CAPE TOWN - The organisation undoing tax abuse (OUTA) has laid charges of corruption and fraud against the former board of the Passenger Rail Agency (PRASA) over the disastrous locomotive contract.
The charges were laid yesterday at the Randburg police station and are supported by an affidavit by OUTA COO Ben Theron.
This comes after Prasa was awarded a R3.5 billion contract to local company, Swifambo on March 25, 2013.
This hefty contract was to secure the purchase of 20 Euro 4 000 locomotives and 50 EuroDual locomotives.
Popo Molefe who was appointed as PRASA board chairman in 2015, successfully defied the deal in court based on the Public Protector’s report.
Subsequently, the court issued demand to Swifambo for the return of the R2.65 billion already paid.
"PRASA was supposed to be replacing the trains for inter-city services. They’ve paid Swifambo R2.65 billion but received locomotives unfit for purpose. This negatively affects poor citizens and commuters directly. It’s about time those responsible for this mess were held accountable and funds returned", says Theron.
At the time of the deal, PRASA was run by then Group CEO Lucky Montana, who was also a board member. Notably, the board was chaired by Sfiso Buthelezi, who is now Deputy Minister of Finance.
“It is a terrifying prospect that a board chair with this track record was appointed as Deputy Minister of Finance and the chair of the Public Investment Corporation. If he cannot manage a locomotive deal, how can he manage the PIC or the national Budget?” addsTheron.
OUTA then turned to the police to ask them to probe the charges against all the surviving members of that board.
The irregularities of the illegalities in the deal had emerged in the 2015 investigations. Notably, these illegalities were not challenged in the high court case, finalised in July 2017.
The irregularities include:
-Locomotives delivered were unsuitable for South African railways
-Swifambo did not have a valid tax clearance
-They also did not have relevant work experience or financial backing
-They were effectively fronting for Spanish company Vossloh
-Prasa intended to lease the 70 locomotives but ended up buying them
The Prasa board knew that procurement procedures had not been adhered to and was legally responsible for approving such deals.
“The delivery of the defective locomotives could have been averted had the BOC not approved the bid. The agreement, in turn, resulted in financial loss to PRASA as defective locomotives had been delivered,” says Theron in the affidavit.
The then board further tarnished matters by failing to report the known procurement irregularities to law enforcement authorities, concluded Theron.
- BUSINESS REPORT ONLINE