Probe into Transnet 'irregularities' pointed directly at Brian Molefe

28 May 2019 - 16:51 By AMIL UMRAW
MNS Attorneys told the state capture inquiry on Tuesday how their investigation into procurement irregularities at Transnet pointed directly at former CEO Brian Molefe.
MNS Attorneys told the state capture inquiry on Tuesday how their investigation into procurement irregularities at Transnet pointed directly at former CEO Brian Molefe.
Image: James Oatway

Former Transnet CEO Brian Molefe allegedly paved the way for a state capture-linked Chinese locomotive manufacturer to score billion-rand contracts from the state-owned company.

This according to MNS Attorneys' Tshiamo Sedumedi, who told the state capture inquiry on Tuesday how their investigation into procurement irregularities at Transnet pointed directly at Molefe.

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MNS attorneys was appointed by Transnet's new board in 2018 to investigate various contracts under the tenures of Molefe and his successor Siyabonga Gama.

These included Transnet's controversial purchase of 1,064 locomotives; the appointment of advisers and consultants and their influence on the company; and the procurement of locomotives from China South Rail (CSR).

Sedumedi's testimony on Tuesday focused mostly on the procurement of 95 electric locomotives from CSR.

"CSR seems to have enjoyed some special relationship with Transnet and that has happened both prior to the issue of the request for proposal itself and through the procurement process (for the locomotives)," he told the commission.

Sedumedi referenced e-mails between Molefe and CSR's Wang Pan, which indicates that the pair met in December 2011 and discussed the contract before it was advertised.

In another set of e-mails a month later, Pan thanks Molefe for giving his company the opportunity to tender and further asks Molefe for his support in setting up a "discussion of co-operation" and arranging a meeting with Transnet's technical group to discuss the specifications of the trains.

"It creates a reasonable apprehension and perception that CSR might have been favoured over other bidders," Sedumedi said.

This was before CSR was contracted for the job.

The commission earlier heard from Transnet's acting CEO, Mohammed Mahomedy, who said that Transnet flouted the Public Finance Management Act when awarding the R2.7bn contract to CSR.

CSR failed the first stage of the tender process as it required companies to have a BBB-EE certificate. The company scored 57%, which was 3% less than the minimum requirement to advance to the next stage in the bid process.   

However, an alternative evaluation structure was created which removed the BBB-EE requirement and allowed CSR to move on and eventually land the deal.

The Gupta family is alleged to have secured billions of rands in kickbacks from CSR for the various contracts Transnet awarded it.

Sedumedi's testimony will continue on Wednesday when he will outline irregularities in Transnet's awarding of another contract to CSR for 100 locomotives at the cost of about R4.4bn.


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