LIVE: Corruption, state capture a high cost to the economy – Gigaba

Gigaba washes his hands of Gupta-related contracts at Eskom,

Home Affairs Minister Malusi Gigaba has washed his hands of
Gupta-related contracts with state-owned enterprises during his tenure as
public enterprise minister.

He was delivering his testimony before the portfolio
committee on public enterprises on Tuesday.

He spoke specifically to Gupta-related contracts with Eskom,
Denel and Transnet.

“This topic is challenging as the extent of Gupta-related
corruption is only now surfacing. It is becoming increasingly apparent that
even tenders that appeared lawful may have been tainted,” he said.

“At Eskom, the primary issues that have attracted attention
were Trillian, the Regiments Saga, and Tegeta. All of these occurred outside of
my tenure at DPE (department of public enterprises). I cannot therefore comment
on them.

“The only interaction I had in relation to Tegeta, is when I
ordered a forensic investigation in 2017 as the minister of finance,” he said.

With regard to Denel, Gigaba said he is also only aware of
the VR Laser Asia partnership which also happened after his tenure at the DPE.

minister of finance, I did not give concurrence to the VR Laser proposal.”

Gigaba however spoke on Transnet contracts, particularly the
procurement of 1064 locomotives.

The contract, submitted to Gigaba for his
approval in May 2013, was estimated to cost R38.6bn over a seven-year period.

In June 2013 he received a decision memorandum wherein the
business case for the tender was made.

“In summary, the new locomotive purchase was going to create
value for Transnet,” he said. The tender would also lead to benefits for the
economy, including R68bn in localisation, the development of manufacturing
skills and the creation of jobs, among other things.

Gigaba said that he was advised that an “enhanced governance
process” was in place for the acquisition. A locomotive steering committee
(LSO) was established and mandated by Transnet’s Executive Committee and
chaired by the Group CEO.

“I was satisfied with the business case, and I approved the
memorandum on 3 August 2013,” he said.

Gigaba explained he was not involved in the procurement of
locomotives and was only involved in the process of granting authorization under
the PFMA.

With regard to New Age Sponsored Breakfasts, Gigaba said in
2011 he became aware that New Age was looking to sponsor Transnet and Eskom for
business breakfasts.

“I was upset about these sponsorships because it was a large
sum of money, even though it was below the materiality threshold and was
strictly within the operational purview of the board.

“I felt it was inappropriate that such large sums of money
were being spent on breakfast sponsorships, especially in the midst of such
large-scale build projects that were being undertaken.”

Gigaba then issued a
directive that all sponsorship requests be routed through the department.

By 2013, the Public Protector had initiated an investigation
into the sponsorships.

“I was informed that the Public Protector’s main focus was
an investigation into fruitless and wasteful expenditure at Eskom, Transnet,
SABC and Telkom, and the allegation that the Department exercised undue
influence on those companies in deciding to sponsor the TNA breakfasts.

“It is apparent from what I have just stated, and from the
written instructions that I sent to the chairs of the SOC’s (state-owned
companies) that I was doing the opposite of militating in favour of the TNA
sponsorships,” he said.