Molefe picks up the Prasa fight

NEWS ANALYSIS

Popo Molefe is back as board chairperson of the state-owned rail company, Prasa, and sparks are expected to fly over several politically charged investigations of deals worth billions of rand from which the ANC is accused of having benefited handsomely.

The Passenger Rail Agency of South Africa (Prasa) was on the verge of dragging the Hawks to court for apparent dereliction of duty when the board was axed last month by then-minister of transport Dipuo Peters.

Molefe’s board was reinstated this week after the high court in Pretoria reviewed and set aside Peters’s decision to dissolve it. Her appointment of new board members was also declared invalid.

But the reinstated board will find their world has changed dramatically in their absence. The judgment was preceded by President Jacob Zuma’s Cabinet reshuffle, in which he appointed Joe Maswanganyi as the minister of transport and businessperson-turned-MP Sfiso Buthelezi as the deputy minister of finance.

The rot Molefe claims he is trying to root out emanated from Buthelezi’s tenure as Prasa board chairperson before Molefe took over.


As directed by the public protector’s 2015 report, Derailed, the treasury and Prasa are conducting separate investigations into several alleged dodgy contracts in which Buthelezi is implicated. The reshuffle will allow him to monitor the sensitive Prasa investigations, if not have a direct oversight role.

He has a long history with Prasa and has been accused of wrongdoing several times, though nothing has yet been proved. He presided over the acquisition of Swifambo Rail Leasing’s locomotives, said to be too high for the local rail network and now the subject of civil litigation.

The public protector also investigated whether he benefited illegally when two private companies he was involved with clinched an advisory tender at Prasa.

Former public protector Thuli Madonsela did not finalise her Derailed investigation, specifically Buthelezi’s role, saying she lacked material evidence because it was withheld by former Prasa chief executive officer Lucky Montana.

The matter was rolled over to the current public protector, Busisiwe Mkhwebane.

Under Molefe, Prasa had asked the court to review two multibillion-rand contracts awarded to companies Swifambo and Siyangena.

In the Swifambo case, Molefe accused Buthelezi’s board of ignoring material evidence of “problems with the procurement process” before the tenders were awarded. He said the board was aware of several alarm bells sounded over these contracts and simply ignored them.

In his answering affidavit, Swi­fambo managing director Auswell Mashaba admitted he had made payments amounting to about R80-million to Maria Gomes, an Angolan businessperson linked to Zuma. Part of that was paid to George Sabelo, a business partner of Zuma’s son Edward, he said.

According to Mashaba, Sabelo introduced himself and Gomes as “ANC fundraisers”.

But he denied Molefe’s assertion that the money was paid to the ANC — via Sabelo and Gomes — as a quid pro quo for the tender. He said the money paid to the party was a private donation.

Asked about this after he was appointed deputy finance minister, Buthelezi denied that the locomotives were unsuitable and he also denied any wrongdoing.

Delivering judgment in favour of Molefe’s board, Judge Peter Mabuse said it is in the public interest that Prasa must be properly regulated by its board “independently of any interference from government”.

Mabuse said it is of “paramount importance that corruption in Prasa be exposed and prevented. The public has an interest to fight the deep-rooted corruption … because it compromises the democratic ethos, the institutions of democracy and gnaws at the rule of law.”

But he vindicated Collins Letsoalo — Prasa’s acting chief executive, seconded from the ministry of transport, who was accused by Molefe of unilaterally increasing his salary by 350% — saying “the perpetuation of the myth” of the unilateral increase was unfounded and unfair to him.

“The truth is that, based on the information before the court, Letsoalo was entitled to the same package that was agreed upon in his appointment package or the same package that was enjoyed by Lucky Montana.”

Molefe said he will follow up on his decision to take on the Hawks. In February, he wrote to Hawks boss Mthandazo Ntlemeza expressing concern that “South African citizens and the fiscus are prejudiced by the fact that the [Hawks] has done nothing tangible to respond effectively” to the Prasa investigation.

He said he will “ask the Hawks to explain why they failed to reply to my letter after phoning me the Saturday before the board was dismissed and promising to reply on the Monday following. Suddenly they did not reply and the board was dissolved.”

Asked whether the board will initiate legal proceedings as planned if the Hawks’ reply is unfavourable, Molefe said: “Certainly.”

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