Ex-Prasa boss ‘sold rail line’

CHARGE SHEET: REPLACEMENT COST IS NEARLY R59 MILLION

Former exec ‘confirmed’ to buyers firm was involved with Metrorail.

Former acting CEO of the Passenger Rail Agency of South Africa (Prasa), Mthuthuzeli Swartz and another accused, Syed Nadhir Mohiudeen, are facing charges of fraud, allegedly involving the sale of a large chunk of Eastern Cape railway line that was not theirs to sell.

The matter will return to the Specialised Commercial Crime Court in Port Elizabeth on September 6.

Mohiudeen’s name is usually spelt Mahuideen in the media, but in this report the spelling in the National Prosecuting Authority’s charge sheet is used.

Swartz was dismissed from Prasa on November 8 last year. He has denied any wrongdoing.

The charge sheet, marked as a draft, states that Mohiudeen owned a Cape Town-based company called Spanish Ice. It reads that in September 2012, Mohiudeen phoned Adrian Samuels saying he had 360 000 metric tons of used railway material for sale which he claimed to have obtained directly from Metrorail.

Samuels was the sole director of a company called Akisisa, where he worked with his cousin Cedric. Mohiudeen claimed he could supply Samuels with 30 000 tons over 12 months. Mohiudeen claimed a Turkish company was interested in buying the material.

Mohiudeen allegedly took the cousins to view the railway stock in Woodstock, Cape Town. Afterwards, they met Swartz. The charge sheet states that Swartz “confirmed at the meeting that Spanish Ice was involved in programmes with Metrorail”.

The cousins then allegedly gave the two accused a bank guarantee that they could pay R5 million. Mohiudeen then informed the cousins the

25 000 tons of railway at Woodstock could be lifted up on October 25, 2012. But when the cousins arrived in Cape Town to collect the material, they were met with excuses about why the delivery could not take place.

The four men then allegedly met at the Waterfront and Swartz asked for a R1.5 million up front payment. This was paid and Mohiudeen signed receipt of it. But the delays continued. So the four met again. This time, according to the charge sheet, Swartz suggested they go to the Eastern Cape to source railway material there. This they did on November 1, 2012, travelling to Sterkstroom and Maclear.

The cousins asked for documents regarding the removal of the railway material (presumably proving what they were being offered was legal). Mohiudeen promised they would receive it.

And then Samuels, allegedly with the permission of the accused, put together a workforce and began lifting up the railway line between Sterkstroom and Maclear. The charge sheet says buyers were approached for the rail material that was being removed. It claims the uplifted rail material was loaded onto trucks and taken to Durban Harbour and loaded into containers belonging to the buyers.

On February 8, 2013, the charge sheet states, Transnet security discovered Akisisa employees removing the railway line. Samuels allegedly informed Transnet he had been sold the rail by the accused. Transnet informed Samuels the rail could not be removed and had not been sold to Spanish Ice, Swartz or Mohiudeen.

“About 42 000m of railway line had already been lifted up,” reads the charge sheet. “The railway line between Sterkstroom and Maclear was never for sale and was in the process of being refurbished to service a coal mine project in Indwe.”

The charge sheet estimates that rebuilding the uplifted railway line would cost Transnet just under R59 million.

Republished from GroundUp. org.za

42 000m of railway line had been lifted up already