Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


Schabir Shaik

South Africa: Mbeki, Manuel to give evidence in arms probe

The Citizen

July 16th, SAPA

Former president Thabo Mbeki will testify as a witness in the first phase of the Arms Procurement Commission, it was announced.

The commission, which is probing the R70 billion arms procurement deal, will hold public hearings from August 5 until January 31, subject to President Jacob Zuma granting an extension beyond November, spokesman William Baloyi said in a statement on Monday.

Mbeki and Minister in the Presidency Trevor Manuel were set to testify in the second half of January.

Baloyi said the first phase of the commission would “deal with the rationale for the Strategic Defence Procurement Package”, and whether the arms and equipment acquired were under-utilised or not utilised at all.

The first witnesses would be navy and air force officials. Armscor witnesses would be named later.

Former Intelligence Minister Ronnie Kasrils and Congress of the People president Mosiuoa Lekota would be called as witnesses between September 30 and October 4, followed by department of trade and industry officials until November 11.

Former Public Enterprises Minister Alec Erwin was expected to testify for three days in November, followed by National Treasury officials until the end of that month.

“It is also important to note that the programme is not cast in stone and circumstances prevailing at the hearings may require that it be adapted or altered, and this may also effect the sequence of witnesses,” Baloyi said.

“Some of the witnesses may be recalled at a later stage, when the commission deals with the terms of reference relating to allegations of impropriety, fraud and corruption in the acquisition process, a phase in which the ‘whistleblowers’ and those who are implicated will feature.”

The commission would be held in the council chambers of the Sammy Marks Conference Centre in Pretoria.

The deal, which was initially estimated to cost R43 million, has dogged South Africa’s politics since it was signed in 1999, after then Pan Africanist Congress MP Patricia de Lille raised allegations of corruption in Parliament.

Zuma himself was once charged with corruption after his financial adviser Schabir Shaik, who had a tender to supply part of the requirements, was found to have facilitated a bribe for him from a French arms company.

The charges against Zuma were later dropped.

DA asks protector to probe e-tolls ‘link’ to arms deal companies


May 3rd, 2012

Probe demanded into possible connections between companies involved in arms deal and the company that runs the e-tolling system.

THE Democratic Alliance (DA) has asked Public Protector Thuli Madonsela to investigate controversial contracts relating to the collection of e-tolls in Gauteng.

“Suspicion is high that politically connected people may have benefited from the toll companies contracted to the South African National Roads Agency (Sanral),” DA MPL Jack Bloom said in a statement on Thursday.

He added: “Widespread public concern needs to be allayed by a full investigation by the public protector.”

On Wednesday, the Congress of South African Trade Unions demanded an investigation into possible connections between companies involved in South Africa’s arms deal and the company that runs the controversial e-tolling system on the Gauteng Freeway Improvement Project.

While they are not conclusive of wrongdoing, links between the corruption-tainted arms deal and the unpopular e-tolling plan will add to the stiff opposition that the government is facing from business, unions and civil society.

Websites have been buzzing with allegations of links between Swedish companies involved in the arms deal and the Vienna-based Austrian company Kapsch TrafficCom.

Kapsch TrafficCom is the largest shareholder in the Electronic Toll Collection (ETC) joint venture, which won the R1,1bn project from Sanral in 2009, along with Traffic Management Technologies, a local company.

“In giving the background to his interdict against the e-tolls, Judge Bill Prinsloo criticised Sanral for its secrecy on the contract with the ETC consortium,” Mr Bloom said on Thursday. “There are also 35 sub-contracts with ETC, all with confidentiality clauses.”

On Saturday in the North Gauteng High Court, Judge Prinsloo granted an urgent interdict, brought by the Opposition to Urban Tolling Alliance, to stop the e-tolling system so that a full court review could be carried out to determine whether it should be scrapped.

The judge said that while he realised Sanral would suffer huge financial losses, the public would also suffer hardship if the controversial project went ahead.

The ETC consortium will install and operate the toll system on the upgraded highways. When the contract was signed, Kapsch — both its Austrian and Swedish arms — held 65% of the company and TMT owned 35%.

Sanral CEO Nazir Alli said last year the Kapsch consortium had tendered the most competitive bid, which also had the largest South African composition.

However, the next year Kapsch TrafficCom “invested” in TMT, which resulted in the company owning 57% of TMT.

The Swedish and Austrian arms of Kapsch owned most of the ETC consortium, but it appears the Swedish unit owns the lion’s share. Kapsch TrafficCom holds 40% of ETC while Austrian principal Kapsch has the remaining 25%.

The Swedish arm was previously part of Swedish manufacturing company SAAB and later became part of Kapsch AG.

SAAB, which sold 28 Gripen jet fighters to South Africa in the arms deal, sold a subsidiary called Combitech Traffic Systems to Kapsch. That company had already been involved in several toll-road contracts, including Marianhill Plaza in Durban.

One of its partners in these toll contracts was Kobitech, owned by Schabir Shaik, who was jailed for arms deal corruption. Most of Shaik’s business interests were in toll roads and electronic licensing contracts handled by the Department of Transport.


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