Transnet loses R1.3 billion through corruption, fraud

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Transnet says it has lost R1.3 billion through corruption and fraud. Chairperson Popo Molefe has told the media in Johannesburg that investigations are on-going and more people have been suspended.

Molefe says summons have already been issued to some of its top executives implicated in financial mismanagement. Some are still with the organisation while others have already left.

He has confidence in the new board which he says has recovered some of the money from the controversial locomotive deal reached with the Guptas.

Molefe spoke confidently about his new board and changes that will be taking place at the state-owned freight and Rail Company. He says it has not been easy to root out corruption as some of the people involved were reluctant to release information.

Molefe says the company is also reviewing various contracts, including the controversial Gupta-linked locomotive deal.

“We have recovered some money so far, the money that was paid for the maintenance of the locomotives; it was about R700 million we have recovered 600 so far. We are trying to get the VAT that was paid from that money. We are coordinating our work with all these organs of state partly to make sure we don’t duplicate the work and spend money on the lawyers which can be done by the SIU and the Hawks but we also share information with them and we think a number of heads are going to roll as a result of the investigations that are taking place. So it’s a combination of civil action as well as criminal action. We will focus more on the civil side because we want the money and let those who deal with criminal action do their job.”

Transnet says it will come back with a more detailed plan on how they will resolve challenges at some of their business units.

Acting Chief Executive Officer Tau Morwe says they want to restore integrity and profitability at the organisation. Morwe says they have started talking to customers and will address challenges at the Durban port which is running out of space.

The company is also engaging with the private sector to see how they can co-operate. Transnet acknowledged that some assets are not being utilised such as its R30 billion property assets. Morwe says this can be turned into a fully-fledged property development company.

“Strategy that was on paper and what was happening in reality the two were not taking to each other and the key focus area was to go back and put in place an operating model for Transnet  that is fit for purpose, it’s not a new strategy but rather doing things that Transnet is supposed to be doing.”

Molefe says he is confident that the organisation is moving in the right direction and that the right people have been appointed.

“The attitude we take is that we want to operate purely on a professional basis, we don’t want to treat everyone as a suspect in the company. They will reveal themselves as suspects once they begin to drag their feet and they don’t want to do their job. But we have here people with extensive experience. We’ve got more than a thousand engineers in this organisation and there are many good men and women who want to serve this country and as a board we would like to give them an opportunity to prove them wrong.”

Transnet’s new board was appointed in May last year. It has since been trying to stabilise the organisation and root out corruption.

Axed Transnet CEO, Siyabonga Gama, and former CEO Brian Molefe are among those who have been issued with summons. The board says its priority is to collect money lost through state capture and other fraudulent activities. Disciplinary hearings for those suspended will start next week. Click below for more on the story: