Swifambo loses appeal over R2.6bn paid in abortive black empowerment locomotives tender
The Prasa board says they finally have closure on one of the worst periods in the parastatal's history.
Picture: Gallo Images
The beleaguered locomotive supplier Swifambo Rail Leasing lost its Supreme Court of Appeal challenge with costs against a high court order last year that saw it waving its R3.5 billion tender with the Passenger Rail Agency of South Africa (Prasa) goodbye.
It may now ultimately also have to repay R2.6 billion after the SCA heard arguments earlier this month. The SCA said apart from the fact that no purpose would be served in continuing with the performance of the contract, it would be harmful to allow a contract, concluded in a corrupt process, to stand.
Investigations done by then public protector Thuli Madonsela, the Auditor-General and forensic investigators appointed by the Prasa board revealed fruitless, wasteful or irregular expenditure of between R9 billion and R14 billion in tenders awarded by the then Prasa CEO, Lucky Montana, to the Siyangena and Swifambo companies between 2009 and 2013.
The Afro4000 locomotives tender was awarded to Swifambo Rail Leasing in 2013 to supply Prasa with locomotives. They were made by Vossloh Espana, a Spanish company.
The Swifambo contract, which was set aside by the court last year, became synonymous with the delivery of trains that were too tall for South Africa’s rail standards, while the Siyangena contract had to do with the installation of high-speed passenger gates at more than 60 stations throughout the country.
The Prasa board, then headed by Popo Molefe, now chairperson of Transnet, launched a court bid to have the Swifambo contract declared invalid and to recoup the R2.6 billion paid to Swifambo.
Swifambo only delivered 13 trains out of the 70 they were meant to, and the trains were in any case too tail for the local rail network.
Prasa said on Friday that the judgment vindicated the decision by their board to review the contract.
Khanyisile Kweyama, current Prasa chairperson, said the agency would take serious lessons on how not to do contracts from this verdict.
“This decision assists with two things: firstly, it establishes rules on how not to do Black Economic Empowerment; secondly, it brings about closure on a contract that has seriously hampered our ability to plan in a focused manner on the long distance train service used by our passengers,” Kweyama said.
Sibusiso Sithole, Prasa chief executive, said: “Prasa is working hard to bring back reliability in the long distance service and the commuter service in the Eastern Cape. These services have been adversely affected by the unavailability of locomotives”.
In a report titled ‘Derailed’ released in 2015, Madonsela found that Prasa had failed to comply with their own supply-chain policy. She found widespread maladministration and impropriety in the awarding of contracts worth R2 billion.
Montana was fired following her damning report.
The Prasa board resolved to take legal action after the complaints it filed with the police were referred to the Hawks, but were then met with what it described as a dilatory, lackadaisical and disorganised investigation by the police.
Prasa and Outa earlier this year wanted the court to force the Hawks to finalise their investigation – in cooperation with the National Prosecuting Authority – into the complaints.
(Compiled by Charles Cilliers)