Johannesburg: The fraud and corruption case against former Group Chief Executive Officer (GCEO) of Transnet, Brian Molefe, and his co-accused has been postponed for further investigations. The other accused are former Group Chief Financial Officer Anoj Singh, former Chief Executive Officer Siyabonga Gama, and former Chief Procurement Officer in the Transport Freight Rail (TFR) division.

According to South African Government News Agency, the four are facing 18 charges, including Contravention of the Public Finance Management Act (PFMA), Contravention of the Companies Act, fraud, and corruption. They were granted bail of R50,000 each. Investigating Directorate Against Corruption (IDAC) spokesperson, Henry Mamothame, explained that the charges relate to Transnet’s strategic plans in 2011 to ‘actively create capacity, giving rise to their Market Demand Strategy (MDS)’.

The MDS was aimed at expanding and modernizing Transnet’s rail, port, and pipeline infrastructure. During the process of acquiring locomotives to expand and modernize the country’s rail infrastructure, the accused allegedly flouted the tender process by irregularly appointing a company that did not qualify, CSR, a Chinese company, to provide the 95 locomotives. Other due processes were not followed to advantage CSR, resulting in a bid initially costed at a little over R3.2 billion being inflated and allegedly exceeding its contract value by over R231 billion, leading to a payment of over R3.4 billion.

There were two other bids relating to the acquisition of 100 and then 1064 locomotives, procured again with CSR due to the alleged flouting of processes by the accused. The 100 locomotives, initially costed at R3.8 billion, were inflated to R4.8 billion, and the 1064 locomotives, initially costed at R38.1 billion, soared to R54 billion.

Additionally, the four held key positions at the state-owned entity, and it was their duty to perform due diligence and ensure that Transnet got value for its money. They, however, are alleged to have enabled and ensured that costs were inflated and that their preferred bidder was unduly advantaged.

This case is a significant state capture matter. During the State Capture Commission hearings, the country heard how billions were looted from Transnet. This case illustrates the flouting of services and the generation of billions of rands not attributed to the rail modernization project. The arrest of the accused highlights how persons in positions of trust and power allowed themselves to be part of a corrupt relationship that sought self-enrichment rather than the enrichment of the country and its infrastructure.

The case is expected back in the Palm Ridge Specialized Commercial Crime Court on 6 October.