The recent Public Protector’s Report, Derailed, which is a report on the investigations on maladministration relating to financial mismanagement,

tender and appointment irregularities against PRASA are a matter of concern to this Board and management as well as to the Shareholder, to whom we are accountable.

The widely publicised Public Protector’s Report is equally of public interest. Accordingly, the Board of PRASA is impelled to take necessary measures on the reported maladministration and irregularities raised therein.

The Public Protector has received a total of 37 complaints and made several damning findings which the Board has already begun to address appropriately. The Public Protector stated that in respect of those complaints that she either could not fully investigate because of late arrival of or inconclusive information and, further complaints that she received at the time of the finalisation of Volume One of her Report she would deal with same in  Volume Two of the report.

PRASA committed to cooperating in this regard, has asked the Public Protector’s Office to forward it the new complaints as some of them might be the subject of the ongoing internal investigations already commissioned by the Board which the Public Protector might find helpful.

As part of the remedial actions on the findings of the Public Protector the Board directed management to strengthen internal controls, overhaul the supply chain management structures. To this extent, PRASA has requested the Chief Procurement Officer at National Treasury to second to it an experienced procurement officer whilst it restructures its procurement management systems. 

Furthermore, PRASA is considering appropriate legal steps in respect of some of the remedial actions recommended by the Public Protector. Internally, management applying the disciplinary code of the company, will deal with the employees implicated in irregularities and wasteful and fruitless expenditure.

The Board wishes to draw attention to the fact that prior to the release of the Public Protector’s Report it had already commissioned an independent investigation led by Werksmans Attorneys into several irregularities identified by the Auditor General in his Draft Report. This is all part of the cleaning up of the company and enhancing good corporate governance.

Regarding contracts identified or suspected to have been irregularly awarded, the Board directed the Acting Group Chief Executive Officer to take appropriate steps to suspend all such contracts and to engage where appropriate with the relevant parties.

In addition, all employees unlawfully suspended, their suspensions continue to be appropriately addressed.

In April 2015, PRASA’s Internal Audit was instructed to review all payments over R10 million made from 01 April 2014 to check irregular, wasteful and fruitless expenditure. The Internal Audit was also directed to conduct probity checks on all future payments and procurements above R 10 million.

Furthermore, as resolved by the Board and also as directed by the Minister of Transport, PRASA will immediately begin an academic qualifications verification audit – a process to be conducted by the South African Qualifications Authority (SAQA). Communication will be addressed to all affected levels of management and other technical staff in this regard.

We remain committed to ensuring the roll out of a modern passenger rail system of the future, which will deliver on the PRASA mandate. PRASA strives to remain a leader in public transport solutions and a preferred mode of transport.

The highly experienced management collective acting in concert with thousands of the PRASA employees are capable of discharging our historic mandate with the highest degree of ethical standards and unwavering commitment to good corporate governance.

 

Thank you

 

Issued by PRASA