/ 29 January 2010

Nyanda Inc makes millions from govt

Communications Minister Siphiwe Nyanda — South Africa’s former defence force chief — owns a 50% stake in a company that has at least five contracts with government agencies, bringing it millions of rands in government business, the Mail & Guardian has established.

GNS [General Nyanda Security] Risk Advisory Services (Pty) Ltd, Nyanda’s company, has been in the news since last year when it was revealed that Transnet Freight Rail, on suspended chief executive Siyabonga Gama’s watch, had awarded GNS a R55-million tender without proper tender processes being ­followed.

However, an M&G investigation has established that GNS has also benefited from security contracts with at least four other government entities.

The M&G has also learnt that Nyanda’s business partner and chief executive of GNS is embattled Johannesburg lawyer Sylvester ­Sithole, fingered for alleged fraudulent dealings with the SABC in a 2007 draft forensic report.

After Nyanda was appointed a minister in May last year, he told the M&G that his interest in GNS posed no conflict of interest with his official duties and that the company’s area of business was ‘security risk”.

What he failed to declare was GNS’s clients — Transnet Freight Rail; passenger train company Metrorail; state bus company Autopax; and two contracts with the Gauteng provincial government.

At least three of these entities fall under the political leadership of two of his Cabinet colleagues — Transport Minister S’bu Ndebele (Metrorail and Autopax) and Public Enterprises Minister Barbara Hogan (Transnet Freight Rail).

This week Nyanda defended himself by saying he had declared his interest in GNS to Parliament and ‘has not been active in the affairs of the entity”.

He declined to clarify his role in the company’s affairs, his involvement in obtaining government business or his relationship with Sithole.

Nyanda, the country’s defence force chief from June 1998 to June 2005, was appointed a director of GNS on June 29 1998. He resigned from the board on August 13 last year but keeps his shares.

In the 2009 register of members’ interests, he told Parliament that GNS provides him with a ‘driver for household and children transportation”.

GNS, which is based in an office park in Rosebank, Johannesburg, also refused to answer the M&G‘s questions about its business with government, requesting through its lawyers a copy of the article before publication to ‘properly comment”.

The M&G declined to provide them with the unpublished story.

It was revealed last year that GNS was awarded a R19-million contract in December 2007 on Gama’s watch to provide surveillance and investigation services for the parastatal’s goods trains. Gama is currently ­facing a disciplinary hearing for allegedly signing off the tender, worth more than the R10-million he was allowed to award.

In response to a parliamentary question last year, Hogan revealed that GNS ‘has been paid approximately R55-million in a 20-month period since the conclusion of the contract in December 2007”.

The M&G this week established that the contract was jointly awarded to GNS and Johannesburg-based Nayle Outsourcing, which provided investigation services to Transnet.

According to Nayle’s Jaco van Wyk, the tender was up for renewal last year and advertised by Transnet three times. ‘Every time something went wrong with the advert.”

GNS and Nayle’s contract finally comes to an end on Sunday — 25 months after signing a 20-month contract with Transnet.

Nyanda has publicly come out in support of Gama and likened his case to President Jacob Zuma’s graft trial. ‘The challenge is that some people out there are really bent on ensuring that he is destroyed. What happened to JZ is happening in this case. People vilify and cast aspersions on you,” Nyanda told Business Times in September.

Metrorail and Autopax
According to Tiro Holele, spokesperson for the Passenger Rail Agency of South Africa (Prasa), Metrorail awarded GNS a contract to provide ‘various security risk-related functions” in October 2008 for two years.

Metrorail and Autopax, which manages the Translux and City-to-City buses, were incorporated into Prasa last year.

According to a former GNS employee, the company was contracted to do surveillance on Metrorail’s passenger trains and on ­Translux and City-to-City buses. ‘We had to ride on them and write reports on what we saw.”

According to Holele, Metrorail has paid GNS R15,1-million to date, or little more than R1-million a month.

The M&G has established from two inside sources that the Gauteng government paid GNS to investigate and protect the provincial government garage, with a fleet of more than 5 000 vehicles.

Nyanda’s company was also contracted by Impophoma, a provincial entity that manages ­Gauteng’s construction equipment, to provide security services.

It is not clear whether these contracts have expired and how much GNS was paid. Gauteng failed to respond to questions.

Nyanda responds
Nyanda’s office gave the following response to the Mail & Guardian‘s questions: Upon accepting appointment to public office, the Minister of Communications General (Ret) Siphiwe Nyanda made a declaration to Parliament with regard to his interests in the entity in question, GNS, as required by law.

It is worth noting as well that the minister has not been active in the affairs of the entity in question since his appointment to public office.

Any other question regarding GNS should therefore be directed to GNS itself and not to the office of the minister of communications.

The minister has no other protection services other than those provided by the South African Police Service as ­prescribed by law.