The Passenger Rail Agency of South Africa (PRASA) has described its dire financial state of affairs as the result poor accountability, negligent decisions and “a state of lawlessness and fraudulent behaviour”.
PRASA Chairman Popo Molege said this when briefing the public accounts watchdog, the Parliamentary Standing Committee on Public Accounts (SCOPA), at Parliament here Tuesday.
PRASA may have obtained an unqualified audit opinion for its latest accounts but its own leaders seem to admit to a parastatal in deep crisis. It incurred 550 million Rand (about 35.7 million US dollars) in irregular expenditure.
Molefe told the committee: “The reality is that there has been a culture in the organization of lawlessness, of fraudulent behaviour, of hiding things from the board …. of misleading the board.”
Molefe said that had been the culture and the agency was busy going about ending it.
There wa an unsolicited tender of 91 million Rand which was awarded without going through proper processes. The blame was shifted to former Group chief executive officer Lucky Montana and former chief procurement officer Josephat Phungula.
The current acting Group CEO at PRASA, Nathi Khena, said it was simply negligence on the part of the agency. “There is a clear understanding of the Treasury notes in that regard. The process was not followed,” said Khena.
Meanwhile a member of the board at PRASA, Zodwa Manase, said the contract had since been stopped. “We are in the process of investigating to take action on anybody who is implicated besides the two,” said Manese.
The parastatal has reiterated that criminal cases have been instituted against those implicated and also civil suits to recover monies. Internal controls have alsoi been tightened.
Minister of Transport Dipuo Peters said: “The one thing that I have requested the board to deal with is the issue of consequence management and the issues of procurement. The issue is whether we have the requisite skills.”
Molefe said the law should be applied.
Members of the Parliamentary Committee expressed frustration at the slow action against people implicated in tender irregularities and said it would continue to “baby sit” PRASA until the parastatal was back on track.