Billions spent on railway contracts. Yet Metrorail collapses

Roy Moodley, who is implicated in a leaked forensic report, says that criminal charges have been laid against GroundUp reporters

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Photo of Metrorail train
Forensic reports by Werksmans Attorneys indicate that a huge amount of irregular spending has gone into train infrastructure. Photo: Ashraf Hendricks

If you travel on Metrorail’s Southern Line in November 2018 and compare it to two years ago, a few things strike you. First, most infuriating, is that trains are more irregular than they used to be. Second, the carriages, even the higher priced Metro Plus ones, have deteriorated to an even more parlous state. Barely a seat is still covered. Graffiti and advertising stickers plaster the sides.

What’s eery though is how relatively empty the carriages are during the morning rush hour at Retreat Station, one of Cape Town’s main hubs. You’re almost guaranteed to get a seat now, even though it may be torn and have no more stuffing. Far fewer people appear to be using this line, and commuters must be finding other more expensive but reliable ways to get to work.

Yet over the past half-decade Metrorail has spent, or squandered, billions of rands on supposedly improving trains infrastructure.

The leaked Werksmans Attorneys reports into mismanagement at the Passenger Rail Agency of South Africa (PRASA) have flagged irregularities in the agency’s dealings with infrastructure service providers. The firm has recommended that racketeering charges be considered.

According to one of the reports, the agency spent R9.3 billion between 2010 and 2016 on its General Overhaul (GO) project for “the repair and refurbishment of coach features, fittings and equipment”.

The contracts of some service providers for the GO program have been identified as irregular. Goldex Engineering and Maintenance (Pty) Ltd, a “coach refurbisher and general maintenance supplier … is part of the GO Program, but was not part of the panel [of service providers] appointed in 2006 … PRASA could not provide documentation to the investigation team in support of their appointment to the panel despite having personally signed off on the work allocation to Goldex Engineering,” wrote the investigators, concluding that their appointment “appears to be irregular”.

According to the investigators Roy Moodley has “business interests” in a company called Hail Way Trading and this company trades under the name Goldex Engineering and Maintenance. However, a Windeed search did not substantiate this.

GroundUp approached Moodley for comment and received a threatening text response. See the full response below. Moodley was named in Jacques Pauw’s best-selling book, The President’s Keepers, as a key player in state capture.

Werksmans also pointed out that Goldex’s registration number is connected to a company with a different trading name. This “is indicative of a risk of fraud,” the report states. It recommended that “offences of racketeering in terms of the Prevention of Organised Crime Act 121 of 1998 as amended be considered.”

Another of the reports revealed that PRASA spent over three times the approved budget for its Infrastructure 2013 program. “The total value of contracts, received to date, exceeds R575 million, which is in excess of the envisaged program value in the November 2013 memorandum of R136 million.”

The report states that service providers for this project also appear to have been appointed irregularly. “Dikiza [Railway and Civil Engineering CC] was appointed by means of a confinement process” in November 2013 “as part of a program to appoint additional suppliers … to improve after-hours reaction time for infrastructure repairs.”

Appointing service providers on confinement involves deviating from competitive bidding processes and is done in emergency situations or when a particular service is only provided by one supplier. But Werksmans were unconvinced there was any emergency. “We are of the opinion that the confinements were irregular,” the report states.

PRASA has not responded to our questions regarding the GO and Infrastructure 2013 projects, despite repeated requests and generous deadlines for comment. We were unable to get comment from Dikiza.

Train travel drops over the same time period

The Railway Safety Regulator (RSR) has reported that train mileage decreased and operational occurrences on South Africa’s rail network increased between 2010 and 2016.

Their latest State of Safety report states that train mileage decreased due to “the effects of a prolonged period of decreasing availability of rolling stock, infrastructure maintenance and criminal acts of vandalism and theft on PRASA Rail.”

PRASA Rail trains were travelling 26.3 million kilometres in 2010/11, this decreased to 22.2 million kilometres in 2015/16. Operational occurrences rose steadily over the same time period, from 4,181 in 2010 to 4,250 in 2016, peaking at 4,632 in 2014/15.

Operational occurrences include train collisions and derailments and are caused by things like faulty signalling equipment and cable theft.

The Werksmans reports, known as #PRASALeaks2, were provided to GroundUp by commuter activist group UniteBehind. UniteBehind has not divulged the source of the leaked reports. The first #PRASALeaks referred to leaked reports commissioned by National Treasury, and were reported by GroundUp last year. You can find the reports here.

It is important to note that the National Treasury and Werksmans Attorneys investigations, like those of the Public Protector and Auditor General, are smell tests. They make recommendations for further action but are not sufficient grounds for prosecution in and of themselves.

Even so, it is concerning to note the lack of response from prosecution agencies to the numerous red flags raised by the various investigations into mismanagement and corruption at PRASA.

Due to the sheer volume of the Werksmans reports, together with GroundUp’s relatively limited capacity to peruse them, we cannot claim to have a comprehensive overview of the reports.

Roy Moodley’s Response

GroundUp sent the following message to Roy Moodley’s cell phone:

“Good day Mr Moodley. GroundUp will be publishing a report about the Werksmans Attorneys investigation into PRASA in which they claim a company directed by you called Hailway Trading bought and restructured a company called Goldex Engineering that provided general maintenance services to PRASA as part of their General Overhaul program between 2010 and 2016, however the investigators claim the appointment was irregular. Do you have any comment on this? If so, please get back to us by midday tomorrow. Thank you.”

We received this response:

“Hello I don’t understand your logic. Which appointment was irregular you better get facts and then publish. As you might already know there is a criminal charge against Aidan Jones and Nathan Geffen for publishing false accusations in last weeks media the ground up. Watch the space what ever you publish make sure you have the facts and if you dont have facts then you are committing fraud by misrepresenting the public to generate personal income. Make Sure you publish the truth to the public and don’t misrepresent the public for personal gain. Remember there is only one law in this country misrepresentation is a criminal offense. Thanks”

It appears Moodley is referring to the article GroundUp published on 30 October which dealt with his family’s company Royal Security: New leaked reports show why train security has collapsed

TOPICS:  PRASALeaks Prasa / Metrorail

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