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Prasa acting CEO: ‘I have no reason to doubt the Hawks’

Dec 02 2016 06:20
Gareth van Zyl

Johannesburg - Acting CEO of the Passenger Rail Agency of South Africa (Prasa), Collins Letsoalo, is confident the Hawks will properly investigate alleged corruption at the parastatal.

Prasa shocked parliamentarians on Wednesday when it recorded irregular expenditure of R14.6bn for the 2015/16 financial year, the biggest of any state-owned company for the period under review.

READ: Prasa admits to 'collapse in controls' in R14.6bn spend

The rail agency further admitted before Parliament that R24bn worth of contracts are currently under investigation.

Meanwhile, Hawks head Mthandazo Ntlemeza told Parliament’s standing committee on public accounts (Scopa) on Wednesday that Prasa referred 142 issues to the crime-fighting body. Four of these matters have criminal case numbers, while the others remain at an inquiry stage, Ntlemeza said. The Hawks did not provide details on the cases.

Earlier this year, though, the Mail & Guardian reported that the Hawks have only “dedicated a lone investigator to handle a complex multibillion-rand fraud and corruption scandal unearthed” at Prasa.

But Letsoalo told Fin24 on Thursday evening by phone that he is confident the Hawks will take Prasa investigations seriously.

"Well, I don't have any reason to doubt the Hawks. From where we sit, there's nothing that I guess that there has not been seriously investigated.

"As we said in Parliament, there's a couple of correspondence that we have between ourselves and the Hawks. They needed some more information on other things,” Letsoalo said.

"And I worked with the Hawks before, (when I worked with) their anti-corruption task team in my position as CFO (chief financial officer) of the department of transport, and I've seen them acting on these matters.

"I don't have any reason to doubt so far. I think that once we have consolidated the necessary information that they require from us, that they will be able to investigate and probably push this through to the NPA to make a decision on the prosecution side,” he said.

READ: R24bn worth of Prasa deals being probed

Letsoalo also told Fin24 that he is confident in the evidence they have.

He added that the evidence regarding the Hawks’ “four cases is good enough to secure a prosecution”.

Lesoalo was made acting Prasa CEO in July last year.

On Wednesday, he faced Scopa, and disclosed the state of problems for the parastatal.

In addition to Prasa’s R14.6bn irregular expenditure, the company also incurred fruitless and wasteful expenditure of close to R15m for uninstalled hardware for a ticketing system and R218.3m to Swifambo Rail Leasing – which is currently subject to a litigation process.

Listen to Fin24's Gareth van Zyl interviewing Lesoalo:


The agency also wasted more than R9.5m on human resources irregularities, including the unfair dismissal of two executives that resulted in legal costs.

Lesoalo told Fin24 that a breakdown in controls was to blame for the irregular and wasteful expenditure.

"Well, there was a general breakdown in controls in finances, general breakdown in controls in HR and also a general breakdown in control in supply chain management,” he said.

"People have not followed processes; they did not adhere to the PFMA (Public Finance Management Act) and ... the consequence of that is that then there was a lot of procurement that was done outside the law.

"There have to be consequences. Of course, depending on the level of breaches that people have committed. One is that if there would be areas of criminality as said in parliament,” Lesoalo said.

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