Parliamentary inquiry into Transnet Chinese locomotive deal gains momentum
24 October 2017
The Democratic Alliance (DA) welcomes the adoption of a document by the Portfolio Committee on Trade and Industry outlining the scope and focus of the planned inquiry into the local procurement component of the Chinese sourced Transnet locomotives.
The inquiry follows shocking revelations that China South Rail (CSR) used a Gupta front company, Tequesta Group Ltd, for ‘advisory services’ to help secure a deal to supply 359 of the 1064 locomotives tendered for by Transnet.
Details of the deal indicate that, for each R50 million spent by Transnet on the locomotives, R10 million was paid to Tequesta as an ‘advisory fee’. It is also clear, through “Gupta-Leak emails”, that the family may have scored nearly R6 billion worth of ‘fees’ without a single locomotive being built in South Africa. Incredibly, there we no penalty clauses for failure to meet local procurement requirements.
This seems highly suspicious and an attempt to allow CSR to abscond from their local content requirements as required by government policy.