Siyabonga Gama
Picture: Itumeleng English, INLSA
Siyabonga Gama Picture: Itumeleng English, INLSA

Transnet trio face suspension

By Kailene Pillay Time of article published Aug 17, 2018

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Durban -The three senior Transnet executives, including group chief executive Siyabonga Gama, who were served with letters of intention to suspend were allegedly linked to a dodgy multi-billion rand procurement deal for 1064 locomotives.

Chairperson of the Transnet board Dr Popo Molefe said in a statement yesterday that the trio had been served with the notices after reports from Werksmans Attorneys, Mncedisi Ndlovu & Sedumedi Attorneys and Fundudzi Forensic Investigators revealed various acts of possible misconduct against them.

The board said the reports recommended that further investigations be conducted to establish the extent of the misconduct.

The board said it had contemplated placing the employees on precautionary suspension until the finalisation of further investigations and disciplinary enquiries

According to some of the reports, which The Mercury has seen, it is alleged that Gama, Transnet engineering chief executive Thamsanqa Jiyane and Transnet executive manager Lindiwe Mdletshe are allegedly linked to the flawed acquisition of locomotives for Transnet.

It is understood that to date, none of the companies that won the three tenders delivered locomotives to Transnet on time and in accordance with the delivery schedule, even though Transnet paid in advance.

The reports also allege that the three signed off on a locomotive deal for 1064 locomotives where the costs were increased by R15.9bn without a valid reason.

A report by Mncedisi Ndlovu & Sedumedi Attorneys alleges that Gama and his subordinates “misrepresented” to the board the true reasons and extent of the increase of the deal from the initial cost of R38.6bn to R54.5bn.

The report alleged that there were a number of laws and policies that were breached by the trio and recommended disciplinary proceedings be instituted against them.

The billion-rand tender is also currently part of a state-capture investigation being conducted by the Hawks.

A draft Treasury-commissioned investigation into the Gupta network’s alleged five-year looting spree at Transnet and Eskom, revealed that the Preferential Procurement Policy Framework Act was not applied during the evaluation of the locomotives tender.

“The board contravened the Shareholder’s Compact Agreement in that the board did not notify the Department of Public Enterprises (DPE) of the acquisition of 1064 locomotives which was above the R2.5bn threshold. We determined that the board notified the Minister, DPE, after the procurement process had commenced,” the draft report stated.

The Treasury also found that the contracts were concluded without the board and minister’s approval and the cost increase to R54.5bn was revealed to the board and ministry only after the contracts were signed.

The draft Treasury report also points out that McKinsey’s consortium was appointed for R35.2m to render advisory services in respect of the locomotives tender.

Molefe said Gama, Jiyane and Mdletshe had been accused of misconduct which includes contravening the Constitution of the Republic of South Africa, the Public Finance Management Act, Preferential Procurement Policy Framework Act, Transnet’s internal procurement policies in the issuance of the Request For Proposals, the Companies Act & Fiduciary Duties, improper changing of evaluation criteria and failure to comply with government policy on local content requirements.

Gama is also accused of wrongfully obtaining his MBA with the help of McKinsey.

“In view of the seriousness of the alleged transgressions, the Transnet board is concerned that the continued presence of the three employees, given their seniority and influence, might interfere with and jeopardise the investigation,” Molefe said.

The Organisation Undoing Tax Abuse (Outa) welcomed the suspension of the three and the promise of an investigation .

Rudie Heyneke, Outa’s portfolio manager for transport, said that shortly after taking office earlier this year, Minister Pravin Gordhan said he would ensure there was a clean-up in the state-owned entities and the “intention to suspend” notices for the Transnet executives was a clear sign that Gordhan and the new Transnet board were converting this undertaking into action.

“The three executives certainly have a case to answer. We hope that Gama, Jiyane and Mdletshe will face the internal Transnet disciplinary procedures and will not resign before their side of the story can be heard.”

He said Gama, who took over as chief executive of Transnet after Brian Molefe moved to Eskom in 2015, should have done more to investigate the alleged maladministration that had been taking place.

Heyneke said Outa was submitting a comprehensive report with evidence to the Commission of Inquiry into State Capture and the Hawks to assist them with investigations into the long and destructive looting of taxpayers’ money.

The Transnet executives have until Monday to make written submissions as to why they should not be suspended.

Gama did not respond to requests for comment and Jiyane and Mdletshe could not be reached for comment - at the time of publish.

The Mercury

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