Transnet pays Nyanda firm R55m

Cape Town - A security company linked to Communications Minister Siphiwe Nyanda was paid R55m by Transnet under a contract awarded by suspended rail freight boss Siyabonga Gama, Public Enterprises Minister Barbara Hogan has disclosed.

The amount was more than double the R19m the tender, which helped to scupper Gama's bid to become Transnet's new chief executive, was so far believed to have been worth.

Hogan confirmed that Gama was only authorised to sign off on tenders worth up to R10m.

She also confirmed that the company, General Nyanda Security Risk Advisory Services (Pty) Ltd, continued to benefit from the contract for several months after Nyanda was included in President Jacob Zuma's cabinet.

She said in reply to a parliamentary question from Congress of the People MP Leonard Ramatlakane that the company "has been paid approximately R55m in a 20-month period since the conclusion of the contract in December 2007".

The initial value of the contract had been R18.9m a year, Hogan said.

She declined to divulge the details of the alleged irregularities on Gama's part since these are subject to an ongoing disciplinary hearing, but said he stands accused of exceeding his authority on the security contract.

"It is alleged that the chief executive of TFR [Transnet Freight Rail] exceeded his delegated authority for contracts concluded without a tender process when he authorised the conclusion of the specialised security contract.

"In the case of the security contract, the limit of the relevant executive's authority was R10m."

Gama was suspended in September as a result of alleged misconduct relating to that contract and a second, worth R900m, to buy 50 locomotives.

Hogan said with regard to the locomotive contract with the Electro-Motive Sibanye Joint Venture, it is alleged that he "failed to give effect to a condition determined by the Transnet Board in concluding and implementing the contract".

She said the Electro-Motive Sibanye Joint Venture had been paid about R550m since the deal was signed in May 2007. The company is said to have lacked the necessary experience to do the job.

Gama went to court to have his suspension lifted, but the application was dismissed.

He received strong political support, including from Justice Minister Jeff Radebe, but Zuma stepped in to say this had been inappropriate.

- Sapa