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The United Front (UF) supports the call that Public Protector Thuli Madonsela made in her report on the Public Rail Agency of South Africa (Prasa) for the National Treasury’s Chief Procurement Officer to conduct a forensic investigation on all the agency’s contracts or tenders issued between 1 April 2012 and 30 June 2015.  Considering that the bulk of the 32 complaints Madonsela investigated took place before Prasa announced in June 2012 that it was to spend R136-billion to acquire new trains and modernise its infrastructure, what we heard about maladministration and improper conduct in relation to procurement, could just be a snapshot of what may be organised and well-orchestrated looting of public resources by politically-connected mafias.

Prasa’s audit outcome was not included in the consolidated report of Auditor-General (AG) for 2013/14 as the financial statements were submitted later than the cut-off date of 31 August 2014.  The picture of no compliance, maladministration and outright corruption that the Public Protector sketches in her report pales into insignificance if one reads the AG’s comments in the 2012/13 and 2013/14 Prasa annual reports. In between the nicely laid-out and glossy pages of the transport agency’s annual reports, the Auditor-General points to material inconsistencies in the information in the reports, the preparation of financial statements not in accordance with the requirements of the law, deviations from competitive bidding, non-compliance with Prasa’s supply chain management policies, ineffective financial controls, irregular, fruitless and wasteful expenditure amounting to millions of rands.

While headlines have focused on incorrect specifications and bridge height clearances of the 70 dual diesel-electric locomotives that the unknown and non-manufacturing Midrand-based BEE company is importing from Spain, the Auditor-General in a Prasa 2013/2014 declared that the R3.5-billion contract given Swifambo Rail Leasing contravenes the agency’s procurement policy and the Public Finance Management Act (PFMA). The evaluation criteria used was not fully consistent with the criteria stipulated in the request for proposals (RFP) documents.  Contrary to Prasa’s policy which states that the company that wins a tender must pay a “performance security” or “performance bond” of 10%, Prasa gave Swifambo a deposit of R460-million (15%) of the contract which the company used to pay the required 10%; four months after the contract for the purchase of locomotives had been signed. 

The National Treasury’s Chief Procurement Officer must also probe the R51-billion tender given to Gibela Rail Transportation for 600 trains. The majority shareholder of Gibela, the French company is notorious for offering bribes to government and parastatal officials. In December 2014, Alstom admitted to have bribed officials in Indonesia, Saudi Arabia, Egypt and Bahamas. The company agreed to pay the US Justice Department an amount of $772-million. Earlier this year, Alstom’s assets in Brazil were frozen as part of a fraud investigation. In Britain the company faces its third criminal charge for bribery that involves contracts in Hungary and India.

The forensic audit that the Public Protector has called for must include – as the National Union of Metalworkers of SA (Numsa) has demanded – an investigation on whether there has been any breaking of the Preferential Procurement Policy Framework Act (PPPFA) and its local content regulations. We already know that Swifambo Rail Leasing imports the trains as completely-built units from Spain. The first 20 trains that Gibela is delivering are built in Brazil.

All those found to have transgressed legislation and regulation must face the might of the law. Heads must roll and the remedial action proposed by the Public Protector must be implemented. This is one way to deal with the cancer of corruption and the denialism that goes with it. 

As the United Front, we hope that the tenacity of the transport workers who blew the whistle on Prasa will inspire millions of other South Africans to act against corruption. As a way of saluting these workers as the UF we call on our people in their millions to take part in the marches against corruption planned across the country for Wednesday 30 September.

Issued by United Front