Former Transnet employee Gerhard van der Westhuizen says he cannot understand the value that a Gupta-linked letterbox company added to a deal brokered between Transnet and Neotel - for which it was paid more than R25m.

Testifying at the state capture inquiry on Monday, Van der Westhuizen said Transnet was a "captive client" and had no choice but to contract Neotel in 2014 to buy back assets the state-owned company sold off five years prior.

The commission made reference to a letter from Homix dated December 12 2014 and forwarded to Neotel. The letter details an agreement detailing how the communications company would pay Homix up to R25m to assist it with closing a R1.8bn deal with Transnet.

Transnet, at the time, withdrew from ongoing negotiations with Neotel without giving reasons, leaving the company desperate to close the deal.

Just a day after Neotel signed with Homix, Transnet returned to the negotiating table and Neotel got the contract.

"This letter was issued the day before we finalised the master sale agreement [MSA] and I supplied that document to Anoj Singh," said Van der Westhuizen.

"I question what kind of value Homix could have added in a day ... There is absolutely no way Transnet would have not signed this MSA.

"Transnet did not have an option to contract with Neotel at this stage ... We were fully dependent, we were a captive client."

It was later revealed that Neotel paid Homix up to R36m in kickbacks after securing the deal with Transnet.

The commission will continue on Tuesday with evidence from Tshiamo Sedumedi from MNS Attorneys.