Johannesburg - A now suspended general manager at the Passenger Rail Agency of South Africa (Prasa) has told State Capture Inquiry how officials feared to scrutinise certain contracts awarded by the state-owned company for fear of reprisal.
Fani Dingiswayo took the stand at the inquiry on Thursday. He is under suspension and served as Prasa's general manager for group legal services.
He said when he was first appointed, the first controversial contract he handled was that involving a company called Siyaya.
Siyaya was a company run by a man named Makhensa Mabunda, who was politically linked to former Prasa CEO Lucky Montana. Mabunda had worked with Montana while they both served as director-generals at the department of public enterprises.
When Montana was appointed at Prasa, Mabunda appeared to have benefited from contracts awarded by SOE..
Dingiswayo said he was warned not to scrutinise the Siyaya contract too much.
He said he had several concerns about the Siyaya contract, which saw Prasa's technical division being outsourced. For every component of fuel that Prasa purchased for its fleet, Siyaya would receive 20c.
According to Diginswayo this disadvantaged Prasa as the company could have been in a position to negotiate fuel with suppliers directly, but the SOE was stuck with procuring fuel through Siyaya.
Dingiswayo also used other examples of entities that did business with Prasa which were known as being off-limits. These organisations included; Prodigy which was linked to politically connected businessman Roy Moodley.
"On the Siyaya matter, someone whispered in my ear that do not scrutinise too closely. You learn very quickly that there are some holy cows. That everything that relates to certain companies or service providers must not be scrutinised too closely. Even in places where there are procurement issues.
"It is key contracts in the organisation. Even when you have meetings with service providers, they give you looks that says if you do not toe the line they will report you. My work is to ensure that the organisation complies with the law and the management of legal risks. You find that you cannot do that work properly in relation to certain service providers and companies," Dingiswayo told the inquiry.
He said under Montana, a parallel structure existed at Prasa with the former CEO ruling with an iron fist. Montana had his own legal advisors that did not consult with Prasa's legal team.
Dingiswayo said he was chastised by Montana when he questioned an invoice from a lawyer.
When staff questioned contracts signed by Montana, they were dealt with "ruthlessly"
"You would be dealt with ruthlessly if a contract involved influential people".
Montana served as Prasa CEO from 2010 until July 2015.