Transnet awards R1.3bn contract to black firms

Transnet had awarded a R1.3 billion internal audit contract to black-owned accounting firms over the next five years, the state-owned transport and logistics company announced yesterday. As part of the deal, SekelaXabiso would have a 40 percent share of the contract in the first year and Nkonki 20 percent, while big four firm KPMG would have 40 percent. By the fifth year of the contract, Nkonki’s share would grow to 35 percent, while SekelaXabiso’s share would peak at 45 percent, the parastatal said. The total value of work done by local accounting firms at Transnet is about R2bn, including a five-year R450 million external audit contract that was awarded to SizweNtsalubaGobodo, South Africa’s biggest black-owned accounting firm, last year.

The two appointments were examples by which Transnet was providing the blueprint for meaningful and broad-based empowerment and skills development targeting black people – especially black women, Mafika Mkwanazi, the chairman of the Transnet board, said yesterday. “With its stable financial footing, solid management team and massive infrastructure projects, Transnet is at the forefront of government’s drive to transform the economy in a sustainable manner as dictated by the objectives of the New Growth Path,” he said. Israel Skosana, the Transnet audit committee chairman, said the contract was expected to transfer skills. “Throughout the duration of the contract, the two local firms will be expected to strengthen and enhance their expertise in areas like information technology, as well as infrastructure- and engineering-related processes to enable them to service accounts like Transnet’s on their own,” Skosana said.

The two companies were chosen out of 12 bids including all major firms other than Ernst & Young and SizweNtsalubaGobodo, the company’s external auditors. Transnet is rolling out a R300bn rolling seven-year infrastructure investment programme to revamp its port, rail and pipelines infrastructure as part of its market demand strategy. Meanwhile, as part of the government’s commitment to the transformation and productivity of state-owned enterprises and their ability to create jobs, the Department of Public Enterprises launched the Competitive Supplier Development Programme in 2008.

Its goal is to ensure that key state-owned enterprises plan and execute their procurement programmes to promote investment in plant, skills and technology, and the development of new capabilities in existing, emerging and new suppliers to drive the economy’s growth and industrialisation while fostering fundamental transformation of the economy. To date, Transnet has entered into contracts valued at R14bn containing supplier development commitments of R5.4bn, according to data from the Department of Public Enterprises. Of these commitments, R2.9bn has been delivered to date.