Radebe sacks execs
Transport Minister Jeff Radebe sacked two senior board members of the South African Rail Commuter Corporation (SARCC) shortly after they criticised the corporation’s handling of a multibillion-rand tender for the replacement of the entire Metrorail passenger train fleet.
Radebe announced the recapitalisation of Metrorail during his budget speech in Parliament last year, calling it “probably the biggest acquisition currently in the developing world”. He later said the contract would be worth R18-billion.
In September 2008 Radebe removed SARCC chairperson Zukile Nomvete and board member Nonku Tshombe as directors of the corporation. The move came after Nomvete questioned why the board had been bypassed when the business case for the recapitalisation of Metrorail was drawn up for presentation to Cabinet.
This week Radebe denied that their sacking was linked to the recapitalisation, saying the skills and experience required of the board had to be reviewed “in light of the challenges facing the organisation”.
Nomvete is a businessman and former executive director of Transnet, and Tshombe is a senior manager at the South African Revenue Service.
The SARCC, an agency of Radebe’s department, is responsible for providing rail services, capital investment and infrastructural maintenance of the country’s passenger trains.
The Mail & Guardian is in possession of correspondence between Nomvete, Tshombe and the corporation’s chief executive, Lucky Montana, in which Nomvete raises concerns about the acquisition of thousands of carriages.
The queries were raised after Radebe’s announcement in Parliament on May 20 that a case for the recapitalisation of Metrorail had been completed.
On September 1 Nomvete wrote to Tshombe, who was chairing the corporation’s finance, capital and procurement committee: “I do not recall the board ever approving, let alone consider fleet recap. This matter has never been before the board. It is shocking to hear about a timetable. As a director I am not aware of the tender or specs for fleet recap.”
His email was copied to Montana and other board members. On the same day Montana responded to Nomvete’s email, saying Radebe must obtain Cabinet approval for the plan before SARCC could start to discuss details of the rollout of a new fleet. But according to Montana the corporation had “started doing work” with Radebe’s department on the project.
On September 8 Tshombe replied to Nomvete’s queries, stating that the matter of recapitalisation was indeed never discussed by the corporation’s finance committee.
Ten days later, at the end of the corporation’s annual general meeting for 2008, Transport Department Director General Mpumi Mpofu announced that Radebe had decided to remove Nomvete and Tshombe from the board.
A circular reflecting Radebe’s decision was sent out to the corporation’s staff on the same day. Letters terminating their contracts were delivered to Nomvete and Tshombe four days later, on September 22.
Although Montana denies a link, SARCC insiders believe the sacking of the two board members was a direct result of their criticism and probing of the Metrorail recapitalisation decision. “This plan [for replacing the Metrorail fleet] was never managed in the SARCC, but developed somewhere else,” a corporation insider told the M&G.
Radebe is known to be close to Montana, an ex-deputy director general in Radebe’s department who served as a non-executive director on the SARCC board before being appointed chief executive in 2007.
Nomvete this week said no reasons were given by Radebe for the cancellation of his contract and referred the M&G to his lawyer, Michael Motsoeneng, whom he had instructed to get answers from government.
According to Motsoeneng there has been “no solid response” to clarify Nomvete’s removal from the corporation’s board and they are considering taking Radebe to court to force him to review his decision.
Tshombe declined to comment, but confirmed her suspension and the fact that the corporation’s board never approved a business case for the Metrorail recapitalisation.
Montana said the decision to remove the two board members was Radebe’s.
But on various occasions he [Montana] had raised concerns with the board and Radebe about “board effectiveness/leadership and poor governance practices in some instances”.
He said the recapitalisation of Metrorail had been on the cards since 2007 and Nomvete’s board was informed in August 2008 that SARCC had assisted the transport department to present a business case for the recapitalisation.
“But,” said a SARCC source, “that is exactly the problem. The corporation is not supposed to assist transport, it has to work the other way around. The SARCC is not a rubber stamp.”
No tenders have been called for and Cabinet has yet to take a decision about the multibillion-rand acquisition.