Former PRASA boss pleads not guilty to stealing railway line
Mthuthuzeli Swartz and his co-accused plead after six years of court delays
Former PRASA acting CEO Mthuthuzeli Swartz (right) exits the Gqeberha Regional Court with his advocate, Mzwamadoda Mnyani. Photo: Steve Kretzmann
- Between December 2012 and February 2013, 42km of railway line were stolen in the Eastern Cape.
- The upliftment of the rails was stopped by Transnet security guards, who opened a case at the Elliot police station.
- In January 2019 – six years later – PRASA’s former acting CEO Mthuthuzeli Swartz and businessman Nadir Mohiudeen were arrested.
- This week, another six years after their arrest, the trial finally got underway.
Former PRASA acting head Mthuthuzeli Swartz and businessman Nadir Mohiudeen pleaded not guilty of fraudulently selling 42km of railway line in the Eastern Cape, as the trial got underway in the Gqeberha Regional Court this week.
Swartz, the Passenger Rail Agency (PRASA) regional manager in the Western Cape at the time the alleged crime took place in 2012, was arrested in January 2019. Mohiudeen was arrested the following month. The case has been beset by delays in the intervening six years, including a High Court review, resulting in the accused’s pleas being heard for the first time on Tuesday.
The case centres on the Transnet-owned railway line between Sterkstrook and Maclear being sold by Mohiudeen’s company, Spanish Ice, for scrap to Durban-based company Akisisa. The state contends that Swartz provided fraudulent cover for the upliftment of the rail.
The cost of reinstating the rail line was estimated at R59-million.
The case was initially opened at the Elliot police station in the Eastern Cape in February 2013 after Transnet security guards stopped Akisisa from continuing to uplift the rail, which was believed to have been done with a flatbed truck and mounted crane.
In the six years between the case being opened and Swartz and Mohiudeen’s arrest, Swartz was appointed as acting CEO at PRASA. He served for three months before the PRASA board removed him in April 2018, because insurers wouldn’t provide directors’ and officers’ liability cover for him.
Following the not-guilty pleadings before magistrate Thabisa Mpimpilashe on Tuesday, prosecuting advocate Gerrit van der Merwe called Adrian Samuels to the stand. As general manager at Akisisa at the time, Samuels negotiated the scrap rail deal with Mohiudeen and Swartz.
Samuels said in late 2011 an old high school friend introduced him to Mohiudeen, who was looking for a subcontractor to build low-cost houses in the Northern Cape. Samuels said he flew from Durban to Cape Town and met Mohiudeen for the first time at a coffee shop in Claremont. There, he said, Mohiudeen told him his company, Spanish Ice, was in a joint venture to build low-cost houses. Akisisa was then brought on as subcontractor to build the houses. But Samuels said “some time” after they started the job, they “started experiencing payment delays”.
“As a result of non-payment we stopped all work on site,” he said. Meetings were held with the municipality but they were “unable to reach a resolution”, and Akisisa withdrew from the project.
He said Mohiudeen then presented another business opportunity, in which Spanish Ice was to provide hire vehicles to Parliament. Akisisa struck a R19.5-million, two-year deal with Mohiudeen to provide six luxury buses, nine vans, and two Mercedes-Benz luxury cars. But this deal also fell apart, said Samuels, after Mohiudeen told him he took too long to secure the vehicles and the Parliament contract was “no longer available”. But he said Mohiudeen told him the vans could be used for a contract with “Metrorail in the Western Cape”. This contract “continued successfully” despite invoices often not being paid in full by Metrorail/PRASA.
Samuels said his old high school friend contacted him again around September 2012, telling him Mohiudeen was selling used rail from Metrorail.
“I said I was interested. Not long after, Nadir (Mohiudeen) called me.”
He said Mohiudeen told him he was “in the process of concluding a deal” for the rail line with a Turkish buyer. “I asked him to stop … and allow us to negotiate on the same rail.”
Samuels said he presented the opportunity to his cousin, Cedric Samuels, and the pair met with Mohiudeen at his office in Cape Town, where Mohiudeen showed them a document from Metrorail authorising the collection of the used rail. He said it was issued to Spanish Ice and dated 31 August 2012.
Questioned by Van der Merwe, Samuels said he never saw the original document, “only copies”.
Samuels also received a document from Mohiudeen confirming the scrapping of 25,000 tonnes of rail. At some point Mohiudeen said he had a 12-month contract to sell 30,000 tonnes of used rail per month, reaching a total of 360,000 tonnes. A purchase price and deal were then negotiated.
Although Samuels said he couldn’t remember the exact timelines from 2012, Mohiudeen also introduced him and Cedric to Swartz, whom they met at the Table Bay Hotel in Cape Town, where Swartz confirmed Mohiudeen had been awarded a contract to dispose of used rail.
“Nadir (Mohiudeen) further explained various programmes available and everyone can benefit from these progammes in regard to used rail.”
He said Akisisa was required to produce a guarantee they could purchase 5,000 tonnes of rail, which they then provided.
Samuels said he received an email from Mohiudeen on 12 October 2012 with an attachment confirming the used rail was available for delivery on 25 October.
Mohiudeen’s attorney, Julian Lindoor, objected to the authenticity of the email and the attachment, which he said Mohiudeen did “not acknowledge”. But Lindoor conceded it could be admitted to the court, with his right reserved to cross-examine its authenticity and contents.
The court adjourned shortly before 2pm, as all staff had been ordered to leave the building due to health and safety concerns over a lack of water at the court buildings. Water had been disconnected during the morning due to a burst pipe in the area.
The case continues on Wednesday.
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