Poor advice has cost transport department R100m in legal fees
This emerged in a written response by Transport Minister Blade Nzimande to a parliamentary question from the DA’s Manny de Freitas.
Nzimande’s response shows that the department and its entities, that have made disclosures on litigation, spent R91 259 009 in the past 12 months.
The amount excludes those costs incurred by the Passenger Rail Agency of South Africa (Prasa) and the Airports Company of South Africa (Acsa), which did not disclose their expenditure in their litany of legal cases.
The amount spent on litigation has been described by De Freitas as not surprising because state institutions spend too much money on litigation.
“The problem, in many cases, is that they get bad legal advice,” he said.
“Their attitude on legal issues is not done in the right spirit,” De Freitas said, adding that the department defended legal matters out of pride and arrogance.
He said he would look into Nzimande’s written reply and send follow-up questions for more details.
The breakdown of the amounts spent on litigation showed that the Road Accident Fund spent R58.6m, followed by the South African National Roads Agency (Sanral), R10.9m; the South African Civil Aviation Authority, R6.6m; and the Road Traffic Management Corporation, R6.2m.
The Cross-Border Road Transport Agency incurred R2.6m in litigation costs, the Road Traffic Infringement Agency R1.1m, the Air Traffic and Navigation Services had five litigation matters that cost the entity R942401, the Railway Safety Regulator R868590, and the South African Marine Safety Authority R45000.
The Ports Regulator of South Africa reported no litigation in the past year.
Acsa and Prasa did not disclose the amount they spent on litigation. However, Acsa has faced 32 legal cases, with only five being finalised and the rest still pending. Prasa faced 59 lawsuits during the same period.
One of Prasa’s lawsuits involved a R1 billion claim for services allegedly rendered and construction work allegedly performed.
The Transport Department, which spent R3.1m on litigation, had faced about 24 legal matters. Only nine matters were finalised, with at least three settled out of court and six others ruled in favour of the department.
The department spent R691 050 in a legal challenge by Tasima - the company which for 16 years operated the electronic National Transport Information System (eNaTIS) - to enforce payment of R30m for services rendered on eNatis, in which the Constitutional Court ruled against the company.
It also spent R518 818 on disciplinary proceedings relating to unlawful extension of the eNaTIS contract. An employee was found guilty, but has taken the case on review in the Labour Court.
The department had also paid R448 121 in legal costs to recover amounts paid to consultants without following procurement procedures.
It has paid more than R500 000 for ongoing labour-related matters involving its employees to date.