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OUTA takes on PRASA over locomotive deal

Oct 26 2017 15:02
Jan Cronje

Cape Town - The Organisation Undoing Tax Abuse (OUTA) has laid charges of corruption and fraud against the former board of the Passenger Rail Agency of South Africa (PRASA) for awarding a controversial contract for 70 locomotives in March 2013 to Swifambo. 

In a statement on Thursday, OUTA – which has in the past laid corruption charges against suspended Eskom chief financial officer Anoj Singh, Public Enterprises director general Mogokare Richard Seleke and others – said it lodged its complaint at the Randburg police station on Wednesday. 

In response to a request for comment, PRASA spokesperson Nana Zenani said: "PRASA does not have a comment in this regard."  

“PRASA was supposed to be replacing the trains for inter-city services. They’ve paid Swifambo R2.65bn but received locomotives unfit for purpose,” said OUTA chief operating officer Ben Theron in a statement.

“This negatively affects poor citizens and commuters directly. It’s about time those responsible for this mess were held accountable and funds returned,” he said. 

Theron said that at the time of the deal, PRASA was run by then-group CEO Lucky Montana, who was also a board member. He said the board was at the time chaired by Sfiso Buthelezi.

Buthelezi was appointed Deputy Minister of Finance in President Jacob Zuma's March Cabinet reshuffle. 

“It is a terrifying prospect that a board chair with this track record was appointed as deputy minister of finance and the chair of the Public Investment Corporation. If he cannot manage a locomotive deal, how can he manage the PIC or the national budget?” said Theron.

Theron said OUTA wanted police to investigate charges against all the surviving members of that PRASA board.

Court set contract aside

In its 2015/16 annual report, PRASA reported that its contract with Swifambo “never came into existence’. 

“During a forensic investigation it became apparent that the contract between SRL (Swifambo Rail Leasing) and PRASA never came into existence as conditions precedent were not timely fulfilled,” stated the report.

“Furthermore the investigation revealed irregularities including unlawfulness and the court is now requested to set aside the tender process.”

Earlier this year, the North Gauteng High Court set aside the contract for the new locomotives.

"Corruption will triumph of this court does not set aside the tender," the court said in its judgment in early July 2017. 

Swifambo has been granted leave to appeal the high court judgment. 

Update on October 26 at 17:14: This article was updated to reflect that the contract was for 70 and not 450 locomotives.  

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