Prasa racks up more than R14 b

Prasa racks up more than R14 billion in wasteful expenditure thanks to dodgy tenders

Looks like things over at the Passenger Rail Agency of South Africa aren’t all that peachy.

Prasa racks up more than R14 b

Prasa’s current financial reports show irregular expenditure of over R4.1 billion for the 2016/17 financial year already, but previous years’ dodgy spending – under previous CEO Lucky Montana – totals R9 billion.

Remember Lucky Montana, the former Prasa CEO responsible for the Spanish trains that didn’t run on our tracks, couldn’t be serviced by our engineers and cost us a shitload of money? Well, he’s responsible for a fat chunk of the R14 billion lost to shady deals and dumb decisions and, even though he was fired back in July 2015, the effects are still being felt.

Prasa’s current financial statements detail the following as some of the key incidents leading to the crazy amount of money lost:

  • The undisclosed conflict of interest by a member of Prasa’s bid evaluation committee;
  • Failure to do a feasibility study and testing of the market before considering a supplier contract;
  • Failure to follow a competitive bidding method when appointing a supplier;
  •  Unfair advantage granted to a winning bidder;
  • Contract extensions granted more than once without a competitive bidding process; and
  • Payments made to a supplier without a contract.

The agency said it’s currently investigating all recorded instances of dodgy spending, but in addition to that National Treasury is investigating another 100 cases and the hawks a further 34. Werksmans Attorneys is also involved in investigating a few.

Lucky Montana’s dismissal also cost Prasa a tonne of money, as his golden handshake had a Rand value of about R3 million when he was fired back in 2015 and for some reason got an extra R458 000 in the 2016/17 financial year.

Prasa’s not exactly had the best couple of years, with corruption, fraud, shady tenders and mismanagement pretty much having been the order of the day for the last two years or so; but the agency attributes much of its current cash shortfall to vandalism, the trying economic climate, South Africans not paying their train fares and service disruptions.