REPORT: Red lights over PRASA loco pricing

BY CHARL BOSCH - JULY 15, 2015

The Passenger Rail Agency of South Africa (PRASA) reportedly payed the winning consortium, responsible for the buying of the controversial Spanish-built Afro 4000 diesel locomotives, an additional R40-million more than originally planned, despite reducing the number of units from 88 to 70.

According to Business Day, the rail operator’s ordering of the locos from Valencia-based manufacturer Vossloh España, through Swifambo Rail Leasing, rose from R3.5-billion to R4.8-billion as a result of inadequate foreign currency hedging.

The findings comes after an auditor-general report last year found that a “performance bond”, totalling R307-million, had been paid by Swifambo to PRASA four months after the contract for the locos was signed. This came after the consortium received a deposit of R460-million, with both payments reportedly contradicting PRASA’s procurement policy.

PRASA CEO Lucky Montana however stated that there was “nothing dodgy” after the contract was awarded to Swifambo in 2013, describing it at the time as “open and competitive”.

It was further reported that, in line with the contract, a so-called “advance payment” of 15% had to be made by PRASA on the date the agreement was signed. Following-on, two “progress payments” of 10% had to be paid within a year, one of which equated to 11.2% with no reason being provided.

As part of the advance payment agreement, an amount of R525-million, or 15%, was paid while a second of more than R468-million, was paid to Swifambo in December 2013.

 

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