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R24bn worth of Prasa deals being probed

Cape Town – The Passenger Rail Agency of South Africa (Prasa) admitted before Parliament that R24bn worth of contracts are currently under investigation.

This means the financial corrosion at Prasa could be significantly more than the R14.6bn of irregular expenditure incurred in the 2015/16 financial year.

Acting Prasa CEO Collins Letsoalo said Werksmans Attorneys has received R108m for investigating 142 contracts that were by and large agreed upon under the reign of former Prasa CEO Lucky Montana.  

In addition to Prasa’s R14.6bn irregular expenditure, the state-owned entity 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.

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

Prasa also admitted that it had to cough up R6.2m in interest because it could not pay suppliers on time due to liquidity problems.

In September this year, Transport Minister Dipuo Peters said in a parliamentary response that Prasa had outstanding creditor payments amounting to R796m, of which almost 40% were overdue by more than 180 days. 

She admitted that Prasa has a “cash flow” problem, which makes it difficult to pay its service providers on time. 

The state-owned entity made a R1.8bn loss in the current financial year. 

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