PRASA aims to generate R1bn from its property portfolio


The Passenger Rail Agency of South Africa (PRASA) has over the past five years embarked on a modernisation drive procuring 600 new trains for Metrorail and 70 locomotives. The modernisation programme also involves the upgrading of stations around the country and improving the signalling system.

This according to Business Day who also notes that PRASA has stated that it is aiming to generate R1bn a year as from 2018 from its core property portfolio and says the revenue will help subsidise the cost of train tickets.

PRASA CEO, Lucky Montana, said the state-owned company was looking to unlock more value from its property assets which would also help fund its capital expenditure programme and day-to-day operations.

This was said at PRASA’s recent unveiling of the first phase of its renovation of the concourse at Cape Town station.

The upgrade of the Cape Town Station is part of the national station upgrade programme, in which Prasa is spending R1.3bn over the next three years. IOL stated that a total of R126m of this amount was spent on upgrading the Parade Concourse.

“This upgrade and the continuing programme puts us side by side with the rest of the world,” said Montana. “The property portfolio which currently generates R220m per annum is growing … from 2018 onwards our property portfolio will give us revenue of R1bn per year.”

“From a revenue point of view we are seeing a lot of income… This is a good thing because it means the passenger benefits since the cost of the train ticket will not be increased… We are developing our property side so that we can subsidise our rail operations.”

He said PRASA was still waiting for a “Section 54” approval which regulates how state assets can be disposed of in line with the Public Finance Management Act.

Business Day notes some interesting statistics about the concourse, which links the station with the Grand Parade, is a 12,350m² area with 4,002 m² available for commercial use. Prasa has already secured leases with a number of retailers and major banks for ATMs to provide services on the concourse. These include Vodacom, Steers, Pepkor, Debonairs, Zebros Chicken and local businesses. According to PRASA, 145,000 people pass through the Cape Town station every day and businesses operating in the precinct thus stand to benefit from the footprint.

Of the new trains, 20 were built in Brazil and 580 locally. The first newly-procured test train is scheduled to run from November 1.

PRASA said it aimed to make the concourse, where construction began in August 2013, more energy efficient and user friendly. Montana said a date for the public opening would be announced once final touched had been added to the concourse.

By Kristy Jooste


Business Day