Train agency got security worth R248 million in July riots — but now won’t pay up

The Passenger Rail Agency of South Africa (Prasa) approved 20-day security contracts worth over R248 million for the July riots, and the Sunday Times reports it is yet to pay the security companies in question.

Red Ant Security, which was awarded R241 million in contracts, is taking Prasa to court because it has only received R10 million.

“They gave quotations to Prasa and those quotations were accepted,” said Red Ant Security’s lawyer Jan Allen.

“The security guards were deployed to various sites in terms of those quotations, the work was done and Prasa confirmed that the job was done correctly. If there is presumption of something untoward that is incorrect.”

Prasa did not respond to the Sunday Times’ questions regarding why it had paid only R10 million.

The only other company that received a similar contract was IPTS Security, which reportedly billed Prasa for R7.6 million.

Prasa insiders and security companies that have previously worked with Prasa said the R248 million figure is “beyond ridiculous.”

“Payments such as this R248m come from the operational side of the Prasa budget, and Prasa does not have that money. Prasa pays its suppliers only after 180 days because there is no money,” said an insider.

“Security companies are suing Prasa for unpaid invoices … and remember everyone knows that Prasa’s network and infrastructure has been destroyed, but this destroyed network was guarded for R248m.”

The Sunday Times also reported that IPTS Security had 300 security guards on contract. Since Prasa claimed it had procured 5,500 security personnel, this would mean that Red Ant Security provided the other 5,200.

The problem with this is that the Private Security Industry Regulatory Authority only has 1,620 security officers registered to Red Ant Security.

Red Ant COO Fuzile Balintulo declined to provide detailed information about the invoice.

While the contracts approved by Prasa may be controversial, there is no doubt that the July riots had a major impact on the local economy.

National Treasury and the South African Special Risk Insurance Association (Sasria) released a joint statement earlier this month where they confirmed that Sasria has paid out R5.8 billion in claims to businesses that suffered damages during the unrest.

“Our discussions with National Treasury are in line with the desired determination of the best medium that can inject capital, as we look at how to be future-proof ready and acknowledge the lessons learnt during the unfortunate unrest in July,” said Sasria Managing Director Cedric Masondo.

National Treasury said that the government would give R3.9 billion to Sasria following the Special Appropriation Bill recently tabled in Parliament.

Pepkor explained last month that it alone had spent R1.3 billion fixing damage incurred during the riots.

Even by November, there will still be almost 100 of its stores that will not have reopened because “the property was burnt down or there’s structural damage.”

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