Prasa's tall trains, tall stories and gravy trains laid bare at state capture inquiry

It did not take long for the state capture inquiry to establish why Swifambo Rail director Auswell Mashaba “pulled a Jacob Zuma” and refused to appear on Wednesday to account for his company's dealings with the state.

The Zondo commission heard jaw-dropping details of how Swifambo unduly won a R3.5bn contract for the notorious “tall trains” earmarked for the Passenger Rail Agency of SA (Prasa). This was contained in the evidence of forensic investigator Marc Sacks who investigated Swifambo.

His testimony included revelations that when Swifambo got the contract in 2013, aided by then Prasa boss Lucky Montana, it had no experience in rail.

As if this was not enough, the company's bank account had no major transactions before an inflow of R2.65bn from Prasa.

Swifambo was not going to do any of the work but would outsource all of it to Vossloh, a German rail technology company with whom a signed contract was concluded 16 months after Swifambo submitted a bid to Prasa.

Prasa entered into the controversial contract with Swifambo on March 25 2013 and it was Montana who signed on behalf of the SOE.

Eleven days later, R460m was paid to Swifambo which had never had such a sum in its bank account.

Of that amount, R290m was paid to Vossloh 116 days later.

Several other payments from Prasa to Swifambo followed while the latter would pay Vossloh and other companies linked to Mashaba and his business associates.

The scheme, Zondo could not help but notice, was identical to the Free State asbestos saga where companies that scored the contract subcontracted all of the work but kept most of the money.

Sacks explained: “There was no evidence that Swifambo did any work other than being the contracting party. Essentially they added no value to the performance of the contract. I stated in my report that Swifambo obtained a R3.5bn tender for the supply of locomotives when it had no offices or infrastructure and no experience in the rail industry.”

Sacks said Swifambo was a scam from the onset, before the contract was awarded to them.

For starters, they did not inform Prasa that they would subcontract the work and had no legal relationship with Vossloh.

It did not end there as “the bid [submitted by Swifambo] did not comply with local content requirement and [the] locomotives were designed and manufactured in Spain,” said Sacks.

“The bid did not contain evidence to support Swifambo’s say that it had previous experience in similar projects as required by the RFP [request for proposals].

“At the time the bid was submitted, Vossloh was not a co-bidder and Swifambo had not concluded a subcontract with Vossloh and there was no legal relationship between Swifambo and Vossloh and therefore there was no indication that Swifambo could perform.”

The shortcomings on the part of Swifambo that were overlooked by Prasa did not end there, Sacks discovered during his investigation.

He added that it made no sense how Prasa might now have picked up all the red flags when he easily did so by contacting Swifambo's auditors and bank account holder.

The company's auditors told him that Swifambo “were a new company and had never traded before and their bank, Standard Bank, indicated that Swifambo had no financial history which the bank would use to evaluate its financial viability”.

“It is evident that this was a company that had no operational history,” said Sacks.

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