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South Africa’s state owned enterprises – SOEs – have made headlines in the past few months, as they have been accused of corruption and maladministration in the issuance of contracts worth millions of rand.Reports of corruption and maladministration have sparked public outrage, leading to parliament’s oversight committee also expressing its worry that these issues might impact on critical service delivery projects.
A number of high ranking officials have recently left SOEs but not before receiving golden handshakes worth millions.
Some of the affected enterprises include power utility, Eskom, oil company, PetroSA, the national airline, South African Airways (SAA) and the Passenger Rail Agency of South Africa (Prasa).
In the latest controversy, Public protector, Thuli Madonsela released a damning report on corruption at Prasa.
Prasa has been in the news following disclosure that it might have misspent taxpayers’ money in a R3.5 billion ($260 million) locomotive contract.
The Public Protector’s report painted a picture of deep, widespread corruption within the organisation.
MPs also believe people within the passenger rail agency are involved in the widespread network of corruption.
Parliamentary portfolio committee on transport chairperson, Dikilede Magadzi also stressed that corruption and fraudulent activities need to be stopped.
Prasa chairman, Popo Molefe told the committee that the agency embraced the outcome of Madonsela’s investigation and would continue updating the transport minister and the portfolio committee on its interventions.
The committee wanted to know why the Treasury and Prasa would institute investigations on all contracts that are only above R10million, instead of a full probe into all contracts, regardless of size.
It was of the view that cancelling some of the contracts would lead to protracted legal battles, which would leave Prasa with huge legal bills.
Magadzi also warned against not following proper procedures, which could have legal ramifications.
Axed Prasa CEO, Lucky Montana has been critical of the board chairperson Popo Molefe.
The outspoken Montana was fired from his position in July by Molefe.
Montana has also been battling his board since February, and claimed that Molefe had interfered with operations and that he wanted to “reallocate resources” in Prasa.
During its presentation, Prasa also indicated that the Public Protector would issue a second report.
The committee said phase two of Public Protector’s report should be brought before it so parliamentarians could engage from an informed position.
