NEWS

Transnet Tender Balloons After 'Backchannel Negotiations' By Gupta Associate

The Guptas' fingerprints are all over an inflated IT contract.

14/11/2017 08:02 SAST | Updated 14/11/2017 08:03 SAST
Dean Hutton/Bloomberg via Getty Images
Jacobus van der Merwe, a train driver, passes a locomotive operated by Transnet at the company's rail depot in Ermelo, March 10, 2014.

A tender awarded to an IT company ballooned in price allegedly following the intervention of Gupta lieutenant Salim Essa, News24 reported. The contract, awarded to IT company T-Systems, reportedly grew in value from R1.7-billion to R3-billion after Essa became a "backchannel negotiator" for the company.

While T-Systems admitted to News24 that it considered hiring Essa as a "sales agent", the company said this did not occur. But sources reportedly told News24 that in 2013 and 2014, Essa appeared in meetings with Transnet as a negotiator on behalf of T-Systems.

Essa was allegedly involved in the negotiations during the time when the contract was up for renewal.

"The tender was ready to roll [be issued] in November 2013 and was being insisted on by procurement (Transnet's procurement division). But in January 2014, T-Systems was awarded the two-year extension, which was set to commence in 2015," a source said.

A source at Transnet reportedly told News24 that the extension of the contract took place with no reasons given, and that this was done on orders from Transnet's then-CEO, Anoj Singh. Singh is currently on suspension from his position as chief financial officer of Eskom following allegations about his links to the Guptas and state capture.

Local empowerment partners chosen by T-Systems also reportedly had links to the Gupta family and their networks. In one case, around the time that the contract was being negotiated, Essa's wife reportedly bought shares in one of the empowerment partners.

This information was reportedly contained in the #GuptaLeaks emails.

T-Systems reportedly said it did not know about the links between the Gupta associates and the empowerment firms, and it has terminated its relationships with these firms.

T-Systems told News24 that this took place after an investigation by law firm Bowmans.

Court documents reportedly show that a data services tender at Transnet was awarded to T-Systems in spite of the fact that Transnet management recommended the appointment of another firm. Transnet's board acquisitions and disposals committee allegedly overrode the recommendation. The committee is reportedly chaired by a Gupta benefactor, Stanley Shane, who apparently received R1 million from the Guptas in September 2016.

Essa and his wife did not respond to News24's questions, and Transnet said it wanted to reserve comment.