PRASA warns unions it may not be able to meet obligations of wage deal that takes effect in August

JOHANNESBURG - The Passenger Rail Agency of South Africa (PRASA) appears to be on a collision course with two labour unions after the rail operator sent out letters to union leaders warning it may not be able to meet the obligations of a signed wage agreement meant to take effect in August.

After at least three failed rounds of negotiations, threats of industrial action and a conciliation process, PRASA and unions agreed on an above-inflation wage deal.

But the SOE has sent letters to its biggest unions, the United National Transport Union (UNTU) and the South African Transport and Allied Workers Union (SATAWU).

ALSO READ: PRASA to implement travel fare increase for first time in 10 years

In a two-page letter from PRASA, seen by EWN, the SOE said it was still committed to complying with the signed agreement but has, however, noted that "the business is currently facing significant financial constraints and cannot meet current obligations going forward".

It said this position had been consistently expressed over the last 18 months.

PRASA is in advanced discussions with the Department of Transport and National Treasury to address operational funding challenges.

"PRASA will communicate any decision made by National Treasury timeously so that all parties are clear on the way forward. We kindly request that our social partners bear with us, as we continue to attempt to resolve this matter," the letter reads.

The July wage agreement included a 5.5% salary increase for the 2025/26 financial year, effective this month.

The backpay for the period April to July 2025 was set to be paid as a once-off lump sum with the September salaries.