Transnet is ‘failing because of people like Silinga’ as probe into R300m begins

Logistics parastatal Transnet has engaged the Special Investigating Unit (SIU) to probe corruption allegations against Transnet National Ports Authority CEO Pepi Silinga. Image: LinkedIn

Logistics parastatal Transnet has engaged the Special Investigating Unit (SIU) to probe corruption allegations against Transnet National Ports Authority CEO Pepi Silinga. Image: LinkedIn

Published Jan 25, 2024


The SA Transport and Allied Workers Union (Satawu) yesterday called for Transnet National Ports Authority CEO Pepi Silinga to be fired from office, alleging he was likely to interfere with investigations into his alleged irregular picking of close associates to a lucrative ports fencing upgrade tender.

The tender’s value has controversially ballooned from R80 million to R300m.

Transnet acting group CEO Michelle Phillips confirmed yesterday that the port and logistics parastatal had launched an independent probe into Silinga. It had also referred allegations of corruption against the executive to the Special Investigating Unit (SIU).

However, Satawu yesterday said Silinga had to be removed from office as he was likely to tamper with investigations.

Transnet CEO Portia Derby retired from the company last year following years of lobbying by pressure groups for her removal from office over “corporate sabotage”, according to the DA. Transnet also dismissed other top executives after the SIU unearthed a scandal under which the price of disposable straws was inflated to R29 each.

“Silinga is an employee at Transnet and he must be treated as such. He is facing serious allegations of corruption and he must be suspended and allow the entity to do their own investigations,” Amanda Tshemese, a spokesperson for Satawu, told “Business Report” last night.

Allegations against Silinga are that the Transnet executive irregularly appointed Coega Development Corporation – a company he had previously worked for – as the implementing partner for a fencing contract at Richards Bay, KwaZulu-Natal, and Saldanha Bay ports. Dust over the contract was raised when the cost for the fencing project at the three ports ballooned from R80m to R300m.

“Transnet has consequently appointed an independent law firm to undertake an in-depth investigation in this regard. The matter has also been referred to the SIU, who have acknowledged receipt of the referral, and will be proceeding with the investigation,” Phillips said in a statement yesterday.

Tshemese said Transnet was “collapsing because of people like Silinga”.

This latest Transnet setback comes at a time many South African companies have been grounded because of problems at ports that are delaying deliveries and preventing timely shipping of raw materials and finished products.

Although Transnet was “co-operating fully” with investigation processes under the SIU, anti-corruption watchers and pressure groups have raised concern that investigations into Silinga’s alleged irregular conduct would be affected if he continued to stay in office.

Transnet confirmed receiving, on numerous occasions, a number of allegations against Silinga, although there had been no evidence to substantiate the accusations, the company said.

“He hired his close friends in that office and he is likely to tamper with the evidence,” added Tshemese.

Transnet, however, said, that “should prima facie evidence become available during these investigations”, it would “not hesitate to invoke the relevant processes in line with the company policies, laws of the country, and to take the necessary disciplinary action” against Silinga.

Andile Sangqu, Transnet’s board chairperson, said in October that the parastatal was focused on implementing the Transnet recovery plan aimed at driving up volume growth and enhancing rail and port operations. The plan is also geared at improving the availability and reliability of critical equipment as well as enhancing the quality of assets.

To achieve this, Transnet is focusing on private sector partnerships as conduits to drive growth and operational delivery in its key market segments. Moreover, another key focus area would be on disposal of non-core assets to preserve cash.

Transnet has been haemorrhaging cash, with generated revenue falling from R72.9 billion in 2017 to R68.9bn for the 2022/2023 year. Operating expenses, however, increased from R40.4bn to R45.9bn over the same period, a growth of 2.15%.

Last year, South Africa approved a R47bn bailout under a guarantee facility for Transnet, which says it has a zero tolerance towards corruption. This will likely be tested by how it acts on Silinga.