How Brian Molefe and Co ditched BEE to help Guptas and the Chinese

In what Deputy Chief Justice Raymond Zondo has equated to “changing the rules when the game is on”, the Commission of Inquiry into State Capture yesterday heard how Transnet’s team in 2012 bizarrely recommended that top executives approve the dumping of the broad-based black economic empowerment (BBBEE) bid evaluation criteria, ensuring that China South Rail (CSR) received a qualifying score in winning the multibillion-rand 95 electric locomotives supply tender.

CSR’s deal has already been linked to the controversial Gupta family.

Under cross-examination by commission senior counsel Mahlaphe Sello, MNS Attorneys managing director Tshiamo Sedumeni told how Transnet officials who served on the cross-functional evaluation team (CFET) went out of their way to assist CSR in a bid to get the company appointed as a preferred supplier of the electric locomotives.

The team’s recommendation was approved by former top executives Siyabonga Gama, Thamsanqa Jiyane and Brian Molefe. In stage two of the bid evaluation, CSR’s score increased from 56% to 70% due to Gama, Jiyane and Molefe’s approval to ditching BBBEE in the middle of a tender evaluation process.

Sedumeni is joint author of the damning report into the roots of the Transnet graft, which has led to several top executives being suspended or fired because of questionable transactions.

Sedumeni said suppliers had to meet a 60% threshold to proceed from stage one to two of the bidding process, which initially proved impossible for CSR.

“You had to produce a valid BBBEE certificate, demonstrate involvement in supplier development and the empowerment of locals. In the first stage, CSR only obtained 56 because of lack of compliance, while Siemens scored 63%, Bombardier 70% and SSMN 60%.

“Following the scoring outcome, the CFET created an alternative evaluation criteria, which removed the required BBBEE and made recommendations to Gama and Jiyane seeking approval. After their approval, the two recommend that Molefe finally approve the change, which he did on June 8, 2012,” Sedumeni said.

“To come up with such a change in the request for proposals (RFP) document, you are legally required to re-advertise and inform all bidders. But this was not the case.

“The issue is, if you are going to have a material amendment which affects other bidders, the right thing to do is to re-issue the tender. The major beneficiary of this waiver became CSR. As a matter of law, it is unfair to change matters of procurement during the bidding process. The law that prescribes the process to be followed, prohibits material changes.”

To demonstrate that CSR “enjoyed a special relationship with Transnet”, Sedumeni referred to a 2012 e-mail correspondence between Molefe and CSR representative Wang Pan – during the bidding process – something he said became a red flag for the MNS investigating team.

Pan wrote to Molefe thanking him “for the opportunity to bid for the 95 locomotives tender”, also alerting him that a CSR delegation would attend the briefing session on January 31 ,2012.

He also sought Molefe’s support on:

• Arranging “a discussion of cooperation” meeting.
• Meeting Transnet’s technical team.
• Setting up a Transnet site visit.
• Arranging discussions with private companies for “localisation work”.

In an e-mail to Pan, Molefe responded: “Thank you for your letter. “I have forwarded it to Mr Siyabonga Gama who will process and respond to your request. Thank you for the interest shown in the tender.”

“The e-mails cannot be considered innocent, particularly in the light of what followed,” said Sedumeni.

– brians@citizen.co.za

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