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What did Montana do wrong at PRASA?

By Staff Writer
There were a total of 37 complaints laid against the Passenger Rail Agency of South Africa (PRASA) and an investigation by the Public Protector Thuli Madonsela followed soon thereafter. In the report titled ‘Derailed’, former PRASA CEO Lucky Montana has been found to be directly implemented and guilty of maladministration and improper conduct in eight of the charges.
 
Following these findings, the Democratic Alliance (DA) and the Freedom Front Plus (FF Plus) are calling for an investigation into the findings, and into the conduct of Montana. But what exactly did Montana do wrong?
 
Eight wrongs don’t make a right
 
Following the investigation of the 37 complaints lodged some of the findings have been deferred to a later date, while other allegations were not substantiated. Of those that were substantiated, Montana was directly implicated in eight of them. These were:
 
  1. The improper termination of the contracts of five executives, which resulted is wasteful expenditure of approximately R5 million.
  2. The improper suspension of employees which resulted in labour dispute settlements to the value of R 3.35 million in wasteful expenditure.
  3. The improper and irregular appointment of a special adviser at a cost of R2 million.
  4. Maladministration, abuse of power and improper conduct in the improper termination of all the companies contracts for cleaning services, and the irregular appointment of two new companies.
  5. The improper awarding of a R10 million tender to Edwin Lekota and his company Lekga Investment Holdings without going through the competitive process for the development of a Contingency Emergency Preparedness Programme for Metrorail by PRASA.
  6. The irregular appointment of Ezra Ndwandwe’s Consultancy without attaining three quotes from suppliers, which amounted to about R6 million.
  7. The improper appointment of a service provider for the publication of Hambanathi Magazine.
  8. The continued payment of rental to a building that PRASA vacated before the expiry of the contract, resulting in wasteful expenditure.
 
The initial complaints against PRASA were lodged by the South African Transport and Allied Workers Union (SATAWU) in 2012. When SATAWU later tried to withdraw the complaints, they were pursued by the National Transport Movement (NTM) who requested that the investigation into PRASA continue.
 
The report explained: “The essence of the complaints was that Montana, then group chief executive officer (GCEO) of PRASA, and/or PRASA, improperly awarded tenders; appointed service providers without following proper tender processes and allowed maladministration, corruption, conflict of interest and financial mismanagement, in the procurement of goods and services and managed human resources irregularly, including nepotism and the improper handling of whistle-blowers.”
 
Where to from here?
 
Following the release of the report on Monday 24 August 2015, the DA will be laying criminal charges for fraud and corruption against Montana. They are also requesting that the “Special Investigative Unit (SIU) conduct a forensic investigation into the misconduct at PRASA in order to determine the criminal liability of those involved in the scandal and prosecute them accordingly.”
 
Furthermore, the DA believed that the report “must be tabled before Parliament, so that its recommendations can be properly monitored and enforced by the Portfolio Committee on Transport.”
 
The DA said: “The abuse of public funds uncovered by the Public Protector, Advocate Thuli Madonsela, at PRASA poses a significant threat to the parastatal, which has an important mandate to transport millions of South Africans to work and school on a daily basis.”
 
Furthermore, the DA revealed that it will be pursuing “a number of avenues to ensure that the remedial actions taken by the Public Protector are enforced, the misappropriated funds are recuperated, and that criminal charges against the appropriate authorities are investigated.”
 
As with the DA, the FF Plus announced that it was considering laying a criminal complaint against Lucky Montana and PRASA officials following the release of the report.
 
The FF Plus have since requested that the Hawks (the Directorate for Priority Crime Investigation) investigate the findings of the report, focusing on five specific aspects. These are:
  1. The tender awarded to Siyangena Technologies where Lucky Montana’s house had been bought in a questionable way by Siyangena Technologies’ legal advisor for more than double the market value (as reported by Network24);
  2. The financing and appointment of a media company, which is owned by Pule Mabe, ANC parliamentary member and member of the ANC’s NEC, to start a magazine for PRASA;
  3. The contract of R4 million awarded to a company that has ties with a PRASA board member;
  4. The payment of rent for a building, which PRASA had already vacated;
  5. The replacement of seven cleaning companies’ contracts with the contracts with two other companies in a questionable manner.
 
According to Anton Alberts, FF Plus parliamentary spokesperson for transport, “from the [Public Protector’s] report it is clear that money had been wasted on a huge scale and there are obvious irregularities that could possibly only be explained by Montana.”
 
Both the DA and the FF Plus believed that the findings of the Public Protector’s report are an indication of corruption within PRASA.
 
 
To read the full report, click here.

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