The dismissal of Transnet Freight Rail [TFR] chief executive Siyabonga Gama this week has raised the ire of some executives in the company, who have accused Transnet’s top management of practising selective justice.
The executives, who are known Gama supporters, question why Transnet vigorously pursued Gama’s case while it ignored other serious corruption allegations levelled against some of the company’s top management.
They provided the Mail & Guardian with confidential documents and a list of corruption cases, which they allege have been ignored by Transnet management.
One such case involves Transnet’s group executive for human resources, Pradeep Maharaj, who allegedly awarded a R48-million tender to a company called Resolve Group to develop and implement the company’s HR strategy without following proper procurement procedures.
According to the documents, the Resolve Group — whose shareholders include ANC national executive committee member and Speaker of Parliament Max Sisulu, former chief of communications in the Presidency Murphy Morobe and former Johannesburg City manager Pascal Moloi — was paid a total of R165-million by Transnet between April 2006 and March 2010.
In terms of Transnet procurement policy, section heads can opt for the confinement of tenders in circumstances when, owing to urgency or a restrictive market, it would not be possible, practical or economically viable to invite open tenders. As group executive for human resources, Maharaj can only authorise the confinement of tenders amounting to R2-million; he would have to seek prior authority from the group CEO in circumstances when the confinement was above that amount.
But internal Transnet documents suggest Maharaj contravened the procurement procedures by not seeking prior authority from then-group chief executive Maria Ramos when he first awarded the R48-million contract to the Resolve Group in 2006.
The documents indicate that Maharaj only submitted a motivation for retrospective authority for confinement in March 2008, after Ramos raised concerns in January that year.
‘Well-established mechanisms’
One of the key charges that cost Gama his job was that he awarded an R18-million contract irregularly to a firm linked to Communications Minister Siphiwe Nyanda, although his authority was limited to contracts of less than R10-million.
John Dludlu, spokesperson for Transnet, wrote in a statement to the M&G that the appointment of Resolve was “approved by the delegated authority — namely the GCE [group chief executive] of Transnet at the time”.
He also said the company had “well-established mechanisms to deal with our procurement processes and related grievances. In addition, we have an anonymous tip-offs line, which is independently run by a reputable auditing firm. Any complaints may be addressed through such channels.”
But Maharaj’s decision to award the tender to the Resolve Group was also criticised by members of the Transnet acquisition council (TAC), which acts as the company’s tender board. In a confidential document containing minutes of a TAC meeting in October 2009, one member stated that the contract was allowed to roll over for six months and an additional amount was irregularly spent during this period.
She said: “No apparent evaluation was ever done on the quality of services rendered by the service provider [Resolve Group] during the original contract period.”
The Gama supporters said in a statement that “the board [of Transnet] and the minister [of Public Enterprise Barbara Hogan] have no interest to investigate the gross irregularities.
“Instead, they offer inconclusive responses via a spokesperson that leave more questions unanswered. The zeal demonstrated in Siyabonga Gama’s case to uphold high governance standards is never there when it comes to these cases. We know Gama’s unquestionable character and maintain that he has been subjected to a vicious witch-hunt of which none of the Transnet executives and indeed very few CEOs [chief executive officers] of large organisations would survive.
“The question still stands, though, why did the minister and the board not investigate these gross irregularities but instead defended them?”