By Lehlohonolo Lehana.
Public Enterprises Minister Pravin Gordhan has left for China in a bid to resolve a standoff over the delivery of locomotives and spare parts by rail equipment manufacturer CRRC E-Loco.
In a statement, the Department of Public Enterprises said the trip, which was announced earlier this year, was part of an effort to fast-track the supply of the goods to SA state-owned company Transnet.
The genesis of the dispute between Transnet and CRRC dates back to 2014. At the time, Transnet bought 1,064 new locomotives — the heavy haul ones that are supposed to pull the coal and iron ore wagons — for R54.4-billion. Transnet bought about 25% of the 1,064 new locomotives from CRRC.
The purchase by Transnet was laudable as it was projected to increase South Africa’s rail capacity, helping the country operate the fifth-largest rail system in the world by 2019.
But the R54.4-billion deal became mired in State Capture corruption. The price tag of purchasing 1,064 new locomotives from CRRC and other suppliers escalated by almost R16-billion from the “all-inclusive” R38.6-billion originally agreed upon. The R16-billion escalation was created to facilitate kickbacks to Gupta-linked firms, State Capture Commission reports dealing with State Capture at Transnet have found. The commission’s evidence shows CRRC planned to funnel 21% of the contract value (R9-billion) to Gupta-linked shell companies. But the companies ended up receiving at least R3.6-billion in late 2016.
Former Transnet bosses including Brian Molefe and Siyabonga Gama (ex-CEOs), and Anoj Singh (ex-CFO) have been charged with corruption and money laundering relating to the locomotives deal with CRRC. No one from the local arm of CRRC has been charged.
Meanwhile Gordhan was supposed to appear before the parliament’s standing committee on public accounts (Scopa) as one of the officials mentioned by the former Eskom CEO Andre de Ruyter in his submission to the committee.
Scopa engaged with de Ruyter on the submission he made following a request from the committee that he appears to elaborate on his interview on ENCA alleging corruption and malfeasance at Eskom.
The main point of inquiry directed at de Ruyter centred around his allegations that corruption was entrenched at Eskom and that a senior minister had apparently been well aware of another high-ranking politician’s involvement.
Scopa wanted de Ruyter to name the two individuals. However, de Ruyter said he would not, as it posed a security risk to himself, could draw further legal troubles, and might defeat the ends of justice by disrupting ongoing investigations.
The former Eskom CEO said that he had reported the names and the related matters to his shareholder representative, Gordhan, and that he would be best suited to answer the committee’s questions.
He did however make scathing accusations against Gordhan, who he blamed for his resignation while accusing the public enterprises minister of constant interference and trying to micro-manage daily operations at the struggling power utility.
De Ruyter also said he raised the issue of the mysterious high ranking politician with Gordhan, but the minister was already in the know about the fleecing activities, and took it a step further saying some ministers had to eat for the greater good.
Scopa then resolved to call Gordhan to account on Wednesday, but it appear the hearing clashes with Gordhan’s pre-planned visit to China, in which the minister is expected to do damage control regarding Transnet’s locomotives impasse.