'Prasa paid R31.5m to keep one train station safe'
Now Prasa wants court to set aside contract with Siyangena Technologies
The Passenger Rail Agency of South Africa says in a court affidavit the R3.9-billion contracts it awarded to keep dozens of train stations safe were unauthorised, unlawful and a waste of money.
In an explosive affidavit filed at the Pretoria High Court, the Prasa group executive in charge of legal risk and compliance, Onica Martha Ngoye, alleges that certain of the rail agency’s executive seemingly bent over backwards to ensure that IT and security company Siyangena Technologies was awarded increasingly lucrative deals – without proper tender processes taking place.
She claims this resulted in the installation of outdated, overpriced and ineffective security systems when less expensive and far more effective systems were available.
Ngoye says Prasa wants arbitration agreements reached between itself and Siyangena set aside so its disputes with the company can finally be aired in public, before a court of law.
“The awarding of the tender(s) to Siyangena resulted in irregular, wasteful and fruitless expenditure,” says Ngoye.
“Furthermore, there are indications that Prasa’s procurement processes were unlawfully abused by certain individuals within the organisation. Accordingly, it is important that the disputes be resolved in a public forum.
“It is in the interests of justice for a court to assume responsibility for the resolution of disputes that involve an organ of state and by reason of the nature of the disputes should not be heard behind closed doors in private arbitration.”
Ngoye also alleges that, while many officials agreed to speak about the rampant abuses of process and alleged tender-rigging they witnessed, certain employees had asked not to be named because of threats made against people “seen to be assisting the investigation”.Ngoye alleges Siyangena went from providing security gates and CCTV cameras to two stations for R2.5-million each during the 2010 World Cup to scoring a R1.9-billion tender with Prasa – for security for 62 train stations.
This meant it was effectively being paid a staggering R31.5-million per station.
To make matters worse, she claims, the services provided by Siyangena failed to provide Prasa with a proper access control and fare collection system and included unnecessary equipment.
Access gates were not installed, while ticket readers and gates did not have automatic readers, requiring staff to man the gates at additional costs.
Two years after this deal was put in place, Ngoye says then Prasa CEO Lucky Montana approved an “extension to phase 1” to include the installation of a “fit-for-purpose security system at Braamfontein and Wolmerton staging yards at the total cost of R97.7-million”. She says he had no authority to do this.
Prasa subsequently decided to approve the appointment of Siyangena for the “Supply and Installation of Integrated Security Access Management System phase 2” where the company’s security services were extended to other stations. The cost attached to phase 2 brought the total value of the contracts to R3.9-billion.
Then-public protector Thuli Madonsela found that the two contracts awarded to Siyangena Technologies by Prasa were unlawful.
Her report – entitled Derailed – prompted Prasa and the Treasury to launch investigations into the rail agency’s financial dealings.Out of 216 contracts with a combined value of about R19-billion, Treasury found only 13 were lawfully concluded.
In an application running into thousands of pages, Ngoye said Prasa’s case had been driven by its own detailed investigations, conducted by Werkmanns Attorneys.
These investigations “focused on a number of relationships and activities that were suspected to be generally corrupt or inappropriate”.
The Hawks’ Hangwani Mulaudzi confirmed to Times Select that the crime-fighting unit is currently still investigating charges of fraud, corruption and money-laundering linked to certain Prasa contracts.
Prasa, then under the leadership of chairperson Popo Molefe, previously went to court to argue that the R4-billion contracts awarded to Siyangena were unlawful and defined by corruption.
Molefe claimed that investigations had revealed that Montana had “corruptly benefitted” from his relationship with Siyangena. Montana said Molefe’s investigation was illegal, and slammed him for spending millions of rands in taxpayers’ money to the law firm responsible for the probe.The High Court dismissed Prasa’s first application to challenge the Siyangena contracts on the basis that the state rail agency had failed to adequately explain its delay in launching the case.
But this month, emboldened by a recent Constitutional Court ruling that seemingly undermines the legal basis for this earlier decision, Prasa has now launched a fresh legal challenge to the Siyangena contracts.
Siyangena responded by launching an urgent application, demanding proof that Werksmanns Attorneys were properly authorised to represent Prasa in this case by its board. This move was seemingly motivated by recent instability in the state rail agency board, which culminated in its interim chairperson, Tintswalo Nana Makhubele, resigning so she could take up a position as a High Court judge.
The Pretoria High Court is expected to consider Siyangena’s protest about board support for Prasa’s legal action next week.
What it decides will determine the future of the Siyangena litigation.