Resignations, dismissals and suspensions as Prasa nabs staff linked to dodgy contracts

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  • Passenger Rail Agency of SA chair Leonard Ramatlakane said 44 employees were found to be involved in irregular locomotive tenders, of whom 11 have resigned. 
  • Prasa has placed the remaining 33 on suspension and they are at varying stages of the agency's internal disciplinary proceedings.
  • Ramatlakane said discussions with under way with Stadler for 13 locomotives to be brought to South Africa to service Prasa's corridors. 
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Passenger Rail Agency of South Africa (Prasa) chair Leonard Ramtlakane said the company has identified a host of employees instrumental in facilitating the entity's dubious locomotive contracts - and is taking action against them. 

Ramatlakane was speaking to reporters in Johannesburg on Wednesday alongside Transport Minister Fikile Mbalula. The Prasa board was updating reporters on interventions Prasa had made to restore financial, operational, and financial stability.

Prasa got into a contract in 2013 to procure 70 locomotives from Swifambo Rail Leasing for R3.5 billion. During the State Capture Inquiry, Chief Justice Raymond Zondo said the Swifambo contact was "so flawed" that it must have been apparent to "any reasonable person" that it was corrupt right from the start.

In another deal, Siyangena Technologies got a contract to install integrated security systems at Prasa's stations, initially budgeted at R517 million, but which had ballooned to R4.5 billion. That contract was set aside by the North Gauteng High Court in Pretoria in 2020. 

READ | Prasa tells Parliament it must shift R7.5 billion to fix trains

Ramatlakane said 44 employees were found to be involved in these tenders. Eleven voluntarily resigned, and Prasa then placed the remaining 33 on suspension. Some were eventually fired and others are at varying stages of the agency's internal disciplinary counsel (DC) proceedings.

"The investigations have [identified] 44 employees of Prasa that were part of the Swifambo matter. In the Siyangena contract as well, there have been a number of officials who worked for Prasa and presided over that particular tender. They are still going through the process. But most of them are undergoing a DC now, others have been dismissed already, others are in court, and others are in CCMA [Commission for Conciliation, Mediation, and Arbitration]. The same goes for Swifambo. The officials there are now under DC," said Ramatlakane.

Prasa's acting CEO David Mphelo said of the 33 disciplinary processes, 19 cases had been completed, six were still in progress, and another four were subject to court proceedings. He said four officials had been dismissed. 

Ramatlakane said when the current board was appointed in October 2020, the agency was riddled with waning infrastructure and governance failures, and was in the throes of a financial crisis, with a disclaimer opinion from the Auditor General of South Africa (AG).

Ramatlakane said the agency had inherited an unaccounted-for amount of R28 billion, identified by the AG. R12 billion was subsequently found to have been spent appropriately.

"...We must go to Treasury and ask for condonation of that R12 billion, while the board continues to ask the divisions about the spending of the remaining money [R16 billion]," said Ramatlakane.

Tall loco tango

Ramatlakane said Prasa had to finalise the procurement of locomotives with Stadler locomotives after Swifambo was liquidated. This included a visit to Standler's headquarters in Spain and negotiating for the locomotives to be returned to South Africa.

"Prasa had to start negotiations with a new company, Stadler, which is in Spain. Prasa went there to discuss with Stadler the locomotives. We engaged them and said we wanted the value of the money Prasa has paid.

"Prasa has paid R2.6 billion towards those locomotives and 13 of those locomotives were, in fact, dispatched to South Africa. They arrived and, of course, after arriving there was a court case that determined that those locomotives were [too] tall.

"The truth is those trains are not too tall to go under the bridge. That is something else for another day. At the moment, [of] the 13 locomotives here under the Stadler agreement, seven ... were auctioned before we arrived and they will only be able to raise R65 million. So that process was halted to find a way to address this, because to continue with it would have been like throwing money into the fire," Ramatlakane said.

Prasa is engaging with the liquidator for an agreement with Stadler for the locomotives to be restored to South Africa within six months. The agreement now has to go to the South Gauteng High Court in Johannesburg to be made an order of the court. 

READ | Mbalula to companies: Help us improve SA's rail system

He said the remaining six locomotives have been commissioned to be serviced and run on the 25KV and 3KV railways, pending approval by the Railway Safety Regulator.

Operational interventions

Mbalula said Prasa and the Department of Transport decided to prioritise 10 commuter rail corridors for reconstruction and recovery this year, following severe vandalism and theft that worsened during the Covid-19 lockdown in 2020. 

"Today we are conducting oversight on the reconstruction and recovery work intended to rehabilitate our infrastructure, from perway [tracks], overhead traction electricity, sub-stations, signalling, and train stations in these corridors," said Mbalula.

Mbalula said since the implementation of Prasa's modernisation programme, more than 100 of these trains have been delivered and are being deployed on a corridor-by-corridor basis.

"In addition to the rollout of the comprehensive security plan with boots on the ground to protect both the assets and commuters, we are also addressing some of the root causes of cable theft in our environment. New technologies have enabled us to drastically reduce copper content in our cables by more than 70%," Mbalula said.

Sealing security

He said Prasa was on track with its plans to revive the 10 corridors and has shut down the three strategic corridors in Gauteng to ensure the reconstruction and rehabilitation work proceeds faster without any disruptions.

"The progress being made means that we are firmly on track towards the realisation of our target to return to service the 10 priority corridors by the end of this calendar year," he said.

Security will be bolstered by a combination of in-sourcing and private sector suppliers, he added. Mbalula said while this was being rolled out in Gauteng, this work will be replicated in all corridors soon. 

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