Prasa contract was ‘tailored’ to favour Roy Moodley-linked entity, Zondo hears

Prasa headquarters. Image: Moneyweb

The witness says former Prasa CEO Lucky Montana signed a contract worth R10 million a month which no one at Prasa knew about.

The commission of inquiry into state capture heard on Tuesday that it was not surprising that Siyangena Technologies, a company associated with businessman Roy Moodley, who is said to be linked to former president Jacob Zuma, was awarded a contract at the Passenger Rail Agency of South Africa (Prasa) because the specifications for the tender were “tailored” to the advantage of the company.

This is according to testimony by Prasa’s head of legal, Martha Ngoye, who on Tuesday concluded her testimony before the commission chaired by Deputy Chief Justice Raymond Zondo.

Ngoye said it was against Prasa’s policy to specify which brands the bidders should provide for the contract.

She said the contract was awarded without the tender process being followed and without failure to do so being justified.

Ngoye said one of the “tailored” specifications of the contract was the mention of specific brands only Siyangena could provide.

“The mention of the brands was a giveaway,” Ngoye said.

The contract was valued at over R2 billion, the commission heard.

Ahead of the lunch adjournment at the commission on Tuesday, Ngoye told Zondo that during the first phase of the contract, Siyangena had been advantaged by being privy to information that in its bid submissions for the first phase of the project, it should have included a funding model for Prasa.

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Ngoye said earlier that the agency has approached the courts to have these contracts reviewed and set aside.

Ngoye said when the board, during Popo Molefe’s tenure, looked at the contracts the agency had entered into, including those with Siyangena, the board, around 2016 or 2017 instructed Prasa to inform Siyangena to stop work as they would not be paid, as the contracts were being reviewed. The company then brought an interdict before court as a counter.

The interdict, Ngoye said, included an addendum that no one at Prasa knew about, she said.

“The addendum was a mystery to Prasa,” Ngoye said.

Zondo expressed his difficulty in understanding why any official would think that not putting to an open tender process a contract of such “big amounts” without any justification given would not raise red flags.

“I just don’t understand what are the answers you will give when you are asked questions,” he said.

Ngoye told Zondo that following Siyangena’s interdict, which had attached the addendum, Prasa officials “vigorously” searched for the agency’s copy.

“We searched the documents at Prasa looking for this addendum and it was not found,” Ngoye said, adding that Prasa officials first came to know of the addendum when it was produced by Siyangena at court.

She added that the addendum was signed by former Prasa CEO Lucky Montana, in April 2014, at a time when the former CEO had indicated that his contract ending 31 March 2014 should not be renewed.

Testifying last week, Molefe told the commission that an agreement had been reached between Montana and the board that the former CEO should stay on for six months after the end of his contract, while his replacement was being sought.

The addendum, a contract for the maintenance of electronic equipment, did not have a service level agreement, Ngoye told the commission.

“But what we understood was the requirement at the time that Prasa would have to pay Siyangena R10 million a month for those services,” she said.

She added: “We saw it [the addendum] for the first time when Siyangena’s attorney’s produced [it in court],” she said.

Evidence leader at the commission, advocate Vas Soni, asked Ngoye whether it would be possible that the equipment Siyangena had been contracted to maintain had been outdated – “almost ancient”, about two or three years old, when the addendum was signed.

“Yes, chair, that’s possible,” Ngoye responded.

She said since the existence of the addendum had “surprised” Prasa officials, it was assumed that it had been “created outside” of the agency.

The commission heard that investigators could not find the document even after imaging the computers at Prasa.

Ngoye told the commission that Prasa, however, did not make any payments to Siyangena in relation to the maintenance addendum.

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