Brian Molefe. Picture: ALON SKUY
Brian Molefe. Picture: ALON SKUY

Former Transnet CEO Brian Molefe allegedly paved the way for Chinese locomotive manufacturer South China Rail (CSR)  to score billion-rand contracts from the state-owned company, the state capture inquiry heard on Tuesday. 

Tshiamo Sedumedi of MNS Attorneys gave details about how their investigation into procurement irregularities at Transnet pointed directly at Molefe.

The inquiry into state capture, headed by Judge Raymond Zondo, has been holding hearings since August 2018 on allegations of corruption and fraud at several state-owned enterprises. 

MNS attorneys was appointed by Transnet’s new board in 2018 to investigate various contracts under the tenures of Molefe and his successor, Siyabonga Gama.

These included Transnet’s controversial purchase of 1‚064 locomotives; the appointment of advisers and consultants and their influence on the company; and the procurement of locomotives from CSR.

Sedumedi’s testimony on Tuesday focused mostly on the procurement of 95 electric locomotives from CSR.

“CSR seems to have enjoyed some special relationship with Transnet and that has happened both prior to the issue of the request for proposal itself and through the procurement process (for the locomotives)‚” he told the commission.

Sedumedi referred to e-mails between Molefe and CSR’s Wang Pan‚ which indicated that the pair met in December 2011 and discussed the contract before it was advertised.

In another set of e-mails a month later‚ Pan thanked Molefe for giving his company the opportunity to put in a tender and asks Molefe for his support in setting up a “discussion of co-operation”, and arranging a meeting with Transnet’s technical group to discuss the specifications of the trains.

“It creates a reasonable apprehension and perception that CSR might have been favoured over other bidders‚” Sedumedi said.

This was before CSR was contracted for the job.

The commission earlier heard from Transnet’s acting CEO‚ Mohammed Mahomedy‚ who said that Transnet flouted the Public Finance Management Act when awarding the R2.7bn contract to CSR.

CSR failed the first stage of the tender process as it required companies to have a BBBEE certificate. The company scored 57%, which was 3% less than the minimum requirement to advance to the next stage in the bid process.

However‚ an alternative evaluation structure was created which removed the BBBEE requirement and allowed CSR to move on and eventually land the deal.

The Gupta family is alleged to have secured billions of rand in kickbacks from CSR for the various contracts Transnet awarded it.

Sedumedi’s testimony will continue on Wednesday when he will outline irregularities in Transnet’s awarding of another contract to CSR for 100 locomotives at the cost of about R4.4bn.