A protest at Transnet’s Richards Bay port has escalated into a demand for the suspension of Transnet Port Terminals (TPT) chief executive Jabu Mdaki and five officials over two equipment contracts linked to R824.6-million in alleged irregular expenditure.
The Professional and Labour Civil Organisation of South Africa (Placosa) delivered a memorandum on July 20 giving Transport Minister Barbara Creecy and the Transnet board seven days to act against Mdaki, Dean Moodley, Bhekani Cele, Natasha Anderson, Michelle van Buren Schele and Xolani Mthethwa.
Placosa wants the six officials suspended pending a forensic investigation into alleged fraud, corruption and kickbacks over the procurement of 110 pieces of materials-handling equipment from High Power Equipment Africa (HPE).
‘Investigations underway’
Transnet Port Terminals confirmed receiving the memorandum and said its contents drew on a forensic investigation it had commissioned as part of its accountability processes.
“While the findings are still being addressed through established internal processes, it is regrettable that aspects of the report were leaked to external parties before these processes had been concluded,” TPT said.
It said it had begun implementing recommendations from the forensic report and that investigations and disciplinary processes remained underway, including matters at Richards Bay.
However, TPT did not say whether Mdaki and the five officials named by Placosa were being investigated. It also did not disclose the findings of Fundudzi Forensic Services or confirm whether they were complete or would be released.
“A number of investigations and disciplinary processes remain underway, including matters at Richards Bay Terminals,” TPT said.
“These processes form part of TPT’s broader anti-corruption programme and, where necessary, are being pursued in collaboration with relevant law enforcement agencies.”
Excerpts from Fundudzi draft report
The memorandum relies on excerpts from a draft report prepared by Fundudzi Forensic Services. It records that consultations with HPE and RADDS were still required to determine ownership of equipment supplied under the contracts.
The draft investigation recommended the precautionary suspension of Transnet supervisor Thulasizwe Dlamini after finding that allegations against him were supported by documentary evidence.
“The allegations against Mr Dlamini had been substantiated through documentary evidence,” it states, adding that they were “of a sufficiently serious nature to justify suspension”.
Placosa disputes the focus on Dlamini alone and describes the draft report as “biased”.
“The above report is biased and only holds Mr Dlamini accountable,” the memorandum states.
Placosa says responsibility extended to executives and members of Transnet’s Divisional Bid Adjudication Committee, claiming the procurement was a “collaborative effort by Mr Mdaki, Mr Dlamini, and DBAC members”.
It alleges the tender involved “corruption, fraud and collusion between HPE, RADDS, Mr Mdaki, Mr Dlamini, and DBAC members” and wants those implicated subjected to “a full forensic investigation and an immediate suspension from Transnet”.
The first contract covered 45 pieces of equipment and resulted in TPT paying HPE R305.3-million.
Appointment of HPE ‘irregular’
According to the memorandum, the draft findings concluded that “the appointment of HPE through a confinement process was irregular”.
The investigation says HPE was presented as an accredited Hyundai agent. However, the memorandum records that “HPE primarily provided RADDS-owned equipment rather than Hyundai supplied equipment”.
“The urgency relied upon to justify the confinement process was self-created,” the draft findings state.
They further record that Mdaki, Dlamini and DBAC members knew about the requirement for about six months before the confinement motivation was submitted in June 2023.
Fruitless and wasteful expenditure
The second contract covered another 65 pieces of equipment and is linked to R519.3-million in alleged irregular expenditure.
The draft findings state that Dlamini ordered 65 additional machines despite the terminal having only 55 operators.
The purchase increased the fleet to 122 units and left 52 pieces of equipment idle, according to the memorandum. Placosa says this caused R132.9-million in fruitless and wasteful expenditure.
The memorandum also records R14.8-million linked to a contract amendment, R40.8-million allegedly lost because excess equipment was not removed, R72.5-million in price differences and R129.8-million linked to a six-month extension.
The exposure exceeds R1.2-billion, although the memorandum does not establish whether some amounts overlap.
The draft findings also allege that Dlamini instructed officials to accept equipment exceeding the contractual limit of 5,000 operating hours and failed to implement an instruction to remove excess equipment between October 2024 and May 2025.
HPE and RADDS arrangements ‘must be stopped’
Placosa wants the HPE and RADDS arrangements stopped and investigations expanded to contracts involving Liebherr-Africa, Konecranes, Demag, tyres and security services.
TPT said its anti-corruption action had included restricting seven companies through National Treasury and dismissing 45 employees, including managers, for theft, corruption and fraud. It did not identify them or link those cases to Richards Bay.
The protesters also want Transnet to halt the proposed privatisation of the Richards Bay Dry Bulk Terminal until traditional leaders are consulted, adopt a plan reserving between 85% and 100% of jobs for local people and prioritise surrounding businesses.
Placosa warned that it would continue mobilising and “frustrate Transnet operations” if its demands were ignored.
Transnet Port Terminals
- Placosa is demanding the suspension of Transnet Port Terminals CEO Jabu Mdaki and five officials over alleged R824.6 million in irregular expenditure linked to equipment contracts at Richards Bay port.
- A forensic investigation by Fundudzi Forensic Services found irregularities with procurement from High Power Equipment Africa (HPE), including misuse of a confinement process and excess equipment purchases causing wasteful expenditure.
- Transnet Port Terminals confirmed ongoing internal investigations and disciplinary processes related to the allegations but did not disclose specific details or confirm suspensions of implicated executives.
- Placosa criticizes the draft report for focusing accountability only on supervisor Thulasizwe Dlamini and insists responsibility extends to executives and bid committee members for corruption and collusion.
- Protesters also oppose the proposed Richards Bay terminal privatization without local consultation, demand job reservations for locals, and warn they will disrupt Transnet operations if demands are unmet.
