State capture: Transnet bosses accepted R600m relocation costing at face value
This was among the submissions of MNS Attorneys Thobani Mnyandu who testified on Thursday about the cost of relocating train manufacturing facilities from Johannesburg to Durban at great cost for the state-owned company.
PRETORIA - The state capture commission of inquiry heard how a locomotive manufacturer submitted a cost proposal of more than R600 million, but Transnet bosses accepted it on face value without interrogating how the sum was reached.
This was among the submissions of MNS Attorneys' Thobani Mnyandu who testified on Thursday about the cost of relocating train manufacturing facilities from Johannesburg to Durban at great cost for the state-owned company.
Mnyandu explained how the estimated costs of the relocation started at an estimated R9 million but by the end of negotiations had grown astronomically.
“The relocation costs were made up of the transportation cost, logistic costs and the loss of industrial footprint synergies which totaled to R618 million. There is, however, no conclusive breakdown of the costs which would seek to support the amounts which were claimed in each respect.”
Mnyandu explained the nature of his engagement with Transnet’s Lindiwe Mdletshe, who was part of the team negotiating with the suppliers.
“One, the exchanges to the relation of relocation were rather hostile. Two, she gave the impression that she being a supply chain services personnel would not have the expertise to deal with the assessment of the proposals notwithstanding that she was part of the negotiation team.”