Probe Transnet, Prasa tenders
Flouting policies, MPs claim
PARLIAMENT has called for a forensic investigation into Transnet and the Passenger Rail Agency’s (Prasa) multi-billion rand locomotives contracts. Members of Parliament (MPs) last week claimed that the contracts flouted procurement policies.
The portfolio committee on trade and industry halted a probe into Prasa after it emerged that the agency was exempted from implementing local content on its rolling stock programme.
But MPs said a forensic investigation into the procurement of 1 064 trains by Transnet had to be carried out.
ANC MP Bongani Mkongi said there must be a forensic investigation into the procurement policies.
“It raised question marks why SOEs (state-owned-enterprises) would go ahead and flout procurement policies on local content,” he said.
Nic Koornhof of the ANC also called for the investigation to dig into the reasons behind the contracts.
On Friday, Transnet announced that it was offering voluntary severance packages to cut its wage bill by R4 billion.
The company said it was under extreme financial pressure with low growth projections for the country.
Transnet chief procurement officer Ali Tshabalala said there had been low demand for its units because of the tough economic conditions, which had impacted on companies doing business with the freight rail and logistics giant, including small suppliers.
Tshabalala told MPs that Transnet had managed to build only 100 wagons in the 2016/17 financial year against 4 000 and 30 000 units it projected a year in its rolling stock programme in 2012/13.
“That hit the market hard because of the difficult conditions and less demand by our customers,” Tshabalala said.
“Some of the contracts we had were impacted negatively,” he said, adding that their contracts were demand-driven. If there is a drop in the demand it affects the suppliers.”
MPs raised concerns that state-owned entities such as Transnet were not implementing the government’s localisation programmes.
Department of Trade and Industry director for industrial development, Mmetsa Komane, said the department had many questions about the 1 064 locomotives contract that Transnet had failed to answer for two years.
She said since the contract was signed in 2014, South Africa had executed imports in the sector worth more than R9bn.
Komane said they wanted the number of imports to be reduced.
She also told Parliament they hoped that the 20 trains delivered from Brazil to Prasa would be the last of the lot.
“Trade and Industry wants to see more components manufactured locally in line with the Preferential Procurement Policy Framework Act and BBBEE policies.”