Another Transnet financial scandal erupts: R10m tender for a ‘friend’

As another jobs-for-pals scandal erupts within the bosom of the state sector, it becomes increasingly apparent that the country’s black economic empowerment (BEE) laws are designed to benefit a clique with political and social connections. News24 has uncovered a Transnet deal that was awarded to an individual, allegedly on nepotistic grounds. This time R10m is at stake, small change in the state capture business –  but unacceptable for many reasons. These include the question mark around whether backhanders, and other perks, have been paid in exchange for securing the work to whether the company is genuinely up to the job of delivering the work to a sufficiently high standard. There are many victims in tender scandals, ranging from taxpayers – whose funds are being abused in the tender award and will have to fork out again if there is an investigation into financial irregularities – to the other companies that put time and resources into applications for work that has already been allocated to a favoured party. BEE talk might be useful for drumming up political support, but it looks like it is one of the ANC’s failures: A nice idea in principle, but too easily abused by the corrupt and greedy. – Jackie Cameron

By Pieter-Louis Myburgh

Johannesburg – A senior Transnet executive allegedly helped ensure that a company owned by his former boss landed a tender worth nearly R10m, and Transnet is refusing to provide evidence of the work the company did to justify its huge pay cheque.

Casterbridge Consulting, a company that appears to have been operated from a residential property in Centurion, was awarded a contract by Transnet Freight Rail (TFR) in late 2013 for providing “stakeholder management services” related to Transnet’s Swaziland Rail Link project.

A loading crane straddles a freight rail track near shipping containers on the opening day of Transnet SOC Ltd.’s new container handling terminal at City Deep inland port in Johannesburg, South Africa, on Thursday, Nov. 26, 2015. Photographer: Karel Prinsloo/Bloomberg

The company was paid R400 000 a month over a period of two years, throughout 2014 and 2015. The company has no website, while it allegedly used a Gmail account to communicate with Transnet.

Casterbridge Consulting’s sole director is Sandile Madolo. He used to be the boss of Sandile Simelane, a Transnet spokesperson and the head of TFR’s corporate affairs department, when the two worked at the Development Bank of Southern Africa.

A Transnet insider says Simelane played a direct role in ensuring Casterbridge secured the contract, and that those opposed to the contract have kept quiet out of fear of being victimised.

According to the request for proposal (RFP) documents for the contract, the winning bidder needed to “engage stakeholders, maintain public awareness and create an understanding of the Swaziland Rail Link project in both countries”.

3 press releases in 2 years

The Swaziland Rail Link, a joint venture between TFR and Swaziland Railway, is an ambitious plan to link Richards Bay in KwaZulu-Natal with Transnet’s rail network in Mpumalanga by means of a series of new and upgraded rail lines, some of which will run through Swaziland. The project was supposed to be completed this year, but it has been severely delayed.

A key component of the contract awarded to Casterbridge, according to the RFP documents, was to secure “positive media coverage” on the rail link project. The winning bidder had to “co-ordinate closely with [Transnet’s] media communications team members to ensure information is fed to the media effectively”.

However, writers from two local news outlets who have done some reporting on the rail link project say they received at most two or three press releases on the project during the time Casterbridge was being paid by TFR.

Read also: Brian Molefe’s Transnet legacy exposed: R8bn in dud trains bought from China?

“We got most of our information from a rail conference held in Johannesburg 2014, not from press releases,” says a writer at one of the publications. The few press releases they did get were from TFR itself, not from Casterbridge, say the writers.

According to the Transnet insider, Casterbridge received R400 000 each month, regardless of whether it did any work or not.

News24 invited TFR to provide us with a list of Casterbridge’s rival bidders for the contract, as well as some documentation proving that the company did indeed do the work it was paid for. TFR refused, claiming that “confidentiality provisions” prohibited it from doing so.

TFR did not deny that Casterbridge was paid R400 000 a month over two years, but stated that “due to contractual obligations TFR cannot divulge the value of contracts to third parties”.

Asked whether Simelane was directly involved in any of the TFR bid processes that led to his former boss clinching the contract, TFR merely stated that “the [bid] process followed all rigorous procurement and governance processes in the bid evaluation”. TFR did, however, indicate that “Mr Simelane disclosed that he once worked with Mr Madolo at the Development Bank of Southern Africa”.

‘Nothing to hide’

According to the state-owned rail entity, “Casterbridge submitted monthly reports of activities carried out on a monthly basis and were paid accordingly. Transnet Freight Rail is satisfied that all amounts invoiced by Casterbridge were for work performed for the project. The invoices were signed by four different people, two from TFR and two from Swaziland Railways.”

News24 asked Swaziland Railways for details on Casterbridge’s activities in that country, but the entity did not respond.

Madolo maintains there is “nothing to hide” with regards to the contract.

“I’ve done my job, and the contract has ended.” When asked exactly what work his company had been doing, Madolo referred News24 to TFR. “Those guys will give you all the details,” said Madolo.

According to Simelane, those questioning the contract are spreading “fake news”. He admitted that he’d previously worked under Madolo. Simelane says Casterbridge provided TFR with an “array of services” related to the rail link project.

According to the Companies and Intellectual Property Commission’s records, Casterbridge’s registered business address is a house in Zwartkop, a neighbourhood in Centurion.

The company was established in July 2012, a month before South Africa and Swaziland signed an inter-governmental memorandum of understanding for the rail link project. – News24


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