Second law firm threatens to ditch Prasa

Just ten days after law firm Weksmans Attorneys withdrew their services to the Passenger Rail Association of South Africa (Prasa), a second firm, Cliffe Dekker Hofmeyr, has threatened to stop representing the agency. 

eNCA reports that Prasa owes the Cliff Dekker Hofmeyr over R9 million. 

GroundUp reported on 17 January that Prasa allegedly failed to pay Werksmans Attorneys R19 million in outstanding fees, according to chairman, David Hertz. 

Hertz said in a letter that the R19 million payment is overdue by more than six months, and that if the firm’s overdue accounts were not settled, they would have to “institute appropriate proceedings” against Prasa to recover the money owed.  

Hertz’s letter refers to information and security company Siyangenga, hired in 210 by former Prasa CEO, Lucky Montana. 

Prasa has been battling to get the contract set aside since March 2018, after it accused the company of installing outdated and overpriced security systems that are ineffective. 

Prasa also claims that it has paid R3 billion to Siyangenga, but that the company is trying to get Prasa to pay them billions more. 

The letter also touched on the corrupt tender process involving former director of Swifambo Rail Leasing, Auswell Mashaba, after delivering trains from Spain that did not fit South African railway tracks. 

Swifambo reportedly went into liquidation shortly after it was ruled that the contract be set aside. However, Mashaba claims he cannot be held financially responsible for the contract, and lodged an application in August 2019. 

If Mashaba’s application is successful, and Prasa does not oppose it, it stands to lose a further R80 million. 

The Cliffe Decker Hofmeyr firm claims it was promised a payment of R500 000 in December last year, but it was never received. 

eNCA further reports that the firm has made payments on behalf of Prasa to the tune of over R2 million, but that it refuses to pour any more funds into the embattled railway agency.

On 15 January, transport minister Fikile Mbalula admitted that Prasa is a “broken entity”. This after it was placed under administration. 

Mbalula said numerous boards had failed to save Prasa, and said that instead of a assigning a new board, Bongisizwe Mpondo had been appointed to provide regular reports. 

So far, Mpondo revealed that Prasa has been ravaged by systemic erosion of value and countless changes at CEO and board level since 2015. 

The changes, he said, enabled Prasa to become a prime target for thieves.

“One telling example is that towards the end of last year, the interim board cancelled the security contracts without a contingency plan in place.” 

The result of this is the continued stripping and destruction of trains by vandals, and the theft of live cables. 

Mpondo said irregular expenditure was close to R30 billion in 2018-19, irregular contracts were at R1.57 billion, and about 52 current and former employees had been implicated in the looting spree.

(Compiled by Nica Schreuder. Background reporting by Sipho Mabena and GroundUp’s Lucas Nowicki.)

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