A Plan of the Passenger Rail Agency of South Africa (PRASA) to offer employees a non-critical grades voluntary severance packages (VSP) depending on the national treasury granting them a budget to implement this initiative to cut back on its annual wage bill.

The Leadership of the United National Transport Union (UNTU) today held a virtual meeting with the Leadership of Prasa and Prasa Administrator Bongisizwe Mpondo to inform the Union representing the majority of Prasa’s employees, on the future of the passenger rail agency.

Steve Harris, General Secretary of UNTU, says Prasa outlined its current financial difficulty to manage its cashflow since the passenger rail agency is unable to generate any income since the national lockdown which started on the 26 March 2020.

Prasa, a state-owned enterprise who employ 799 managers and more than 13 000 junior employees, cashflow crunch started in November 2019 after the disbanded Prasa Board suspended the contacts of (20) twenty private security companies without putting an alternative in its place. The result was mass destruction and vandalism of Prasa’s infrastructure.

According to Prasa it has been struggling to pay its creditors since then despite a moratorium on the filling of vacancies and strict limitations on travel and accommodation.

With the proposed voluntary severance packages Prasa aims to cut 10% off its wage bill without losing critical skilled employees and without having to retrench any employees.

Harris says the Union is disappointed that Prasa did not put a comprehensive proposal on the table. “We need to know how big the size of the elephant is before we can eat it bit by bit.”

UNTU requested Prasa to come up with a detailed outlined plan of how many employees in what grades and of what ages will be targeted once it obtained the budget to offer the packages.

UNTU will also send a detailed letter to Prasa of all the various aspects the Union would like responses to going forward.

Harris requested UNTU members not to panic or to make harsh decision. The Union will continue to keep our members abreast of any developments.

Issued on behalf of UNTU by Sonja Carstens, Deputy-General Secretary: Media, Liaison and Communication. For UNTU press releases phone Sonja at 082 463 6806 or e-mail sonja@untu.co.za

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