Montana accused of improper conduct
Public Protector’s damning report on Prasa’s former boss
PUBLIC Protector Thuli Madonsela has found that beleaguered former group chief executive of the Passenger Rail Agency of South Africa (Prasa), Lucky Montana, acted in an unprocedural fashion in the awarding of tenders, suspension of executives, nepotism and causing cost overruns amounting to billions of rands.
Releasing her report, which focused on 37 complaints brought to her office by trade union Satawu, for the two-year period between 2010 to 2012, Madonsela yesterday found that Montana awarded tenders to friends, unilaterally increased scope and coverage of tenders as well as suspended executives unilaterally, paying millions in salaries to executives sitting at home.
Satawu, as complainants attended the report release along with Prasa chairman Popo Molefe.
Madonsela found that Montana improperly terminated employment contracts of five executives, between 2008 to 2013, causing fruitless and wasteful expenditure amounting to about R5 million.
Amongst these is the awarding of an R800m tender for the installation of high speed passenger gates to Siyangena Technologies.
She found that the amount involved was R1.95 billion, more than the R800m alleged.
She also found that a complaint regarding Prasa’s improper extension of a tender in the 2009/10 year awarded to Siemens for the Dark Fibre and Integrated Communications System was substantiated.
The tender amount involved was R256m and not R800m as alleged.
Other issues laid on Montana’s lap include the improper termination of cleaning contracts of seven companies and their irregular replacement with Reakgona Commercial and Industry Hygiene and Katanga cleaning services.
Ghost payments
Other irregularities include the appointment of Montana’s relatives and cronies, including ghost payments to Pule Mabe as salary after he had left Prasa as well as giving Mabe’s company a tender for the production of an on board magazine, Hambanathi.
“Prasa’s appointment and extension of the contracts with KG media for the Hambanathi totalling R33 528 222 is unlawful, a flagrant contravention of Prasa’s own policy, Treasury regulations, the Public Finance Management Act and section 27 of the constitution…” Madonsela said.
Others who benefited improperly from Prasa include Ezra Ndwandwe, whose company Ndwandwe Consultancy was awarded a R2m contract for a change management consultancy which has been unilaterally extended.
Other contracts were awarded to board members while they were still in office.
Outstanding issues include a complaint that Montana went on a joy ride in the Blue Train.
Also investigated were fruitless and wasteful expenditure relating to the early vacating of buildings for 10 months in one building and 20 months in another building where Prasa paid rentals for buildings already vacated. Madonsela said investigations into seven issues had not been concluded to date largely because of delays in obtaining the relevant evidence and documentation and that these would be addressed in a later report.
“In some of these issues there were issue creeps, we will either report on these later or they will be reported on by someone else,” she said giving the clearest indication that she would not be renewing her contract which expires soon.
These outstanding issues include a complaint that Montana went on a joy ride in the Blue Train along with 10 female companions costing the tax payer more than R170 000.
Systematic failure
“The transactions investigated and related findings reveal a culture of systematic failure to comply with supply change management policy, particularly involving failure to plan for bulk procurement, test the market appropriately for competitive pricing and to manage contracts, which culture may have cost Prasa millions is avoidable expenditure and preventable disruption of services,” Madonsela said.
She said there also seemed to be a culture of either poor information management or hiding of information that could provide evidence of maladministration and other forms of improper conduct. In her recommendations, Madonsela charged the Minister of Transport, Dipuo Peters, to ensure the Prasa board considered the report and act in accordance with requirements of the public funds management act.
“To support national Treasury in conducting a forensic investigation into all Prasa contracts above R10m since 2012 and take measures to address any findings regarding systematic administrative deficiencies allowing maladministration and related improprieties in its procurement system, “she said.
To the acting chief executive of Prasa, Nathi Khena, Madonsela said in addition to closing the door as per advice to the minister, he should undertake a review of Prasa’s procurement policies.
Madonsela strongly recommended forensic investigations going back to 2012.