Siyabonga Gama said the expenditure reviewed related to procurement events dating as far back as the 2005/06 financial year. Photo: Itumeleng English

JOHANNESBURG - Embattled Transnet group chief executive Siyabonga Gama has broken his silence over the irregular expenditure scourge at the parastatal, saying the issue dates back 13 years.
He also argued that Transnet’s results reflected a strong financial and operational performance for the year ended March 31, in which it posted an R8.1billion irregular expenditure.

In a statement released with the aim to clarify “certain aspects”, Gama said the rise in irregular expenditure was as a result of the company undertaking a payments review.

“During this review Transnet identified payments against contracts which were not fully compliant with applicable procurement legislation, regulations, and/or internal policies,” Gama stated.

He said the expenditure reviewed related to procurement events dating as far back as the 2005/06 financial year.

“The irregular expenditure of R8.1bn reported therefore spans several years, and mainly arises from procurement events undertaken in prior financial years.”

Gama, who oversaw the ballooning of the purchase of 1 064 diesel and electric locomotives from R38.6bn to R54.5bn, said that of the R8.1bn 4 percent was irregularly spent during 2006, 2012 (1 percent), 2013 (20 percent) and 2014 (4 percent).

The year 2015 accounted for 37 percent, 2016 for 2 percent, 2017 for 15 percent and 2018 for 17 percent. “Included in the 2016/17 and 2017/18 financial years are amounts totalling R1.7bn, relating to a change in interpretation of contract variations by the National Treasury, of which the clarity was only communicated subsequent to the 2017/18 year end,” stated Gama.

“We have commenced investigation into the irregular expenditure, and appropriate measures will be taken against any employee found guilty of misconduct.”

He said Transnet remained committed to addressing the challenges they faced and promised the staff transparency on progress made.

Last week, the Transnet board gave Gama and two senior executives Thamsanqa Jiyane and Lindiwe Mdletshe until Monday to motivate why they should not be placed on precautionary suspension.

This followed reports from Werksmans Attorneys, Mncedisi Ndlovu & Sedumedi Attorneys and Fundudzi Forensic Services that unearthed various acts of possible misconduct against the executives, and recommended further investigations to be conducted to establish the extent of misconduct.

Gama has questioned the veracity of the Werksmans report since Public Enterprises Minister Pravin Gordhan publicly disagreed with Transnet’s previous board on its handling.

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- BUSINESS REPORT