NEWS & ANALYSIS

Why is PRASA investing R1bn with VBS Mutual Bank? - Manny de Freitas

DA MP to submit PAIA application for proof of bank's compliance with treasury

DA submits PAIA application for proof VBS’ compliance with National Treasury

The DA will today submit an application to Passenger Rail Agency of South Africa (PRASA) in terms of the Promotion of Access to Information Act (PAIA) to request PRASA to fully disclose documents showing concrete proof of VBS Mutual Bank’s compliance with National Treasury.

In terms of Section 7 of Public Financial Management Act (PFMA), PRASA is bound to act within the “prescribed framework” for their banking, cash management and investments. S7(2)(b) requires that a public entity may only open a bank account with (a) Treasury approval and (b) after prescribed tender processes have been complied with.

This follows media reports that the cash-strapped PRASA is allegedly investing R1-billion with VBS Mutual Bank, the bank that lent President Jacob Zuma R7.8-million during the Nkandla scandal.

Further, even if PRASA was granted approval by National Treasury, VBS submitted an unsolicited bid and the DA therefore requests PRASA’s compliance with PFMA procedures for unsolicited bids and any relevant tender documents for this deal.

This is a clear indication of a leadership crisis at PRASA and this once again supports the DA’s call for a total overhaul of the leadership at the entity.

What’s more, is that there are no reasons for PRASA, which is struggling financially, to invest money it doesn’t have.

It is a huge indictment on Transport Minister, Joe Maswanganyi and the ANC government that the current board and executives don’t have the best interests of South Africans at heart.

The DA will not allow any State-Owned-Enterprise (SOE) to be used as a conduit for any corrupt activities whether for Mr Zuma or the politically-connected Gupta family who are heavily implicated in State Capture. Indeed, it is highly unusual for an entity such as PRASA, already marred by serious financial problems, to 'invest' in a bank in the first place.

The DA now awaits a response from PRASA as the public deserves to know the full truth.

Statement issued by Manny de Freitas MP, DA Shadow Minister of Transport, 4 February 2018