News / South Africa

Gosebo Mathope
3 minute read
5 Oct 2017
3:16 pm

Prasa: We didn’t sign a loan agreement with Import-Export Bank of China

Gosebo Mathope

Prasa has denied signing any agreement outside what the acting CEO is permitted by law.

Seven people, including two children aged about seven and 14, were injured when a car and a bakkie collided on the R573 Moloto Road about 10km from the Gauteng/Mpumalanga border on Sunday afternoon. Photo: ER24

Because acting CEO of the Passenger Rail Agency of South Africa (Prasa) Lindikhaya Zide was not in China during the Brics summit in earlier September, the entity is baffled by allegations that he signed a R57 billion loan agreement with Export-Import Bank of China (EXIM).

The Mail & Guardian last month reported that the loan agreement was signed on the sidelines of the Brics summit, where “Prasa’s accounting authority — whoever that may be — signed South Africa into a R57 billion deal with the state-owned Export-Import Bank of China to build the Moloto Rail Development Corridor”.

The project was announced by Cabinet, and is aimed at lowering road accident fatalities on a dangerous stretch of road connecting Gauteng with both Mpumalanga and Limpopo by constructing a new railway line along the notorious Moloto Road.

In addition, it was reported, the bank (EXIM) requires the China Communications Construction Company Ltd to be awarded the contract.

To comply with the Chinese demand, the publication said Prasa would have to obtain permission from Treasury to deviate from procurement law. Treasury said no such request was received.

A week earlier, City Press had also written that “confidential documents” in its possession showed Prasa had entered into funding negotiations with EXIM. Various government sources were quoted as saying the project didn’t qualify for deviation, but government was “just waiting for regime change at Treasury” before they commenced.

READ MORE: Prasa signs agreement to build Moloto Rail Development Corridor

DA shadow minister of transport Manny de Freitas also accused Transport Minister Joe Maswanganyi of deliberately stalling on appointing a board of directors in order to create a chaotic situation where unlawful financial decisions are taken by Lindikaya Zide and his executive team.

Zide’s substantial position at Prasa is company secretary. He has also threatened to report Maswanganyi to the public protector for misleading parliament on the matter.

“Prasa has not signed any contract with the EXIM … Prasa acting CEO Lindikaya Zide did not attend the Brics Summit at which he is falsely alleged to have signed the ‘R57-billion’ contract with EXIM Bank of China, Mr. Zide was in fact in South Africa focusing on his normal Prasa duties,” Prasa spokesperson Nana Zenani said.

Zenani told The Citizen there were no changes in the reporting lines at Prasa and the organisation continued to submit its performance reports as governed by the shareholder compact signed between Prasa and the department of transport; “the annual report will be tabled as soon as approval to do so has been obtained from the relevant structures as governed by policy and legislation”.

Maswanganyi’s spokesperson, Ishmael Mnisi, in a written response, failed to directly respond to why the minister had delayed in appointing the board as well as whether he was aware of the alleged R57 billion loan agreement signed with EXIM, instead pointing out “anybody who acts out of the provisions of the law shall face the full might of the law”.

Mnisi said in terms of reporting lines in the absence of a duly constituted board, “Prasa executives derives (sic) their authority as delegated by the minister through enabling legislation”.

Chairperson of the portfolio committee on transport Dikeledi Magadzi informed The Citizen she was attending Judicial Services Commission interviews and would respond tomorrow.


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