Transnet says no final settlement has been reached with McKinsey

McKinsey1 R - Transnet says no final settlement has been reached with McKinsey

Freight and logistics company Transnet says it has noted the statement issued by the Commission of Inquiry into State Capture with regard to American consultancy firm, McKinsey.

The State Owned company says it is owed just over R1.2 billion by McKinsey and insists the amount must be repaid in full.

Transnet also confirmed that no final settlement has been reached with McKinsey, up until last night discussions were still underway between Transnet and McKinsey, with the main point of dispute being the repayment and interest earned on McKinsey’s fees.

In a statement, Transnet says contracts associated with Regiments Capital, the fee paid to McKinsey totalled R688 million. Furthermore, Transnet says interest cost relating to these payments is close to R558 million.

Mckinsey partners expected to give evidence

Meanwhile, McKinsey Senior Partner Jean-Christophe Mieszala, is scheduled to give evidence at the Commission of Inquiry into State Capture in Johannesburg on Thursday.

The commission will also hear testimony from two other McKinsey senior partners, Dr David Fine and Dr Alexander Weiss. Former Trillian employee Msilo Mothepu will be the first witness on Thursday morning.

This week, McKinsey announced that it has undertaken to repay all of the fees paid to it for work it performed on the Transnet and SAA contracts alongside Regiments Capital.

McKinsey says it assisted the Commission with its investigations on a transparent basis.

Several weeks ago the Commission showed McKinsey certain evidence relevant to its contracts alongside Regiments at Transnet and SAA. The evidence suggested there were transgressions and some irregularities in the contracts of McKinsey alongside Regiments at Transnet and SAA. Although this did not implicate any current employees or partners.

The three witnesses to testify on Thursday will likely give more evidence regarding the company’s role in these Transnet entries, partnerships it entered and the various transactions that were performed.

We were intimidated by Transnet’s Procurement officer:

McKinsey Consulting on Rail for Hatch Transnet contract

Former Managing Director of the company called ‘Rail for Hatch’, Henk Bester told the State Capture that then Transnet Chief Financial Officer Anoj Singh offered McKinsey Consulting an oversight role for R300 million in a Manganese Project that McKinsey knew very little about.

Bester says Hatch as the winners of the Transnet Mangenese tender were never informed that McKinsey would provide oversight on the project.

Bester says the revelation was made during a contract negotiation session with Transnet where he realised that McKinsey people were sitting in the next room listening in on the negotiations meeting.

Earlier, Bester told the State Capture Commission in Johannesburg that he was approached by Gupta associate, Salim Essa, who wanted Hatch to include Essa’s company as a supply partner for Phase 2 of a Transnet Rail Project worth R800 million.

Bester says they had estimated the Manganese project would cost Transnet R27 billion, but the project was divided in two phases to manage costs.

Bester says Essa demanded at the Melrose Arch meeting in April 2013, that he be partnered with Hatch for the Transnet business at a cost of R80 million.

He says he first encountered Salim Essa when Essa took over an earlier meeting which Hatch executives had arranged with former Transnet Chief Financial, Anoj Singh, to discuss payments. He says Essa boasted about how much power he and his associates had.

TRANSNET STATEMENT

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