Johannesburg - Transport Minister Blade Nzimande is headed on a collision course with the newly appointed Prasa board, by seconding the entity’s controversial former group chief executive, Collins Letsoalo, to the board.
In a surprise move on Thursday, Nzimande appointed Letsoalo as non-executive board member to the Passenger Rail Agency of SA (Prasa) interim board that he announced in April.
Insiders at the state-owned entity have criticised the move, with some describing it as “outrageously scandalous”. In February last year, the then Prasa board terminated Letsoalo’s contract as its acting chief executive after it emerged that he had increased his salary from R1.7 million to R5.9m a year, which was four times his agreed salary.
Letsoalo – who was seconded to that position by former transport minister Dipuo Peters – had also allegedly demanded a chauffeur-driven vehicle as well as a “company cellphone with unlimited calls”.
Letsoalo rejected the claims. In April Nzimande, as part of his inter-ministerial interventions, had appointed an interim board led by Khanyisile Kweyama and Dr Simon Lushaba as chairperson and group chief executive respectively. The ailing entity has been dogged by a litany of corruption-related scandals, including irregular expenditure running into billions of rand and procurement of new locomotives that are too tall for the rail network.
The appointment of the new board came after the resignation of former interim board chairperson, Tintswalo Makhubela.
The Sunday Independent has been reliably informed that members of the acting board are up in arms over Letsoalo’s appointment to the board.
The officials, who asked for anonymity for fear of reprisals, said Letsoalo’s association with the ailing entity would compromise the board’s integrity and undermine efforts to turn around its fortunes. “This decision flies in the face of the minister and our efforts and commitment to rescue Prasa.
If the minister was committed about rescuing this parastatal, he would not be appointing disgraced people who carry such baggage,” said an insider. Another source said: “We are baffled by this decision, especially as someone like Nzimande has been preaching against corruption. Either he is ill-advised or misguided.”
The Sunday Independent understands that the board intends to write a letter to Nzimande to raise its unhappiness with Letsoalo’s appointment.
The spokesperson for the Department of Transport, Ishmael Mnisi, said it was the prerogative of the minister to appoint the board and that he was “under no legal obligation to contact the board members in appointing any person, in terms of the act”.
Asked whether the alleged malfeasance against Letsoalo was considered when the decision to appoint him was taken, Mnisi said this was done, including “the decision of the Pretoria High Court regarding the benefits that Mr Letsoalo was entitled to, in which the court found no merit in the allegations against (him)”.
“It boggles one’s mind that the board seemed to have some difficulty with Letsoalo earning the same salary or the salary of the GCEO (group chief executive officer), the same amount that Mr Montana earned per annum or, put otherwise, the salary that a GCEO was entitled to,” Mnisi said. Contacted for comment, Letsoalo said: “I didn’t appoint myself… I remain resolute that I have done nothing wrong. I see myself as among those who fight corruption in the state.”
Letsoalo also cited the court judgment that found that he had deserved the 350% salary increase, when Judge PM Mabuse resolved the sacked Prasa board.
The United National Transport Union (Untu) has also entered the fray, saying it was shocked by the minister’s “ill-advised decision” to appoint Letsoalo as a non-executive director of the Prasa board.
The union said although Letsoalo was never charged, the allegations remained a serious concern. “If the minister did not deem Letsoalo as unfit to hold a position on the Prasa board, he might just as well also appoint former Prasa chief executive officer Lucky Montana as a non-executive director of the Prasa board for his experience and expertise of the passenger rail industry,” said Untu general secretary Steve Harris. Mnisi said Nzimande had confidence in Letsoalo “as a seasoned administrator”.
But Harris said: “Dr Nzimande said in his budget vote in Parliament (on May 18) that Prasa is losing money like an ATM and he wants to put a stop to it.
Untu supports the minister in his statement and believes that this lost money must be used towards drastically increasing safety on our railway lines nationwide… “
However, Untu doubts that the appointment of Letsoalo, irrespective of his experience and expertise, will contribute to the much-needed turnaround strategy in accountability, credibility and reliability