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Prasa alleges tender rigging in court filing

Johannesburg - A bidding process to supply locomotives to the Passenger Rail Agency of South Africa (Prasa) included “irrational” specifications whose sole purpose was to rig the outcome, according to court papers filed by Popo Molefe, the current chairperson of the state-owned rail operator.

Prasa is asking a Johannesburg court to review and cancel a R3.5bn contract awarded to Swifambo Rail Leasing in March 2013 to supply the company with locomotives made by Vossloh Espana SA, according to a notice of motion dated November 27.

Prasa’s decision to award the contract was unreasonable and unlawful, Molefe, who joined Prasa’s board on August 1 2014, said in an affidavit in support of the agency’s application.

Public Protector Thuli Madonsela said in a report published in August that an investigation into Prasa covering the period from about 2008 to 2013, found the company had a culture of “systemic failure” to comply with its own supply-chain policy.

READ: Prasa board 'shocked' by public protector's report

Madonsela also concluded that former CEO Lucky Montana acted improperly regarding the awarding of service contracts and treatment of some employees.

Montana denied any wrongdoing at a press conference held in Johannesburg after he left the company in July 2015.

READ: Montana: I will go to court over Prasa report

Calls to Montana’s mobile phone number on Tuesday went straight to voicemail. He didn’t immediately respond to text messages seeking comment.

Broader probe

The allegations regarding the Swifambo contract were discovered as part of a broader investigation into relationships and activities at the company, Molefe said in the filing.

The first 20 locomotives ordered were so-called Afro 4 000 models, which don’t comply with height requirements for South Africa’s rail network, making them unsafe to operate, he said in his affidavit.

The request for proposals included “irrelevant” specifications such as bore and stroke, the number of cylinders and engine speed, which were precise matches for Vossloh’s 3 000 locomotives included in Swifambo’s bid, Molefe said. Even so, the rail agency ordered the company’s 4 000 model when the contract was awarded.

“Material irregularities in Swifambo’s bid were overlooked and there are indications that the specification included in the request for proposals was tailored to suit the products that were supplied by Swifambo,” Molefe said in the court documents.

“The inference that the tender was rigged to ensure its award to Swifambo is inescapable.”

Molefe asked in the affidavit that the issue be handled by the court rather than through arbitration.

‘Every intention’

Swifambo had “every intention” of concluding its deal with Prasa, the Business Day newspaper reported on Monday, citing Alicia Mngadi, a spokesperson for Swifambo.

The locomotives included in the contract are compliant with all of Prasa’s specifications and Swifambo is looking forward to the court process to resolve the matter, she was quoted as saying. Mngadi didn’t immediately respond to an email  seeking comment on Tuesday.

Erik Leonhardt, who works in Vossloh’s media department, also didn’t immediately respond to emailed questions. Vossloh Espana is a division of Vossloh AG, which said last month it agreed to sell the rail vehicles unit to Stadler Rail AG.

The allegations contained in the filing were first reported by the Johannesburg-based Sunday Times newspaper on November 29.


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