Montana threatens to sue Prasa board
Former chief warns Minister Peters, Madonsela and Molefe to set aside report
THE FORMER chief executive of the Passenger Rail Agency of South Africa (Prasa), Lucky Montana, will sue the parastatal board for “delinquent directorship” if they continue to use the findings of the public protector’s report to take action against him.
Responding to a press briefing by Prasa chairman Popo Molefe that the board would take action against all employees, present and former, cited in the report, Montana said his legal counsel had on Tuesday served Minister for Transport Dipuo Peters, public protector Thuli Madonsela and Molefe with instructions to set the report aside.
“That report is a damp squib. If anything the board should be joining me in correcting misconceptions in that report. If they do not, I will have to go after them and sue them as delinquent directors,” Montana told Business Report.
It could not be independently confirmed last night if the three have received these letters from Montana’s counsel.
Molefe, on behalf of Prasa, yesterday told the media that the parastatal was reviewing all aspects of its operations and procurement processes in light of the findings.
Interventions
Interventions taken immediately by the board include the secondment of a senior procurement executive from the Treasury to help streamline new processes; the appointment of Werksmens Attorneys to follow up on the auditorgeneral’s report regarding expenditure at Prasa; the suspension of suspicious contracts issued under the tenure of Montana; as well as an academic audit of all staff by the SA Qualifications Authority (SAQA).
“Regarding contracts identified or suspected to be irregularly awarded, the board directed the acting group chief executive to take appropriate steps to suspend all such con- tracts and to engage where appropriate with the relevant parties,” Molefe said yesterday.
Molefe would not be drawn on which specific contracts were to be affected by the review process.
Prasa was reviewing its operations and procurement processes in light of the report’s findings.
Molefe said as part of the remedial actions on the findings of the public protector, the board had directed management to strengthen the internal controls and overhaul the supply chain management structures. “To this extent, Prasa has requested the chief procurement officer at the National Treasury to second to it an experienced procurement officer,” he said.
According to sources close to Prasa, it will spend R174 billion over the next 10 years on fleet replacement, signalling and the construction of tracks.
The parastatal is spending R45bn in the current mediumterm framework (MTF) from 2014 to 2017.
The majority of the capital expenditure of R51bn is for the procurement of a fleet of trains from Brazil, with a component to manufacture the rest locally.
Among existing contracts is one for R8bn, which has been awarded to several contractors in the Western Cape, Gauteng and KwaZulu-Natal, to set up signalling infrastructure. Siemens is halfway through its R3.8bn contract for developing the Gauteng corridor’s signal systems. Last year Alstom was paid R5.7bn for the procurement of trains.
Meanwhile, Huawei is working on a R600 million contract to establish a state of the art communication system to replace the old “Trunk in Radio System”, which relied on the use of radios and sometimes cellphones for communication between locomotives.
Molefe said the new Prasa board had not issued new tenders since it assumed office and would wait until it had proper systems in place.
He said tender applications received so far did not meet Prasa requirements of either technical competence or legal compliance. As such they had been put aside.
Vendetta
Montana said: “It would be madness to stop existing tenders because of a vendetta with Lucky Montana. If no new tenders are issued then you are paralysing metrorail because a third of the fleet is aged and you have got to replace as you go along. If you don’t procure anything in this system, you will pay the price later.”
Montana said the financial implications of the board’s actions were astronomical, from suppliers suing for breach of contract to the opportunity cost of dealing with unattended damages to the system.