T-Sys­tems, Transnet stand­off is over

Pro­longed lit­i­ga­tion over R500 mil­lion-a-year ten­der is not in any­one’s in­ter­est

CityPress - - Business - SIZWE SAMA YENDE busi­ness@city­press.co.za

Ger­man multi­na­tional com­pany T-Sys­tems has ended its court bid to force Transnet to change its de­ci­sion to award a highly con­tested multi­bil­lion-rand IT data ser­vices ten­der to its com­peti­tor, Gi­jima Hold­ings. T-Sys­tems has been chal­leng­ing Transnet’s board since 2016, af­ter the state-owned en­ter­prise (SOE) changed its mind about award­ing the Ger­man com­pany the

R500 mil­lion-a-year ten­der on Feb­ru­ary 22 of that year.

The con­tract was held by gov­ern­men­towned IT com­pany Arivia.kom un­til T-Sys­tems bought the com­pany in 2009.

Since then, T-Sys­tems has been pro­vid­ing the ser­vice to Transnet.

Transnet’s ac­qui­si­tions and dis­pos­als com­mit­tee – chaired by Gupta-linked Stan­ley Shane at that time – awarded the ten­der to T-Sys­tems, de­spite rec­om­men­da­tions by Transnet man­age­ment and ad­vice from Trea­sury not to do so.

Gi­jima Hold­ings, owned by busi­ness mogul Robert Gumede, had scored the high­est points in tech­ni­cal and pric­ing, and de­served to be awarded the ten­der in terms of the Pub­lic Fi­nance Man­age­ment Act.

Although Transnet’s cross-func­tional eval­u­a­tion team high­lighted a num­ber of risks that were preva­lent within Gi­jima’s fi­nal of­fer, the SOE’s of­fi­cials in le­gal ser­vices and in sup­ply chain man­age­ment, along with the IT chief in­for­ma­tion of­fi­cer, ex­pressed their col­lec­tive sat­is­fac­tion with Gi­jima’s pre­sen­ta­tion to mit­i­gate the risks.

As a re­sult, they de­cided that the ten­der be awarded to Gumede’s com­pany.

In try­ing to rec­tify the ac­qui­si­tions and dis­pos­als com­mit­tee’s mis­take, for­mer Transnet CEO Siyabonga Gama ap­proached the Pre­to­ria High Court to set aside the de­ci­sion to award the ten­der to T-Sys­tems.

Gama’s ac­tion led to T-Sys­tems op­pos­ing the ap­pli­ca­tion.

This week, T-Sys­tems spokesper­son Tham­sanqa Malinga said: “We have in­structed our lawyers to that ef­fect [to with­draw the court’s chal­lenge against Transnet].”

The com­pany’s manag­ing di­rec­tor, Di­neo Molefe, said that T-Sys­tems agreed to “co­op­er­ate” with Transnet fol­low­ing ex­ten­sive con­sul­ta­tion and back­ing by its share­hold­ers.

Molefe, how­ever, added that T-Sys­tems’ de­ci­sion was “un­der no cir­cum­stances to be con­strued as T-Sys­tems with­draw­ing what it has said in var­i­ous af­fi­davits that have been filed on its be­half in the pend­ing court pro­ceed­ings …”

She said that, in a let­ter dated Septem­ber 21, the new Transnet board had af­firmed the pre­vi­ous board’s de­ci­sion to award the ten­der to Gi­jima.

“The new Transnet board re­quested T-Sys­tems to with­draw its op­po­si­tion on the ba­sis that a pro­longed lit­i­ga­tion was not in the in­ter­est of all par­ties,” Molefe said.


Ma­phum Nx­u­malo, Gi­jima’s chief op­er­at­ing of­fi­cer, said the IT ser­vices com­pany was grate­ful for Molefe’s sound lead­er­ship.

“We fur­ther thank the new board of Transnet and man­age­ment for the de­ci­sive guid­ance from Na­tional Trea­sury.” he said.

“Transnet, and in­deed South Africa, has freed it­self from pre­vi­ously com­pro­mised Transnet board mem­bers, who ini­tially took the con­tro­ver­sial de­ci­sion to award the con­tract to T-Sys­tems.

“Gi­jima has ac­cepted T-Sys­tems’ elec­tion to with­draw its op­po­si­tion and has agreed with both Transnet and T-Sys­tems that each party will be li­able for its own le­gal costs ex­pended to date,” Nx­u­malo said.

He said that Gi­jima, as the new suc­cess­ful IT out­source ser­vice provider, would, in­ter alia, fo­cus on value add by en­hanc­ing ser­vices to be de­liv­ered to Transnet and, in par­tic­u­lar, on in­tro­duc­ing cost-sav­ing so­lu­tions.

“I am de­lighted and thank­ful that this le­gal im­passe is now be­hind us,” added Nx­u­malo.

“The Transnet ap­pli­ca­tion to the High Court for a declara­tory or­der to award the five-year IT data out­source con­tract shall no longer be op­posed by T-Sys­tems … We have been ready since 2016 to move on site at Transnet to de­liver and bring in­no­va­tion, in­clud­ing cost sav­ings, through Gi­jima’s pro­vi­sion of top-drawer ICT ser­vices.

“Gi­jima’s strength is ev­i­dent through its 2 000-strong ... highly skilled staff mem­bers.”


Af­ter buy­ing Arivia.kom, T-Sys­tems ceded its con­tract to Zestilor – a com­pany that was owned by Zeenat Os­many, the wife of Gupta as­so­ciate Salim Essa.

The ces­sion agree­ment is one of a num­ber of deals that Gupta-linked com­pa­nies sealed over the past few years to cash in on multi­bil­lion­rand ten­ders at Transnet and Eskom.

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