Ugly fight as R123bn rail bids sought

The explosive corruption allegations against top officials at the Passenger Rail Agency of SA (Prasa) have laid bare the behind-closed-doors battle for stakes in the R123 billion tender to replace a fleet of passenger trains. The Sunday Independent can reveal that Prasa group chief executive officer Lucky Montana is embroiled in an ugly fight with his chief financial officer Sindi Mabaso-Koyana over, among other claims, allegations of graft related to the massive tender. This tender is much bigger than the controversial arms deal which cost the government R30bn when it was sealed in 1999 and is now the subject of a commission of inquiry.

The Jacob Zuma administration has set aside R300bn to invest in capital projects over the next seven years, of which two-thirds will go to rail projects and the rest to ports. Prasa is a key engine for the government’s huge infrastructure programme, with R136bn earmarked for new passenger trains, improvement of the signal system and new stations in the next three years. The agency will, from this month until July 31, accept bids for the tender. More than 7 200 new coaches will be bought in the next 20 years, the first one expected to hit the tracks in 2015. Documents in possession of The Sunday Independent, and five sources close to the saga, said Montana accused Mabaso-Koyana of leaking confidential information to transport union Satawu, which has called for his suspension and the conduct of a forensic probe into poor management at Prasa.

In a Satawu dossier, Montana is accused of awarding a tender for advice on the rollout of the rail network improvement to a company linked to a Prasa board member. The member, whose name is known to The Sunday Independent, is a senior manager of Makana Investment Corporation, which is wholly owned by Makana Trust, set up by ANC leaders to look after the welfare of former political prisoners. Makana Trust has a stake in Cadiz Holdings, the company that won a tender at Intersite, one of Prasa’s subsidiaries. Satawu, in the dossier, alleged Cadiz got the tender to advise Prasa on its rolling stock, not Intersite.

This week, Prasa said the allegations against Montana were baseless. This came after Prasa commissioned an audit from accounting firm Deloitte to verify Montana’s response to Satawu’s claims. “We are supporting the group CEO,” Buthelezi said. The Sunday Independent has established, from independent sources, that Montana believed Mabaso-Koyana was colluding with the union to oust him. Sources close to Montana and Mabaso-Koyana, who spoke on condition of anonymity, said relations between the two had soured badly. The fallout is said to be well-documented in letters and SMSes the two have been exchanging in the weeks leading up to Satawu’s allegations against Montana being made public. One source said: “Lucky said he read the allegations contained in the so-called dossier from president of Satawu.

“He said they mentioned specific issues that Mabaso-Koyana kept on raising with him. He said it was a very interesting coincidence.” The source said Mabaso-Koyana hit back, saying Montana should “not involve her in his fight with the union. You never involved me from the beginning and don’t start now”. Montana has put Mabaso-Koyana on special leave as part of a restructuring of his executive committee and is said to be reluctant to redeploy her to Intersite as CEO. Mabaso-Koyana is said to have replied to Montana in one e-mail, saying he had to deal with the “mess”. “She said if she doesn’t get the new letter (appointing her as CEO of Intersite) she will be left with no choice but to go to Satawu and the media,” another source said. Montana denied he was at war with Mabaso-Koyana and refused to comment on communication between them.

Mabaso-Koyana said:

“If such communication existed and you were in possession of it, I believe you shall declare how it ended up with you as this should be a serious breach of privacy which could lead to a legal or an ombudsman intervention.

“I would appreciate direct questions based on fact and proof that you have, rather than asking me to respond to what you clearly say in your message are allegations which you state you got from unnamed sources.”

Last Monday, Montana told Metro FM Satawu was being used by companies that had an interest in the R123bn tender. The invitation for bids for the tender opened a few months after it emerged that a consortium linked to Zuma’s son Duduzane and their family friends, the Guptas, was positioning itself to cash in on the railway infrastructure programmes, including the proposed high speed trains.

Prasa has not yet determined how much the high-speed trains – which will link Cape Town and Musina and also Durban and Joburg – would cost. On Friday, Satawu president Ephraim Mphahlele presented a memorandum of grievances to the Presidency insisting on Montana’s suspension pending a forensic investigation.