Forensic audit tops Nixon’s in-tray

ne of the first assignments awaiting newly reappointed Eswatini Railways (ESR) Chief Executive Officer (CEO) Nixon Dlamini is overseeing a Cabinet-approved forensic audit expected to examine years of allegations of financial mismanagement, procurement irregularities, governance failures and operational weaknesses at the State-owned rail operator.

This was disclosed by Minister of Public Works and Transport Chief Ndlaluhlaza Ndwandwe, who made it known that Dlamini’s contract has already been renewed.

“His contract has been renewed already,” Ndwandwe said.

He also revealed that the long-awaited forensic investigation, approved by Cabinet earlier this year, has yet to commence, but is expected to start shortly.

“The forensic has not been done yet, but we are expecting it to start soon. It will be one of the CEO’s first tasks under the new contract,” he added.

Cabinet authorised the forensic investigation following Auditor General Timothy Matsebula’s findings, which highlighted a sharp increase in fuel expenditure from E11.99 million in 2022 to E44.14 million in 2024, exposing alleged diesel theft, weak internal controls and possible fraud.

The audit also raised concerns over governance and procurement, including suspected irregular tender awards, unexplained contract price variations on major infrastructure projects, the appointment of lower-ranked contractors and possible non-compliance with procurement procedures in the leasing of locomotives.

Correspondence seen by this publication shows that Ndwandwe subsequently informed Eswatini Railways Board Chairperson Nonhlanhla Shongwe that Cabinet had approved the board’s request to proceed with the forensic investigation.

He further directed that both the terms of reference and final report be submitted to his ministry and the Office of the Auditor General.

Significantly, the minister stated that the investigation should not be confined to the Auditor General’s findings, indicating that investigators would be free to examine additional matters that emerge during the inquiry.

The forensic audit follows years of mounting governance concerns at Eswatini Railways. The board of directors reportedly resolved as early as 2024 that an independent forensic investigation was necessary after receiving whistle-blower reports alleging possible maladministration within the organisation.

The allegations reportedly included irregular tender awards, unexplained contract price variations on major infrastructure projects, the appointment of lower-ranked contractors and possible procurement irregularities involving locomotive leasing.

The board is understood to have concluded that only an independent forensic investigation could determine whether the allegations were substantiated and recommend appropriate action.

That proposal, however, reportedly met resistance within the organisation before eventually finding its way to Cabinet.

While the forensic investigation has awaited implementation, additional concerns have continued to surface. Following the release of the Auditor General’s report, the Eswatini Railways Workers’ Union wrote to Ndwandwe raising further governance concerns.

Among them were allegations that certain coal consignments had not been captured in the company’s tracking systems.

After considering both the Auditor General’s findings and the union’s submissions, the board resorted to recommending that Cabinet authorise a comprehensive forensic investigation capable of examining all allegations together rather than addressing them individually.

Earlier this year, this newspaper revealed that Eswatini Railways was prevented by the Eswatini Public Procurement Regulatory Agency (ESPPRA) from abandoning an open tender in favour of a restricted procurement process for an E82 million locomotive.

The railway operator had sought permission to invite only six pre-selected international manufacturers to bid after expressing dissatisfaction with previous procurement exercises.

ESPPRA, however, rejected the application after finding that the railway had not properly justified declaring the open tender a failure under procurement regulations.

Instead, the regulator directed the company to resume evaluating bids already received through the competitive process.

Further questions emerged when Eswatini Railways recently appeared before the Public Accounts Committee.

During the hearings, the committee questioned why the company spent millions of Emalangeni on private architectural consultants for its rail resettlement programme instead of using architects employed by the Ministry of Public Works and Transport.

Legislators argued that, given government’s financial constraints, greater use should have been made of existing public sector expertise.

Management defended the appointments, saying external consultants had been engaged to accelerate implementation of what it described as a complex resettlement programme spanning multiple chiefdoms.

The same hearings also exposed the scale of an alleged fuel theft syndicate operating within the organisation.

Director of Operations and Technical Services Sandile Dlamini, who was the then acting chief executive officer, disclosed that investigations had confirmed fuel theft, resulting in several employee suspensions while further investigations continue.

He said the matter was now being investigated jointly by the Anti-Corruption Commission and the Director of Public Prosecutions.

More alarmingly, Dlamini told MPs that investigators had come under armed attack.

“There have been attacks using guns because of these investigations,” he said.

He further explained that suspects had repeatedly changed their methods as management tightened controls, progressing from siphoning fuel through locomotive nozzles to extracting fuel through tank breathers before eventually draining fuel from moving locomotives.

Dlamini also made it known that management believed substantial losses may have occurred through bulk fuel deliveries.

Against that backdrop, the forensic audit is expected to determine whether longstanding allegations relating to procurement, financial management, project implementation and operational controls are supported by evidence, while identifying any corrective measures and accountability processes that may follow.