SCA dismisses Siyangena's appeal against setting aside of Prasa contracts

The Supreme Court of Appeal (SCA) on Tuesday dismissed an appeal by Siyangena Technologies against a 2020 Pretoria high court judgment which set aside contracts worth billions signed between it and the Passenger Rail Agency of South Africa (Prasa).

Siyangena was appointed by Prasa to supply and maintain an integrated security access management system at various train stations. This was pursuant to a Prasa decision to initiate a pilot project to upgrade certain stations in preparation for the 2010 Fifa World Cup.

The rollout was extended with substantially increasing costs through an ostensibly irregular procurement process.

Prasa approached the Pretoria high court in March 2018 to have its decision to conclude about R5.5bn in procurement contracts with Siyangena reviewed and set aside.

In addition to setting aside the contracts in 2020, the full bench of the court directed that an independent engineer be appointed to determine whether any payments made to Siyangena by Prasa should be offset against the value of work done.

The SCA said Siyangena appeared to accept the contracts fell to be declared invalid. However, it said Siyangena took issue with the order for the engineer's appointment because it claimed it was an innocent party.

Siyangena’s position was that it had no knowledge of the internal workings of Prasa, was an “innocent” contracting party and there was no basis to infer it was complicit in malfeasance.

In a unanimous judgment of the full bench by acting judge of appeal Mahendra Chetty, the court said where there was evidence of corruption, an order declaring the contracts unconstitutional ought to follow.

Chetty said the factual findings by the high court displayed a concerted effort on behalf of officials within Prasa to debase almost all aspects of the procurement process, to the benefit of Siyangena.

He said it was also apparent Siyangena was, on occasion, without resort to a bidding process and introduced as the contractor that would deliver on a particular project based primarily on it being an existing contractor.

In other instances, specifications were proposed by Siyangena rather than Prasa. When officials within the procurement structure raised concerns about source and price, these were dismissed.

“The high court inferred an ‘existence of corruption ... [because] a multitude of irregularities exist’ and the ‘absence of a candid explanation from the tenderer’,” he said.

Chetty said Siyangena was rightly found by the high court to have been "complicit to the corruption, impropriety and maladministration".

"It is inconsistent with notions of justice and equity that it should be allowed to profit from the unlawful procurement contracts. Furthermore, even innocent counterparties are not generally entitled to benefit or profit from an unlawful contract.”

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