“I had small fears in the back of my mind,” said Transnet Freight Rail’s executive manager responsible for enterprise-wide business services, Yousuf Laher, while testifying at the Zondo commission of inquiry into allegations of state capture on Thursday.
Laher, who has been accused by former Transnet engineer Francis Callard of inflating tender prices, was describing his role as part of a team that worked on two controversial tenders – one for more than 1 000 trains and another for 100 locomotives that the state entity paid an excess of R1 billion for.
Callard had told the commission that Laher asked him to draft a memorandum to increase the cost of the locomotives, but Laher denied that he was responsible for the approval of the deal, saying he took instructions from Transnet’s chief financial officer at the time, Anoj Singh.
“Singh said they were affordable and that Transnet had the funding to afford those advance payments, and the advance payments were agreed to as part of the package deal by the steering committee. So when Singh told us that the steering committee accepted the price of R44 million, he also said they accepted the advance payment that goes with it,” said Laher.
He told the commission that he did not question Singh’s instructions because of his seniority and experience, and it would have been tantamount to insubordination if he had done otherwise.
“Singh was very senior at the time, he was very experienced, so I had to respect his views,” he said.
He said that he told his bosses that he didn’t agree with the increase of a contract price from R3.8 billion to R4.8 billion, but the numbers were approved by Singh and by the steering committee.
Evidence leader Advocate Anton Myburgh asked why Laher, as a chartered accountant, did not point out to Singh that the pricing had been inflated when he realised that something was wrong.
“Post the negotiation sessions, Singh explained to me the principal elements that needed to be included in a memorandum that needs to go to the board to request an increase in the estimated total cost from the initial pricing. I think it was R3.4 billion, I could be wrong, to the amount of R4.4 billion detailing the reasons for the increase in price.
“He also explained to me the detailing of the format he wanted the numbers presented in for this particular memo to the board, and he requested that I type it up into a draft memo that was already prepared,” said Laher.
He said that he would not have approved the price and did not have the powers to sign off on the deal, therefore, it was approved by the steering committee.