[100710.EN.LAN] S. Africa : Transnet Fires Freight Rail Chief

Transnet has summarily dismissed its Freight Rail chief executive, Siyabonga Gama, for three incidents of misconduct. Sharon Gill reports from South Africa. Gama was found guilty on three charges of misconduct by an independent chairperson.

When the media cast doubt on Gama's integrity back in 2005, Transnet jumped to his defence, saying: "We have no reason to suspect anything untoward as far as Mr Gama is concerned. Accordingly, we are not investigating anything against him."

Transnet added that the company had full confidence in Mr Gama, who had the support of the board, his colleagues and Transnet executives - led at the time by group chief executive Ms Maria Ramos, in his efforts to turn Spoornet around as it embarked on its ambitious capital expenditure program.

Fast forward to March 2009, when Transnet responded to a series of articles published by Business Report that linked Gama to alleged impropriety in the cancelled tender to acquire 212 diesel locomotives for Transnet Freight Rail.

Transnet said that certain allegations had been made in February 2008 regarding the procurement process for the acquisition of certain locomotives.
Transnet commissioned an independent investigation, which revealed that there had indeed been irregularities that had compromised procurement process for the acquisition of the 212 locomotives. The deal was terminated and disciplinary proceedings were instituted against one of the TFR executives, who subsequently resigned.

Transnet emphasised that the investigation did not point out any impropriety on the part of the Gama in respect of this tender.

However, in September that same year, Transnet suspended Gama pending the outcome of an internal disciplinary process to investigate an alleged serious breach of governance requirements in respect of two procurement contracts.

In February 2010, Transnet admitted that the alleged irregularity relating to a locomotive contract amounting to ZAR867 million by Gama - contrary to the board of directors' resolution, resulted in an alleged irregular expenditure and a waste of at least ZAR18 million.

Gama was found guilty of misconduct on June 4th, 2010, and Transnet terminated his employment effective June 30th.

Earlier this year, two senior TFR managers were sacked for their role in manipulating the tender process for security services.

Source : EFT, 08.07.10.