Prasa disputes independent engineer's findings on Siyangena valuation

Much of the equipment is no longer operational as it was vandalised

The Passenger Rail Agency South Africa (Prasa) said on Thursday it was challenging the findings of an independent engineer on the valuation of its dispute with Siyangena Technologies regarding the R5bn contract the agency had with the company.

Last month, Sunday Times reported that Prasa was refusing to pay a further R2.2bn for an unlawful contract it signed with Siyangena Technologies for a project in which costs skyrocketed from R1.9bn to R5.1bn.

It was reported that the contract that was awarded in 2010 was for security equipment such as speed gates and access control and surveillance systems at train stations. Much of the equipment is no longer operational as it was vandalised after Prasa cancelled security contracts in 2020, leaving infrastructure vulnerable to criminals.

Prasa reiterated that the Integrated Security Access Management System (ISAMS) project failed to meet critical benchmarks for functionality and usability.

It said the system was found to be under-designed, not fit for purpose and unable to meet the operational needs of Prasa's commuter network. According to Prasa, these deficiencies significantly diminish the financial valuation of the works.

“Prasa believes it is premature to rely on the findings of the independent engineer’s report given the fact that it is challenging the report prepared by Errol Braithwaite, the independent engineer,” said Andiswa Makanda.

Makanda said the agency was engaging with its legal and technical teams to ensure that the final valuation process adhered to the court’s directives and reflected the true value of the works delivered.

“We remain steadfast in protecting the public interest and upholding transparency in this matter,” she said in a statement. 

The Sunday Times reported that the contract was set aside by the Pretoria high court with costs in October 2020. The court ordered that an independent engineer be appointed to calculate just and equitable compensation to either Siyangena or Prasa. Siyangena appealed the ruling but lost in the Supreme Court of Appeal (SCA) in November 2022.

Makanda said the October 2020 judgment was prescriptive on what should be excluded from value, with the most relevant prescripts being that “the works were far beyond budget which meant that what originally was contemplated had to be adjusted to meet budget. In addition, uncontrolled variations could be brought about to benefit unscrupulous people”.

“People who are complicit in maladministration, impropriety or corruption should not be permitted to profit from an unlawful tender ... they cannot now seek to gain from these agreements in respect of the contract rates, for it would clearly amount to the respondent profiting from unlawful agreements.”

Prasa said Siyangena was found by the high court to have been “complicit to the corruption, impropriety and maladministration”.

It said the court's order for an independent engineer to value the work was not intended to give Siyangena back-door access to benefit or profit from an unlawful contract.

“Prasa is challenging Mr Braithwaite’s valuation approach because it relied heavily on project data and invoices provided by Siyangena without adequately scrutinising their veracity or fitness for purpose of the structures created.

“The valuation process undertaken by Mr Braithwaite failed to account for the functional obsolescence and lack of fitness for purpose of the works delivered under the ISAMS project,” said Makanda. 

She added these deficiencies undermine the stated value of the project.

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