Malema takes on the ‘runaway trains’ of corruption

A fighting Julius Malema is to lay criminal charges against Finance Minister Malusi Gigaba and the board of Transnet in connection with alleged corruption amounting to R17 billion.

And he’s going to demand an investigation in the US, China and Canada, where the foreign companies allegedly involved are based.

The allegations of corruption, which the EFF leader claims came to his party from whistle-blowers, relate to the alleged inflating of tender bidding prices for more than 1 000 railway locomotives.

Malema and EFF officials were due to go to Johannesburg Central police station this morning to open case dockets, the party said.

Malema said yesterday that those at the centre of the “massive corruption” were Gigaba, Brian Molefe, the Transnet board and the Gupta family.

He said the party was in possession of e-mails that would link Gigaba to corrupt transactions that took place in the bidding process.

He said the EFF would also apply for a court interdict to stop the process to procure the locomotives until the fraud and corruption allegations had been probed.

Information obtained from whistle-blowers by the EFF showed that local bidders who submitted bids to supply the locomotives were sidelined during an assessment period in favour of four foreign firms. The recommended suppliers were Bombadier from Canada, General Electric from the US and two Chinese bidders – China South Rail and China North Rail.

Malema said the Transnet board approved the recommendation for the acquisition of 599 electric locomotives by two successful bidders, Bombadier and China South Rail, at 40% and 60% of the total, respectively, while China North were to acquire the order for the 465 diesel locomotives with General Electric.

However, said Malema, all this was done after the evaluation process – a move that was irregular.

The process also raised eyebrows when the Transnet board itself required the approval of its subcommittee for the decisions, instead of it being the other way around. It was interesting that although Bombadier’s initial bid was for just over R32 million per unit, its price rose to R55 million per unit in the new process; while China South Rail’s bid increased to R50 million per unit.

In the bidding for diesel locomotives, the prices were inflated from R30 million to R42 million per unit for China North Rail and from R27 million to R38 million per unit for General Electric.

The decision was subject to endorsement by the board acquisition and disposal committee, chaired by Iqbal Sharma.

“How can a supplier charge a client more if they are awarded contracts to be concluded over a shorter period? They should instead give a bigger discount, but not according to Brian Molefe, Anoj Singh, Iqbal Sharma and Garry Pita,” Malema said.

He said the prices were inflated from the original best price as part of corruption. The contracts were awarded to the four bidders at increased prices from the board’s submission for its approval, and that pushed the total inflated amount to be charged to Transnet to R17 billion more than the original amount.

Malema said he would take the matter to the four companies’ countries of origin – China, the US and Canada – so they could be investigated by their own governments for corruption. – ericn@citizen.co.za