Government-owned freight and ports company Transnet has reported a huge jump in its irregular expenditure.
The company’s irregular expenditure increased to R8,1 billion in the 2017/18 financial year, from R692-million in the previous financial year.
Transnet says the huge increase was mainly because procurement systems were flawed and procedure was not properly followed.
Transnet CEO Siyabonga Gama released the company’s financial results ending 31st March 2018 in Kempton Park, east of Johannesburg, earlier on Monday, despite being under notice of suspension.
Gama says the company has had to endure a bad reputation as a result of state capture allegations. He says they have strengthened their procurement systems and they will be presenting a remedial plan to the board.
Gama says they have a long way to go to receive a clean audit. “There is 8.1 billion of irregular expenditure. Our external auditors were unable to obtain sufficient and appropriate audit evidence that irregular expenditure as disclosed in the financial statement was complete and accurate.
“Primarily due to the lack of implementation and monitoring of the existing controls to identify and report of irregular expenditure, so they were also unable to confirm the completeness of irregular expenditure by alternative means,” Gama explained.
He says there are 22 different investigations taking place. Many of the issues of state capture are as a result of third parties being paid by Transnet, Gama says, adding that they are working with the Hawks and the Special Investigation Unit (SIU).
“At the end of the investigations there needs to be retribution obviously by all means, if we find and there is evidence that there are people we have overpaid for whatever reason, we will find who the culprits are we will find , what entities they are to find out those amounts can be recovered by Transnet.”
#Eskom and #Transnet were the two biggest public-sector spenders on fixed assets, with Eskom responsible for 28% of total capital expenditure while Transnet was in second spot at 9%https://t.co/4v2DmELHPW pic.twitter.com/VqvoSpnbH0
— Stats SA (@StatsSA) August 20, 2018
Despite facing tough economic challenges, the Group reported revenue increasing by 11.3% to R72.9 billion for the reported period as a result of growth in railed export coal volumes, automotive and container volumes.
The Group invested R2.3 billion in rail infrastructure for the reported period.
Meanwhile, Gama and two executives have been issued with letters of intention to suspend by the board. The three executives are alleged to have various acts of misconduct levelled against them in particular allegations linked to the procurement and acquisition of more than 1000 locomotives for Transnet valued at R54 billion.
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