WHY TRANSNET DISCONTINUED THAT DIESEL ORDER

Summarising the deal with EMD that Transnet recently discontinued, Business Report explains that “Electro-Motive Sibanye (EMS) – a joint venture between Electro-Motive Diesel (EMD), based in Chicago, and Sibanye Trade & Services (STS), an empowerment company – tendered for a contract to supply 212 locomotives to Transnet for R6 billion before the conception of the joint venture. The joint venture was subsequently selected by Transnet as the preferred bidder, but after several meetings between executives of Transnet and those of EMD, the parastatal said it could not go ahead with the contract after all. It alleged that there were material irregularities in the tender process that had culminated in EMS being nominated as the preferred bidder. Chris Wells, Transnet’s chief financial officer and acting chief executive, says in an affidavit that the reasons for ending the joint venture’s status as the preferred bidder in the first tender were communicated formally to EMS last July. He says it came to Transnet’s attention that a personal and business relationship existed between a Transnet manager, Percival Mosweu, who chaired the adjudication steering committee during the tender evaluation process, and Gustav Adams, a director of STS. Their wives were shareholders or directors in several inter-related commercial entities, Wells alleges.”

The tender was for the supply of 212 main-line diesel-electric locomotives.

Sibanye subsequently sought an interdict that would have prevented the Transnet from proceeding with the awarding of a new (effectively, replacement) contract for 100 diesel locomotives. The attempt was unsuccessful.

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