The Passenger Rail Agency of South Africa (PRASA) has welcomed a report by Public Protector Thuli Madonsela into alleged careless expenditure and tender irregularities at the rail parastatal, stating on Tuesday that her findings would complement an earlier report by the Auditor-General in which irregular, fruitless and wasteful spending was detailed.

Acting group CEO Nathi Khena said on Monday that the agency would study the contents of Monday’s report over the coming days and would, thereafter, communicate its views and related actions.

“Notwithstanding, this report is considered instrumental as part of other interventions that are primarily intended to improve operations at the organisation by putting greater emphasis on clean governance.

“These include the Auditor-General’s report, a skills audit and a [company-wide] verification of academic qualifications,” he said in a statement.

PRASA was, meanwhile, awaiting legal opinion about the prospects of recovering funds from former employees accused of falsifying their qualifications. 

This followed the recent dismisal of PRASA CEO Lucky Montana amid a cloud of controversy and the exit of PRASA head of engineering services Daniel Mthimkhulu, who was currently facing legal action by the parastatal for lying about his qualifications.

“PRASA is at full steam to transform itself into a more efficient, effective and profitable company. No effort is spared to uncover and clear up fraud,” said Khena.

Commenting on the release of the report, struggle organisation, the United Front (UF) supported Madonsela’s call for the initiation of a forensic investigation into the awarding of all the contracts and tenders by the agency between April 1, 2012, and June 30, this year.

“All those found to have transgressed legislation and regulation must face the might of the law. Heads must roll and the remedial action proposed by the Public Protector must be implemented,” it asserted.

This was reiterated by trade union, the National Union of Metalworkers of South Africa, which this week called on National Treasury and the Department of Trade and Industry to conduct an investigation into procurement undertaken by the agency in relation to its rail rolling stock since July 2012.

Such a forensic audit should include an investigation into whether there had been any breaking of the Preferential Procurement Policy Framework Act (PPPFA) and its local content regulations.

“As a union that organises in the rail rolling stock sector, we feel that it is not enough to investigate whether these contracts were consistent with PRASA’s supply-chain management policies, but whether the contracts are in compliance with the PPPFA and its local content regulations.

“Over the last few years, we have witnessed the widespread disregard of local content regulations and the large-scale importation of products produced in other countries, [which has] decimated local industries and local jobs,” Numsa held.

The Federation of Unions of South Africa (Fedusa) added in a statement that PRASA chairperson Dr Popo Molefe had, in a recent meeting with the trade union body, committed to improving good corporate governance, monitoring and accountability within the parastatal.

“Fedusa calls on Molefe to set a clear tone of ethical leadership, which can filter down to all levels of PRASA, ensuring the success and incorporation of ethics management interventions in the governance structures of the company.

“The importance of introducing the ethics risks assessment, ethics strategy, as well as a code and policy could be institutionalised to ensure that everyone in PRASA is familiar and adheres to its ethics, values and standards,” it noted.