Transnet fighting to keep R2.5-billion Gupta-linked contract

State-owned enterprise Transnet is fighting to keep its R2.5-billion five-year contract with T-Systems, despite a court order to give the contract to a competitor, the City Press reports.

According to documents seen by the City Press, Transnet plans to defy an order from the Johannesburg High Court to award the contract to Gijima Holdings.

Transnet has not taken any action towards complying with the court order, instead conducting an internal assessment to determine whether it should award the tender to Gijima.

The state-owned enterprise reportedly has a “political aversion” to Gijima, despite the company charging 50% less than T-Systems for the same tender.

While Transnet aims to extend the T-Systems contract by a further 12-24 months, Gijima COO Maphum Nxumalo said the company was concerned about its intentions to defy the court order.

“We do not believe that Transnet’s chairman, Popo Molefe, would condone such underhanded tactics against Gijima by Transnet forces who are evidently still aligned to the Guptas,” Nxumalo said.

“We expect Transnet to implement the high court order without delay to save itself spending more than R500 million per annum, and to transform and innovate its business with Gijima.”

Transnet under fire

Transnet has a troubled past with Gupta-linked contracts and tenders, with an investigation by the National Treasury last year recommending criminal probes into locomotive tenders.

The state-owned enterprise awarded a tender for the delivery of new locomotives to Gupta-linked companies, after which the cost of the contract was inflated from R38.6 billion to R54.5 billion.

As investigations into the locomotive tender continued, Transnet began demanding the additional costs to be paid back by its former executives in addition to the Gupta-linked financial services firm Regiments Capital.

Transnet also demanded R93.5 million from Trillian Asset Management for work it paid the company for.

According to the claim, Trillian Advisory submitted a proposal to now-suspended Transnet engineering head Thamsanqa Jiyane, offering to “undertake financial structuring advisory services in order to assist Transnet Engineering… with the fundraising required to facilitate its African and global sales of rolling stock”.

Transnet said this proposal was unsolicited.

Now read: Report recommends criminal probes against Eskom and Transnet

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Transnet fighting to keep R2.5-billion Gupta-linked contract