Transnet fights to keep multinational T-Systems in R2.5bn IT contract


Defying a high court ruling that the deal go to a competitor, the SOE is making alternative plans

Transnet appears to be pulling out all the stops to keep a IT firm company in a R500 million a year contract – despite a court judgment ordering the state-owned enterprise (SOE) to give it to a competitor.

City Press has seen documents marked “strictly private and confidential” that show how Transnet officials are hellbent on defying a Johannesburg High Court order stipulating that the SOE appoint IT mogul Robert Gumede’s Gijima Holdings, instead of German multinational firm T-Systems, for the IT data services contract.

This is also despite T-Systems voluntarily withdrawing from the contract while the court case was pending.

Transnet awarded the R2.5 billion five-year contract to T-Systems in March 2017, although Gijima had scored more points during the bidding process and was cheaper by R500 million. T-Systems came second.

The court ruled in December that Transnet had shown “bias” towards T-Systems.

City Press has seen proof of this in a transcript of the Transnet board’s acquisitions and disposals committee (ADC) minutes.

The court quoted the ADC’s minutes in the judgment. In the minutes, Transnet’s former chairperson, Stanley Shane, shows a brazen bias towards T-Systems.

Shane has been heavily linked to the Gupta family’s state capture project.

In February 2017, before the tender was awarded, Shane addressed the ADC, saying: “To go and source to Gijima or anybody else, in my opinion, would be tantamount to suicide.

“That is my perspective on it. That is the newspaper article I would rather have – with no disrespect to Gijima, who are not alien to suing their customers.

“I am happier with the risk of getting sued by Gijima, who did not get the contract, than us getting rid of the incumbent we helped to create.”

T-Systems is in partnership with supplier development company Sechaba, known for its links to the controversial Gupta family.

Judge Raylene Keightley said in her ruling in December that: “To permit such a tainted decision to stand would be inimical to the constitutional requirement that tender processes should be fair, equitable, transparent, competitive and cost-effective.

“I am satisfied that Transnet acted unlawfully to award the tender to T-Sytems.”

Gijima Holdings had been waiting for Transnet to abide by the court order since the judgment, but no action to this effect has been taken.

Instead, Transnet officials have been trying to extend T-Systems’ contract for a further 12 or 24 months.

T-Systems was awarded the five-year contract in December 2009, but ever since it expired in January 2015, Transnet has been extending the contract.

City Press can confirm that Transnet is ignoring the court order and instead, intends to conduct an “independent assessment” that will determine whether the tender should be given to Gijima or not.

Events in the Transnet IT data services contract

The SOE has issued an advert for an IT expert to do the job.

A document, titled GICT IT Data Services – Risk Agreement, indicates that Gijima’s montly costs would amount to R23.6 million – about 50% less than T-Systems’ current charge of R58.5 million a month.

It indicates that the “interim T-Systems’ disengagement” from Transnet was put on hold as the board wanted an “independent assessment” of the tender.

Transnet, according to the document, will explore options on how to extricate itself from the conundrum.

The document notes a “political aversion to Gijima by the board”. This can be interpreted to mean that the Transnet board is unwilling to award the tender to Gijima.

Transnet did not respond to written questions sent to communications officer Nompumelelo Kunene last week, despite her promising to do so.

Further email correspondence between Transnet’s acting group chief information officer, Rebatho Madiba, and its divisional chief information officer, Sharla Chetty – which City Press has seen – indicates that there is a push to ask Treasury to extend the contract with T-Systems and then advertise the tender, thereby pulling the rug from under Gijima in contempt of court.

Gijima’s chief operating officer, Maphum Nxumalo, said the company became aware of Transnet’s intentions when City Press asked questions.

“Gijima has noted the questions and the concerning internal documents,” said Nxumalo.

“We have written to Transnet via our attorneys and await their response.

“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.

“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,” he said.


What do you think about state-owned enterprises that blatantly ignore court orders? How should the state root out all these corrupt forces?

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