- The Gauteng High Court in Pretoria has set aside a R4.5 billion contract between the Passenger Rail Agency of South Africa and Siyangena Technologies.
- The contract, signed off by the rail agency’s former CEO Lucky Montana, has been marred by claims of irregularities and a ballooning budget.
- The rail agency and Siyangena are to appoint an independent engineer to determine the value of the work done by the contractor.
The Gauteng High Court in Pretoria has set aside the controversial R4.5 billion contract between the Passenger Rail Agency of South Africa (Prasa) and electronic security systems company, Siyangena Technologies.
Siyangena, in 2011, won a contract to install an integrated security system at the passenger rail agency's stations, including providing security cameras and access gates. The initial budget for the contract was R517 million but it later ballooned to R4.5 billion after being extended in July and September 2014.
The contract, which was signed off by the rail agency’s former CEO Lucky Montana, has been marred by claims of irregularities, which led Prasa to begin litigation in 2018 to have it set aside. The rail agency said the security systems installed by Siyangena were outdated, ineffective and overpriced.
In its court documents filed in the Pretoria High Court Prasa, joined by civil society coalition #UniteBehind as an intervening applicant, said the contract did not have a fixed budget, had not followed procurement processes and did not have board approval.
Prasa also asked that the court order both parties to appoint an independent engineer to determine the value of the work done by Siyangena, should it decide that the technology company needs to be compensated for the work it has already done. The amount determined by the engineer, will then be set off by payments Prasa has already made to the technology company.
In the same application, #UniteBehind asked for the court to declare the contracts void and for Siyangena to pay back all the money it has received from Prasa.
On Thursday, the court ruled in Prasa’s favour, setting aside the contract with costs. It also ordered that the rail agency and Siyangena appoint an independent engineer within 30 days, to determine the value of the work done by the technology company. Both parties are then meant to come to an agreement on the value, within 90 days of receiving the engineer’s report. They can approach the court again if they don’t agree.
The contract between Prasa and Siyangena has been a thorn on the rail agency's side and has featured in the ongoing Commission of Inquiry into State Capture, where Martha Ngoye, Prasa's head of legal risk and compliance explained that the contract should not have gone over budget.