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PRASA Welcomes The Constitutional Court Decision On The Swifambo Matter


The Passenger Rail Agency of South Africa (PRASA) welcomes the ruling by the ten judges of the Constitutional Court that dismissed an application brought by Swifambo Rail Leasing (Pty) Limited (In Liquidation) (“Swifambo”) for leave to appeal a decision of the Supreme Court of Appeal.

On 3 July 2017, Judge Francis J of the South Gauteng High ordered the review and setting aside of a contract for the supply of locomotives by Swifambo that were not fit for purpose to PRASA.

Photo: Craig Dean

In his judgement, Francis J, found amongst others that: “The relationship that exists between Swifambo and Vossloh [the original equipment manufacturer] amounts to exploitation of the intended beneficiaries, being black people as defined in the B-BBEE Act, "it is a criminal offence under the B-BBEE Act”. Swifambo took this decision on appeal to the Supreme Court Appeal and the appeal was unsuccessful. Delivering the unanimous judgement, Lewis JA stated that: “the continued performance of the contract would serve no useful purpose. It might benefit Vossloh and Swifambo, but it would be to the detriment of the public and to the detriment of PRASA,” The SCA also noted that “While Swifambo contends that Vossloh is ready to deliver more locomotives, Vossloh is silent”.

The Constitutional Court found that Swifambo’s application for leave to appeal bore “no reasonable prospects of success”. PRASA is pleased that it’s contention of the unlawfulness of this award and the futility of this contract to effectively deal with the operational challenges of PRASA was confirmed by 16 judges up to the apex court. “This leaves Swifambo with no further legal remedies and paves the way for PRASA to recover taxpayer monies paid as a result of an unlawful contract to a company found by the court to have been used as a front", said Ms Khanyisile Kweyama, Chairperson of the PRASA Board of Control.

Ms Kweyama further emphasised the Board's strong opposition to companies using fronting as a means to access government tenders at PRASA, "Government Policy on Black empowerment is meant to create real transformation for the black majority who have been on the fringes of economic benefits. The lengthy but triumphant battle to ensure that black exploitation is reversed is a testament to our commitment to the BBBE and the empowerment of our people as the Board".

PRASA will now focus on ensuring that it has locomotives that will be suitable for the network and suitable for PRASA’s operational requirements. "Our transformation policies in this country are meant to empower the previously disenfranchised and create business opportunities that dismantle racial biases without compromising the quality of goods supplied and services rendered to SOEs", added Ms Kweyama



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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