State-owned freight and logistics company Transnet has reached an in-principle agreement with China Railway Rolling Stock Corporation (CRRC) E-Loco Supply to resolve all legal disputes.
The agreement will enhance Transnet Freight Rail’s ability “to serve customer demand on an urgent basis”, Transnet said.
The deal will also allow Transnet to procure spare parts required to service locomotives, which the freight company was previously unable to do because the contract with CRRC was suspended due to irregularities in the tender process, prompting CRRC to withhold the balance of the spare parts and components required for the locomotives.
The suspension of the contract, worth R50bn, left Transnet with insufficient trains, which it expects to address by issuing a tender for the purchase of new locomotives.
“The next steps will be to finalise a definitive settlement agreement and complete the resolution of the current legal disputes,” Transnet said.
This includes the legal dispute launched by Transnet earlier in August, which aims to compel CRRC to release spares and components for locomotives needed to return about 120 trains to service.
Transnet and the Special Investigating Unit (SIU) have since lodged a high court application to review and set aside the controversial contracts.
Transnet’s shortage of locomotives has been flagged by mining companies as having contributed to lost revenue of about R35bn in 2021 from contracted coal, iron ore and chrome volumes that could not reach ports.
“We trust this will result in a larger number of trains hauling bulk minerals to the port, and for improved productivity on the rail corridors to achieve contracted delivery targets, which will boost critical export earnings for SA,” Minerals Council SA spokesperson Allan Seccombe said.
CRRC had previously refused to supply Transnet with spares for the 95 20E and 100 21E locomotives it acquired from the Chinese firm in 2012 and 2014. The spare parts are critical to servicing and maintaining certain locomotives used by Transnet Freight Rail for transporting commodities to ports.
The state capture commission of inquiry found that the suspended tender to supply Transnet with 1,064 diesel and electric locomotives to have been improperly awarded and Treasury’s instructions were deliberately ignored.
The Gupta family, friends and business partners of former president Jacob Zuma, including his son Duduzane, were alleged to have received millions of rand in kickbacks, according to testimonies presented to the commission of inquiry into state capture.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.