State Capture Commission of Inquiry chairperson Deputy Chief Justice Raymond Zondo. Picture: Karen Sandison/African News Agency (ANA)
State Capture Commission of Inquiry chairperson Deputy Chief Justice Raymond Zondo. Picture: Karen Sandison/African News Agency (ANA)

LIVE FEED: #StateCaptureInquiry May 27, 2019

By Zintle Mahlati Time of article published May 27, 2019

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Johannesburg - The state capture inquiry continues hearing testimonies related to state capture at state-owned enterprise Transnet. 

The commission is this morning expected to hear testimony from a former Transnet employee Gerhard van der Westhuizen. 

The commission last week heard from two Transnet-related witnesses. The first to appear was former Transnet engineer Francis Callard. 

Callard told the commission about his involvement in drawing up a business case for Transnet to acquire locomotives, he said that business was later changed by the SOEs executives to the detriment of the organisation. 

He drew up the business case and keeping in line with the needs, specifications and the urgency recommended that Mitsui & Co, a Japanese company, be selected. 

He said his recommendations for Mitsui & Co was that the company already supplied Transnet and would be able to provide the locomotives with specific requirements with urgency. 

Callard said he submitted his business case in October 2013. 

He said when he eventually received the business case document back in early 2014 when he was asked to add slides by former supply manager Lindiwe Mdletshe, he noticed that the memorandum had been changed and would favour the confinement to China South Rail (CSR), a Chinese based company. 


The second witness was Roberto Gonsalves, a minority shareholder in a consortium appointed to supply Transnet with locomotives, told the commission that a case that was opened with the Hawks in 2017 has yet to bear fruit. 

Gonsalves was part of a consortium along with a small group of companies who were minority shareholders while China North Rail (CNR) was the majority shareholder. 

The consortium was put together to bid for a tender to supply locomotives to Transnet. The parastatal had issued a tender in 2013 for the supply of 1064 locomotives. The CNR consortium was awarded a contract to supply 232 diesel locomotives. 

Gonsalves said the CNR consortium had calculated that the move would cost R9.7 million. He said that price was included in the cost of the locomotives. 

Gonsalves said he and other minority shareholders were then approached by CNR majority shareholders and asked to sign an agreement which would appoint a company called Bex as an agent to negotiate with Transnet over the relocation bill. 

He said he, along with other minority shareholders, protested to the agreement and Bex’s involvement. Gonsalves explained that they were concerned about Bex because the company seemed to be a shelf company with one director. They were also concerned about the company as it seemed to be linked to a new company registered in 2009. 

Gonsalves said the majority shareholders went ahead with appointing Bex regardless of the objections. The consortium then went on to receive an R647 million payment from Transnet for the relocation fee. Bex received R67 million of the payment. 

Gonsalves explained that due to a lack of progress the minority shareholders opened a case with the Hawks providing them with documentation from auditors that had red-flagged the irregularities regarding the payments from Transnet and Bex’s involvement. 

He said the Hawks case was reported in late 2017 and since then no progress has been communicated. 

The inquiry resumes at 10 am. 


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