Business

Prasa in fight to get ill-fitting locomotives back

2019-09-09 01:46

The chances of the Passenger Rail Agency of SA (Prasa) getting 13 of the ill-fitting Afro-4000 locomotives back hangs in the balance, amid a looming court battle over who owns them.

The pricey locomotive tender gained notoriety after news emerged that the locomotives were too tall for certain portions of the tracks on which they were meant to run.

The legal dispute over the locomotives has now taken a bizarre turn after Auswell Mashaba, the controversial boss of the empowerment company, Swifambo Rail Leasing, admitted that his own company operated as a front during the tendering process and that the locomotives therefore do not belong to the company.

Auswell Mashaba, the controversial boss of the empowerment company, Swifambo Rail Leasing, admitted that his own company operated as a front during the tendering process

As a result of Swifambo not owning the locomotives, his company can’t be held accountable for the billions of rands paid for the trains, he argues.

In the case, brought by Mashaba against Prasa and Vossloh España, the manufacturer of the Afro-4000 locomotives, he now contends that Vossloh España should be held liable for a R2.6 billion claim that Prasa instituted against Swifambo.

The locomotives were returned to Swifambo Rail Leasing after a separate court case over the corrupt tender, which nearly reached the Constitutional Court.

In November, the Supreme Court of Appeal (SCA), found that the entire contract for the supply of 70 locomotives was irregular and set it aside. The contract was worth about R3.5 billion.

The SCA confirmed an earlier high court ruling that the tender was obtained through corrupt means and that the tender specifications for the new locomotives were designed to benefit Vossloh España, and therefore also Swifambo.

Swifambo has been ordered to pay back the money that Prasa had already paid to it, but the hopelessly bankrupt company is now being liquidated.

In 2015 City Press’ sister publication, Rapport, revealed that the locomotives in question were not fit for the purpose Prasa needed them.

The trains were too high for certain parts of the tracks on which they were meant to run. The Afro-4000 locomotives are expected to be sold at auction in September.

Mashaba is asking the Pretoria High Court to issue a declaratory order in terms of which the locomotives would be returned to Vossloh España because it was the real bidder for the tender, while his company was just a front.

“The conduct of the liquidators in treating the locomotives as the property of Swifambo and treating them as a claim by Prasa against Swifambo prejudices Swifambo’s position as well as that of the shareholders and the director [Mashaba],” state the court papers.

Read: Will Mbalula’s war room be able to fix Prasa’s core problems?

Mashaba further argues that Prasa in February found that the locomotives could be deployed in the Free State, Northern Cape and the Eastern Cape, subject to certain alterations being done.

Hannes Müller, director of the Tshwane Trust and a Swifambo liquidator, disputes Mashaba’s allegations in his affidavit.

“The Supreme Court of Appeal has already found that there was an agreement between Swifambo and Prasa and this agreement was set aside. As a consequence of this decision, restitution must take place between Swifambo and Prasa.”

Mashaba’s contention that the 13 Afro-4000 locomotives are not the property of Swifambo is disingenuous, argues Müller, because Vossloh España had delivered the trains to Swifambo as part of the subcontract between the two entities.

He also points out that the Master of the High Court had accepted Prasa’s claim in the liquidation proceedings and that the restitution process had already begun, as Prasa had agreed to hand over the 13 locomotives to Swifambo’s liquidators.

Müller argues that Mashaba’s latest court application is an attempt to stop the investigation of cash flows related to the controversial train tender.

He says that the cash flows clearly indicate the applicant – Mashaba – and related entities, including family members, had enriched themselves with thousands of rands belonging to the insolvent estate.

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October 13 2019