chaos: Eskom starts restoring power after Prasa pays up

Neilson said in follow-up questions that the water and electricity disconnections are to offices and minor train stations and should have a minimal impact.

"It does not affect the power for train traction, which is supplied directly from Eskom to Prasa," he said.

Refuse services will also not be affected, and there should only be a minimal disruption, primarily to the Prasa administration.

Neilson said action was being taken in terms of the City's Credit Control and Debt Collection Policy, which entitles it to disconnect services as a result of Prasa's repeated failure to pay for services.

In February, Eskom cut Prasa in the Western Cape off because its bill was in arrears. The shock announcement left hundreds of thousands of afternoon rush-hour commuters stranded, and Golden Arrow drivers and taxis stepped up services to get everybody home. The bill was paid a few hours later.

Neilson said the decision was not taken lightly, but Prasa was not paying its monthly accounts, unlike some of the most vulnerable of the City's residents who were paying their bills.

"Debtors must service their debt every month. Prasa must do so too."

He said a culture of payment is vital. 

Read more on:    prasa  |  eskom  |  ian neilson  |  cape town  |  transport
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