Accusations of Transnet’s lack of control over its security services are contained in some explosive reports. Ann Eveleth investigates
TRANSPORT parastatal Transnet is sitting on an explosive report into weak controls over private security companies it contracted, estimated to have cost the taxpayer R100- million.
The Mail & Guardian has established that the long-running irregularities allegedly occurred under the nose of the ex-army officer in charge of security for Transnet’s rail division Spoornet.
Several private firms fingered in the investigation still work for Spoornet, including SSH Security – the company that used cattle prods at a Johannesburg station last year, triggering a stampede that cost 16 lives.
The South African Rail Commuter Corporation, which employs Spoornet to provide a local railway service, bears some of the extra costs incurred, but has still not been advised of the findings, even though Transnet has been kept abreast of the damning findings since November 1995.
The investigation has so far targeted “short-posting” – charging for employees who don’t show up for work – as the main cause for concern.
But the other allegations include:
* tenders not being awarded to the lowest bidders;
* contracts awarded without tenders;
* duplicate payment of invoices
* invoices paid before services rendered; and
* overpayments for the hire of vehicles, guns and unnecessary VAT payments.
Transnet chair Louise Tager refused to comment this week on the investigation, saying the “entire matter is sub judice”.
Outside auditor Steve Ochse and Partners began the investigation in May 1995, initially at the request of group general manager Gert Britz before Tager took control of the investigating team.
The auditor examined 78 contracts worth R130,5-million awarded to six companies in the Southern Transvaal region. It is now investigating security contracts in Spoornet’s other regions.
Ochse’s first report in November 1995 pinpointed short-posting as a central concern. The initial estimate was that the losses amounted to 10% of the private security firm’s contract values, though this was revised in a later report to Transnet to a “conservative estimate” of 30%.
An April 1996 report examined 25 contracts awarded to SSH Security and found short- postings in connection with 13 contracts and “major variations from tender procedures” in the remainder.
Ochse’s report on another security company also mentions short-posting, but this is the least damning of the allegations.
The report refers to a “sworn affidavit” from a police officer alleging the company paid bribes to retain contracts and stole goods from locations guarded by its competitors in order to cast them in a bad light so the company could get their contracts.
The officer also alleged Spoornet security head Brigadier David (Archie) Moore “was aware of the aforegoing and took no steps to put a stop to it”.
Affidavits from two former employees of the security company further allege the company paid kickbacks to Moore in the form of “a Bedford truck and a blue Ford tractor delivered to Moore’s farm in the Vaalwater District by an employee of [the company on instruction of its owner who] mentioned that this was his way to keep Spoornet contracts”, the report says.
Some sources have questioned Transnet’s failure to suspend Moore in connection with the allegations, and following his appearance in the controversial Steyn Report.
Moore this week denied the allegations, accusing the police officer who had written the affidavit of slander. The vehicle he had bought from the security company owner was an unrelated private transaction, he added.
Other sources argue, however, that Moore has become the target of a power play by Transnet executives bent on wresting control of the parastatal’s security structures.
The report also noted that a review of contracts awarded to Crosskeys Security – Transnet’s ill-fated joint venture with British-based Securicor – was underway.
Crosskeys was liquidated in December 1996 after barely a year in operation amid reports of substantial losses and worker strikes despite, according to Ochse’s initial comments, being paid rates “substantially higher that the rate paid to other security firms”.