The Passenger Rail Agency of South Africa (Prasa) has frozen payments to contractors implicated in overcharging and is pursuing the civil recovery of overpaid funds following an independent forensic investigation into seven contracts awarded in 2022.
Webber Wentzel Attorneys are conducting the probe into irregularities in contracts awarded for the refurbishment and extension of the service life of PRASA’s legacy rolling stock fleet under the General Overhaul Programme.
The programme was launched as a strategic bridging solution to maintain commuter rail services during the transition from the legacy yellow fleet of trains to the new Gibela Electric Multiple Units. Its purpose was to ensure a safe and uninterrupted transition from old to new rolling stock.
Prasa received a written complaint in April 2024 from a General Overhaul contractor alleging irregularities in how the programme was being administered.
“Rather than dismissing the complaint or handling it internally, together with project management concerns, we acted decisively: within one month of receiving the complaint, PRASA formally engaged Webber Wentzel Attorneys to conduct an independent investigation,” the agency said in a statement on Tuesday.
Webber Wentzel presented preliminary findings to the Prasa Group CEO on 29 November 2024. The draft report allowed the agency to review its contents, verify factual accuracy and enable affected parties to respond before findings are finalised.
Contractors against whom material breach has been established are being formally terminated. Some are no longer part of the programme and two are currently on 30-day notice. Strengthened financial management and internal control systems are being implemented for the programme.
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“Prasa has instructed specialist legal counsel to pursue the civil recovery of funds overpaid to contractors. Independent expert analysis has confirmed significant overcharging across multiple contractors, with the full quantum of recoverable funds still being quantified as part of the ongoing civil and disciplinary processes,” the agency said.
Formal disciplinary proceedings, including charges of bribery, corruption, fraud, financial misconduct and policy violations, were instituted against implicated employees before they departed from the organisation. In both cases, the employees concerned chose to resign after disciplinary processes had been formally initiated.
“Resignation does not constitute exoneration, nor does it extinguish liability – criminal, civil or otherwise,” PRASA said.
The agency said the referral of implicated individuals’ conduct to the Directorate for Priority Crime Investigation and the pursuit of civil recovery proceedings are not contingent on continued employment status. These processes are active and ongoing.
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