Transnet, CMI Emtateni terminate controversial R4.2bn port expansion contract

22-05-2019
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IOL Business Report
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JOHANNESBURG – State-owned freight and rail company, Transnet said on Tuesday that its contractor, CMI Emtateni Joint Venture, had terminated its R4.2 billion contract for a megaproject to create deeper berths at the Durban Container Terminal (DCT).

This comes after Transnet in November last year stopped all the works in the project and launched a probe into the contract after receiving an unsolicited report from private investigator Paul O'Sullivan's Forensics for Justice, with allegations of procurement irregularities on the project.

Allegations in O'Sullivan and Sarah-Jane Trent's report centred around issues of fraud, BEE fronting and collusion between the Transnet employees and suppliers.

In September last year, Transnet awarded the main marine package of the R7 billion DCT Berth Deepening project to CMI Emtateni Joint Venture to create deeper berths at the DCT's North Quay.

CMI Emtateni Joint Venture comprises of an Italian construction company, CMC di Ravenna and CMI Infrastructures, with former Greytown mayor Philani Mavundla's CMI Infrastructures as a BEE partner.

The upgrade and expansion of the berth will enable the port to accommodate newer generation container vessels by 2023.

Transnet said the "stop all the works" instruction was to afford it time and space to conduct its own internal forensic investigation into the allegations.

But on February 20 this year, Transnet said the contractor issued a "notice of termination" as they may choose to do in accordance with the contract.

"In the best interest of both parties, Transnet accepted the contractor's notice of termination and issued CMI Emtateni JV a termination certificate on the 16 April 2019," it said.

"Transnet’s internal forensic investigations are still ongoing and have not been concluded. Transnet is currently reassessing a way forward on the main marine contract scope of works in order to minimize any further delays in realizing the benefits of the project."

African News Agency (ANA)