Zondo: How ‘number one’ wanted Gupta associates to partner on R25bn Transnet manganese deal

In 2013, Transnet identified a railway route from the Northern Cape to the Eastern Cape which would carry manganese for global exports. The project would cost the freight utility R25bn and increase its capacity at the time from 5,5m tons to 16m tons of transported manganese. According to Advocate Seegeels Ncube, the evidence leader at the Zondo Commission, two contracts which would enable Transnet to carry out the project flouted the tender process. PM Africa and DSE Consultants were appointed to partner on the project which was originally handled by  Hatch Global. The companies are understood to be aligned to the Guptas, and were handpicked by ‘number one’ – Bernice Maune. 

By Bernice Maune

A former employee of Transnet, Henk Bester who worked for the company for eight years, has given evidence on how he was forced to partner with Gupta associate companies on a lucrative manganese contract. While Bester left Transnet to join Hatch Global in 2008, an independent engineering consulting company he continued to do work with the state-owned enterprise.

Speaking at the Zondo Commission, Bester said Hatch was extensively involved in the manganese project and conducted feasibility studies to understand what the tariffs of exportation would be and how the project would be executed. A business case would also be conducted, with there being two phases of the project.

The first phase would be owned by Hatch and the second phase would introduce supplier development – a term coined by former president Jacob Zuma. Supplier development sought to empower black suppliers to win contracts in parastatals and partner with larger, more established companies.

The split would be broken down to 30% of the project handled by black suppliers and the rest by the larger companies. However, Bester explains that he was visited by Nilan Padayachee and Dave Reddy of PM Africa and DEC Consultants who indicate there was a wish from Transnet to include them on the manganese deal. The instruction came from ‘number one’ and though Reddy would not say who that was, Bester said he concluded that it was either Zuma, former Transnet chief financial officer Anoj Singh or then Transnet CEO Brian Molefe.

Read also: Zondo: ‘Do you agree that former Transnet board must pay back R17m in taxpayers’ funds?’

“Obviously at the the time in the media, everyone referred to Jacob Zuma as number one. In my world at Transnet, it was Anoj Singh or Brian Molefe. So it was between those three,” said Bester.

What surprised Bester was Padayachee and Reddy had sensitive information relating to the project which could only be given to them by a Transnet insider. It was agreed that a memorandum of agreement would be drawn up by Padayachee and Reddy.

According to Bester he was uncomfortable with the inclusion of the two companies without going to tender and alerted his superior, Alan Grey. The following events then occurred;

  • Bester received the MOA which stated the two companies owned by Reddy And Padayachee had formed a joint venture.
  • Bester and Grey were uncomfortable with the process and indicated to Transnet they would not sign the MOA.
  • Capital director of Transnet Rudi Basson was told of the new developments but urged Hatch to sign the MOA
  • Later, Bester would be told ‘number one’ was not happy with Hatch’s refusal to sign the MOA.

Hatch would eventually bow down to pressure from Transnet’s Singh and sign the MOA. Bester said Gupta lieutenant Salim Essa held a meeting at which Singh was present but said nothing as Essa took charge and told them how the project would be conducted.

“Mr Singh was sitting there, very well-dressed in a suit and tie, and Mr Essa was controlling him and, you know, he was sitting there as if he can, almost as if he can only talk to us when he is allowed to talk. It was very strange,” said Bester.

Though the deal went ahead, Singh was later suspended from the South African Institute of Chartered Accountants (SAICA) for gross financial misconduct at Transnet and Eskom. He also had a relationship with the Guptas, having taken trips to Dubai at their expense.

Catch up with testimony at the Zondo inquiry:

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