Molefe defends repeated awarding of contracts to McKinsey

He's told the state capture commission that he believed a new contractor would have to develop new models or use McKinsey's existing ones.

A screengrab of Brian Molefe giving evidence at the state capture inquiry on 9 March 2021. Picture: SABC/YouTube

JOHANNESBURG - Former Transnet CEO Brian Molefe has defended the repeated awarding of contracts to McKinsey and Regiments, insisting it came down to something called confidential confinement.

He's told the state capture commission on Tuesday that he believed a new contractor would have to develop new models or use McKinsey's existing ones.

He made an example in the form of a car, telling the commission “you can't buy Mercedes Benz from BMW.”

Molefe contradicted head of governance Mark Volmink who told the Inquiry that there were no proper grounds for these confinements.

READ: Molefe stands by decision to deviate from agreed payments to Essa's Regiments

Salim Essa’s company Regiments replaced another firm Letsema as McKinsey’s subcontractor.

The two companies were transaction advisors for the 1,064 locomotives project that was expected to cost R32 billion.

But after the contract was awarded, Molefe approved a decision to find another partner, saying Letsema was conflicted.

In 2014, several contracts were then awarded on confidential confinement.

When asked by the commission when one would invoke confidentiality confinement provision, Molefe said: “The reason for confinement is where you cannot source the service or goods anywhere else. You can confine if we require a Mercedes Benz C-class, you won’t get it from BMW.”

Molefe denied that the confidentiality applied internally.

McKinsey would later cede its rights to Regiments - making Regiments the main contractor.

But McKinsey has since said it would repay R650 million of its revenues from Transnet and South African Airways because the money was tainted.

WATCH: Brian Molefe on visiting the Gupta compound in Saxonwold

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