Prasa blames Peters for CEO delay
Board says minister’s lack of action harming rail agency
MORE than a year after the Passenger Rail Agency of SA (Prasa) fired its CEO Lucky Montana, the agency’s board has accused Transport Minister Dipuo Peters of causing harm to the organisation and undermining the board by delaying the appointment of a new CEO.
In a letter addressed to Peters in May, Prasa board chairman Popo Molefe told Peters that she had failed to respond to submissions on a CEO. He said her delay “perpetuated noncompliance” with governance codes, and caused harm to an organisation that had experienced “serious instability in the recent past”.
Molefe said the delay created further uncertainty about Prasa’s future.
When asked for comment, Peters spokesman Ishmael Mnisi said the minister and board of Prasa would release a joint statement on Thursday, but they did not do so.
When asked to comment on the letter, Molefe said on Wednesday: “The interception of confidential information is a gross violation of my right (to) confidentiality and should not be the basis of an inquiry by the Business Day.”
Prasa has one of the biggest fleet renewal contracts in the world. It is in the middle of implementing its R172bn modernisation programme which will see a complete overhaul of its urban commuter rail service, Metrorail.
Montana was fired in July 2015, after 10 years in the job, following a public dispute with the board. He had resigned in April and was serving six months notice. At the time, Molefe said six months was “enough time” to find a successor while Nathi Khena, the chief operating officer, acted as CEO.
Montana accused the board of interfering in operations while the board said he had contravened aspects of an agreement with the board
Montana’s departure also came after a slew of allegations relating to the R3.5bn procurement of 70 Spanish-made diesel and hybrid locomotives through black empowerment company Swifambo Rail Leasing. The allegations related to the suitability of the locomotives for local rail infrastructure; lack of foreign currency hedging, which led to the contract ballooning to R5bn from R3.5bn and unexplained higher payments to Swifambo.
In 2015, Prasa applied to the high court to have the contract set aside on the grounds that it was improperly awarded.
In June Prasa made a separate application to recoup monies paid to Swifambo under the contract.
In his letter to Peters, Molefe said the board had to be seen to be in control of the company and the delay in the appointment of a new CEO “sends the opposite message to management, staff and the stakeholders of the company. The board draws to the attention of the honourable minister that the public
The interception of confidential information is a gross violation of my right (to) confidentiality
debates around the appointment of the Prasa GCEO (group CEO), bore a risk of this matter getting out of control of the board and will inevitably bring instability, uncertainty and harm to the company,” said Molefe.
Molefe said the delay in appointing a CEO had also drawn questions from parties in Parliament. He implied in the letter that Peters had failed to respond to the board’s submissions on a new CEO for two months.
Prasa has a separate R51bn contract with Gibela Rail Transport Consortium, led by French power and transport group Alstom, for the delivery of 600 new trains for Metrorail. The trains come with new technology, and infrastructure such as rail lines and depots will need to be modernised.
Last year, Business Day revealed that Prasa was behind on its own timelines to get infrastructure ready for the new trains. The first of the trains arrived in November without a depot to be housed or a test track.