Transnet Group Acting Chief Executive Officer Mohammed Mahomedy at the state capture inquiry. File picture: Karen Sandison/African News Agency(ANA).

Johannesburg - The Zondo commission has heard how state-owned enterprise Transnet continued paying millions to lease computers while of the bulk of the devices had gone missing after being delivered. 

Transnet chief executive officer Mohammed Mahomedy told the commission on Thursday that Transnet had entered into a lease agreement with T-Systems for leasing of computers. 

The computers were delivered to the company but some went missing after delivery. 

Mahomedy said Transnet was obliged to continue paying the lease. Commission chair deputy chief justice Raymond Zondo appeared shocked and questioned how the computers could go missing.

 “They cannot just disappear, where did they go?” Zondo asked. 

Zondo said it was “horrifying” at the unaccountability for the missing computers, he said it was taxpayers' money. 

Mahomedy explained that the incident was reported to Transnet’s forensic department and some people were suspended. 

Earlier, Mahomedy told the commission how Transnet blocked a contract which would have seen auditing company Nkonki being paid close to R1 billion for providing auditing services to the state-owned company. 

He explained that Nkonki had an existing R500 million auditing contract with Transnet which would expire after five years. 

He said Nkonki then approached Transnet with an unsolicited bid to provide a variety of services. 

“They asked for three things which included procurement optimisation, bring in savings on procurement contracts, coal line optimization and to engage with customers and tariffs. Those were the three issues and they were approved,” he said. 

Transnet board committee approved the ballooning of the contract which would have seen Nkonki being paid close to a billion rand. Mahomedy said the approval of this extension was wrong as proper processes had not been followed. 

Mahomedy said the contract was stopped and Transnet did not pay the money. 

He agreed that the services that were being offered by Nkonki should have gone out to tender and not simply accepted by the board. SOEs are not obliged to accept unsolicited bids. 

“They are services providers who could provide this service outside of Nkonki,” Mahomedy said.

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