An internal Passenger Rail Agency of South Africa (Prasa) probe into allegations of corruption into its multibillion-rand general overhaul (GO) programme points to governance weaknesses in the execution of the project, including allocation controls, pricing discipline, performance management and oversight mechanisms.
Prasa, through the rolling stock recapitalisation programme, procured new rolling stock for its Metro Rail operations as part of its long-term modernisation strategy.
The new fleet was designed to be phased in progressively, while the yellow legacy fleet would be phased over an extended transition period, projected to conclude around 2033.
At the time of initiating the GO programme, the legacy fleet was experiencing declining reliability, increasing technical failures, safety compliance pressures and reduced availability, which materially affected service reliability and commuter confidence.
The report by law firm Webber Wenztel, released on Wednesday and seen by the Mail & Guardian, was triggered by a whistleblower account of one of the GO contractors, CTE Western Cape, who worked with the now-suspended Prasa rolling stock senior manager, Arthur Trenuch.
CTE allegedly employed Trenuch’s son and was getting information on the payments made to contractors, failing to acknowledge that they did not have the same share of work based on the contract.
The investigation further revealed that CTE had overcharged Prasa in access of R58 million. Another company, Armature, overcharged the state-owned enterprise by R21m and Karabo-Nhlamolo Projects Cooperative (KNPC) did so by R7.5m.
Prasa spokesperson Andiswa Makanda confirmed to the M&G that the agency commissioned the forensic investigation into the management of the GO programme.
The report found that while the GO project was conceived as a strategic intervention to stabilise Prasa’s legacy fleet during the transition to new rolling stock under the rolling recapitalisation programme, there were weaknesses in its execution.
“While the original strategic rationale remains sound, the execution of the programme revealed governance weaknesses in allocation controls, pricing discipline, performance management and oversight mechanisms,” it said.
The weaknesses had been subjected to forensic review, internal reform and strengthened governance intervention, the report added.
It also found that as at 31 December 2025, R3.81 billion had been expended under the GO programme, with 958 assets allocated across the first three years.
“A critical financial exposure of approximately R1.645 billion remains in respect of metro coaches currently in WIP [work in progress] or allocated but not yet shunted. Litigation and arbitration processes are ongoing with certain contractors.”
The report said management had implemented structural reforms to ensure that any further capital deployment under the GO contract was legal, defensible, commercially rational and aligned to operational needs.
The Prasa board was required to consider whether further capital should continue to be deployed towards metro coach refurbishment “in light of network readiness constraints”.
The report said board decisions “must be guided — not by historical allocation patterns or public pressure but by net economic outcome, legal defensibility, operational alignment and governance integrity”.
Termination of contractual shifts would be evaluated against evidentiary sufficiency, material breach thresholds, fraud, overcharging determinations and financial sensitivity modelling it said.
The contractors included TMHA, whose contract was terminated due to non-performance, while KNPC had been subjected to a breach notice process and YNF was subject to an ongoing oversight.
The report made no damning findings against YNF Engineering despite allegations of the company having benefitted from “preferential treatment” by Prasa head of engineering Molefe Mosweu and of overcharging.
“YNF Engineering reiterates its unwavering commitment to transparency, integrity and delivering quality engineering services under its existing contracts with Prasa and other state entities,” the company said in a statement.
“The company has never overcharged Prasa, as the costings are all regulated by a price book regulated by Prasa.”
Prasa also dismissed the allegations against YNF Engineering, stating: “It is common cause that Prasa has commissioned a forensic investigation into the management of the general overhaul programme and issued letters calling for representations from all GO contractors (which include YNF Engineering). Prasa … confirms that the contract between YNF and Prasa is currently on track and ongoing.”
Investigation by law firm Webber Wentzel finds no wrongdoing by black-owned YNF Engineering