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South Africa

Zondo commission hears of power struggle at PRASA

───   06:37 Fri, 13 Mar 2020

Zondo commission hears of power struggle at PRASA | News Article

Former chairperson of the Passenger Rail Agency of South Africa (PRASA) Popo Molefe on Thursday told the commission of inquiry into the state capture scandal that his tenure saw a tug of war with the entity's then CEO Lucky Montana.


Molefe, currently the chairperson of Transnet, told the Zondo commission there was tension from the moment his board sought to familiarise themselves with the details of contracts that were in place when it took office in August 2014.

He said Montana promised to supply the board with all the contracts signed, but he never did. The board was particularly interested in a large contract worth R51 billion to procure new trains, IOL reported. 

Because Montana did not provide the documents, the board tuned to the law firm that helped to draft the contract, to Montana's apparent dismay.

"It was already clear to us at the time that he (Montana) was not keen on sharing information with the board at the time. Increasingly, the board was getting an indication that the CEO did not consider himself fully accountable to the board. 

"He [Montana] would later raise the issue that he was not consulted when the new board was appointed."

Molefe said the board was also concerned about the scathing audit report PRASA had received from the Auditor General for the 2014/15 financial year. It flagged irregular expenditure of half a billion rand, which rose to R8 billion in the following financial year.

Molefe said the board then asked the entity's risk and audit committee to assess the true state of PRASA's financial health and point out where interventions were needed.

"The risk department said that all departments, especially the finance department, were dysfunctional and people there did not have the necessary skills," Molefe testified. 

"They also highlighted that there were no controls in the organisation. They were saying that a lot is wrong in this organisation and a lot has to be done to fix this." 

Montana left PRASA under a cloud in March 2015. The Public Protector found that the company and Montana had flouted procurement rules and fingered the CEO for maladministration, as well as irregular and fruitless expenditure.

Transport Minister Fikile Mbalula has now appointed an administrator for PRASA in a bid to stabilise the entity, which he has described as being in a state of collapse after years of corruption.


African News Agency

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