Passenger Rail Agency Of South Africa Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

INTRODUCTION

PRASA is anenter prise, which is involved in providing the high quality service to the residents of South Africa. The subsidiaries that are working under this parent company include Autopax, Shosholza, Metrorail and Intersite. Moreover, being a sole provider of the rail services to the overall economy, it can be considered to be having greater implications.

Despite this, progress was shown by this company and it was taken into account by the CEO of PRASA, Mr. Montana over the past seven years, which is comprised of the fiscal year 2004 and 2005.

However, this progress in the performance of this company was seen because of the contributions that were made by the government of South Africa in order to avoid any sort of problem that may have an impact upon the performance of PRASA.

Moreover, on 1 April 1990 Transet came into existence and this resulted in undertaking a majority of the operations of SATS. Despite this, some of the measures were taken by the government of South Africa in order to know about the problems earlier.

In addition to this, the capital expenditure incurred by PRASA was R5 billion and the purpose behind this was the stability of the services offered by the company. Despite this, the presence of outdated technology resulted in the negative impact upon the reliability of operations that were in place at the railways. Moreover, the financial performance of the company was also affected badly due to the massive increase in these costs.

PART A: CASE STUDY

HISTORY OF PRASA

The passenger rail agency of South Africa has the responsibility to provide rail services to the people of its country. It has four branches or subsidiaries, which include Metrorail that is responsible for the operation of commuter rail services in the urban areas.

Secondly, the subsidiary named Shosholza Meylhas the responsibility related to the regional and intercity rail services. Apart from that, Autopax is responsible for coach services on regional and intercity basis. Despite this, another subsidiary is Intersite that is responsible for the corporate property portfolio.

PRASA is the provider of public infrastructure; therefore it has an implication on the overall economy. This is a government owned company that has estimated total net assets of R19 billion in the fiscal year of 2010/2011. However, in 1910, after the formation of the Union of South Africa, all of the railways that were present at that time went into a merger with South African Railways and Harbours.

There was a process of reclassification and re-numbering that was related to the three constituent railways, which was implemented in January 2012. Hence, later on the South African services and the Harbours were named as South African Transport Services.

Moreover, with the passage of time on 1 April 1990 the creation of Trans net took place in order to take over the majority of the operations of SATS relatively. However,there was an exception that was related to the commuter rail that was being transferred to the newly originated South African Rail Commuter Corporation SARCC.

SARCC had the ownership related to the commuter rail services, which also included the surrounding land as well as the stations, rolling stocks and also the infrastructure. However, the services related to the rails that were mainly offered were operated by the Metrorail.

On the other hand, the CEO of PRASA named Mr. Lucky Montana has taken into account regarding the progress that was made by this enterprise in the past seven years, which commenced in the fiscal year 2004/2005 by making the use of the increased resources that were made available by the government of South Africa.

In addition to this, the foundation that was related to the current state of the transport system was implemented, but this system mainly remained without an integration. The formal launch of PRASA took place in the fiscal year 2009 and the purpose behind this was the transformation and consolidation of the passenger’s rail enterprises into a single entity in order to avoid hurdles(Jain, 2013).

Moreover, Mr. Montana also mentioned that the rail safety regulator granted PRASA with a commissioning as well as the testing permit for the locomotives. Despite this, it was a final arbitrator and the permit would not have been provided if the specifications that were mentioned about the locomotives were incorrect.Passenger Rail Agency Of South Africa Case Solution

There were also some challenges that had to be faced by the South African Railways including the life of the whole system of the railway that is mainly comprised of the operating structure, technology, the number of staff and also well as the operating systems. There was also deterioration of the current technology that was under the use of railways, which did not seem to be reliable and there were also higher costs attached in order to maintain the infrastructure...........................

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