/ 2 September 2016

Transport minister Dipuo Peters: I didn’t know of graft crisis at Prasa

Transport Minister Dipuo Peters denies trying to halt the probe into Prasa contracts
Transport Minister Dipuo Peters denies trying to halt the probe into Prasa contracts

Controversial former Passenger Rail Agency of South Africa (Prasa) chief executive Lucky Montana allegedly misled Transport Minister Dipuo Peters into believing that its R24-billion crisis was a minor issue.

“I asked Mr Montana. He said to me: ‘Minister, don’t worry about it; it is not a serious matter,’” Peters said this week in a wideranging interview with the Mail & Guardian.

She reluctantly conceded that she was largely unaware of the scale of the corruption that has crippled Prasa, one of several state-owned entities in her portfolio.

It was under her watch that the bulk of the alleged irregularities, now being handled by a team of private forensic investigators and a team in the treasury, were carried out.

Speaking from her Tuscan-styled Pretoria home, the minister said that, once she became aware of “red flags”, she raised her concerns with the Prasa board, which at the time included Montana and chairperson Sfiso Buthelezi.

“I raised issues of performance and procurement and everything that always came up as red flags. From my time of arrival [in July 2013], I raised these things.”

She said Montana told her in early 2014 not to worry about the public protector’s investigation after she saw the serious allegations made against him and Prasa in the media.

He did not take the M&G’s phone calls, answer SMSs or reply to messages on WhatsApp or Twitter, but in a string of tweets he claimed to have done nothing wrong.

“What happened to [the] presumption of innocence till proven otherwise? There’s not even a case against me except noise in the media,” he tweeted. Over the weekend he also tweeted: “I take full responsibility for the key decisions made at Prasa during my tenure as group [chief executive]. Decisions made remain correct and lawful.”

The alleged corruption seems to have continued unabated for several consecutive years, until the auditor general, public protector and Rapport newspaper exposed the severity of the fruitless and wasteful expenditure.

Public protector Thuli Madonsela, in a report titled Derailed, found that Montana was at the centre of several irregularities. She recommended that all tenders worth more than R10-million awarded since 2012 be investigated.

Peters presided over the bulk of the irregularities now being investigated by Prasa’s lawyers, Werksmans Attorneys, and the treasury.

Although she talked tough about corruption during the interview on Tuesday, Peters seemed reluctant to apportion blame at first.

When asked about the former board, she said: “If they lied to me, they probably believed I would never find out, or they lied to me believing that ‘she’s new in this environment, she would not get to know this’. But I won’t say they came and deliberately lied to me.”

She conceded that Montana must have understood the enormity of the allegations against him and should have alerted her. When pressed about his accountability, she said she did not have enough evidence at the time.

“I can praise the president [Jacob Zuma] for one thing,” she responded. “Two weeks after my appointment I went to the president and said: ‘You have deployed me to transport; what should I do?’ He said: ‘Go in there and you’ll realise and see what needs to be done.’

The reports of the auditor general and that of the public protector were released after Montana resigned in March last year.

“There are times you realise that, in process of doing work, even the department loses sight of the task at hand, and don’t deal with issues at hand,” she said.

Peters, talking tough, said those who see Prasa as the “goose that lays the golden egg” must “go to jail”. “People saw these opportunities [in Prasa] and they started salivating. There were contracts of billions. People started thinking: ‘How do I put my claws, my fingers, hoe sit ek my tandjies [how do I sink my teeth] in this thing?’ That is wrong, that is criminality, that is illegal, a sin.”

She blamed Prasa’s R24-billion worth of “mishappenings” on “serious lapses” in the company’s governance systems.

Peters was speaking in the wake of a damning affidavit that the current Prasa chairperson, Popo Molefe, filed in ongoing litigation against a supplier last week. In the sworn statement, he claimed he had been told that R80-million in payments flowing from Prasa deals had found their way to a friend of Zuma’s, Maria Gomes.

Gomes allegedly insisted that the winning supplier had to make some payment “towards the movement”. The ANC has vehemently denied receiving a cent from Prasa deals.

“I don’t believe that story,” Peters said. She dismissed the accusations as name-dropping by the third party named in Molefe’s affidavit as Auswell Mashaba, a director of the Swifambo group of companies, which had won a deal to supply Prasa with locomotives.

Peters also vigorously denied that she had attempted to stop the forensic investigation into Prasa contracts after it became known that she wrote to the rail agency last month, instructing it to “close off” the forensic investigation by Werksmans Attorneys.

In the same letter, dated August 12, she added that a “determination of any further investigation and a way forward will subsequently be made after studying the report in detail”.

Peters insisted this week that she had only good governance in mind when she asked for a report and ordered the investigation to be “close[d] off”. She described the country’s heated reactions to her letter as a “misinterpretation”. Those saying she tried to stymie the investigation because of political pressure were simply “lying”.

According to her, the investigation cannot “continue forever”, must be properly budgeted for and shouldn’t cause “investigation fatigue” among Prasa staff members.

“We are also closing the books of [state-owned] companies on July 31. We need to table our reports to Parliament soon. [Asking for a report is] the best way for a minister to have the full picture.

“I am not running a tuck shop. I am running a company on behalf of government. I must account when asked questions in Parliament. I need to talk with records [in front of me].”

The continuing turmoil at Prasa emanates from four investigations. The auditor general and the public protector each conducted an investigation. Werksmans Attorneys is investigating about 140 matters on behalf of Prasa and the treasury is scrutinising 200 others.

The cumulative value of tenders involved in the four investigations amounts to about R24-billion, Prasa sources with knowledge of the matter said this week.

This includes the acquisition of trains that were too high for the rail network and alleged dodgy tenders being awarded to provide security and to upgrade Prasa’s infrastructure.

In her own words

On Tuesday, 30 August, at 14:00, minister of Transport Dipuo Peters met with M&G Investigative journalist Pauli van Wyk at her tuscan-style Pretoria home.

Peters and Van Wyk discussed the controversial state-owned rail agency Prasa, its challenges and Peters’ concerns. Although ministerial advisor Tiyani Rikhotso only once participated in the conversation, he was the only other person privy to the discussion.

Beneath follows a guideline to the highlights of the discussion.

2:45 Unfortunate mishappenings – matters of procurement – the irregularly awarded tenders worth about R24-billion.

3:44 There was serious lapses in the procurement process, lapses that still prevail.

4:00 Prasa is seen as the goose that lays the golden egg.

4:30 M&G Photographer Delwyn Verasamy pitch up and the recording gets stopped for a few minutes so that Verasamy can work without interruption.

4:54 The recording continues and Van Wyk recaps the previous conversation.

5:20 Dipuo says she “don’t know” about (former Prasa CEO Lucky) Montana and (former Prasa chief engineerDaniel) Mtimkulu’s political connections.

9:20 Van Wyk asks Dipuo again about Montana and Mtimkulu’s political connections.

12:20 Peters says God, the ANC and President Jacob Zuma gave her the honour to serve.

13:05 Peters deny that she is under any political pressure.

14:00 Peters explain what she meant with her instruction to “close off” the Prasa forensic investigation into the vast irregularities in Prasa 17:00, 22:40 Peters continue explaining that she wants to stymie investigation fatigue in Prasa staff.

26:00 Peters says those who accuse her of trying to stop the Prasa investigation is lying.

28:00 Peters on the ANC allegedly benefitting through a third party from Prasa monies.

32:37 “I am not running a tuck shop, I am running a department on behalf of government,” Peters says.

37:28 Lucky Montana said the Public Protector’s investigation is “not a serious matter”, Peters relates.

38:10 Peters said she picked up issues of concern and wrote to the board to ask about the matter.

40:55 Van Wyk says the board allowed criminal activity, Peters explains why.

41:20 There were Prasa contracts worth billions awarded in irregular ways. Peters says “people started thinking how do I put my claws, my fingers, hoe sit ek my tandjies (how do I sink in my teeth) in this thing”

41:40 Van Wyk states the board allowed criminality, Montana was the centre of it and it happened in Peters’ term. She reacts, saying she do not think they lied to her

42:00 Whilst asked about Montana and the board’s culpability, Peters start speaking about President Jacob Zuma

46:50 Van Wyk asks for clarity about her feelings towards the former board. Peters still think they did not deliberately lied to her.

47:40 Van Wyk presses Peters on whether Montana lied to her. Peters first says Montana maybe lied to himself..

48:52 Peters concedes that Montana must have been aware of the severity of the irregularities in Prasa.

Transport Minister Dipuo Peters did not provide clarity on how corruption in the rail agency was allowed to continue. She said she alerted the relevant authorities whenever red flags were raised. This is an extract of the 66-minute taped conversation with her:


Pauli van Wyk: Montana and the board allowed the criminality. It happened during your term. Did they lie to you or how did this happen?
Dipuo Peters: I wouldn’t say they lied to me. When someone lies to you, they look you in the face and say it is this.
PvW: But Montana said it’s not a big issue.


PvW: Can I get a clearer answer on your feelings towards the [previous] board? … Either they lied to you and you didn’t know, or you knew and you did nothing.
DP: I would say it is the former. If they lied to me, they probably believed I would never find out, or they lied to me believing that ‘she’s new in this environment, she would not get to know this’. But I won’t say they came and deliberately lied to me.


PvW: But Montana said: “No, Minister, it is a small thing.” Later we realise it is at least R14-billion. It is not a small thing.
DP: Yes! He said it is a small thing.
PvW: That sounds to me like a lie.
DP: (Silence) Ja, maybe he lied to himself …


PvW: I don’t see how you lie, to yourself even, about R14-billion. He knew exactly.
DP: He knew!

Listen to the full interview below: