Contract between Transnet and Gupta-linked T-Systems under the spotlight

Arthur

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Rather unfair to say "Gupta-linked T-Systems", in my view.

T-Systems are a huge organisation owned by Deutsche Telekom. They operate around the globe. They might well have been involved in deals where the Guptas also inserted their grubby paws, but I find it hard to believe they knowingly did shady things.

It's the nature of state-capture crookery to taint even the innocent, and I suspect hundreds or even thousands of otherwise ethical and honest people and firms have been innocently and unknowingly caught up in the Gupta corruption rampage through our public institutions.

We shouldn't rush to judgment until clear and unambiguous evidence of malfeasance emerges.
 

ambo

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I don't think T-Systems Germany would have a majority ownership of T-Systems South Africa. They would not have the BEE scorecard to win business at parastatels like that. More likely a franchise or some other vehicle with majority local ownership.
 

Arthur

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Fair point.

But the local operation certainly uses the German/global vendor, supplier and payment systems, so the link must be close.

I don't know ... Isn't there some sort of BBBEE exemption, waiver, or relaxation for foreign-owned entities? Also, maybe T-Systems is a supplier or partner to the bid-winner, rather than the directly contracting bidder?
 
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Suspect99

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Fair point.

But the local operation certainly uses the German/global vendor, supplier and payment systems, so the link must be close.

I don't know ... Isn't there some sort of BBBEE exemption, waiver, or relaxation for foreign-owned entities? Also, maybe T-Systems is a supplier or partner to the bid-winner, rather than the directly contracting bidder?
When I worked at Transnet T systems used to charge us R30k for a basic 14" i3 Lenovo ThinkPad. And it used to take months to arrive from overseas. They were definitely milking the contract
 

Arthur

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When I worked at Transnet T systems used to charge us R30k for a basic 14" i3 Lenovo ThinkPad. And it used to take months to arrive from overseas. They were definitely milking the contract
Were you privy to the contract details? Their supply contract might well have stipulated that a multi-year maint & support be included in the purchase price in one roll-up figure, allowing that to be capitalised and so get the max tax benefit in Year 1. I know from long experience that things are seldom as simple as they might appear lower down.

On the other hand, sometimes they are.

So it depends. One would have to know a lot more detail.
 

Suspect99

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Were you privy to the contract details? Their supply contract might well have stipulated that a multi-year maint & support be included in the purchase price in one roll-up figure, allowing that to be capitalised and so get the max tax benefit in Year 1. I know from long experience that things are seldom as simple as they might appear lower down.
Sure that could be the case. I don't have all the details. I was in the engineering department and used to order laptops for my technicians from IT.

All I know is that we paid very high prices for mediocre laptops which took months to arrive and support was non existent when they failed. That's the experience from the end user.
 

Arthur

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Ja, that's certainly eyebrow-raising.

It's also possible that IT's billing to cost centres bore no relation to the supplier's contract price. Anyone who's worked in a large org knows that's often the case. T-Systems might have seen only a fraction of that price after annual recon and agterskot. Also, not a few large outsourced supplier contracts stipulate a buy-back after say 3-4 years at a defined percentage of original capex.

But we digress.

Just saying we shouldn't rush to judgment. It's easy to make things appear far worse than they really are. Or not.
 
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