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PRASA will think before rushing to court over suspect contracts – Molefe

PRASA will think before rushing to court over suspect contracts – Molefe

Photo by Duane Daws

11th September 2015

By: African News Agency

  

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The Passenger Rail Agency of South Africa (PRASA) will carefully weigh the merits of each criminal and civil case potentially arising out of the web of corruption uncovered at the rail agency before proceeding to court, chairperson Popo Molefe said on Friday.

Molefe said the board of the PRASA would do so both to assess its chances of successful litigation, and the potential loss of service delivery that might make it unfeasible to cancel certain contracts, even if they were not entered into lawfully.

“We are getting legal opinion, the best minds, applying our minds, Because we have to precisely made a determination on what chances we stand on winning the cases when we go to court,” he told Parliament’s portfolio committee on transport.

“Some of them are straightforward and we would go for those that are straightforward. Others we would have to think twice and think about what the cost would be involved. It may well be that we do them, on proper legal counsel’s advice.

“We would also have to appreciate that there might be instances where the previous board might have made decisions that are wrong but they did so in good faith and based on the reports that they were receiving and we may well be at the point where the programme has run so far that you can’t even think of halting it.”

The PRASA board was briefing MPs on its plans to address the conclusion of Public Protector Thuli Madonsela in her damning report “Derailed” that PRASA had improperly extended a number of tenders worth millions of rands.

Madonsela implicated axed PRASA boss Lucky Montana in several instances of financial mismanagement and improper conduct.

She directed that the board commission National Treasury for a forensic investigation into all PRASA contracts worth more than R10 million signed in the past three years.

Molefe said the entity was not confining its own efforts to get to the bottom of misconduct to contracts of that value.

“We as PRASA in our own investigation are investigating everything that shows maladministration whether it is R300 000, if we pick it up, we would show it, and we do that under the guidance of the audit and risk committee,” he said.

However, he again cautioned that the company could not rush into suspending contracts that may be suspect if this would leave commuters stranded.

Molefe cited the 2014 Constitutional Court ruling that suspended the court’s declaration of a contract secured by Cash Paymaster Services (CPS) with the South African Social Services Agency (Sassa) to pay out welfare grants as invalid, and ordered that the company continue to carry out its obligations for an interim period while the agency initiated a new tender process. The court had declared the R10 billion contract invalid.

“We are not acting precipitously on any matter that we are dealing with. Would we in our litigation precipitate a situation of discontinuation of services? Each case will be dealt with on its merit and in dealing with these things … we are also very much informed by precedents in court,” he said before recalling that the Sassa could not terminate the fraudulent tender immediately because of “how it would impact on ordinary grant recipients”.

It would be reckless to try to appease critics but forget that the mandate of the state-run rail agency, he said.

“We ourselves understand the importance of the modernisation programme of PRASA and its renewal and we understand that it is not about the board, it is not about the management of PRASA, it is not about the politicians, it is about the masses of our ordinary people.”

Molefe said another reason not to rush into action, was that he believed internal investigations would soon unveil more about the extent and details of wrongdoing at PRASA.

“We are going to be shocked by what would come out in the investigations that we are doing, so it is better to wait for that work to be done and for us to decide if we are faced with the situation to decide how we manage it.”

However, he said PRASA had established that reports about allegations that one employee paid R58 million to a service provider who defrauded the company were untrue.

“That is a lie. It is a lie that an employee of PRASA paid R58 million to a service provider who defrauded the company. It is not true but it is there and it being said in public. That employee who was suspended on flimsy excuses has been reinstated,” he said.

Asked whether he believed Montana would make good on threats to challenge Madonsela’s findings in court in what he described as a “war” and “matter of life and death”, Molefe said he did not know.

“That is his business.”

Edited by African News Agency

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