Transnet board found 'horror show' when it took over, says Popo Molefe

By Zintle Mahlati Time of article published May 7, 2019

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Johannesburg - Transnet board chairman Popo Molefe says when Transnet's new board took over last year, it found a company in a state of paralysis and a horror show of corruption and a culture of fear. 

Molefe took the stand at the Zondo commission of Tuesday and told the commission how badly run Transnet was when he took over as board chairman in May 2018. 

The commission has shifted focus to allegations of corruption at the state-owned company. 

Molefe pulled no punches as he detailed how supply chain management structures were disregarded and systems and rules were abandoned. He said they found that money was syphoned off to serve only a few individuals and “darling” companies. 

“It is not an exaggeration to say that the board was astonished by the widespread corruption and disregard of the rules which pertain to policy on procurement and processes that must be followed by various procurement and supply chain management structures. 

“We go further to say that the situation of disregard for systems and rules suggests that there is a state of paralysis that has set in. The way in which money was syphoned off and nothing being done to stop it could be described in what I call a horror show, a movie or a theatre and the managers of this corruption were the protagonists,” Molefe said.  

Molefe used an example of a Transnet Durban port which was supposed to be used as a new port for the company which would help with congestion experienced by the Durban harbour. He said the land on which the port was to be situated was bought from ACSA and construction on the site was delayed due to a shortage of funds. 

He said when the new board visited the port they found that it had been illegally occupied by various businesses who had no lease with Transnet, yet had the courage to open up businesses on the site. 

“There were logistic companies and one which had a big metre warehouse and there was no lease agreement between them and Transnet and Transnet was not getting money into its accounts. There were others there who were running events management companies. The management including the then-chief executive Mr Siyabonga Gama pretended that they did not know that the land is occupied illegally,” Molefe said. 

Molefe said he suspected that those illegal businesses had acquired permission to illegally occupy the space by someone senior within Transnet who probably benefited financially. 

“We asked ourselves that these people must have been paying money and they were reassured that you can build a factory here and nothing is going to happen to you. That factory was probably built for close to R15 million and nobody would spend that much money if there is uncertainty,” he said. 

The board chair also detailed how the board was often starved of information and it took time for it to be able to start peeling off the layers which revealed widespread corruption. 

“We could not get information and no employee could simply talk to directors. It made it difficult for us as the board,” said Molefe. 

He said the lack of cooperation was also evident in the culture of the company where junior employees were often bullied into silence and told not to question or debate their managers. 

Molefe said at one point they had to work with information from whistleblowers and employees had to be spoken to without the presences of senior management. 

He said the culture within has somewhat improved with more whistleblowers coming forward. 

There were over a 1 000 contracts that would need to be re-looked at for other signs of corruption, Molefe said. He said often it was the bigger tenders, such as the procurement of over 1 000 locomotives from China, that got more attention but there were smaller contracts which also need to be re-evaluated.  

The inquiry continues.


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