Investigations into R3.2 billion tender lead to executives facing charges

The prosecution in the case against four former executives of Transnet has said there were further investigations to be fully disclosed hopefully when the matter resumes on October 6th.

Former Transnet chief financial officer Anoj Singh, former CEOs Brian Molefe and Siyabonga Gama, and former engineering chief executive Thamsanqa Jiyane were each granted R50 000 bail by the Palm Ridge Specialised Commercial Crimes Court yesterday.

They face charges including contravention of the Public Finance Management Act (PFMA), fraud, corruption and the contravention of the Companies Act.

Prosecutors argued that there was a substantial volume of documentary and electronic evidence still to be examined, necessitating a structured process for the defence to access all the pertinent information surrounding the charges.

At the heart of the accusations lies the R3.2 billion tender awarded for the supply of 95 locomotives to Chinese manufacturers, CSR and CNR—an arrangement purportedly established through favouritism rather than due diligence.

This initial contract, marred by alleged misconduct, saw costs escalate to over R3.4bn. Subsequent agreements for additional locomotives followed suit, with contract values ballooning alarmingly from R3.8bn to R4.8bn and from R38.1bn to R54bn.

The developments form part of a broader investigation into Transnet’s controversial 2011 Market Demand Strategy (MDS).

The MDS was aimed at bolstering South Africa's freight capabilities through significant investment in rail and associated infrastructure.

In response to enquiries, Transnet said through its media desk that it will continue to support the National Prosecuting Authority.

"The organisation has completed its own investigations into the locomotives contracts and has instituted civil recovery litigation for the losses suffered. Transnet has implemented all the Zondo Commission recommendations applicable to the organisation," Transnet said.

State prosecutor Advocate Santhos Manilal alleged the accused used their senior positions within the State-owned enterprise to manipulate procurement processes, inflate costs, and steer contracts toward favoured suppliers.

"There are further investigations that I want to have finalised and then I want to disclose not in piecemeal, but I want to disclose the docket in its entirety. So on the 6th October I will give the defence an indication of when we are going to disclose (details)," he said.

"I will now suggest a proper timeline and process of how we are going to disclose because of the volumes of documents involved in this particular matter, also the electronic evidence. I will have to formulate a clear process of how we are going to disclose."

This as the Umkhonto Wesizwe Party (MKP) called for fair treatment by the judiciary of its members, saying the charges were a direct attack on black professionals, especially those affiliated with the party.

MK Party spokesperson Nhlamulo Ndhlela accused the justice system of engaging in a troubling pattern of retaliation against party members, who have held state institutions to account.

"We are also particularly alarmed at what appears to be a targeted campaign against black professionals and intellectuals, especially those affiliated with the party who once held strategic roles within SOEs including Transnet," Ndhlela said.

"These developments are reminiscent of unfair treatment as afforded to our President as widely known, who is yet to receive a legal process grounded on fairness and constitutional justice."

According to the Investigating Directorate Against Corruption's (IDAC) spokesperson, Henry Mamothame, during the process of acquiring locomotives to expand and modernise the country’s rail infrastructure, the accused allegedly flouted the tender process by irregularly appointing a company that did not qualify, CSR, to provide the 95 locomotives.

Mamothame said there were two other bids relating to the acquisition of 100 and then 1 064 locomotives, which were procured again with CNR due to the alleged flouting of processes by the accused.

"This is a state capture matter. During the State Capture Commission hearings the country heard how billions were looted from Transnet. This case depicts that flouting of services and the generation of billions of rands for use not attributed to the rail modernisation project," Mamothame said.