Insiders at the Passenger Rail Agency of South Africa (Prasa) claim that board chair Leonard Ramatlakane is getting a leg up from taxpayers after he moved his family into a posh property belonging to the struggling state-owned entity.
Ramatlakane moved into the house in the expensive Cape Town suburb of Newlands because his own house, which he bought 25 years ago, has been undergoing renovations and extensions.
His occupation of the Prasa house — as nonexecutive chair of the entity — has raised eyebrows at the agency’s offices in Johannesburg because it is supposed to be used by executives on work trips to Cape Town to avoid the company having to pay for hotel accommodation.
Prasa spent R2.5m renovating the house for this purpose two years ago. It is now a modern home with top-tier finishings including glass balustrades.
Occupants enjoy 24-hour security from two guards stationed in an office at the entrance behind tinted glass.
Last month Ramatlakane hosted family and friends for a lavish 70th birthday celebration there.
Prasa confirmed yesterday that Ramatlakane was staying in the house but denied that he was receiving any taxpayer handouts.
Spokesperson Andiswa Makanda said he was paying a “market-related rental” but did not reveal how much.
A house down the road on a property half the size is now on the rental market for R37,767 a month, according to Property24.
Makanda said Ramatlakane moved in on a short-term rental agreement valid from December 15 to February 15.
“The rental was market-related and was paid in full before occupation. The amount included sundries, such as water and electricity and a breakage deposit. Administratively all application forms were completed and the lease was signed for the two-month period.
“The lease was extended to the end of March 2023. Mr Ramatlakane used his own furniture as the house was unfurnished.”
Makanda said the house was vacant and unfurnished after it was renovated. She said the lease was in line with Prasa’s leasing policy and did not require ministerial approval.
However, insiders say Ramatlakane’s occupation of the house would have had to have been approved by transport minister Fikile Mbalula because the board of Prasa accounts to him. When contacted, Mbalula said he had no knowledge of the house.
Prasa insiders said the chairperson’s occupation of the house would have to be declared to the South African Revenue Service (Sars) as a fringe benefit, but Makanda said: “The rental was not for the personal benefit to Mr Ramatlakane because he paid the ruling market rental and such rental does not trigger a Sars benefit obligation.”
Ramatlakane’s occupation of the Newlands property is the talk of Prasa corridors, with questions raised about who gave him permission to occupy it.
“Everybody is talking about this,” said one insider.
Another said: “We understand the house was meant to be used by employees of Prasa when visiting Cape Town for work purposes to save money on hotels.”
Former Prasa board chair Popo Molefe said such arrangements should be avoided as it could lead to perceptions of favouritism.
During his tenure on the board between 2014 and 2017, Molefe exposed widespread corruption at the agency.
“If Prasa has properties to let on a commercial basis and to the extent that the potential tenant is a Prasa director or employee, it would be better for an independent determination of market-related rental to be made,” he said.
“If a director or the chair of the board rents and pays market-related rental, it is fine. However, there will always be a problem with the optics.
"Given the history of the widely publicised endemic corruption at Prasa, it will be difficult to avoid the perception that because of their proximity to the company and its management, the individuals renting the property might have received preferential treatment.
“If it is the chair, director or an executive, it would be difficult to ignore the perception of favouritism and therefore corruption. It should thus be avoided,” Molefe said.
Another Prasa insider who spoke on condition of anonymity said: “So if a board member can use Prasa’s property for parties, will the house be made available to the executives also to do the same? This is an abuse of taxpayers’ money.”
When the Sunday Times visited Ramatlakane’s own house in Cape Town’s northern suburbs this week it was still being renovated.
The roof had been removed and a number of decorative pillars had been installed. A builder on the construction site said they had begun work on the home in December.
In contrast, the double-storey Prasa house was in pristine condition with a large, modern balcony and immaculate paving. The house, close to Newlands cricket stadium, is in one of Cape Town’s most sought-after suburbs where houses are on the market for more than R15m.
Prasa has suffered serious financial losses in the past four financial years and received a disclaimed audit opinion from auditor-general Tsakani Maluleke, the worst possible finding that indicates that the organisation cannot account for how its money was spent.
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