Judicial Commission

Of
Inquiry into allegations
Of
State Capture, Corruption and Fraud in the
Public Sector Including Organs of State

Report: Part II
Vol.1: Transnet

Chairperson: Justice R.M.M. Zondo

Acting Chief Justice of the Republic of South Africa
 TRANSNET

LIST OF KEY ABBREVIATIONS AND TERMS....................................................................A

CHAPTER 1 – STATE CAPTURE AT TRANSNET .............................................................. 1

The terms of reference and legal framework................................................................. 1

An overview of state capture at Transnet ...................................................................... 7
The restructuring of governance and the weakening of institutional controls ......... 18
President Zuma’s refusal to appoint a GCEO ............................................................. 27
The dismissal of Mr Gama ............................................................................................ 40
The role of Mr Gigaba as Minister of Public Enterprises ............................................ 43
The appointment of Mr Brian Molefe as GCEO ........................................................... 47
The reinstatement of Mr Gama ..................................................................................... 50
The payment of Mr Gama’s legal costs ....................................................................... 62
Political interference and impropriety in the reinstatement of Mr Gama .................. 67
The appointment of Mr Gama as GCEO....................................................................... 70
Mr Gama’s links to the Gupta enterprise ..................................................................... 73
Mr Singh’s links to the Gupta enterprise ..................................................................... 76
Other key appointments ............................................................................................... 80
The role of Mr Essa ....................................................................................................... 83
The cash bribes ............................................................................................................. 86

CHAPTER 2 - THE GNS/ABALOZI CONTRACT ............................................................. 105

The confinement and terms of the contract .............................................................. 105

Misrepresentations and improprieties in the award of the contract ........................ 107
The litigation ................................................................................................................ 108
The withdrawal of the litigation .................................................................................. 111
The settlement and improper payment of R20 million to GNS/Abalozi ................... 116

CHAPTER 3 – THE PROCUREMENT OF THE 95 LOCOMOTIVES ................................ 123

The procurement decision.......................................................................................... 123

Inappropriate communications with CSR during the bid ......................................... 125
The changing of the evaluation criteria to favour CSR ............................................ 132
The award of the contract to CSR .............................................................................. 137
 CHAPTER 1 – STATE CAPTURE AT TRANSNET

The terms of reference and legal framework

1. The Commission is required to investigate allegations of state capture, corruption

and fraud in Transnet. In the period between 2010 and 2018 Transnet was involved

in major procurements of locomotives, network services and infrastructure

expansion. The evidence reveals extensive wrongdoing by some members of the

board of directors and senior executives at Transnet during the relevant period.

2. The terms of reference (“TORs”) of the Commission in relevant part require it to

determine: i) whether attempts were made to influence members of the National

Executive, office bearers or employees of Transnet through any form of

inducement or any form of gain;1 ii) whether the President or any members of the

National Executive, public official or employee of Transnet breached or violated the

Constitution or any relevant ethical code or legislation by facilitating the unlawful

awarding of tenders to benefit the Gupta family or any other family, individual or

corporate entity doing business with government or any organ of state; iii) the

nature and extent of corruption in the awarding of contracts, tenders to companies,

business entities or organisations by Transnet; and iv) the nature and extent of

corruption in the awarding of contracts and tenders to companies, business entities

or organisations by government departments, agencies and entities - particularly,

whether any member of the National Executive (including the President), public

1 Including gratifications and property as defined in the Prevention and Combatting of Corrupt Activities Act 12 of
2004 (“PRECCA”) and the Prevention of Organised Crime Act 121 of 1998 (“POCA”)