A security company, partly owned by South Africa’s new spy boss, last year scored a contract worth about R90 million from the Passenger Rail Agency of SA (Prasa), without following tender processes.
City Press and News24 can reveal that, in the document we’ve seen, Resurgent Risk Managers was appointed by Prasa early last year on the basis of a confinement, which refers to contracts that are awarded without a tender, but only if it can be justified by factors such as urgency or a lack of competitors in the market.
Former national intelligence agency boss Manala Manzini and Arthur Fraser, the newly appointed State Security Agency director-general, are Resurgent’s shareholders and directors.
But on Friday, Fraser told City Press he had resigned from this company and many others to preserve the integrity of the State Security Agency.
“I resigned before I could take office. You should ask Manzini … if your questions are around Resurgent, you should direct them to Resurgent,” he said.
The company was contracted during the tenure of axed Prasa CEO Lucky Montana to provide security and risk advisory services for a period of two years.
Resurgent would have pocketed just less than R90 million by the time the contract was supposed to come to an end next year.
The company had apparently invoiced Prasa on a monthly basis. Sources at Prasa say the company had received about R30 million before the contract was put on ice.
Resurgent’s services were halted by Prasa in the wake of a damning report on Prasa’s financial affairs released last year by Public Protector Thuli Madonsela.
The Public Protector had found that Prasa routinely broke the Public Finance Management Act and other related laws and regulations in the awarding of contracts.
Madonsela also recommended that all contracts awarded by the troubled state-owned company be probed.
It is understood that the contract awarded to Resurgent is among a host of contracts now being investigated by the Treasury at the request of the Public Protector.
A report on securing the safety of Prasa’s trains, which over the years have been the target of attacks by arsonists and vandals, is said to be one of the few examples of actual risk assessment work the company did for Prasa.
Following the announcement on Monday by State Security Minister David Mahlobo of Fraser’s appointment as the new State Security Agency director-general, the DA referred in a statement to an “irregular” contract Resurgent was given by the SA Social Security Agency in 2011.
The SA Post Office also used Resurgent’s services in 2013.
In May, Montana had allegedly collated and distributed to the media an “intelligence dossier” that called on government to stop the Prasa investigation.
Treasury on Friday referred all inquiries regarding Resurgent to the office of the Public Protector.
Thabisa Whittington, who speaks on behalf of the office of Treasury’s director-general, said:
“Please note that the investigations have been at the request of the office of the Public Protector. All work done in this regard will be reported to the client [the Public Protector]. Any questions can therefore be directed to that office.”
Manzini said he was not aware that his company was under investigation.
“I think the normal process is that if a company was being investigated, it would be notified,” he said.
Manzini said that, as with all the contractors dealing with Prasa, their company’s service was also suspended for a while and they had to explain to the board how they had received the contract.
“After we explained the process, we continued to provide the services to Prasa and there are no issues,” he said.
The Public Protector’s office did not comment by the time going to press.