How a Durban company came to illegally remove a railway line in the Eastern Cape
General manager says they were duped by then Western Cape regional manager Mthuthuzeli Swartz and businessman Nadir Mohiudeen
Former PRASA Western Cape regional manager Mthuthuzeli Swartz (centre), who was also appointed acting CEO for three months in 2018 while under investigation, leaves the Gqeberha Regional Court with his advocate, Mzwamadoda Mnyani (left). Swartz is accused of fraudulently selling off 42km of railway line in the Eastern Cape. Photo: Steve Kretzmann
- Former PRASA acting CEO Mthuthuzeli Swartz and Cape Town businessman Nadir Mohiudeen stand accused of fraudulently selling off a railway line in the Eastern Cape.
- The general manager of Durban company Akisisa testified they were led to believe Mohiudeen had a 12-month deal with Metrorail to sell off used rail.
- In February 2013, upliftment of the rail was stopped by Transnet, who owned the rail that was being uplifted, and a case was opened at the Elliot police station in the Eastern Cape.
- The trial is now underway, 12 years later.
A Durban company, promised 25,000 tonnes of used rail by then PRASA Western Cape regional manager Mthuthuzeli Swartz and businessman Nadir Mohiudeen, paid R1.5-million as a deposit in October 2012, but the material was never released.
They were told by Swartz they could uplift a railway line in the Eastern Cape instead, only for them later to discover the line was owned by Transnet, resulting in the company incurring costs of R3.5-million.
Taking the stand for the second day in the Gqeberha Regional Court trial against Mohiudeen and Swartz, who are accused of illegally selling off 42km of railway line between Sterkstroom and Maclear, Akisisa general manager Adrian Samuels detailed how the pair misled them.
Samuels told magistrate Thabisa Mpimpilashe he was led to believe Mohiudeen’s company, Spanish Ice, had a tender with Metrorail (the commuter rail section of the Passenger Rail Agency South Africa) to dispose of 360,000 tonnes of used rail over a year.
He said Mohiudeen told him 25,000 tonnes of used rail at the PRASA rolling stock yard in Woodstock, Cape Town, would be available for delivery on 25 October 2012.
Samuels said he and his cousin, Cedric Samuels, together with a friend, Berni Shaw, went to Cape Town on 24 October and leased a space for the used rail at a scrapyard in Blackheath.
“On the 25th we woke up early to start the business only later to be told by Mohiudeen that there is a delay. This had to do with changes in the volume at the stockyard, as well as stocktake.”
He said they were promised delivery on 29 October. But, he said, on Sunday 28 October, he met with Mohuideen and Swartz at a coffee shop at the V&A Waterfront where he was told to pay R1.5-million for the rail to be collected and delivered. He said he was told this was “normal procedure”, and payment was to be made to Spanish Ice, and Mohiudeen would “pay it on to Metrorail”.
Samuels said he was unhappy as such payment had never been discussed in numerous previous meetings with Mohiudeen.
However, Samuels said he went to Mohiudeen’s offices in Claremont the next day (Monday 29 October) and made the payment. He requested a receipt which included the purpose of the payment.
Samuels said he was promised the used rail would be delivered to Blackheath the next day, 30 October 2012.
But the next day he was told there was still a delay due to stock take.
“We expressed our unhappiness, especially due to part payment having been made, but Mohiudeen said the delay was beyond his control and he’d arrange a meeting with Swartz.”
On Wednesday 31 October, with the used rail still not delivered, Mohiudeen took Samuels and a potential buyer, Man Singh from the company New Reclamation Group, to meet Swartz at his offices in central Cape Town. Samuels said Swartz suggested Akisisa uplift rail in the Eastern Cape which was immediately available, and suggested a site inspection.
Samuels said he made arrangements and flew to East London the next day with Cedric, Swartz, and Mohiudeen to identify the rail to be uplifted.
Back in Cape Town on Sunday 3 November 2012, Samuels said Mohiudeen confirmed they could start to uplift the rail and the paperwork would be sorted out by Swartz. With promises they could go ahead in the Eastern Cape, the Samuels’s hired a car, bought a GPS handset and drove to the Eastern Cape where they measured the length of the line as “just over 200km”.
In Durban they mobilised a crew and hired equipment, and by the end of November had set up in Elliot to start uplifting the rail. Samuels said they kept Mohuideen and Swartz informed and kept asking for the paperwork.
He said that during “communications”, Mohiudeen “indicated he had not taken us to the Eastern Cape” but that it was Swartz who had taken them to the Eastern Cape. “I disputed this,” he said.
By 2 February, a supply agreement between Akisisa and the New Reclamation Group was signed.
He said they then got a letter from Clayton Vorster at New Reclamation Group, saying a “last letter” was needed for the transporting and processing of the used rail.
“A few days later I got a call from Albert Links at Transnet Freight Rail”, who said the coordinates he received of the rail being uplifted were for a Transnet-owned line.
“I said we were told it belongs to Metrorail as pointed out by accused number two [Swartz].”
Samuels said he told Links how they acquired permission to uplift the line and that a R1.5-million deposit had been paid to Spanish Ice, and that there was a letter of authorisation “from Metrorail”.
He said the next day, Transnet security guards stopped the upliftment of the rail and opened a case at the Elliot police station.
He said the day after that, two Transnet “special investigators” came to Akisisa’s Durban offices and he offered to cooperate with the investigation.
“During all this I contacted (Mohiudeen and Swartz) and told them what had happened … both said they would resolve the matter.”
He said Transnet confiscated all the rail that had been uplifted. As a result, Akisisa lost about R3.5-million in costs incurred for the work they had done.
The case continues this week.
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