Prasa did not follow processes when extending contracts with Roy Moodley-linked entity, hears Zondo

The commission of inquiry into state capture on Tuesday heard how a company – Siyangena Technologies – associated to a businessman linked to former president Jacob Zuma, Roy Moodley, scored contracts at the Passenger Rail Agency of South Africa (Prasa) without processes being followed.

The head of legal at Prasa Martha Ngoye told the chairperson of the commission, Deputy Chief Justice Raymond Zondo, that the agency has approached the courts to have these contracts reviewed and set aside.

Ngoye told Zondo that the basis of the court application was that processes that were required to be followed in appointing Siyangena Technologies were not followed, there were issues with non-compliance, and Prasa’s supply chain processes were flouted.

Ngoye said the Public Protector in her first report on investigations into allegations of maladministration at Prasa found that processes had not been followed in the awarding of the said contract.

“The extension did not follow process… so they were irregular,” Ngoye said.

Ngoye said former Prasa CEO Lucky Montana approved the project, subject to it being looked at by the finance department, for Siyangena to supply gates to the agency’s stations despite issues being raised to him.

Luvuyo Gantsho is one of the Prasa officials who pointed out to Montana that Siyangena’s prices were too excessive, there was no budget for the project and that the gates the company provided did not comply with the agency’s requirements, Ngoye said.

However, Gantsho had “a change of heart” on the matter after a telephone conversation with Montana, the commission heard.

Ngoye said another Prasa executive, Piet Sebola, raised issues around the project, including issues of non-compliance, procurement process not being followed, there being no budget and that Siyangena was not certified with the Construction Industry Development Board.

Ngoye told the commission that Prasa extended the contract with Siyangena without due processes being followed, which include the contract not being put out for open tender, without requesting to deviate from the tender process, without a request for proposal (RFP), and without evaluation criteria in place.

“So there were stages missing in the process,” Ngoye said.

Ngoye said this “matter suddenly came back to life” when Prasa’s bid evaluating committee (BEC) met on 14 February 2011.

The BEC made a submission to the agency’s bid adjudicating committee (BAC) for Siyangena to be awarded the contract, the commission heard.

However, the BAC raised concerns over the project, which included the issue of the budget and the tender process not being followed, and recommended that the contract should not be awarded to Siyangena, Ngoye said.

“Effectively there was no support for this submission by the BEC to the BAC,” she said.

The chairperson of the BAC’s signature was allegedly forged and so, too, was the price Siyangena had quoted, in the submission the committee made to the board’s finance and capital investment committee (FCIP) for the latter to consider awarding the contract to Siyangena, the commission heard.

“BAC had decided we are not going to recommend this thing to the FCIP,” Ngoye said, adding that this alleged criminal conduct has been reported to the police and the Hawks, however, nothing has been forthcoming.

On 17 February 2011, the FCIP dealt with the submission from the BAC, which was to approve the awarding of a contract worth R1.9 billion – an R800 million increase from the original price –  to Siyangena, the commission heard.

Ngoye told the commission that the FCIP, without thoroughly satisfying itself that all was in order, approved the submission despite being aware that the budget for the project was set at R317 million.

“It shouldn’t have happened,” she said.

Ngoye said another extension of the contract was done without the tender process being followed.

This extension was valued at R350 million, which took the total value of the contract to around R2.2 billion.

The commission has adjourned for lunch.

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