Gautrain: Massive secret payoffs

LazyLion

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mg.co.za/article/2012-05-31-first-evidence-of-payoffs-in-contract-for-gautrain

More than a quarter of a billion rand was paid as “commission” to a shadowy Tunisian fixer.
The money came from Canadian multinational Bombardier Transportation, the lead partner in the Bombela consortium that won the tender in 2005 to build and operate the Gauteng rapid-rail system.
Although there is no specific evidence of onward flow to politicians and officials, the Bombardier payment is remarkably similar to the billion rand in commissions – which investigators regard in part as intended bribes – splurged by Britain’s BAE Systems during the controversial arms deal.
Similarities in the Bombardier and BAE payments include like-worded agency contracts, very large offshore payments in case the tender is won and even a related cast of characters.
The Tunisian who received the Bombardier commission is Youssef Zarrouk, an international arms and projects fixer who was influential in the notoriously corrupt regime of Ben Ali, the first president toppled in the Arab Spring last year.
In a call from Tunisia this week, Zarrouk confirmed receiving millions of dollars from Bombardier as its “agent”, but both he and Bombardier denied bribery. Bombardier insisted it followed best practice in such agreements and Zarrouk said: “No, no, no, no, these people of Bombardier, they don’t want corruption.”
The M&G has obtained an early version of the “representative agreement” between Bombardier and Zarrouk’s Tunis-based All Trade Company.
It envisaged a success fee of 6% of the contract value. Based on Bombardier’s reported $900-million (now R7.65-billion) share of the Gautrain contract, this would have given Zarrouk a commission of $54-million.
But Zarrouk said that Bombardier had subsequently whittled down the amount. He claimed not to remember the final figure.
Another source with knowledge of the situation, who asked not to be identified because of the sensitivity of the matter, said that the final figure was now $35-million (about R300-million).
At the time of the 2002 to 2005 Bombardier campaign to win the Gautrain contract, Zarrouk was close to a Frenchman with a long history in South African arms projects through his local company Advanced Technologies & Engineering (ATE).
The latter upgraded Mirages for the apartheid regime, helped to introduce arms deal fall guy Schabir Shaik to the arms trade in the mid-90s and got its own slice of the arms deal pie by producing navigation and weapons systems for BAE Systems.
Pizano became a significant player in the Gautrain campaign, tasking staff at ATE to help. Zarrouk claimed to have paid him an $8-million share of his commission, but Pizano told the M&G: “That is an absolute lie. I would be glad if that was the case, but it is a lie. I have not heard from him in the past three or four years, which is good … He took a lot of money, I suppose, but I never received a cent for my involvement in good faith.”
One of Pizano’s partners in ATE was Richard Charter, a key local agent for BAE during its campaign for arms-deal tenders.
An affidavit from Britain’s Serious Fraud Office, previously reported on by the M&G, details how BAE paid an offshore company of Charter’s more than £26-million, including $4-million in December 1999 as the contract between BAE and the South African government for the sale of military jets was signed.
Charter died in a 2003 kayaking incident on the Orange River that is yet to be fully explained.
The version of the representative agreement between Bombardier and Zarrouk’s All Trade Company obtained by the M&G is remarkably similar to the commission agreements used by BAE in its arms deal campaign. They are vague pro-forma contracts referring to “products” to be marketed in “territories” with a set percentage payable on successful conclusion of a deal. Details of territories and products are specified in addendums. Both contain strict anti-bribery clauses. Although these may help to shield companies like BAE and Bombardier by placing the legal onus on the agent, the question arises whether the payment of success fees of such magnitude are not incentives to bribe. Historically, this has often been the case.
The first hint that large sums of money might have changed hands to secure the Gautrain tender for Bombela came when connected businessman Peter-Paul Ngwenya filed summons against Bombardier in the South Gauteng High Court last year.
In the particulars of his claim, Ngwenya described himself as “an influential individual in political circles, having been a former Robben Island prisoner”.
He claimed that, in late 2003, he had entered into an oral agreement with Bombardier – the latter “represented by Richard Charter and/or Yousef Zarrouk” – under which he would join the company’s lobbying effort in exchange for a $7-million (R60-million now) success fee should it win the Gautrain tender. He demanded $6.55-million, claiming he had received only $450 000.
In responding papers, Bombardier claimed that the matter should have been referred to arbitration in London under the terms of a “settlement and release agreement” signed by itself, Ngwenya and Zarrouk in an earlier attempt to resolve the dispute. Bombardier attached a largely blacked-out copy of the agreement, obscuring all detail of the underlying facts.
The matter is heading for court next month, when Bombardier wants proceedings to be stayed in favour of the London arbitration, which would be held behind closed doors. Ngwenya has filed an opposing affidavit insisting the matter should be heard in open court. Bombardier, he claimed, “appears to believe that its conduct may have been improper and seeks to shield this from the South African courts, the South African authorities and citizens”.
Dealing with the background to the dispute, he accuses Bombardier of having been “very reluctant” to record its relationship in writing and of interposing Zarrouk, “a Tunisian … who had no ties or contact with South Africa into the relationship as the apparent paymaster”.

[ARTICLE CONTINUES....]
 
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Rabobi

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WOW IM SHOCKED :wtf:

/goes on with day to day work
 

Synaesthesia

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^ :p
I will try to carry on but I am shocked and appalled.
 
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Rabobi

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South Africans have become completely desensitized when it comes to cANCer and corruption because its reported daily, its just plain sad
 

LPCPT

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I always had my doubts about the cost of these projects. Now it's more understanable. The people who does the least work gets the most in the end. This is unacceptable
 

dualmeister

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Takes pinky finger out of corner of mouth.
Puts down fluffy white cat.
Fills out ANC application form.
Rubs hands together while picturing the millions.
Evil laugh.
 

Arthur

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Well, colour me unsurprised.

There's one scandal no-one speaks of that makes any Gautrain corruption pay-offs pale in comparison: the huge cost to the SA taxpayer, not just in the initial build cost, but over the next two decades. The recoveries from fare-paying passengers are but a small portion of the true overall cost of this project, and it is we taxpayers who ultimately pick up the tab (via taxes, redistributed to Transport Dept, Gauteng Province, Bombela, JMTD, etc, etc, etc. Sure it's a nice ride on the train, all first-worldy 'n that ... We Africans love our "vanity projects" that make us look oh so modern and advanced ... but it's all made possible by voodoo economics.
 

lucifir

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all these projects have been grossly over paid .... the figures just do not make sense when you look at the work done and the logical cost, even if you add 50% in some cases. These guys have generally received more than double what the projects should have cost and just so that some fool can get his hands on a few million, we end up paying billions extra!!
 

grok

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Just last week it was asked why we don't have any respect for Zuma or his government.

'Cos they're a bunch of ****ing thieves, that's why! :twisted:
 

Hemi300c

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Only the tip of the iceberg when it comes to Gautrain or and other government related "deal"

Be Corrupt - is first priority on job description for the government and cANCer.
 

lucifir

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Gautrain - a reason for E-tolling.

may have started off as that, but someone saw a further opportunity to fleece the citizens and the etolling also ended up with inflated prices .... think we will hear about the bribes related to etolling in about 5 years time
 

Bundu

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..... and the ignorant poor just carry on making their ticks next to the ANC on the ballot papers - suffer more!
 

Ady

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To be honest this doesn't surprise me, it seems to be the norm these days.

I'm waiting for the next secret payoffs scandal to break. E-TOLLING
 
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