Werksmans boots PRASA off the train
Law firm drops rail company for not paying R7.8 million invoice
Werksmans Attorneys has unequivocally severed ties with the Passenger Rail Agency of South Africa (PRASA).
This law firm’s decision to withdraw its services was made after PRASA committed to an outstanding payment by 31 January, yet failed to pay it. This is according to a letter addressed to Bongisizwe Mpondo, the administrator of PRASA, by David Hertz, chairman of Werksmans Attorneys. The letter is dated 3 February.
Mpondo was appointed in December by Minister of Transport Fikile Mbalula, who disbanded the PRASA board.
In January, Werksmans wrote a letter to PRASA threatening to withdraw its services over R19 million in outstanding fees. Werksmans also withdrew representation of PRASA in its litigation against Siyangena Technologies.
PRASA, according to Hertz’s letter, responded to Werksmans, writing: “The Group CFO has assured me that in the next pay run (month-end) we will be in a position to pay all the disbursements that you have incurred with your suppliers in the matters that you are seized with. We will make payment of the remainder of the fees by the end of February 2020.”
On 17 January 2020 a PRASA executive, sent a letter to Werksmans assuring the firm that PRASA “is in a financial position to pay all disbursements that have been incurred with all the suppliers in the matters that Werksmans is handling on behalf of PRASA”.
This “disbursement” amount, which PRASA committed to paying by 31 January, tallied up to approximately R7.8 million. Werksmans said that it sent these invoices to PRASA on 27 January.
Hertz, Mpondo and other PRASA representatives and Werksmans employees, attended a meeting at PRASA’s offices on 28 January to “discuss the Siyangena matter”, according to Hertz. However, this was the last date that Werksmans heard anything from PRASA.
Werksmans decided to “formally and finally” withdraw from representing PRASA’s interests after the amount to be paid by 31 January was not paid, without any explanation given. Information with regards to the Siyangena matter was also not provided to Werksmans, even though PRASA agreed to do this by 31 January.
Hertz’s letter reads: “We will now commence formal steps to recover amounts due to Werksmans, and further reiterate that until all payments are received, Werksmans retains a lien on all work done in all matters.”
PRASA had not commented by time of publication.
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