Inquiry hears of ‘improper engagement’ between Transnet and China South Rail

There was “improper engagement” between Transnet and locomotive manufacturer China South Rail before the awarding of controversial tenders for the construction of locomotives, the judicial commisison of inquiry into state capture has heard. 

The commission of inquiry has been investigating allegations of state capture, corruption and fraud since August 2018.

Tshiamo Sedumedi, of MNS Attorneys, was testifying on Tuesday about the findings of six investigative reports into Transnet. The group had been asked to probe allegations of irregularities by the state-owned entity’s previous board. 

This included an investigation into tenders awarded for the construction of 1 064 locomotives, which were meant to modernise Transnet’s fleet. The cost for these trains ultimately escalated from R38.6bn to R54.5bn. 

‘Improper engagement’

On Tuesday, Sedumedi started his evidence by talking about an earlier Transnet tender for 95 electric locomotives from late 2011. This tender was awarded before the far larger tender for 1 064 locomotives. 

Sedumedi said the MNS investigation flagged “improper engagement” between Transnet and train manufacturer China South Rail around the tender.  

This was based on internal Transnet emails which MNS accessed to during its probe. 

He quoted from an email by Gary Pita, the group’s former supply chain officer, to an official at China South Rail. The email was sent on December 16 2011. 

In the email, Pita alerts the CSR official to the fact that the tender for the 95 locomotives is open. But he also refers to a previous meeting between former Transnet CEO Brian Molefe and a CSR official. 

“My CEO Mr Brian Molefe advised me that you met in early December. He also stated that CSR Zhuzhou Electric Locomotive showed interest in participating in our next tender for 95 electronic locomotives,” said Sedumedi, reading from the email. “I wish to advise you that this tender has been released.”

Pita resigned in April 2018. 

Sedumedi told the commission that the reference to a “next tender” in the email implied that when Molefe and the CSR official met, the tender would not have been officially released. 

The response, by the CSR official, confirms the meeting with Molefe had taken place, said Sedumedi. 

The inquiry continues.