Pretoria - Axed Prasa chief executive Lucky Montana abused his position of power during his stint at the state-owned entity, Public Protector Thuli Madonsela said on Monday.
“The allegation that Prasa improperly terminated the contracts of seven cleaning companies and improperly replaced them with Reakgona Commercial and Industrial Hygiene and Katanga Cleaning Services is substantiated,” Madonsela said while releasing her investigative report, titled “Derailed”, during a media briefing in Pretoria.
She said the cleaning companies’ contracts were summarily terminated by Montana on March 14, 2012 in contravention of existing contracts between the Passenger Rail Agency of South Africa (Prasa) and the companies.
Madonsela said Montana replaced the cleaning companies on March 15 with Reakgona Hygiene and Katanga Hygiene, without following transparent and competitive procurement processes.
“Prasa’s summary termination of the contracts of the seven cleaning companies and their irregular replacement with Reakgona and Katanga, accordingly constitutes maladministration, abuse of power and improper conduct,” said Madonsela.
“The failure by Mr Montana to afford the seven cleaning companies an opportunity to explain themselves and possibly remedy the breach cannot be considered to be in line with section 33 of the Constitution and the provisions of PAJA (Promotion of Justice Act).”
In July, the Prasa board led by Popo Molefe axed the outspoken Montana.
The Public Protector probe into Prasa followed 37 complaints lodged by the South African Transport and Allied Workers Union in 2012. The complaints were later pursued by the National Transport Movement.
On other investigations, Madonsela found that Montana made improper appointments and improperly terminated employee contracts, costing the state-owned enterprise millions of rands.
“The allegation that Mr Montana improperly appointed Mr Ezra Ndwandwe (on a change management consultancy) is substantiated. However it was the consultancy and not the person that was appointed and the amount involved was R10 833 774 for 12 months,” said Madonsela.
“The appointment of Ndwandwe Consultancy was unlawful, in contravention of Prasa’s own SCM (supply chain management) policy, treasury regulations on procurement, the Public Finance Management Act (PFMA) and section 217 of the Constitution and accordingly constitutes improper conduct and maladministration.”
In her investigation, Madonsela found that the appointment of Ndwandwe Consultancy “was triggered by an existing relationship”.
“It is clear that no process was followed to establish if any other agency offered similar services. More importantly, no demand management exercise preceded engagement,” she said.
On allegations that Montana improperly terminated the contracts of Prasa executives, Madonsela found the claims were merited.
“The allegation that Mr Montana improperly terminated the services of five of its executives mentioned in this report is substantiated. Mr Montana terminated the services of five executives during 2008 to 2013 without following proper procedure,” said Madonsela.
The unwarranted dismissals of the executives resulted in the CCMA overturning some of the terminations, and others being settled out of court at a significant cost to Prasa.
“Prasa subsequently paid labour disputes settlements amounting to R3 816 735, principally due to procedural irregularities in the disciplinary steps taken against involved officials, which payments can be said to constitute fruitless and wasteful expenditure as envisaged in section 38 of the PFMA,” said Madonsela.
She also found that Montana improperly suspended Prasa employees, resulting in labour dispute settlements amounting to millions of rands.
On another allegation, Madonsela found that Montana had improperly appointed Joel Chimanda “for advisory services”.
“However it was Mr Chimanda’s company, AR Chimanda Consulting that was contracted for R1 999 750 on a monthly retainer of R150 000, which makes the appointment a procurement contract and not an employee contract,” said Madonsela.
“The conduct of Mr Montana accordingly constitutes maladministration and improper conduct,” she said.
After making numerous adverse findings, including maladministration and financial mismanagement against Prasa and Montana, Madonsela on Monday urged Transport Minister Dipuo Peters to act in light of these findings.
“The minister of transport [is] to ensure that the Prasa board considers the acts of maladministration and improper conduct referred to in this report and take appropriate disciplinary [action] against the officials of Prasa in respect of their conduct referred to therein,” Madonsela said.
ANA