Allegations of Tender Rigging Unveiled in Stunning Letter from PRASA 'Board Member' -

Allegations of corruption related to tenders within the board of the Passenger Rail Agency of South Africa (Prasa) have emerged via an anonymous letter sent to Transport Minister Barbara Creecy, originating from a “dissatisfied board member.”

Dated 4 September, the letter is described by the author as both a whistleblower report and a “call to action” for the Department of Transport (DoT). This claim has been validated by department spokesperson Collen Msibi, who confirmed that it is “under internal review for the minister’s consideration.”

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This incident marks the latest in a series of at least three anonymous claims of fraud and corruption involving Prasa’s leadership this year. The board, made up of 11 members, is chaired by Nosizwe Nokwe-Macamo.

The author of the letter claims that tenders will “never see the light of day” if the board does not have a vested interest in them.

The author alleges that a specific faction within the board is driven by greed and is primarily focused on the financial advantages they can gain from projects through “their allies.”

Notable upgrades to the Benrose and Wolmerton depots in Gauteng are mentioned as key examples.

The letter also points out that board members approved a tender for “Western Cape signaling” to the infrastructure company Maziya “once again through back-channel dealings.”

This further bolsters “the whistleblower’s claims concerning the KZN contracts” awarded to Maziya, which appear to link back to an earlier anonymous whistleblower report alleging nearly R2.7 billion in fraudulent advance payments linked to two tenders valued at R17.4 billion.

Read:
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In July, the Directorate for Priority Crime Investigation (Hawks) seized laptops, cellphones, and documents from senior Prasa executives at the agency’s Braamfontein headquarters during an inquiry believed to be concentrating on two signalling equipment tenders totaling R18 billion. Reports from News24 suggest that the items confiscated included devices belonging to CEO Hishaam Emeran and CFO Brian Alexander.

Excessive Expenditures

The author also condemns lavish spending on travel and accommodation for board members. While Prasa faces financial difficulties—reporting a R2.5 billion deficit in its 2024 financial statements—the board members are reportedly accommodated in luxurious five-star hotels during business trips to Cape Town, Durban, and Magaliesburg.

In Cape Town, they are reported to stay at 15 on Orange, where the least expensive room costs around R3,000 per night, excluding breakfast.

The writer brings attention to the lack of accountability for “over a hundred million” paid to senior executives following disputed unfair dismissals. Among those receiving payouts were Zolani Matthews and Lesibana Fosu.

Read: Prasa’s hiring and firing of CEO has cost R15m [Aug 2024]

Matthews, who was appointed Prasa CEO in March 2021, was suspended in November of that year for failing to disclose his dual British citizenship. He was dismissed by the board in December 2021, a decision he contested in the Labour Court. Retired Judge Robert Nugent, who oversaw the arbitration, ruled in April 2022 that Matthews’ dismissal was unlawful, necessitating his reinstatement as CEO.

Prasa later sought a review of Nugent’s ruling, but the Labour Court rejected it in July 2024, upholding the April 2022 arbitration award as a court order.

However, during this time, Prasa appointed Hishaam Emeran as CEO, directing Matthews to stay at home while compensating him for the remainder of his five-year term, set to end in February 2026. Prasa’s legal missteps involving Matthews, which included two unsuccessful attempts to terminate his employment, have cost over R15 million.

Fosu, who became the chief financial officer in September 2019, was suspended in February 2022 for apparently questioning invoices tied to payments for emergency security contracts.

She received an R11.9 million severance package in February 2024 after having received full salary during her two-year suspension.

The “dissatisfied board member” also mentions that one colleague consistently misses board meetings despite receiving a stipend, and two board members owe millions to the South African Revenue Service (SARS).

“Endless Cycle of Corruption”

The letter sent to the transport minister is simply the “latest in a series of appeals for intervention,” as stated by commuter activist organization #UniteBehind executive director Zukiswa Vuka.

Vuka noted that around the same time the Hawks executed a raid on Prasa’s headquarters, another whistleblower alleged that the current Prasa board was involved in a cover-up aimed at “sacrificing the CEO, CFO, and head of legal.”

This recent report, Vuka asserts, positions the board “at the center of the problems afflicting the state-owned entity.”

“The continuous decline of Prasa deprives commuters—especially the most disadvantaged—of critical opportunities and services. Moreover, it drains every taxpayer, as their funds are diverted into this endless cycle of corruption,” Vuka emphasized.

She urged the transport minister, the Hawks, and “all pertinent state bodies to address the situation with utmost urgency and without further delay.”

Read: Court rules #UniteBehind can be added to Prasa corruption case

Prasa spokesperson Andiswa Makanda mentioned that the board would not be able to answer inquiries from GroundUp until Friday, as they were preparing to present before Parliament’s Standing Committee on Public Accounts on Wednesday.

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