The Democratic Alliance (DA) notes the release of Transnet’s annual report last week. The annual report naturally covers a wide range of issues at all of Transnet’s subsidiaries, with some good outcomes and some problematic outcomes put forward.
The DA, through parliamentary oversight mechanisms, has been keeping track of the Siyabonga Gama debacle at Transnet for some time, and this annual report has shed new light on the extent of the wasteful expenditure in which it has resulted. It has surfaced that throughout the process of suspending, investigating, firing and rehiring Siyabonga Gama, Transnet had paid Mr Gama roughly R10 million while he was not working. This is an ineffective and inefficient use of scarce state resources that could have been directed towards the provision of services or the development of infrastructure.
The DA believes that the chairperson of Transnet’s board of directors should appear before the Portfolio Committee on Public Enterprises to explain exactly how and why this fruitless expenditure was allowed to occur. I will today be writing to the Chairperson of the Portfolio Committee to suggest that he call on the Chairperson of Transnet’s board of directors to do just that.
Furthermore, the DA is concerned by the high level of irregular expenditure in Transnet’s annual report. The total irregular expenditure amounts to R8.264 billion. Although much of this expenditure might be classified as irregular due to small technicalities, some of it would clearly be due to irregular financial processes.
Most worrying, however, is that the annual report omits any fruitless, wasteful or irregular expenditure below R25 million as such amounts were considered “immaterial” by the auditors. This means that any irregular or wasteful expenditure of less than R25 million has not been investigated by auditors or reported in the annual report released by Transnet last week. This leaves a potentially enormous window of opportunity for graft on a scale that could legitimately be considered as “immaterial” from an auditing perspective, but enormously significant on a real scale.
I believe the Chairperson of the Transnet board also needs to explain how Transnet plans to deal with this challenge. Technically, the “immateriality clause” used by the auditors in the Transnet annual report means that any number of irregular or wasteful transactions of just under R25 million could have occurred without any further questions being asked by either the auditors or the public. This is a disconcerting thought that Chairperson needs to address.