Ports authority docks officials

At least nine officials of the National Ports Authority have been suspended because of irregularities in the management of several construction projects by the National Ports Authority (NPA).

In two separate cases investigations are under way into possible overspending at Ngqura, and into alleged kickbacks at Richard’s Bay.

Parent company Transnet is trying to establish how about R450-million in unanticipated claims by German engineering giant Hochtief and its local partners for variations to the original specification for the Ngqura breakwater were approved by former NPA chief Siyabonga Gama (now acting CEO of Spoornet). This without the knowledge and approval of the Transnet board or executive, according to sources close to the parastatal transport company.

And an investigation into alleged collusion by construction firms and NPA staff to inflate claims has led to the suspension of several officials at the Richard’s Bay port.

The revelations come as Transnet CEO Maria Ramos’s focus on risk management — one of the four pillars of her turnaround strategy for the loss making conglomerate — begins to bite, and they come at an unfortunate time for the NPA, hitherto the star performer in Transnet’s stable.

Ramos recently announced the approval of R2-billion in funding for the construction of new container terminals at Durban and Cape Town, and fresh announcements about investment in ports are expected shortly from Minister of Public Enterprises Alec Erwin.

According to the 2005 Budget Review another R1,6-billion is required to complete the port of Ngqura, and the ports authority is expected to increase its expenditure on infrastructure from R1,2-billion in the current fiscal year to R3,5-billion by 2006/07.

The Ngqura joint venture is between Hochtief, local firm Concor — of which Hochtief owns 49% — and Ngqura empowerment partners.

“We have a contract with the NPA, and just as the NPA has rights and obligations, we have rights and obligations.
The contract has provision for variations — there is no construction contract without variations and escalations,” Concor project manager John Millward told the Mail & Guardian.

He initially said there was no way variations at Ngqura could have cost R450-million, but went on to say the total figure, including contractually stipulated cost escalations, could well be that high.

“It could well be true, but to say you need special approval for it, I don’t know, it’s ludicrous,” he said.

Meanwhile, nine officials at Richard’s Bay, including port engineer Leon Gossard, have been suspended, and disciplinary action is being contemplated against officials at Cape Town