JOHANNESBURG – Former Transnet board members and executives, including Brian Molefe and Anoj Singh, face a R1.2 billion lawsuit should the recommendation from the explosive National Treasury report into the rot at the company be implemented to the letter.
Molefe, Singh and fired chief executive Siyabonga Gama were found to have not protected the interests of Transnet when they awarded China South Rail (CSR) a multibillion-rand locomotives tender.
Investigators found that Transnet would have saved R1.2bn if it procured 100 locomotives from Mitsui at R3.188bn instead of procuring from CSR at R4.4bn. The report called on the current board to consider trying to recover the R1.2bn from the previous board and executives who were involved in the deal.
Investigators further determined that Molefe and Singh misled the board into believing that the R3.8bn was for 100 locomotives. The contract proposed by Mitsui for 100 locomotives was R3.188bbn – R612 million cheaper than that of CSR. The report laid the majority of the blame at Molefe’s door.
“We determined that Molefe concluded an agreement with CSR on March 17, 2014 for the supply of 100 locomotives at a cost of R4.38bn. However, the board approved ETC of R3.8bn. Molefe, therefore, committed Transnet to an additional cost of R509 million which was not approved by the board at the time of conclusion of the contract,” investigators said.