‘Unlawfulness’ in Transnet’s 1 064 train tender, inquiry hears

There was unlawfulness in the request for proposals issued by Transnet for 1 064 locomotives, the state capture inquiry has heard.

The inquiry, which has been holding hearings on allegations of fraud and corruption at several state entities since August 2018, heard from Tshiamo Sedumedi of MNS Attorneys on Tuesday. MNS compiled six investigative reports into Transnet, it was asked to probe allegations of irregularities by the state-owned entity’s previous board.

In his testimony, Sedumedi shared evidence that there was unlawfulness in the request for proposals were issued, that there were changes introduced in the bid evaluation process and that the estimated total cost of the project increased from R38.6bn stated in the business case to R54bn.

Transnet had initially issued a tender for the procurement of 1 064 locomotives in July 2012, but the business case was yet to be approved by the board. At the time the board had noted that the business case was yet to be finalised. The business case was eventually finalised in April 2013, a week before the deadline for RFPs, he told the commission, chaired by deputy Chief Justice Raymond Zondo.

Further to the bid process, Transnet deviated from the procurement guidelines, Sedumedi explained.

In a letter from former public enterprise minister Malusi Gigaba, Transnet was granted permission to continue with the procurement process as if an exemption it was previously granted by Treasury had been extended. “The honorable minister said Transnet should operate as if the exemption is still in place,” Sedumedi explained.

According to the letter, Gigaba said any queries from Treasury to Transnet related to the Preferential Procurement Policy Framework Act should be referred to his office. The minister had granted Transnet permission to deviate from an instruction note in the PPPFA regarding the invitation and evaluation of bids as they pertain to the sourcing of local content.

“With all due respect to the minister, as noble as the intentions may have been, he did not have authority to override the law and prescribe any criteria not prescribed in the instruction note.

“The extent to which the RFP did not comply with the requirement – that RFP was irregular as it offends the principle of legality,” Sedumedi said.

Sedumedi will continue his testimony on Wednesday as the inquiry resumes at 09:00.