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Prasa sues government for R26m

Sep 18 2012 12:10 James-Brent Styan

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Cape Town - The Passenger Rail Agency of South Africa (Prasa) is taking legal action against the department of public works (DPW) for unpaid invoices to the value of R26m.

Prasa says the department owes the money for work the agency did in 2007 and 2008.

In a letter written to Minister of Public Wworks Thulas Nxesi, Prasa CEO Lucky Montana said Intersite - Prasa’s property management entity - had a contract to do an audit of the DPW’s property portfolio.

Intersite audited 70 000 properties and drew up an asset register for the DPW. (Fin24 has a copy of the letter.)

Prasa billed the DPW in October 2008 for R26.04m, but has not been paid since then.

Earlier this year the DPW declared the entire contract null and void, after which Montana sent the letter dated March 27 2012 to Nxesi.

The letter is also signed by Prasa chairperson Sfiso Buthelezi.

Prasa is a state-owned entity managed by the departement of transport. Prasa manages Metrorail, Intersite and Autopax (passenger bus services).

Mandisa Fatyela-Lindie, acting DPW director general, said she could not respond to a set of detailed questions.

“The departement can’t react because the matter is sub judice,” Fatyela-Lindie said.

Prasa spokesperson Moffet Mofokeng also told Fin24 that Prasa is unable to comment on the matter due to it being sub judice.

Ian Ollis, DA MP and member of the portfolio committee for transport, said the legal action between two state-owned entities constitutes “seriously wasteful expenditure”.

“Surely a meeting between the ministers of transport and public works and their directors general should have been able to sort this matter out without resorting to legal action?”

Ollis said the contract for services rendered by Prasa to the department should be submitted to the parliamentary transport committee “to ensure that it is dealt with transparently”.

“The premature termination of this contract by the current minister of public works must surely raise questions as to the basis that this contract was entered into in the first place.”

The departement of transport referred questions to Prasa.

 - Fin24

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