Inquiry into failure of localisation in Transnet locomotives deal to go ahead

4 October 2017

The Democratic Alliance welcomes the agreement on the terms of reference by the Portfolio Committee for Trade and Industry to begin its public inquiry into Transnet's R50 billion locomotive contract which, despite local content obligations, saw none of the China South Rail (CSR) locomotives being assembled in South Africa.

The agreement for the terms of reference for the inquiry follows a decision taken by the parliamentary committee on the 15th of September 2017, to launch an inquiry into the acquisition in terms of National Assembly Rule 227,1(c).

This inquiry must get to the bottom of exactly how this contract was awarded and how it was that the law was contravened in order to avoid producing the trains in South Africa, therefore depriving our people of vital jobs.

CSR contracted Gupta-linked Tequesta Group as a consultant, and according to an agreement, stood to earn a 21% cut of every deal gained by CSR.

The committee will now be empowered to call for Transnet to hand over all documents related to this massive deal. It cannot be that R6 billion cost-inflation has been added to these deals which directly takes away from local manufacturers ability to contribute to the build.

The truth is, this spend by Transnet has all the hallmarks of the now infamous “Arms Deal” which saw billions spent and with few commitments of manufactures actually being realised.

There can be no doubt that Transnet has become ground zero for the Gupta’s to loot and steal resources without consequence. We are glad that the committee has now decided to move forward after the DA first called for this matter to be investigated in July 2017.

We will work to ensure that this enquiry gets to the bottom of this sham and hold those that have flagrantly ignored our laws and procurement policies to enrich the politically connected few accountable for their actions, including the prospects of criminal prosecutions.

Issued by Dean Macpherson, DA Shadow Minister of Trade and Industry, 4 October 2017