Prasa uses law firm despite Treasury warnings about procurement

The Passenger Rail Agency of SA (Prasa) board has been using a law firm not on its legal panel to prosecute labour cases despite a warning by the Treasury that it “may not be justifiable”.

The agency has, since early 2021, used law firm De Swardt Myambo Hlahla Attorneys in a number of high-profile cases related to labour issues, including many legal actions against Martha Ngoye, a whistleblower and its suspended head of legal.

The Treasury has warned the agency that using the firm violates procurement law.

Since early 2020, Prasa has been instructed by the auditorgeneral to use the legal panel of the SA Nuclear Energy Corporation (Necsa). The term of the last legal panel properly appointed by Prasa expired in 2011, and the use of firms on that expired panel, in particular Werksmans Attorneys, which has led Prasa’s anticorruption legal action since 2015, was contentious.

In February 2021, the late Thandeka Mabija, then Prasa acting group CEO, wrote to the Treasury to request a deviation from normal procurement procedures, specifically so that De Swardt could litigate on behalf of Prasa’s board in its cases against Ngoye, Tiro Holele and Nkosinathi Khena.

In its request to the Treasury, the rail agency argued the Necsa legal panel was “compromised” because it was introduced before the current board was appointed, and it had been “under the control” of Ngoye. Prasa also claimed that it did not have enough time to verify firms on the Necsa panel.

On March 31 2021, the Treasury responded, saying that it was “not verifiable” for Prasa to claim Necsa’s panel was compromised by Ngoye. Treasury said the request to directly appoint De Swardt “may not be justifiable” procurement.

Ngoye has no apparent link with Necsa and would have played no part in its decision to appoint firms to its legal panel. The Treasury also said that any award made to De Swardt had to be listed on the e-tender portal; but no such award is listed. It is not clear why Prasa’s board chose De Swardt.

Despite the Treasury’s letter to Prasa, De Swardt has continued with services to the rail agency’s board, not just in the Ngoye, Khena, and Holele matters, as it had stated in the request to the Treasury, but in a growing number of labourrelated cases.

As recently as February 22, the Leonard Ramatlakane-led board authorised De Swardt at a special meeting to represent Prasa in its challenge of the arbitration award to Ngoye.

In October 2022, the Sunday Times reported that the auditorgeneral was examining R33m in irregular expenditure by Prasa for the use of law firms not on its panel. This allegedly includes the R17m paid to De Swardt.

Prasa spokesperson Andiswa Makanda declined to comment to the Sunday Times, saying “the agency will not comment as it was now investigating the allegations”.

Five months later, GroundUp has also received no reply from Prasa to questions sent in the past few weeks, about De Swardt or the outcome of any investigation into the use of the firm.