PRASA: Lucky Montana should be prosecuted - Mmusi Maimane

DA leader says misconduct at Agency symptomatic of corruption endemic in ANC govt

DA to call for SIU investigation and Montana’s prosecution

25 August 2015

Note to Editors: The following remarks were made by the DA Leader, Mmusi Maimane MP, DA National Spokesperson, Phumzile Van Damme MP and the DA’s Shadow Deputy Minister of Transport, Chris Hunsinger MP, at a press conference held in Parliament today. 

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.

Prasa, under the leadership of Group CEO (GCEO), Lucky Montana, knowingly contravened the Public Finance Management Act (PFMA) and the Supply Chain Management (SCM) Policies of Prasa, and has acted illicitly and selfishly at the taxpayers’ expense. The DA will therefore pursue 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.

To this end the DA will take the following steps to affect justice:

Lay criminal charges against Mr Montana for fraud & corruption;

Request 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.

Mr Pule Mabe must be compelled to repay the salary he fraudulently received after leaving Prasa’s employ, as well as for the contracts received by his company, KG Media.

“Derailed” must be tabled before Parliament, so that its recommendations can be properly monitored and enforced by the Portfolio Committee on Transport.

The scathing findings by the Public Protector of the improper awarding, extension and appointment of tender contracts to companies and connected individuals by the GCEO and the Prasa board must be condemned in the strongest terms as this amounted to over R355 million. 

Even worse than this is the R1.3 billion loss – at the taxpayers’ expense – because of a failure by Prasa to execute a foreign currency hedge. Just last week, twelve South Africans were injured because one of the newly ordered AFRO-4000 trains derailed near Kimberly in the Northern Cape.

Further to this, Prasa overspent on its budget by R523 million for the 2009/2010 financial year, accumulated losses of R4 billion in the 2010/2011 financial year, an accumulated loss of R1 billion for the 2014/2015 financial year and the recent questionable R3.5 billion tender awarded to a Spanish company, Vossloh Espana. 

This was followed by the resignation of Mr Montana, who has been found to have improperly advanced the tender. Furthermore the former head engineer and the chief procurement officer were forced to resign because they were exposed for lying about their qualifications. These executives must be compelled to repay their salaries.

We vehemently condemn the fruitless and wasteful expenditure incurred by the entity due to the GCEO’s improper termination of contracts of Executives resulting in fruitless and wasteful expenditure amounting to an estimated R5.8 million.

Questions cannot continue to go unanswered and the DA will today submit parliamentary questions to determine: 

How the Minister of Transport, Dipuo Peters, will ensure that the remedial action taken by the Public Protector is enforced.

How the Minister plans to recover the billions lost as a result of the fraud and mismanagement at Prasa.

What plans the Minister has in place to turn around Prasa in order to fulfil its madate to provide the South African public with safe, affordable and reliable rail services.

In addition to the immediate actions the DA will take, we will pursue other available avenues to make sure that the Public Protector’s actions are adhered to. These include:

We will write to Chairperson of the Portfolio Committee on Transport, Dikeledi Magadzi, to request that she summon the Board of Prasa to appear before committee to advise them on how they will go about implementing remedial action;

The Portfolio Committee must further investigate how the mismanagement of Prasa was allowed to occur under the Minister’s watch. There must be political accountability for the corruption at the parastatal.

In the cases of gross financial mismanagement and flagrant contravention of the PFMA and Treasury regulations, these cases must be tabled before the Standing Committee on Public Accounts; and

We will urge the Minister of Transport to take appropriate disciplinary action against the officials of Prasa in respect of their conduct referred to in “Derailed.”

The Portfolio Committee must accelerate the reform of Prasa, such as the Public Protector’s call to lower the R350 million threshold before the entity is required to embark on a competitive bidding process in the procurement process. This will go a long way in preventing the abuse of the SCM Policies of Prasa and future procurement irregularities.

The misconduct at Prasa is symptomatic of the corruption that has become endemic in the ANC government. This is robbing South Africans of basic services and infrastructure while connected individuals become rich through the theft of public funds. The DA will not stand for this and will fight for justice and fairness.

Prasa’s success is essential to grow our economy as it is a public infrastructure provider; therefore, it is imperative that the necessary steps are taken to reform Prasa and hold those involved in the rogue activity to account.

Statement issued by DA leader, Mmusi Maimane, August 25 2015