Transport Department’s hefty legal tab revealed
R35m forked out for litigation over past three years, Nzimande reveals
THE TRANSPORT Department has paid about R35 million in legal costs over the past three years.
This emerged in a written response by Transport Minister Blade Nzimande to a question from the DA’s Chris Hunsinger.
Hunsinger had enquired about litigation involving the department in the past three financial years and since April this year, and what measures were in place to ensure litigation was handled in a way that ensured a favourable outcome.
Nzimande said R35m was spent in legal fees since 2015-16, with at least R1.9m spent since April this year.
One of the department’s cases involved the Tasima contract, in which the Constitutional Court ruled in favour of the government and declared that the 2010 extension was unlawful.
Another related to the Prodiba contract, where the Supreme Court of Appeal found in favour of the Department of Transport (DoT) and declared the 2010 contract extension unlawful. Prodiba’s appeal to the Constitutional Court was also dismissed.
Nzimande said: “The department assesses the probability of success on a matter before engaging in litigation. It then ensures the appointments of a legal team with the requisite experience and expertise in the matter.”
He also said contracts were drafted and vetted by legal services.
“Contract management is handled by supply chain management.”
Nzimande also said that a reduction of litigation costs was ensuring that administrative decisions were carried out within the ambit of the law, which reduced review applications in courts, and that suppliers were paid well on time.
“The strengthening of contract management by supply chain management has added a further control to avoid contract mismanagement that may lead to litigation,” he said.
The minister pointed out that the Airports Company SA (Acsa) had an internal legal counsel which provided an oversight role to the litigation matters.
“Upon receipt of any litigation matter by the legal department, its merits are assessed by the litigation department headed up by the senior legal counsel in consultation with the group legal counsel, and subsequently gets allocated to a law firm based on their expertise and affirmative action credentials.
“This ensures that the matters are allocated to law firms and advocates with the requisite skills and capacity to deal with the matter concerned.
“The legal counsel has an oversight role on the matter by vetting all documents, attending consultations and guiding the strategy on the matter.”
Nzimande added that Acsa had embarked on a strategic drive where the root causes of various litigations were identified by the legal department; and the business units, where the litigation emanated, were engaged on how litigation could be avoided in the future.
“The legal department provides training to the business units on the various causes of the litigation to ensure that they are capacitated to be able to avoid the causes of litigation,” Nzimande said.
The minister also revealed that a breakdown of the Passenger Rail Agency of SA’s monthly costs of litigation required more time.
“However, to provide an idea of the cost, the budget for legal services for the current year is R72m.
“This includes litigation, opinions and other legal support. Litigation makes up most of this budget,” added Nzimande.
He also said the SA National Roads Agency Ltd (Sanral) was in the process of reconfiguring its in-house legal department.
“This should enable Sanral to detect complaints at an early stage, affording it an opportunity to manage and contain them, where possible, to alleviate the immediate need to secure external service providers prematurely,” Nziman de said.
He further said while favourable outcomes in litigation can never be guaranteed, Sanral would have a legal team which would be in a better position to be directly involved with its matters, ensuring early preparation and utilisation of expert legal service providers where litigation was unavoidable.