State capture inquiry chair deputy Chief Justice Raymond Zondo. File picture: Karen Sandison/African News Agency(ANA).

Johannesburg - The Zondo commission has heard how consultancy firm McKinsey was awarded a contract with Transnet even though it failed to comply with bid processes. 

Tshiamo Sedumedi from MNS Attorney has told the inquiry that his law firm found that Transnet had disregarded its own processes in appointing McKinsey as a winning bidder in a consultancy contract. 

MNS was appointed by Transnet’s previous board to re-evaluate contracts awarded by the state-owned enterprise. 

The law firm looked at four reports. 

Sedumedi explained that in 2012, Transnet had issued confinement for consultancy services. A number of companies applied including McKinsey, which was part of a consortium. 

According to Transnet’s bid regulations, bidders should submit a financial statement for the past three years in order to progress to the next stage of the bidding process.

Sedumedi said the investigation revealed that McKinsey did not submit its financial records and was still able to be chosen in the final process. 

“In the confinement of the bid required audited statements from the previous three years. McKinsey did not submit audited financial statements, but in that response, they submitted a letter which indicated to a report of factual findings of PWC report that purported to demonstrate their financial position. That report was not enclosed in the bid document. 

The requirement for financial statement is to assess the financial stability of the bidder and that is why at the very early stages of the process those results are needed. So it is not just those unnecessary requirements,” Sedumedi said. 

“Transnet could not satisfy itself of McKinsey’s financial stability as a result of them not submitting the financial statements. In our view McKinsey’s submission was not responsive to the requirements and should not have been entertained,” he said. 

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