Ex-SANDF chief’s R95.5m Transnet security contract under scrutiny
Johannesburg - Retired SANDF chief General Siphiwe Nyanda and Transnet’s erstwhile boss Siyabonga Gama are under fire for an irregular R95.5 million security contract awarded by the state-owned rail, logistics, port and pipeline company.
Chris Todd, a director at law firm Bowmans, told the Commission of Inquiry into State Capture this week that Nyanda’s company, General Nyanda Security (GNS), was awarded the one-year contract in 2007.
Todd testified that Gama approved the contract in December that year when he was still the chief executive of Transnet Freight Rail (TFR) – a subsidary of Transnet group.
According to Todd’s evidence, Gama awarded the contract without reading the tender documents.
Commission chairperson Deputy Chief Justice Raymond Zondo said he it was quite strange that Gama signed the deal committing Transnet to millions of rand without reading the document.
Todd, who was Transnet’s lawyer when it instituted legal action against GNS, described the manner in which the deal was signed as serious negligence on Gama’s part.
The contract led to a disciplinary hearing in which Gama was found guilty of negligent conduct in relation to his signature in the confinement tender in GNS’s favour.
At Transnet, confinement is a process where other procurement mechanisms would be impractical due to urgency, limited market or sole source supplier and then goods or services are confined to one or a limited number of bidders.
Gama was fired as TFR chief executive in June 2010, but made a spectacular return a year later in a move that the commission has previously heard was ordered by former president Jacob Zuma.
The commission heard that between the time that Gama was dismissed and reinstated, Transnet instituted legal proceedings against GNS in an attempt to reclaim the R95.5m paid to Nyanda’s company after the contract was terminated.
Soon after his reinstatement, Transnet and GNS entered into a settlement agreement in terms of which the state-owned entity withdrew its application and agreed to pay costs on an attorney and own client scale.
Todd said one of the biggest alarm bells that rang for Transnet was that a quick analysis of GNS by the forensic investigators brought to light the fact that the company had no employees at all, was not registered for pay-as-you-earn tax and was not registered with the Private Security Industry Regulatory Authority.
During his disciplinary hearing, Gama claimed he had no personal relationship with Nyanda and he knew the former uMkhonto we Sizwe commander and chief of staff like any other member of the public.
However, Transnet then produced Gama’s cellphone records showing various calls between him and Nyanda in the period immediately before the award of the contract, with the most recent call being four days before the deal was approved by Gama.
”(In) Gama’s own testimony he said that he had in fact given his counsel in the inquiry incorrect instructions because he had wanted to put some distance between himself and the general, and he admitted that that had been wrong and he apologised to the chairperson,” Todd said.
Gama, according to Todd, later admitted that although Nyanda was not a close friend he was an acquaintance with whom he had played golf in the past, spoken on the phone with when there were family bereavements and called him to commiserate when he had been suspended at Transnet.
Todd said the annual value of the contract based on the initial pricing was estimated to be R18m, which exceeded Gama’s authority of deals up to R10m.