Gama guilty over Nyanda contract

Transnet Freight Rail CEO Siyabonga Gama has been found guilty of irregularly awarding a tender to a company in which communications minister Siphiwe Nyanda has a stake.

Gama was found guilty of all charges brought against him, including one of irretrievable breakdown in the relationship with Transnet, after an internal disciplinary process. Gama, who has been suspended since last September, could be fired over the guilty verdict.

Among the charges, Gama faced one of signing off on a R19 million contract to General Nyanda Security Advisory Services (GNS), to provide specialised security. His authority to approve deals was limited to those valued up to R10 million.

However, the value of the contract spiralled beyond the initial R19 million, and GNS was paid R55 million in total, over a 20-month period, after the contract was signed in December 2007. This is according to public enterprises minister Barbara Hogan, who replied to questions in Parliament, in December.

Nyanda owns half of GNS, but previously denied being involved in the day-to-day running of the security company. His spokesman, Tiyani Rikhotso, this morning declined to comment.

The Parliamentary register of interests lists Nyanda as a 50% shareholder in GNS, but there is no value attached to his stake. His only listed benefit from GNS is a driver for general household tasks, the register indicates.

Nyanda's interest in GNS has drawn criticism, with political heavyweights publicly chastising the minister for appearing to be corrupt. Cosatu general secretary Zwelinzima Vavi got into hot water and was asked to apologise publicly for calling Nyanda corrupt.

Transnet spokesman John Dludlu says a 200-page finding has been delivered to Gama after an internal disciplinary process. Gama was found guilty of all of the charges brought against him, including one of irretrievable breakdown in the relationship with Transnet.

“In the final stage of the proceedings, the chairman will be requested, after hearing further submissions from the parties, to recommend a sanction,” says a statement issued by Dludlu. The recommendation will be forwarded to Transnet's board, and could lead to Gama's dismissal.

Transnet has already fired two senior managers over the deal, and cancelled the security contract.

The unnamed managers had awarded the GNS contract without opening a tender process, and without following the required governance processes. Their dismissal follows their suspension late last year, after the irregularities came to light.