ANC’s Mabe loses bid to recover millions from Prasa

ANC MP Pule Mabe has lost a court bid to recover millions from Prasa. Picture: Dumisani Sibeko

ANC MP Pule Mabe has lost a court bid to recover millions from Prasa. Picture: Dumisani Sibeko

Published Apr 20, 2016

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Pretoria - ANC MP Pule Mabe’s company KGP Media Investments has lost its urgent high court bid to recover several millions from the Passenger Rail Agency of South Africa (Prasa), arising from an alleged agreement between the parties in terms of which Prasa would pay the company R530 897 a month to promote its services in the publication Kwela Express.

The publication, which belongs to Mabe and his wife Hleki, is a bi-weekly newspaper for commuters and distributed at most public transport hubs in the country.

Prasa appointed KGP Media to produce the newspaper and an online magazine to promote its services and to communicate with commuters.

The deal between Prasa and KGP Media was mired in controversy when Public Protector Thuli Madonsela found that the agreement was irregular.

Judge Neil Tuchten, of the high court in Pretoria, in a judgment delivered on Tuesday, said the agreement between the parties was described by them as a strategic partnership agreement.

“In law, however, it is nothing but a commercial agreement under which Prasa agreed to be locked in for three years (ending on March 31, 2018) to pay a substantial amount each month to the applicant in return for the promotion of Prasa’s services in Kwela Express.”

The judge said it was common cause that the conclusion of the agreement was not preceded by any competitive bidding process (tender procedures). A complaint relating to the agreement was submitted to Madonsela, who investigated this as well as other alleged irregularities within Prasa.

Madonsela in August last year published a report in which she found that the tender was not awarded transparently. Her investigation revealed that the deal cost Prasa more than R30 million in total, although this was denied by the Mabes.

Madonsela at the time directed Prasa to terminate the deal, which it eventually did in March this year. Prasa, following Madonsela’s directions, also told KGP Media that it regarded the agreement as invalid from the outset, as it was unlawful.

Judge Tuchten said, well aware of the public protector’s report and the remedial action directed by her, the applicant continued to render the promotional services to Prasa and to invoice it at a rate of R530 897 a month. The last payment was made in September/ October last year.

KGP Media told the court that if it did not receive the back payment, it was likely to go insolvent.

The media company is now set on fighting the termination of the agreement during review proceedings. It will also then ask that the public protector’s report relating to the agreement, be set aside.

However, KGP said that in the interim it needed Prasa to urgently pay up for the services rendered. It is not known from Tuesday’s judgment exactly how much is outstanding.

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