https://www.miningweekly.com

Malusi Gigaba named in bombshell Treasury report on rot at Eskom, Transnet

16th November 2018

By: News24Wire

  

Font size: - +

National Treasury has released a bombshell report of more than 600 pages detailing the extent of rot at Transnet and Eskom over the last six years – and says Malusi Gigaba compromised the procurement process of controversial new Chinese locomotives.

The report, compiled after a forensic investigation by Fundudzi Forensic Investigation Services, found widespread irregularities, improper and illegal payments and flouting of good governance laws.

The investigation specifically looked at the deals between Eskom and coal producer Tegeta, the contracts between Regiments Capital and Trillian Advisory Services with both Eskom and Transnet as well as management consultant McKinsey. Tegeta, Regiments and Trillian are all Gupta connected or owned.

The report also looked at the acquisition by Transnet of new Chinese locomotives from which the Gupta-linked companies also benefited. The report states: "Minister Gigaba compromised the procurement process by signing the LSA between Transnet and CSR as a witness."

Other findings include:

  • Senior Eskom executives violated financial and anti-corruption laws in awarding lucrative coal supply contracts to Gupta owned Tegeta and for a R659-million ‘pre-payment’ for coal also paid to Tegeta.
  • Former chief financial officer Anoj Singh and former head of generation Matshela Koko both misrepresented facts to the Parliamentary Portfolio Committee on Public Enterprises in relation to a 3.5% discount they claimed Eskom had negotiated with Tegeta in relation to the coal supply. 
  • Singh and McKinsey compromised the integrity of the procurement process at Transnet by sharing details of the process before the contract was awarded by then Transnet CEO Brian Molefe.
  • McKinsey and Regiments started doing work for Transnet before an agreement was reached and that it and Trillian were paid for expenses without producing supporting documents.
  • McKinsey, Regiments and Trillian were paid R1.5-billion by Transnet between 2012 and 2016.
  • Transnet made an irregular payment of R94-million to Trillian.
  • The appointment of McKinsey to Eskom was “not in line with the Constitution”.
  • Molefe, Siyabonga Gama and others compromised the integrity of the procurement process for the Chinese locomotives by changing the prescribed conditions for the bid after it closed. 
  • Transnet officials “went out of their way” to assist China South Rail, the eventual successful bidders for the new locomotives.

The investigators urge Treasury to act on its investigations in order to address the underlying issues at Transnet and Eskom and to not only treat the "symptoms" of governance shortcomings. 

Read the report here.

Edited by News24Wire

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION