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Gigaba washes his hands of Gupta-related contracts at Eskom, Denel

Home Affairs Minister Malusi Gigaba has washed his hands of Gupta-related contracts with state-owned enterprises during his tenure as public enterprises minister.

He was delivering his testimony before the portfolio committee on public enterprises on Tuesday. He spoke specifically to Gupta-related contracts with EskomDenel and Transnet.

“This topic is challenging as the extent of Gupta-related corruption is only now surfacing. It is becoming increasingly apparent that even tenders that appeared lawful may have been tainted,” he said.

“At Eskom, the primary issues that have attracted attention were Trillian, the Regiments saga, and Tegeta. All of these occurred outside of my tenure at DPE (department of public enterprises). I cannot therefore comment on them.

“The only interaction I had in relation to Tegeta, is when I ordered a forensic investigation in 2017 as the minister of finance,” he said.

With regard to Denel, Gigaba said he is also only aware of the VR Laser Asia partnership which also happened after his tenure at the DPE.

“As minister of finance, I did not give concurrence to the VR Laser proposal.”

Gigaba however spoke on Transnet contracts, particularly the procurement of 1 064 locomotives.

The contract, submitted to Gigaba for his approval in May 2013, was estimated to cost R38.6-billion over a seven-year period. In June 2013 he received a decision memorandum wherein the business case for the tender was made.

READ MORE: How to eat a parastatal like Transnet – chunk by R600m chunk

“In summary, the new locomotive purchase was going to create value for Transnet,” he said. The tender would also lead to benefits for the economy, including R68bn in localisation, the development of manufacturing skills and the creation of jobs, among other things.

Gigaba said that he was advised that an “enhanced governance process” was in place for the acquisition. A locomotive steering committee (LSO) was established and mandated by Transnet’s Executive Committee and chaired by the Group CEO.

“I was satisfied with the business case, and I approved the memorandum on 3 August 2013,” he said.

Gigaba explained he was not involved in the procurement of locomotives and was only involved in the process of granting authorisation under the Public Finance Management Act (PFMA).

With regard to The New Age newspaper’s Sponsored Breakfasts, Gigaba said in 2011 he became aware that New Age was looking to sponsor Transnet and Eskom for business breakfasts.

“I was upset about these sponsorships because it was a large sum of money, even though it was below the materiality threshold and was strictly within the operational purview of the board.

“I felt it was inappropriate that such large sums of money were being spent on breakfast sponsorships, especially in the midst of such large-scale build projects that were being undertaken.”

Gigaba then issued a directive that all sponsorship requests be routed through the department.

By 2013, the Public Protector had initiated an investigation into the sponsorships. “I was informed that the Public Protector’s main focus was an investigation into fruitless and wasteful expenditure at Eskom, Transnet, SABC and Telkom, and the allegation that the Department exercised undue influence on those companies in deciding to sponsor the TNA breakfasts.

READ MORE: Parastatals ‘bullied’ into supporting the ‘New Age’

“It is apparent from what I have just stated, and from the written instructions that I sent to the chairs of the SOC’s (state-owned companies) that I was doing the opposite of militating in favour of the TNA sponsorships,” he said.

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Lameez Omarjee
Lameez Omarjee
Parliamentary reporter at Fin24.com

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