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Prasa: Montana profited ‘corruptly’

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Former CEO Lucky Montana
Former CEO Lucky Montana

Former passenger rail boss Lucky Montana “benefited corruptly” from his relationship with a company that clinched “unlawful” contracts worth R4 billion with the state-owned company he led.

So argues the Passenger Rail Agency of SA (Prasa) in its second court application to have contentious contracts awarded during Montana’s term as chief executive set aside.

Prasa submitted papers to the North Gauteng High Court in Pretoria on Friday to have two ­contracts awarded to Siyangena Technologies – in 2011 and 2014, respectively – declared invalid.

Siyangena installed comprehensive security ­systems that, among other things, included closed-circuit TV (CCTV) cameras and access-control ­systems at more than a hundred train stations.

Prasa’s board chairperson, Popo Molefe, says in his affidavit that the contracts, worth R1.95 billion and R2.1 billion, respectively, were unlawful ­because Siyangena was given an advantage through “bid-rigging” and because the contracts were ­coupled with alleged “corrupt activities” whereby Montana enjoyed “improper financial benefits”.

In December, Prasa brought a similar application in the high court in Johannesburg to have a controversial contract for new locomotives set aside.

The latest court application follows City Press ­sister newspaper Rapport’s revelation in May last year that Siyangena Technologies’ lawyer bought Montana’s house in Johannesburg in 2014 for more than double the market value of the property.

Precise Trade and ­Invest 02, the shelf company through which the lawyer clinched the transaction, also paid R7.5 million in cash for an upscale property in Pretoria in 2014, for which Montana himself had at first paid a deposit of R3.5 million.

The purchase deed initially listed Montana as the buyer, but was later amended to name the lawyer’s shelf company as the new ­owner, though Montana himself took ­possession of the property’s keys from the previous owner.

The details of both property transactions form part of Prasa’s latest court application.

“Persons and entities associated with the first ­respondent [Siyangena Technologies] were ­involved in conferring unlawful financial benefits to Mr Montana,” says Molefe in his affidavit.

The transactions serve as “evidence of corrupt activities” between Montana and people with ties to Siyangena Technologies, the affidavit continues.

Prasa is also asking the court to take into account the “irregular and unlawful” manner through which Siyangena was appointed in the first place.

According to the court papers:

. Montana saw to it that a contract awarded to Siyangena Technologies in 2009 for ­upgrading ­only two train stations was extended to a contract worth R1.95 billion for 62 train stations – without a competitive tender process;

. The bid price of Siyangena Technologies’ only competitor in the “closed-bidding process” for the first contract was R450 million less than that of ­Siyangena’s;

. In contravention of its procurement regulations, Prasa paid a deposit of R250 million to ­Siyangena before the latter started doing any work;

. Siyangena approached Prasa officials in 2013 with an “unsolicited proposal” to once again ­extend the first contract. Montana subsequently approved a contract extension worth more than R300 million; and

. Siyangena was given considerable favour in the second contract because the tender specifications required products for which Siyangena and its sister companies were the only authorised ­distributors in South Africa.

According to a report by an independent engineering firm in which the quality of Siyangena Technologies’ work comes under fire, taxpayers have been seriously done in by the company.

The report, which forms part of the court application, says Siyangena’s CCTV cameras and access-control systems were “excessively priced” and the company’s work was not up to standard.

Pragason Reddy, Siyangena Technologies’ ­managing director, said the company would ­submit answering papers after they had studied Prasa’s application in full.

Montana did not respond to Rapport’s requests for comment. – Rapport

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