What services were provided is a mystery
CONTRACTS between Transnet, McKinsey & Co, Regiments Capital and Trillian Capital Partners remain a mystery as all parties refuse to release details of the deals, which are being investigated by the National Treasury.
Although the Treasury refuses to talk about an ongoing investigation, the Sunday Times understands it wants to know why and how Transnet appointed McKinsey & Company, Regiments and Trillian as suppliers and what they do or did at Transnet.
Regiments executive chairman Litha Nyhonyha said it had never been told it was being investigated by any party. “We have never been informed that National Treasury is conducting a review of any of our contracts,” he said.
Regiments and Trillian have subsequently been appointed as leads in independent contracts by Transnet.
Three independent sources informed the Sunday Times that those appointments, including McKinsey’s, were done via a confined process — they were made without going out on open tender.
Transnet’s internal policies provide for confinement but under strict circumstances, which internal sources insist are absent.
Transnet, over two weeks, refused to divulge details of the contracts or make available documents related to them. Thus it is not clear what work the companies did for Transnet, how much they may have been paid, or the duration of the contracts.
“These entities do a lot of activities within the organisation. They enjoy superior status due to their proximity,” a Transnet source said. “In other instances, they provide services that the organisation is fully equipped in. When they have to be paid, they are paid immediately on submission of invoice.”
Transnet spokesman Mboniso Sigonyela said Transnet awarded contracts to McKinsey and Regiments for various professional support services. “The contracts were awarded in line with Transnet’s procurement policies and procedures for a period of between one and two years.”
Nyhonyha said Regiments had an enviable 12year track record and ensured it was procured in compliance with governance regulation. “We pride ourselves on our track record of delivering exceptional service to our array of clients — both in the public and private sector — that translates ultimately into value added equal to many multiples of the cost of the service.”
A senior government official with intimate knowledge of the Transnet deals said they were highly irregular. “What is clear is that no procurement process was followed, there was no bid advertised so that there can be [a] competitive bidding process followed to appoint those companies. The contracts are obviously irregular,” he said.
“These companies together have already been paid hundreds of millions by Transnet. They are appointed as general consultants and given different tasks because there was no competitive bidding . . . No specific task to justify payments.”
Rachel Grant, McKinsey’s director for global media relations, said it held itself to the highest ethical standards. “We have supported clients in South Africa for 21 years and worked with many different supplier development partners, though neither Regiments nor Trillian are currently supplier development partners to McKinsey.”
Essa could not be reached for comment.