Sipho Mabena
Premium Journalist
2 minute read
18 Dec 2018
6:00 am

How Prasa wrecked a BEE company

Sipho Mabena

The rail agency has for three years failed to pay Prodigy Business Enterprises R34.9m for training its staff, despite court cases and a letter to Treasury.

Metrorail trains. Picture: ANA

A director of a black female-owned enterprise has detailed how R34.9 million in outstanding payments by the Passenger Rail Agency of South Africa (Prasa) brought her company to its knees, forcing it to retrench staff.

For the past three years, Prodigy Business Enterprises, which provides training and skills services, had been battling to get the rail agency to cough up the money owed for training Prasa’s staff.

Nerishni Shunmugam said Prodigy had suffered major financial losses as everything, including catering, travel, accommodation, student packs, couriers, facilitator and student administration costs spent training the agency’s staff was funded from the company’s coffers.

She said court processes, numerous interactions with Prasa and even a letter to Treasury had failed to yield any results.

“We have had to pay my running costs, which has crippled our cash flow and this has brought us to our knees. Prasa does not want to resolve this matter amicably and does not respond to us.”

Documents seen by The Citizen showed Prasa contracted Prodigy to conduct 9 000 “learning interventions” between 2011 and 2018. Everything ran smoothly until November 2015, when Prodigy was informed the contract was suspended until further notice.

In a letter Shunmugam wrote last month to the agency’s acting boss, Sibusiso Sithole, she pleaded for his intervention. She stated it was mutually resolved that Prodigy would end its litigation against the agency with the promise of payment but the agency failed to pay.

In the letter, Shunmugam further stated she had also requested the Chief Procurement Office in the National Treasury to assist – but this also came to nothing.

Rakgadi Motseto, Treasury’s chief director of supply chain management stakeholder and clients management, subsequently wrote to Prasa’s acting chief financial officer, Thobeka Mahlati, reminding Prasa of the requirement to pay service providers within 30 days of receiving an invoice.

Motseto instructed Mahlati to provide feedback within five days but Shunmugam said this did not help either.

Prasa spokesperson Nana Zenani simply ignored questions sent to her.

A year ago Prodigy was exposed for reportedly paying more than R4 million to one of controversial Durban businessperson Roy Moodley’s companies in 2015. The payment was reportedly made after Prodigy secured a contract from Prasa, which would ultimately earn the company R82 million.

News24 reported the payment was made after it revealed local electronics and security firm Siyangena Technologies made payments to companies linked to Moodley, totalling R550 million, after Siyangena secured Prasa contracts in 2011 and 2013 valued at about R4 billion.

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