Prasa – scandal


Dit is verseker nie kleingeld nie – en dis maar een van die baie skandale wat ons land sedert 1994 geteister het.  Wapenskandaal is ook onder die tafel ingevee, wat het daarvan geword.?

The 70 new locomotives were meant to pull carriages full of people and goods around South Africa. The billions of rands spent on them were part of a plan by the Passenger Rail Agency of South Africa (Prasa) to modernise its fleet.

Off the rails: One of the 13 locomotives supplied by Swifambo which are gathering dust at one of WH Auctioneers warehouses are up for auction. (Supplied)


After they had been shipped to South Africa from as far away as Spain, operators realised that they didn’t fit local railway lines. 

Now the Afro4000 locomotives are sitting at depots around the country, waiting to be auctioned off to fill a huge hole in Prasa’s budget. 

The agency is pinning its hopes on recovering the more than R2-billion owed to it by a now-liquidated company, which scored billions from the the 70 locomotives contract.


In a 2017 ruling, the high court in Johannesburg said Prasa, a state-owned entity, had awarded a tender to the company — Swifambo Rail — in a “corrupt tender process”.

As a result, the court set aside the R3.5-billion contract for the 70 locomotives. It also said that Swifambo Rail was a front for Vossloh España, a Spanish company that was subsequently bought by Stadler Rail, a Swiss company. An appeal by Swifambo Rail to the Constitutional Court was dismissed with costs in May.

But Prasa maintains that Vossloh España (now owned by Stadler) was a subcontractor so there is no need to recover money from it. This means it has to wait with other creditors and hope that there is some money left over from the liquidation process.

In Prasa’s court papers — which were deposed in 2015 by its then board chairman Popo Molefe — there were no documents to confirm that it had entered into a joint venture with Vossloh España. This venture would be essential, considering that its bid to supply the locomotives indicated that Swifambo would rely solely on the experience and technical capabilities of Vossloh to fulfil its obligations.

Swifambo was not disqualified in that bid, despite submitting a tax clearance certificate that had no value-added tax number and not submitting a tax clearance certificate for Vossloh.

Prasa now hopes it can recover about R2.6-billion from Swifambo, even though it has been liquidated. The utility’s spokesperson, Nana Zenani, said:

“Vossloh was a subcontractor of Swifambo and not a joint venture partner. Therefore, there is no contract between Prasa and Vossloh,” which would allow the rail utility to chase the European company for the money for the useless locomotives.

Zenani added: “It is up to the liquidators to decide on the future of the relationship between Prasa and Vossloh as part of their duty to realise the assets of Swifambo.”

But recovering any money from Swifambo could prove tricky because liquidators have to chase after the money trail in the bank records of Swifambo and also try to sell 70 locomotives in an auction.

According to one of the liquidators, Hannes Muller, the 13 locomotives that Swifambo supplied have already been put up for auction and on July 24 they will meet Prasa for the state agency to prove its claim as a creditor.

“We are trying to sell the trains. We had a meeting with Stadler [Rail] and they told us that there are [more] trains in Valencia [in Spain], which have been paid for [by Prasa]. We are trying to establish if there is a market in the world for these trains. We have a marketing campaign worldwide,” said Muller.

According to a source who was involved in the initial investigation of the deal, Prasa is not likely to recover much from Swifambo unless it also pursues Vossloh. “There is nothing in Swifambo; monies were misused there and given to a number of individuals. Prasa has to go after Vossloh too because it took the money and provided locomotives that could not be used,” said the source.

A briefing note, seen by the Mail & Guardian, to the new transport minister, Fikile Mbalula, has advised that Vossloh should also be pursued. “The matter is currently with the liquidator and liquidator is empowered to take action against Vossloh as well.”

The minister, as the head of the department that owns the state-owned enterprise, is its shareholder and so is heavily involved in what happens next.   The note said: “[The] minister is advised that now that the contract, the bid process and even Vossloh itself were found wanting, it follows that the funds transfer from Prasa over this contract was unlawful and we must recover the money.”

Previous investigations by the M&G showed that Auswell Mashaba, who owned Swifambo, may have used some of the proceeds of the train deal to purchase properties worth about R50-million, some of which were bought for cash.

About R80-million from the company also made its way to Angolan businesswoman Maria da Cruz Gomes, a friend of former president Jacob Zuma.

Vossloh and Stadler had not commented by the time of going to print.


In 2012, South African rail officials embarked on a disastrous R3.5bn drive to source new locomotives through a front company set up specifically for the huge contract. Court judgments have found the deal was steeped in corruption and bid-rigging, while the machines were unfit for South African lines. Thirteen of the Afro4000 locomotives are now set to be auctioned without ever being put into use by their hapless owner, the Passenger Rail Agency of South Africa.

The website of WH Auctioneers advertises a slightly unusual set of items for one of its upcoming auctions.

Among the usual list of farms, residential properties and vehicles that are due to go under the hammer are 13 light-blue Afro4000 locomotives bearing the Passenger Rail Agency of South Africa’s (Prasa) name and logo.

a screenshot of a social media post

Prospective buyers have a chance to bid on the locomotives between 1 and 12 September, according to an advertisement for the auction.

According to the auction house’s website, the locomotives can be viewed at Prasa depots across the country, including the Braamfontein depot in Johannesburg, the Bloemfontein depot, and in Port Elizabeth.

The locomotives are being auctioned on instruction from the liquidators of Swifambo Rail Leasing, the front company that in 2012 clinched a R3.5-billion contract to supply 70 locomotives to Prasa. Swifambo, which merely acted as a middleman in the deal, ordered the locomotives from Spanish manufacturer Vossloh España.

A damaged Afro4000 locomotive, part of a R3.5-billion contract to supply 70 locomotives to Prasa.

Prasa ended up paying Swifambo R2.6-billion, but in turn, received only the 13 Afro4000 diesel-electric locomotives now due to go under the hammer. Prasa never received the seven remaining Afro4000 locomotives and 50 electric locomotives amid a litany of problems with the contract. In mid-2015, after some of the Afro4000s had already been shipped to South Africa, this reporter revealed in Rapport newspaper that the locomotives were too tall for South Africa’s rail specifications.

Follow-up reports detailed how Swifambo had funnelled some R80-million of its Prasa earnings to Maria Gomes, an Angolan businesswoman with ties to then president Jacob Zuma, and to George Sabelo, a lawyer with links to Zuma and his family.

Auswell Mashaba, Swifambo’s director, has stated in an affidavit that Gomes and Sabelo were introduced to him as fundraisers for the ANC. However, he has denied that the R80-million he paid them was linked to Prasa’s locomotives contract.

Despite the reports, Prasa CEO Lucky Montana, who oversaw the acquisition, insisted that the trains were perfectly suited for local use and that the deal had been concluded without any improprieties. He claimed the newspaper exposés were fuelled by racism.

However, in 2017 the Johannesburg High Court found that there had been a “criminal” fronting relationship between Swifambo and Vossloh España. The court set aside the “unlawful” contract after Prasa’s newly formed board, at the time led by Popo Molefe, sued Swifambo.

In his strong condemnation of the corrupt contract, High Court Judge EJ Francis tore into Swifambo, its European partner and Prasa’s senior leadership.

“Corruption is a cancer that is slowly eating the fabric of our society. If it is left unchecked it will devour our entire society,” reads the judgment.

Swifambo thought it might have better luck at the Supreme Court of Appeal (SCA), but the country’s second-highest court in November 2018 dismissed the company’s application to have the High Court decision overturned.

This second judgment contained the first legal pronouncement on the issue of the locomotives’ technical suitability.

The SCA confirmed that “the locomotives already delivered to Prasa… are not fit for purpose” and had been “found to be unsafe”.

The court cited various studies and reports, including one conducted by Transnet, that indicated the Afro4000s “exceeded the vehicle structure gauge height required for diesel locomotives” operating in South Africa. Put simply, the trains were too tall, the court confirmed.

Swifambo went into liquidation shortly after the SCA ruling.

In May 2019 the Constitutional Court dismissed an application by Swifambo’s liquidators for leave to take the matter to the apex court, seeing as it bore “no reasonable prospects of success”.

Swifambo’s liquidators may have to use the proceeds of the upcoming auction to settle the claims of any third-party creditors.

Prasa, which is seeking to recover its R2.6-billion from the liquidated firm, is still in the process of proving its claim.

But even if it is successful, the sale of the 13 Afro4000s will only cover a fraction of Prasa’s expenditure on the doomed contract. The 13 trains cost Prasa around R600-million, and it is unlikely that the locomotives will together fetch this price-tag.

Mashaba’s assets, if proved to be linked to the train deal, could also help to lessen the state’s losses. This reporter in 2015 detailed how Mashaba went on a R50-million property splurge shortly after Swifambo received its first payments from Prasa.

But there are huge sums of money that still need to be accounted for — as mentioned above, Prasa had paid Swifambo R2.6-billion, while Swifambo paid Vossloh España about R1.8-billion. This means Swifambo’s former director may need to explain what happened with about R800-million of the Prasa loot.

The R1.8-billion Swifambo paid Vossloh España will also be extremely tricky to retrieve.

The Spanish rolling stock manufacturer’s former holding company, German-based Vossloh AG, sold the company to Swiss firm Stadler Rail after the 2015 Prasa scandal. It is not clear which of these European entities, if any, would be targeted by South African authorities in any possible bid to recover some of the money.

Since the scandal came to light in 2015, the Hawks and the National Prosecuting Authority (NPA) have on several occasions indicated that their “investigation” into the matter was progressing well. Four years later, however, none of these probes appear to have left the station. DM

I rode Africa’s first superfast bullet train, and I understand why it’s controversial (Supplied by Business Insider)

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