Deputy chief justice Raymond Zondo, who heads the Commission of Inquiry into State Capture. Picture: Karen Sandison/African News Agency (ANA).
Deputy chief justice Raymond Zondo, who heads the Commission of Inquiry into State Capture. Picture: Karen Sandison/African News Agency (ANA).

Zondo commission hears how Lucky Montana and Prasa clashed over tender contracts

By Zintle Mahlati Time of article published Mar 12, 2020

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Johannesburg - The Zondo commission has heard about the clash of power between the Passenger Railway Agency of South Africa’s (Prasa) former board and former group CEO Lucky Montana. 

The commission is on its second day of probing allegations of state capture at the state-owned agency. Former board chairperson Popo Molefe took the stand and explained that when his then board took over in August 2014 there seemed to be a tussle for power with Montana. 

Molefe said the first sign of this tension was when the board requested to be appraised with contracts that the organisation had signed just to familiarise themselves with the business. Molefe said Montana promised to supply the board with all the contracts signed, but he never did. The board was particularly interested in a large contract worth R51 billion to procure new trains. 

Montana was never forthcoming with the documents so the board decided to approach the legal firm which had assisted in drawing up the contract. Molefe said Montana was angry that the board had approached the legal firm to get hold of the tender contract. 

"It was already clear to us at the time that he (Montana) was not keen on sharing information with the board at the time. Increasing the board was getting an indication that the CEO did not consider himself fully accountable to the board. He (Montana) would later raise the issue that he was not consulted when the new board was appointed."

Molefe said another concern for the board at the time, was the Auditor General's report for the 2014/15 financial year. That report was scathing on the state of Prasa. The report highlighted an irregular expenditure of R500 million and that the irregular expenditure would then rise to R8 billion for the next financial year. 

Molefe said Prasa's board quickly recommended that the company's risk and audit committee to conduct a workshop and assess the real state of the company and recommend what needed to be done. 

The former board chair said the committee's report laid bare the core issues plaguing the organisation. 

"The risk department said that all departments especially the finance department were dysfunctional and people there did not have the necessary skills. They also highlighted that there were no controls in the organisation. They were saying that a lot is wrong in this organisation and a lot has to be done to fix this," Molefe said. 

The commission will continue hearing evidence on questionable contracts that were issued by Prasa at the behest of Montana.

Montana stepped down as Prasa CEO in 2015. 

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