LIVE FEED: #StateCaptureInquiry May 24, 2019
preJohannesburg - Zondo commission resumes on Friday morning with more details about state capture allegations at Transnet.
On Thursday that commission heard from Roberto Gonsalves who is a minority shareholder in a company that formed a consortium with China North Rail, a Chinese locomotive company, to supply locomotives to Transnet.
Gonsalves took the commission through a trail of meetings and documentation which outlined how Transnet would latter overpay for a relocation fee.
In 2013 Transnet had issued a tender for the supply of 1064 locomotives. Gonsalves explained that his company along with a group of smaller companies and CNR decided to group together to bid and supply diesel locomotives to Transnet.
In 2015, Transnet decided to split the tender and awarded the CNR linked consortium to supply of 232 locomotives while other companies such as General Electric would supply the other half of the deal.
Gonsalves said as the deal between Transnet and CNR consortium was signed, it was known that the manufacturing would take place in Koedoespoort in Pretoria as there may have been facilities available for use. However, this later changed with Transnet requesting that location should take place to Durban.
Gonsalves said he and a number of stakeholders had disagreed with the need for relocation and insisted that the Gauteng location was best. He said even with the protests, Transnet insisted and even offered to be charged for the relocation fee.
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He said in the calculations of the fees, it was decided that the move would cost R9.7 million.
The twist came when some CNR directors brought in a company called Business Expansion Structure Products (Bex). He said as a shareholder they were asked to sign an agreement which would appoint Bex as the agent to negotiate the relocation fee on behalf of the consortium with Transnet.
Gonsalves said he and a few other shareholders had reservations about Bex’s appointment because he said they did not see a need for the company. He said he and other shareholders refused to sign the agreement.
Gonsalves's other issue with the company was that it appeared to be a dormant shelf company which had one director.
He said the Bex was appointed either way with the insistence of the CNR directors.
The cost of the relocation of the project stood at R9,7 million, but it later ballooned to R647 million when Bex was included. The shelf company, Bex, was paid R67 million for being an agent on the project.
The inquiry resumes at 10am.IOL