Former Transnet CEO Brian Molefe appears at the State Capture Inquiry this week. Picture: Rosetta Msimango
- Former Transnet CEO Brian Molefe told the State Capture Commission he was not aware that a company he had awarded an IT contract to had ties with Gupta associate Salim Essa.
- Molefe said he overturned Transnet’s contract with Neotel because he was concerned about a security breach under its watch.
- The decision by Molefe to award the IT contract to T-Systems was revoked following a legal opinion on the matter.
Former Transnet CEO Brian Molefe told the State Capture Commission on Wednesday that he was not aware that a company he had awarded a network contract to had ties with Gupta associate Salim Essa.
T-Systems, a company that Molefe awarded a network services tender to when he was Transnet CEO in 2013, had intended to partner with an entity that had Essa as one of it directors.
Essa’s name has loomed large in the evidence relating to Transnet and Eskom business transactions presented before the commission, with Molefe, who has been the top executive at both companies, repeatedly stating that he does not know the businessman.
While other companies with links to Essa had managed to bag lucrative contracts in both parastatals, the 2013 appointment of T-Systems as a service provider favoured by Molefe was eventually scuppered by a legal opinion.
Former acting CEO Sharla Chetty had awarded the contract to Neotel on 31 October 2013. The company had an existing contract with Transnet.
However, Chetty’s decision was overturned by Molefe when he took over the reins later that year. Molefe felt that Neotel was not a suitable choice and reversed its appointment in favour of T-Systems on 20 November 2013. T-Systems was to join forces with Broadband Infraco (BBI) on the tender.
Evidence leader Advocate Anton Myburgh asked Molefe if he was aware if BBI had Essa as one of its directors, although he resigned on 14 October 2014.
“I knew that Broadband Infraco was a state entity, but I did not know that Salim Essa was a director,” said Molefe.
I did not know about Essa – Molefe
Myburgh put it to Molefe that during the time that Transnet was dealing with the T-Systems tender debacle, Essa was an active director of BBI.
“I did not know that,” Molefe responded, later conceding that he now understands Essa’s position based on the information presented to him.
Chetty had stated in an affidavit filed with the commission that the reasons provided by Molefe for the reversal of Neotel’s appointment were “bad” – a sentiment also shared by Transnet’s head of governance Peter Volmink and Gerhard van der Westhuizen, and executive in the procurement division.
On 6 June 2014, following a legal opinion, Molefe revoked T-System’s appointment.
He told the commission that he had written a memorandum stating the reason behind his decision and one of the motivations was that Transnet had been hit by a security breach under Neotel’s watch, compromising its IT security systems.
Molefe described the breach as an “embarrassment” as it was not known “what kind of information was taken out of the Transnet system” during the incident.
He further stated that another of the reasons that warranted the reversal was that Neotel was at the time being sold and one of its bidders had been Vodacom, a company which had unsuccessfully made bid for the network services tender.
“It felt like giving a tender to Vodacom, because they had made a bid and lost, and they were now buying Neotel.”
In the memorandum supporting the Neotel’s appointment, Molefe argued that a R248 million discount offered by T-Systems should be considered, as it impacted pricing scores.