Transnet chief under scrutiny over ‘R1bn tender scandal’

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Johannesburg - Controversial Transnet chief executive Siyabonga Gama is at the centre of a storm involving a R1billion tender awarded to German software company SAP, after documents showed he personally asked the acquisitions and disposals committee to award the contract without following tender processes. In a memo dated February 1, 2017 from Gama, he asked for a confinement of the tender from the acquisitions and disposals committee. Chief operations officer Nozipho Sithole signed off on the request on the same day. However, Transnet denied any wrongdoing, saying the contract was not awarded. “The confinement process used in this particular contract was in line with the then procurement guidelines. Please note the contract was a non-award,” said Transnet. Gama was approached for comment but Transnet insisted it was responding on his behalf. Public Enterprises Minister Pravin Gordhan has been cracking down against corruption in state-owned entities (SOEs) since he took over in February.

His department said on Saturday that the new boards in SOEs would review all the contracts there, including the SAP tender.

Former Passenger Rail Agency of South Africa chairperson Popo Molefe chairs the new Transnet board. Public Enterprises spokesperson Richard Mantu said they would clean up the entities.

“Mr Gordhan has appointed a new board of competent directors for Transnet and these appointments were confirmed by the cabinet on May 23.

“The new board, as part of its fiduciary duties, will be required to review the findings and recommendations of all forensic investigations/reports to date into the affairs of Transnet and the details of any other suspicious tender or contract awarded by Transnet. The board will be requested to also look at this transaction,” said Mantu.

In the document seen by The Sunday Independent, the Transnet chief executive asked the acquisitions and disposals committee for the approval of the Lead to Cash (L2C) contract. “Note that since its approval of the confinement of the L2C project, approved in October 2015, the RFP (Request for Proposal) validity date has expired, rendering the transaction invalid. Note that ICT has been working on improving the lead to cash solution architecture and implementation approach,” read the memo.

Transnet wanted the disposals committee to approve the confinement of the tender and not put it out on open tender. “Authorise the Group CEO to approve all subsequent relevant documents relating to this transaction and to conclude the process,” it said.

On the financial implications, Transnet said this would be done within the budgeted amount. “The original budget in the previously approved business cases of R979 million will not be exceeded,” it said.

It asked the acquisitions and disposals committee to approve the amendment to the original confinement of October 2015 after the expiry of the RFP. Management confirmed that the R979m ETC included an estimated R70m budget for training purposes,” read the notes.

At an annual general meeting with investors in Germany a few weeks ago SAP chief executive Bill McDermott apologised for any irregularities in their dealings in South Africa. SAP has removed some of its top executives implicated in the dealings involving the Guptas in the country over its contracts with entities.

SAP has admitted R100m was paid to a Gupta-linked company for scoring it contracts at Transnet. Gama had been with Transnet for many years, but in 2010 he was dismissed after a disciplinary found him guilty of alleged wrongdoing.

However, he successfully challenged his dismissal and kept his job as head of Transnet Freight Rail. He was later appointed acting chief executive of Transnet after Brian Molefe went to Eskom in 2015 and was appointed permanent head of Transnet the following year.

In September last year, the Sunday Times reported that Gama spent two nights in Dubai and met Gupta lieutenant Salim Essa in 2016. Gama allegedly confirmed meeting Essa but denied that the Guptas paid for the trip.

The Sunday Independent