Transnet has secured the National Treasury's blacklisting of seven companies involved in a range of irregularities at Transnet ports. (Photo: Kevin Sutherland / Bloomberg via Getty Images) The state-run logistics company Transnet has gained further traction in its campaign against corruption and fraud with the National Treasury blacklisting seven companies implicated in unlawful activities at Transnet’s ports unit.
“This follows forensic investigations supported by the Special Investigations Unit (SIU), which uncovered a range of irregularities, including financial misconduct, kickback schemes, bribery, theft of company assets, collusion and the submission of false information,” said Transnet Port Terminals (TPT) in a statement on Thursday.
That’s quite a rap sheet. It is this kind of rampant malfeasance that crippled Transnet’s capacity for years, reflecting wider state failure with grave consequences that still hamper South Africa’s fragile economy.
TPT had applied to Treasury for the blacklisting, which prevents the companies from conducting business with TPT or any other public entity for the next 10 years. TPT said it had also brought undisclosed disciplinary action against employees who colluded with the seven blacklisted companies over the years.
It is attempting to claw back the embezzled funds from implicated individuals. One has to wonder how much of that has been splashed out on sports cars and overseas holidays.
“Meanwhile, Transnet is continuing with investigations across its operating divisions. Earlier this week, Transnet Rail Infrastructure Manager (Trim) suspended four employees based on similar allegations. Additionally, restrictions against implicated suppliers at Trim are also proceeding,” the TPT statement said.
“TPT has a mammoth task of enabling South Africa through our specialisation in maritime logistics where the country trades with over 100 markets in the world. As a team, we are united in understanding that we exist to serve and there’s no room for anyone who does not share in that mission,” TPT CEO Jabu Mdaki was quoted as saying.
Asked which companies were blacklisted, TPT referred Daily Maverick to the Treasury’s publicly available database of restricted suppliers.
A search of that database revealed five companies blacklisted on 15 June under Transnet’s authorisation: Dakalo Holdings, Dispo Products, ILT Group, Nqabele Projects and Investments and Philasande Tyre Corporation.
“Fraud and corruption” were given as the restriction reason in all five cases.
Asked if criminal charges were pending against any of the companies or implicated individuals, the SIU said it would respond, but had not replied before publication.
Huge damage
Transnet’s collapse over the years has inflicted huge damage on South Africa’s economy. Simply put, a modern industrial economy that is heavily reliant on commodities cannot grow meaningfully if it cannot efficiently move stuff around by rail and through its ports.
In 2022, for example, the Minerals Council SA — the main body for the domestic mining industry — estimated that Transnet’s woes had cost South Africa an estimated R50-billion in lost bulk mineral exports.
The Gain Group consultancy estimated in 2023 that rail and port dysfunction was costing the South African economy R1-billion a day, amounting to close to 5% of gross domestic product (GDP).
These latest actions taken by TPT, the Treasury and the SIU are a hopeful sign of Transnet’s emerging turnaround under the energetic leadership of CEO Michelle Phillips and her team. The ghosts of State Capture are slowly being exorcised but still haunt the economic landscape. DM