Legal blow to Transnet over unlawful R300 million tender 

Fidelity Security Services has achieved a significant legal victory over Transnet regarding a security tender the utility awarded to Sinqobile Equestrian Security Services.

On Tuesday, 24 March 2026, the Johannesburg High Court ruled that the process for awarding this tender, valued at over R300 million, had multiple irregularities and was unlawful.

This issue started on 12 August 2025, when Transnet invited bids for a critical security contract.

According to the High Court judgment, this is where the “most fundamental” irregularity came about, as the closing date for the tender was three days after it was opened, on 15 August 2025.

The High Court stated in its judgment that four bids were received, with one disqualified in the administrative stage, and three proceeding to the technical evaluation stage.

Fidelity and Sinqobile were among the three to advance to the next stage, which required a mandatory minimum threshold of 80%.

In the evaluation stage, it was found that Fidelity scored a 66.67% and was, therefore, disqualified. Sinqobile scored 90% and was ultimately recommended as the preferred bidder.

Fidelity was notified of its disqualification on 1 September 2025 and launched the review proceedings with the High Court on 3 October 2025.

The organisation argued that the tender process was irregular based on several factors, including the following –

• Non-compliance with Treasury Regulations, which require a minimum 21-day advertising period, as opposed to Transnet’s three days. 
• Irrational disqualification of Fidelity’s bid, with the organisation arguing that the evaluators failed to “apply their minds” to Fidelity’s comprehensive bid. 
• Unequal treatment and failure to consider relevant material, with Fidelity accusing Transnet of failing to consider material regulatory non-compliance by Sinqobile. This allegedly includes an outstanding late-payment interest of over R8.4 million owed to the Private Security Sector Provident Fund.
• Procedural unfairness, with Fidelity saying the initial reasons provided for its disqualification were inadequate. The organisation pointed to the fact that its score during the evaluation stage increased from 66.67% to 71.67%, with no explanation following a request for information.

Ultimately, the High Court ruled that “the cumulative effect of these irregularities is profound”.

“The process was unlawful from the outset due to the breach of Treasury Regulation 16A6.3(c),” the court said. 

“It was rendered substantively irrational by the failure to consider Fidelity’s compliant bid and by the unequal treatment of Sinqobile.” 

The court said Fidelity had clearly established multiple grounds of review, and that the impugned decisions “must be declared unlawful and set aside”.

“The tender process was indeed tainted by several material irregularities that render the decision to award the tender to Sinqobile unlawful and constitutionally invalid,” it said.

What happens now

Fidelity sought two main forms of relief from this case. Firstly, it sought an order setting aside the award ab initio (from inception) and directing Sinqobile to repay all profits gained under the unlawful contract.

Alternatively, the organisation sought an order remitting the matter to Transnet for a de novo (new) evaluation.

The court decided to grant the alternative relief, saying the first remedy would have essentially punished Sinqobile for Transnet’s mistakes. 

In addition, the tender was for a 12-month contract and was therefore nearing completion by the time the judgment was handed down.

The court decided that the alternative remedy was more appropriate, and “best serves the constitutional imperative of a fair, transparent, and competitive process”. 

“It allows for a fresh start, untainted by the procedural and substantive irregularities that plagued this procurement,” the court said. 

“It would require Transnet to re-advertise the tender in compliance with the 21-day minimum period, allowing for full market participation.” 

“All bidders, including Fidelity and Sinqobile, would then be evaluated fairly and equally against the published criteria.”

The court also noted that the argument that this remedy is futile, considering that the contract has almost run its course, is not a bar to granting this relief. 

“The principle of legality demands that unlawful conduct be declared as such,” the court said. 

“Furthermore, a de novo process would govern the procurement of future services, ensuring that they are provided under a lawful contract. It would vindicate the constitutional standards that Transnet failed to uphold.”

The court further ruled that Transnet must pay Fidelity’s legal costs.

In a social media post, Legal Brilliance CEO Dirk Kotze, whose firm acted for Fidelity in this case, celebrated the victory.

“This judgment is a strong reminder that shortcuts in public procurement will not withstand judicial scrutiny,” he said.

Transnet Rail Infrastructure Manager (TRIM) told Daily Investor that it acknowledged the judgment handed down by the Gauteng High Court and respects the court’s role in adjudicating this matter.

“While TRIM notes the outcome with concern, it is currently reviewing the judgment and its implications in detail,” the utility said.

“TRIM is considering its legal options, including the possibility of applying for leave to appeal.”

TRIM explained that, since the matter is still subject to possible further legal consideration and remains sub judice, it will refrain from providing detailed comment at this stage.

“TRIM remains committed to transparency, fairness, and full compliance with all applicable legislation in its procurement processes,” it said.