Transnet clean-up costs port of Durban multibillion-rand contract
JOHANNESBURG – Transnet continued its organisational clean-up on Friday, cancelling a multibillion-rand contract at the Durban port terminal hatched during the tenure of former group chief executive Siyabonga Gama.
The state-owned freight rail and logistics company said it had issued a “stop work” instruction on the Maine Marine Construction works contract of the Durban Container Terminal.
Transnet said it cancelled the project, which was awarded to CMI Emtateni Joint Venture in July, on the basis of its own forensic investigation following allegations raised by the bidder who lost out on the tender.
“In the interest of good corporate governance, Transnet has decided to issue a ‘stop work’ instruction on the Main Marine Construction Works contract, pending the outcome of the investigation,” Transnet said.
The Durban Harbour is the largest and busiest shipping terminal in sub-Saharan Africa, handling about 65 percent of the total containerised cargo of South Africa, or 31.4 million tons of cargo each year.
The canned project was aimed at deepening and lengthening the Pier 2 North Quay berth.
Econometrix chief economist Dr Azar Jammine said the extension of the facility was a vote of confidence on the country’s economic development. “But if that infrastructure development is done in a corrupt manner, I think we are better off without such a project,” Jammine said.
Transnet said the contract had been awarded to CMI following an open tender process that started in January and closed in August last year.
However, the parastatal said the unsuccessful bidders had indicated unhappiness and raised a number of issues. “They also lodged a court application challenging Transnet’s decision to award the contract to CMI Emtateni JV.”
Transnet said it decided to cancel the contract to allow for a transparent investigation that would determine its legitimacy. The company said that in the interest of good corporate governance, it had decided to issue a ‘stop work’ instruction on the project pending the outcome of the investigation.
Transnet was not immediately available to comment on how much the project was valued at.
The suspension of the project comes just hours after Gama lost his court bid to be reinstated in his job.
He was fired by the organisation last month after investigations found that he and Gupta lieutenants, including former chief executive Brian Molefe, may have acted unlawfully in the R54 billion locomotives tender.
On Thursday the Labour Court in Johannesburg dismissed with costs his bid to have his axing overturned.
Transnet board chairperson Popo Molefe welcomed the court’s decision, saying it had confirmed the correctness of the board’s approach in dealing with the matter.
“It also reinforces our resolve to ensure good governance and accountability among the leadership of Transnet and those responsible for the management of public funds,” said Molefe.