State-owned freight, rail and logistics group Transnet says all employees who were involved in the company’s four controversial contracts for the acquisition of more than 1,000 locomotives have either resigned or been dismissed as it battles to restore credibility.
“All those responsible have left Transnet’s employment. Transnet dismissed three employees. Others involved have resigned,” Sandra Coetzee, Transnet chief legal officer, told MPs on Wednesday.
She did not say how many of the implicated employees had resigned. Coetzee was updating the select committee on public enterprises and communication on internal investigations and alleged misconduct by Transnet employees.
Transnet signed the contracts amounting to R54.4bn for the acquisition of the locomotives in March 2014, making the project one of the largest procurement initiatives by a state-owned entity (SOE). The deal was signed with South China Rail, North China Rail, General Electric (GE) and Bombardier Transportation as part of a strategy to renew Transnet’s rolling stock.
The initial estimated price of the locomotives tender was R38.6bn, but it soon shot up to R54.4bn amid claims of corruption in awarding the contracts. The controversial Gupta family, friends and business partners of former president Jacob Zuma and his son Duduzane, were alleged to have received millions of rand in kickbacks, according to testimonies presented to the commission of inquiry into state capture that was chaired by deputy chief justice Raymond Zondo.
‘Consequence management’
Transnet and the Special Investigating Unit (SIU) have since lodged a high court application to review and set aside the four controversial contracts. The matter is yet to be finalised.
Coetzee said both criminal and civil referrals have been made against the employees involved in the transactions, meaning that “consequence management is being enforced”.
“Most of the resignations that occur, occur on the strength of the charge sheet that is being presented to the individuals. We have also introduced independent presiding officers to ensure that the disciplinary hearings are fair and enforceable,” she said.
Transnet executives also briefed MPs on plans to expand and upgrade SA’s ports to boost capacity and efficiency. Transnet has been hamstrung by operational issues at the ports, including ageing, out-of-service infrastructure and congestion, particularly at the ports of Cape Town, Durban and Richards Bay. This has left many who export and import goods frustrated and fearing huge losses.
The company said it had set aside at least R4bn for the current financial year for upgrades and maintenance of ports.
Most of the resignations that occur, occur on the strength of the charge sheet that is being presented to the individuals
— Sandra Coetzee, Transnet chief legal officer
Transnet National Ports Authority (TNPA) CEO Pepi Silinga said port planning, like many infrastructure projects, is a very iterative and consultative process, suggesting the upgrades could take a number of years to be finalised.
Homing in on the port of Durban, Silinga said the company has gone through various iterations since October 2020 with the view of ensuring that the ports meet user requirements.
For Cape Town, the authority is, among other targets, looking to expand the container terminal in a “manner that balances the availability of capacity on the water side with the availability on the land side”.
“That would mean availability of equipment to operate the port itself. On top of that, modernising the docking yards to respond to the market ... to attract [new users],” Silinga said.
The poor state of SA ports and the high tariffs have resulted in an increased use of other harbours in the region at the expense of SA ports.
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