The Joburg High Court of South Africa, Gauteng division, has declared the 2014 Locomotive Supply Agreement (LSA) between Transnet SOC Ltd and Wabtec South Africa Technologies (formerly General Electric South Africa Technologies) invalid, setting aside a contract valued at approximately R8-billion for the procurement of 233 diesel locomotives.
The judgment was welcomed by the Special Investigating Unit (SIU) and Transnet. It marks a significant step in addressing irregularities tied to state capture and restoring accountability in public procurement.
Flagged for procurement flaws
The contract, part of Transnet’s broader 2014 deal to acquire 1 064 locomotives for R54.4-billion, was flagged for procurement flaws. The SIU and Transnet argued that the tender process was marred by a flawed market demand strategy. Also by deliberate violations of laws, government instructions, and Transnet’s own policies.
The court’s decision follows extensive investigations, including the analysis of over 29 million documents. These revealed kickbacks and irregular payments linked to the broader locomotive procurement scandal.
“The first applicant (Transnet) shall retain the 233 diesel locomotives delivered to it by the fourth respondent (Wabtec South Africa Technologies) under the GE LSA and the settlement amount of R70 350,574 as per settlement agreement,” reads the ruling.
Unravelling state capture’s legacy
The ruling adds to Transnet’s efforts to unravel state capture’s legacy. This saw the SIU securing settlements worth over R31.4-million in related cases. The case also spotlighted former Transnet CEO Brian Molefe. His leadership saw the locomotive deal’s costs escalate by R16-billion, prompting criminal investigations.
This victory underscores the SIU and Transnet’s commitment to recovering public funds and rebuilding trust in state institutions. As Transnet navigates its R121-billion debt, the ruling paves the way for cleaner procurement processes, with plans for new locomotive tenders emphasising transparency.
Also Read: Molefe’s Transnet locomotives graft cases moved to next year
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