Senior executives at the Passenger Rail Agency of South Africa (Prasa) oversaw a prolonged period of procurement irregularities, awarding contracts worth R2.8 billion without following proper tender procedures over nearly a decade, a damning investigation has revealed. The Special Investigating Unit (SIU) probe, completed in December 2023 but only now brought to light, pinpointed blatant breaches of rules under six former chief executives or acting chiefs. Yet, no prosecutions have followed despite referrals made years ago. According to the Sunday Times, the report remained confidential until its publication this weekend, highlighting a failure to hold those responsible accountable six years after President Cyril Ramaphosa authorized the inquiry in 2019.
The SIU identified former leaders Lucky Montana, Nkosinathi Khena, Collins Letsoalo, Lindikaya Zide, Sibusiso Sithole, and Nkosinathi Sishi as responsible for appointing service providers without competitive bidding, leading to payments totaling R2.8 billion. In October 2022, the unit urged the National Prosecuting Authority (NPA) to pursue criminal charges against five of them for violating the Public Finance Management Act, which criminalizes the failure to prevent irregular expenditure. As reported by TimesLIVE, nearly three years on, no executives have faced consequences, with the NPA yet to act on the recommendations.
Security firms emerged as major recipients, collectively receiving almost R1.6 billion. Royal Security, owned by Durban businessman Roy Moodley, topped the list with R579 million, appointed via a single-source method and repeatedly extended without open tendering. Moodley, known for his ties to former president Jacob Zuma—including payments totaling R1.5 million channeled through the firm, as evidenced at the Zondo Commission—did not respond to queries. Other beneficiaries included Chuma Security Services (R332 million), Sechaba Protection Services (R293 million), Vimtsire Protection Services (R181 million), Moz Gold trading as Ilanga Security Services (R119 million), and Advanced Detachment Security Force (R84.5 million). According to the SIU findings detailed in TimesLIVE, successive chiefs neglected to enforce competitive processes throughout.
Extensions were routinely approved under Montana’s leadership, who served from 2006 to 2015 before being dismissed amid unrelated controversies over incompatible locomotives. A 2015 Public Protector investigation had previously terminated a Royal Security contract for poor performance, yet it was later reinstated and prolonged. Additional irregularities involved Vimtsire billing for undeployed guards and receiving verbal instructions for extra personnel costing R11.3 million without contracts, while Ilanga improperly handled VAT. Vimtsire’s director acknowledged an overpayment and agreed to repayments, though only partially fulfilled by mid-2023. Beyond security, a further R1.2 billion went to various contractors for services like coach repairs, forensic probes, and cable theft prevention—all awarded without tenders. Prasa has also abandoned efforts to recover over R2 billion from the liquidated Swifambo Rail, linked to a R3.5 billion corrupt locomotive deal set aside by courts. As noted in earlier reporting by GroundUp, Swifambo’s European partner profited significantly, exacerbating losses from unusable trains.
Responses from implicated parties varied, with several declining to comment or claiming a lack of access to the report. Former procurement officer Joseph Phungula insisted motivations were business-driven, while others, like Montana, dismissed the inquiry outright. The SIU spokesperson offered no reply by the publication deadline. This scandal compounds Prasa’s woes, with ongoing probes into multibillion-rand signaling tenders and advance payments alleged at R2.7 billion to Maziya General Services, as highlighted in whistleblower reports covered by Moneyweb and GroundUp.
Recent Hawks raids on Prasa offices seized devices from top officials amid R18 billion contract suspicions, underscoring persistent governance failures. Auditor-General reports have flagged escalating irregular expenditure, reaching R3.8 billion in prior years due to supply chain lapses. As detailed in Business Day, these issues trace back to state capture-era mismanagement, hindering rail recovery.
With commuter services still faltering and billions lost, calls mount for swift NPA action and systemic reforms to restore accountability at the embattled agency central to South Africa’s public transport network. The delayed justice in this case exemplifies broader challenges in prosecuting high-level corruption, leaving taxpayers bearing the cost of unchecked malfeasance.