In May the Passenger Rail Agency (Prasa) suffered a stunning defeat in court.
Armed with a report by the public protector and information from in-house investigations, Prasa’s board had promised to undo dubious contracts with signs of corruption – and took two cases to court.
One case was about a set of security contracts with Siyangena Technologies, a supplier of equipment such as high-speed passenger gates, worth around R4-billion.
Prasa asked the high court in Pretoria to set aside those contracts, but it was turned away on a technicality: Prasa had failed to bring its court case within the legislated time limit of 180 days, Judge Roland Sutherland ruled, and it had not properly argued why that time limit should be varied.
It had to be turned away and costs awarded against it – leaving a contract found unlawful by the public protector in force.
When Prasa tried to cancel another contract, to buy R3.5-billion worth of locomotives, Swifambo, the black fronting company it was challenging brought up that very same Siyangena ruling.
But this time Prasa had learnt its lesson on how to argue the time-limit point, allowing the high court to reject technicalities.
“In my view state institutions should not be discouraged from ferreting out and prosecuting corruption because of delay, particularly not where there has been obfuscation and interference by individuals within the institution,” Judge Jacob Francis said in a judgment delivered this week.
Sticking to the technicalities, Francis said, could serve “to shield the perpetrators” of fraud, black empowerment fronting and probable corruption.
He not only overturned the Swifambo contract but found that the company had committed fraud, which was covered up with the connivance of Prasa’s ex-chief executive Lucky Montana.
“Corruption is a cancer that is slowly eating at the fabric of society. Chemotherapy is needed to curb it,” Francis said.
He also told Swifambo that it had itself to blame for the financial consequences of having the tender retrospectively yanked from it – even if he could not directly find the company guilty of corruption in a civil review matter.
“It is clear from the facts of this case that Swifambo was shown not to be an innocent tenderer.”
He had equally harsh words for Montana, who just weeks ago produced documents to help Swifambo in fighting Prasa.
“Montana, who was implicated in the irregular and unlawful decision to award the tender for the locomotives to Swifambo, managed to frustrate the dissemination and communication of relevant information while he was at Prasa.
“Even after he had left Prasa, he managed to obstruct the distribution of relevant information through a network of associates who were collaborating with him.”
Montana was fired in 2015 after defending the Swifambo contract and insisting the allegation that the locomotives were too big for the rail network was a lie.
Swifambo should never have received the contract in the first place, Francis found.
It had been nothing but an empowerment front for German train-maker Vossloh, it did not have the proper tax documents, Prasa failed to stick to the law and its own rules in awarding the tender, and specifications were manipulated to ensure Swifambo won.
Swifambo has said it will appeal.
Prasa’s crusading chairperson, Popo Molefe, has vowed to use the judgment as ammunition in fighting other dubious tenders – and in an attempt to force the Hawks to investigate corruption.