Prasa ignores Peters’ order to halt corruption probe

Bosses at the Passenger Rail Agency of SA (Prasa) appear to have defied Transport Minister Dipuo Peters’ order that they halt a multimillion-rand investigation by a top law firm into alleged fraud, corruption, and maladministration at the state-owned rail company.

The Sowetan reported on Monday that when the minister first flagged the parastatal’s “excessive spending” by Werkmans Attorneys in August, the agency had spent about R80 million, according to a letter she sent to Prasa board chairman Popo Molefe.

The cost of the investigation has reportedly ballooned to R119 million by December, the paper reported. However, the probe is only expected to be completed in June.

Peters raised the alarm in August that the money could be regarded as irregular expenditure and asked Molefe to close the investigation and produce a detailed report and outcome.

Werkmans Attorneys is investigating various irregularities found by Auditor-General Kimi Makwetu in Prasa’s 2014/15 financial year. Among them that the parastatal’s capital commitment for the purchase of new locomotives significantly increased by R1.3 billion, from R3.5 billion to R4.8 billion.

However, the number of locomotives expected for delivery declined from 88, as stated in the initial contract, to 70.

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Werkmans Attorneys’ investigation also includes then public protector Thuli Madonsela’s August 2015 “Derailed” report, which ordered Molefe to take disciplinary action on her findings of maladministration and improper conduct by then Prasa CEO Lucky Montana and other senior officials.

Madonsela also ordered National Treasury to conduct a forensic investigation into all Prasa contracts above R10 million awarded since 2012. The investigation was still ongoing in December according to Sowetan.

The auditor-general also discovered that the capital commitment for the purchase of rolling stock (fleet renewal programme) was R59.6 billion, which had been disclosed in the previous financial year (2013/14) as R51 billion.

In 2014/15, Prasa incurred irregular expenditure to the tune of R550 million, according to Makwetu’s report. In the year up to the end of March last year, Prasa incurred irregular expenditure of R4.1 billion and R9.8 billion was identified during the same period but relates to previous years.