Union wants dodgy Prasa contracts to be annulled, not suspended

7 Sep 2015

The National Transport Movement (NTM) says the board of the Passenger Rail Agency of SA (Prasa) should not just suspend but nullify contracts identified by the public protector as being improperly awarded at the agency.

FrameAngel via freedigitalphotos

Prasa chairman Popo Molefe yesterday said the board had directed acting group CEO Nathi Khena to suspend all contracts that had been "identified or suspected to have been irregularly awarded".

NTM general secretary Ephraim Mphahlele said even if the contracts had been awarded a long time ago, they should be nullified to send a strong message. "If Prasa is going to conduct its own investigation, it should go to the extent of nullifying the contracts. If the contracts are not nullified, Prasa would be rewarding corruption," he said.

Improper tenders

The South African Transport and Allied Workers Union instituted the investigation by public protector Thuli Madonsela but later tried to withdraw its complaints. The complaints were then pursued by the NTM, a breakaway union. Last week the NTM called for Prasa and the transport minister to recover money from improper tenders. The public protector's report revealed that Prasa had improperly extended a number of tenders, contravening its supply-chain management policy, the Public Finances Management Act and the Constitution.

Prasa extended the scope and value of a tender awarded to Siemens beyond what was advertised for and approved by the corporate tender procurement committee. The contract value was R256m instead of R800m.

The agency also extended a tender initially awarded to Siyangena Technologies to supply and install high-speed gates at Doornfontein Station. The contract value was found to have been R1.95bn, more than double the R800m alleged by the complainant.

Termination of contracts

The report revealed that former group CEO Lucky Montana had violated the Public Finances Management Act a number of times, including terminating seven cleaning contracts and replacing them improperly.

Khena said suspending the contracts would not interfere with Prasa's ongoing projects. "Even though some of them are suspended, there will be a lead time to ensure there are no disturbances to our processes," Khena said.

The report investigated 37 complaints, but Madonsela only dealt with 30 because some had come in too late or the authenticity of documents provided by Prasa was doubtful.

Mphahlele said the NTM would continue pushing for the remaining matters to be dealt with by the public protector in a second report.

Khena said Prasa had asked National Treasury to deploy a procurement officer to help with supply-chain processes. He said details of this were still being finalised.

Source: Business Day

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