PRASA: Fraud and corruption charges laid against Montana
27 August 2015
Note to Editors: The following remarks were made by the DA Leader, outside the Cape Town Central Police Station after laying charges against former PRASA GCEO, Mr Lucky Montana. The Leader was joined by DA National Spokesperson, Phumzile Van Damme MP, DA Shadow Minister of Justice, Adv. Glynnis Breytenbach MP, and DA Shadow Deputy Minister of Transport, Chris Hunsinger MP.
This morning I laid criminal charges of corruption against former Passenger Rail Agency of South Africa (PRASA) Group CEO (GCECO), Mr Lucky Montana, and other functionaries of PRASA, based on the damning evidence against them in the report by the Public Protector released earlier this week.
The contents of the Derailed report looked into cases of grand maladministration at PRASA and revealed how Mr Montana used his power, influence and access to billions of Rands of South Africans’ taxpayer money to enrich himself and a network of associates.
Mr Montana dipped into the finances of PRASA like it was his personal piggybank, he cancelled and rewarded tenders on a whim while knowingly contravening laws and regulations like the Public Finance Management Act (PFMA) and the Supply Chain Management (SCM) Policies of PRASA.
Mr Montana therefore directly allowed and, in fact, facilitated maladministration, corruption, conflicts of interest and financial mismanagement on a large scale.
Having studied the report of the Public Protector, the Democratic Alliance is of the considered view, that there is a prima facie criminal case that needs to be investigated, to which Mr Montana must answer for in a court of law.
The charges that were laid in terms of Section 4 of the Prevention and Combating of Corrupt Activities Act, which deals with Offences in respect of corrupt activities relating to public officers which we contend was violated. Furthermore, these charges were also laid taking into account Sections 84 to 86 of the PFMA.
Like other state entities, PRASA is entrusted with billions of Rands, and it is therefore important that it is managed in line with regulatory framework in which it operates, and that those at the helm are of the highest calibre.
Corruption steals opportunities form the people of South Africa, and all cases, however big or small must be taken seriously, and the law must the criminal justice system must operate without fear, favour and prejudice in each case.
The affidavit can be found here and below.
Text of the affidavit:
AFFIDAVIT
I, MMUSI ALOYSIAS MAIMANE,
declares under oath as follows:
I am an adult male, a South African citizen and the Leader of the Official Opposition (the Democratic Alliance) of the Republic of South Africa.
As such, I submit that I have sufficient interest and the necessary locus standi to depose to this affidavit. This is a matter of immense public interest.
I have read the report entitled “DERAILED”, drafted by the office of the Public Protector (PP). It is a report on an investigation into allegations of maladministration relating to financial mismanagement, tender irregularities and appointment irregularities with regard to the Passenger Rail Agency of South Africa (PRASA).
The report is dated 24 August 2015, and was issued in terms of section 182(1)(b) of the Public Protector Act, 23 of 1994.
The report details the findings of the PP pursuant to the abovementioned investigation, and pertains to 37 complaints lodged by the South African Transport and Allied Workers Union (SATAWU) and by the National Transport Movement (NTM). These complainst related to inter alia maladministration, procurement irregularities, conflicts of interest, nepostism and victimization of whistle blowers. These complaints indicated the abovementioned actions undertaken by the Group CEO, Mr Lucky Montana and other functionaries of PRASA.
PRASA is an important and strategic organ of state, and any maladministration has serious implications for efficient and effective public transport delivery in compliance with section 195 of the Constitution of the Republic. PRASA is an organ of state listed as a National Government Business Enterprise in terms of Schedule 3B of the Public Finance Management Act, 1 of 1999 (PFMA).
PRASA has four subsidiaries – METRORAIL (operating commuter rail services in urban areas), SHOSHOLOZA MEYL (operating regional and intercity rail services), AUTOPAX (operating regional and intercity coach services and INTERSITE (managing the corporate property portfolio).
PRASA reported an accumulated loss of R4.4 billion for 2010/2012 and an accumulated loss of R1 billion for the 2014/2015 financial year. The budget allocation from Government for PRASA for the MTEF period 2015/2016 to 2017/2018 is R17.2 billion. The complaints investigated in the report of the PP deal principally with alleged procurement irregularities in an amount in excess of R2.8 billion.
The essence of the complaints (which are set out fully in the report entitled “DERAILED”, and which is attached hereto in its entirety for ease of reference as annexure AMM 1 to AMM 391, were that Mr Montana, as Group CEO improperly awarded tenders, appointed service providers without following proper tender processes and allowed maladministration, corruption, conflicts of interest and financial mismanagement on a large scale.
The specific allegations investigated by the PP are set out in paragraphs (ix) 1 to 35 on pages 5 to 12 of the report, and further clarified in paragraphs (x) 1 to 38 on pages 13 to 18 of the report.
The findings of the PP are contained in the report under point 8 on pages 360 to 386. To avoid prolixity these are not repeated here, but form part of this affidavit.
The Remedial Action ordered by the PP is set out fully in point 9 of the report, on pages 387 to 391.
I desire investigation by the South African Police Service into the allegations contained in the report and more particularly into the findings of the PP, with a view to instituting criminal prosecutions against those persons implicated in wrongdoing in terms of the activities detailed in the report.
Signed at Cape Town on this the 26th day of August 2015.
_________________________
MMUSI ALOYSIAS MAIMANE
I certify that the deponent has acknowledged that he knows and understands the contents of this affidavit which was signed and sworn before me at Cape Town his 26th day of August 2015, the regulations contained in Government Notice no R1258 of 21 July 1972 as amended and Government Notice no 1648 of 19 August 1977 having been complied with.
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COMMISSIONER OF OATHS
Full Names:
Business Address:
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Issued by the DA, August 27 2015
