Transnet will comply with court order on R2.5bn tender

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Transnet will be complying with a court order to award a R2.5 billion IT data services contract to billionaire Robert Gumede’s company, despite evidence suggesting that officials were contemplating extending T-Systems’ contract by a further 12 months.

City Press reported last week that documents marked “strictly private and confidential” had shown how Transnet officials intended to defy a Johannesburg High Court order stipulating that they appoint Gumede’s Gijima Holdings, instead of German multinational company T-Systems, for the IT data services contract.

T-Systems was Transnet’s IT data services provider for seven years.

Its contract with Transnet was valid for five years, but the state-owned enterprise (SOE) has been extending the contract since its expiry date two years ago.

In March 2017, the Transnet board awarded a new contract to T-Systems, but Gijima challenged it on the grounds that it had scored more points during the bidding process and was cheaper than its competitor by R500 million.

Transnet’s then CEO, Siyabonga Gama, approached the court to set aside the board’s decision.

The court ruled in December last year that the board was wrong in awarding the tender to T-Systems. This was after T-Systems had itself voluntarily withdrawn from the contract to focus on other business opportunities.

However, since the court ruling, Transnet has not appointed Gijima, as ordered.

City Press has obtained documents that prove why Transnet did not implement the court order.

The documents show that the SOE intended to conduct an “independent assessment” that would determine whether the tender should be given to Gijima or not.

The SOE had also put out an advert for an IT expert to do the job.

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

Despite this, Transnet was bent on exploring alternative options, proving its unwillingness to award the tender to Gijima.

Other documents – in the form of email correspondence between Transnet’s acting group chief information officer, Rebatho Madiba, and its divisional chief information officer, Sharla Chetty – indicated that there was a push to ask Treasury to extend the contract with T-Systems and then advertise the tender, in defiance of the court order.

Transnet spokesperson Molatwane Likhethe did not deny that Transnet wanted to conduct the independent assessment, nor did he dismiss the contents of the documents City Press has seen.

“It is a matter of public record that the supply chain management system at Transnet has been abused. It is this board’s intention to ensure that all major contracts will be reviewed to ensure that they comply with the spirit and letter of the Public Finance Management Act.”

He said Transnet would not answer specific questions on the issue but would, instead, focus on factual circumstances of the contract and on the court judgment.

“It was Transnet that approached the court for the declaratory order to set aside the letter of intent to award [the contract] to T-Systems in March 2017,” said Likhethe.

“In its order, the court granted Transnet’s application, which opened the way to award the contract to Gijima [and] Transnet will comply with the court order.

“As expected in any organisation, management should exercise its fiduciary duties and carry out a continuous assessment of risks relating to contracts in place and services provided.

“Accordingly, Transnet’s management continued to engage in this exercise [and] in assessing the risks, and has no intention of undermining the court order,” he added.

Likhethe said given that the transition period between T-Systems and Gijima was six months, “the insinuation that management is keeping T-Systems in the system for longer is incorrect”.

T-Systems spokesperson Thamsanqa Malinga said: “In October last year we widely communicated that we agreed to cooperate with the new Transnet board, to withdraw from the court case and abide by their decision. Our position has not changed.”

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