Explosive Letter From PRASA “Board Member” Claims Tenders Are Being Rigged

A “disgruntled PRASA board member” says tenders are being rigged to benefit members of the board.

• In a two-page anonymous letter a “disgruntled board member” has alleged that PRASA tenders are rigged to benefit certain members of the board.
• This follows a detailed whistleblower report over tender fraud in March this year, after which the Hawks raided PRASA headquarters in Braamfontein.
• Along with allegations of corruption, the letter notes no-one has been held accountable for more than a hundred million rand wasted in salaries to wrongfully suspended executives and the resultant legal fees.

Tender corruption within the board of the Passenger Rail Agency South African has been raised in an anonymous letter to transport minister Barbara Creecy by a “disgruntled board member”.

Receipt of the letter dated 4 September, which the writer describes as a whistle blower report and a “clarion call” for action from the Department of Transport, is confirmed by the department’s spokesperson Collen Msibi, who said it was “being processed internally for the minster’s attention”.

This is the latest of at least three anonymous reports alleging fraud and corruption in PRASA’s top echelons this year. The 11-member board is chaired by Nosizwe Nokwe-Macamo.

The writer of the letter says if the board does not have vested interest in a tender, the tender “will never see the light of day”.

The writer states there is a faction in the board which is driven by greed and how much they can get paid for projects by “their allies”.

Major upgrades to the Benrose and Wolmerton depots in Gauteng are listed as examples.

The writer also mentions board members who have approved a tender for “Western Cape signaling” to infrastructure company Maziya “once again via the back door”.

The writer states this confirms “the allegations of the whistle blower on the KZN contracts” given to Maziya, which appears to relate to an anonymous whistleblower report earlier this year alleging almost R2.7-billion in fraudulent advance payments to Maziya in relation to two tenders worth R17.4-billion.

In July the Directorate for Priority Crime Investigation (the Hawks) seized laptops, cellphones, and documents from top PRASA executives at PRASA’s Braamfontein headquarters in an investigation believed to be related to two signalling equipment tenders amounting to R18-billion. As reported by News24, the equipment seized reportedly included those belonging to CEO Hishaam Emeran and CFO Brian Alexander.

Lavish expenditure

The writer also takes aim at lavish expenditure on transport and accommodation for board members. While PRASA is cash-strapped — its 2024 financial statements reveal a R2.5-billion deficit in operational activities — the writer states board members are put up in expensive five-star hotels when they are on business in Cape Town, Durban, and in Magaliesburg.

In Cape Town they are allegedly accommodated at 15 on Orange, where the cheapest room costs about R3,000 per night excluding breakfast.

The letter writer also raises the matter of no-one being held accountable for “over a hundred million” paid out to senior executives following contested unfair dismissals. Among the executives to whom payouts have been made were Zolani Matthews and Lesibana Fosu.

Matthews was appointed PRASA CEO in March 2021 but suspended in November that year on the grounds he failed to disclose his dual British citizenship. He was then dismissed by the board in December 2021, which he challenged in the Labour Court. Retired Judge Robert Nugent, who led the arbitration process, ruled in April 2022 that Matthews’ dismissal was unlawful and he needed to be reinstated as CEO.

PRASA then sought a review of Nugent’s ruling, which was dismissed by the Labour Court in July 2024, making the April 2022 arbitration award an order of court.

However, PRASA had in the meantime appointed Hishaam Emeran as CEO and so told Matthews to stay at home, and paid him out for the remainder of his five-year term, which was due to end in February 2026. PRASA’s legal botches with Matthews, including trying to fire him twice, cost well over R15-million.

Fosu, who was appointed as Chief Financial Officer in September 2019, was suspended in February 2022, allegedly for raising questions on invoices relating to the payment of emergency security contracts.

She received an R11.9-million golden handshake in February 2024 after receiving full pay while on suspension for two years.

The “disgruntled board member” also said one of their colleagues never attended board meetings despite being paid a stipend, and two board members owed SARS millions of rands.

“Bottomless hole of corruption”

The letter to the Minister of Transport is but the “latest in a long line of calls for intervention”, said commuter activist organisation #UniteBehind executive director Zukiswa Vuka.

Vuka said that about the same time the Hawks raided PRASA’s headquarters, another whistleblower claimed the current PRASA board was engaged in a cover up, aiming to “throw the CEO, CFO and Head of Legal under the bus”.

This latest report, states Vuka, puts the board “at the centre of the problem of the state-owned entity’s failings”.

“The continued destruction of PRASA robs commuters — especially the poorest — of access to the most essential of opportunities and services. Furthermore, it robs every single tax payer — as their money is thrown by the state into this bottomless hole of corruption,” said Vuka.

She called on the transport minister, the Hawks “and all relevant organs of state to address the matter with maximum effort and no further delay”.

PRASA spokesperson Andiswa Makanda said the board could not respond to questions sent by GroundUp until Friday, as they were preparing to appear before Parliament’s Standing Committee on Public Accounts on Wednesday.

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