The DA has written to the Chairperson of the Portfolio Committee on Trade and Industry, Joanmarie Fubbs, requesting that an inquiry be launched into the 2012 appointment of Chinese firm, CRRC, by Prasa.
CRRC, the product of a merger between Gupta-linked China South Rail and China North Rail, received a plum offer in a R50 billion tender after it was contracted to supply 591 of 1064 trains Prasa had commissioned, but despite this CRRC failed to meet the required localisation targets.
CRRC allegedly paid R5.3 billion in kickbacks to Tequesta to secure the tender. Tequesta’s sole director Salim Essa, a known Gupta associate, structured the deal.
Government-linked think tank Trade and Industrial Policy Strategies has documented the slow pace of localisation and it appears that no locomotives were built in South Africa.
Multinationals that are contracted to the state are required by law to meet localisation targets and failing to do that is acting in bad faith.
Transnet granted generous concessions to the Chinese companies which had built the first 60 locomotives in China, yet a number of these locomotives had faulty alternators and this could have been avoided had the build programme taken place in South Africa, overseen by local officials.
Despite Minister Rob Davies raising concerns over the willingness, or lack thereof, of Chinese locomotive suppliers to meet stated localisation commitments for the contracts, the deal was approved. Minister Davies needs to explain why this non-compliance with localisation targets was allowed to go on for so long.
The fact that the lucrative contract was awarded to CRRC despite the company failing to uphold its end of the bargain shows that the Department of Trade and Industry (DTI) sees nothing wrong in being complicit to an irregular deal.
An inquiry into this deal will reveal why the DTI approved this likely dodgy deal. If there was irregular behaviour involved, the DA will ensure those responsible are brought to book.