Transnet's penalties in locomotive deal were unlawful, Zondo inquiry told

JOHANNESBURG - The state capture commission of inquiry has heard how price penalties incurred by Transnet in a questionable locomotive deal were unlawful because they deviated from the contracted agreement.This was among the submissions made by MNS Attorneys’ Tshiamo Sedumedi whose firm investigated several multi-billion-rand contracts.He said that during the request for proposal (RFP) stage of a contract for about 700 trains, it was stated explicitly that Transnet would not be penalised if the contract was split.However, costs for the procurement escalated from R38 billion to R49 billion.Sedumedi said that the board explained that because the contract was split between manufacturers, which led to a reduction in quantities from each manufacturer, the cost per locomotive increased.“That’s not in line with what the RFP envisaged. The RFP was clear, if we split and there’s a reduction in the quantities, Transnet doesn’t expect to pay a price premium through penalties. So, this explanation does not accord with what is contained in the RFP.”He said it appeared that at some point, someone changed the terms of the contract.“There seems to have been this approach that we can the rules of the RFP. Either people were not fully appreciating the import of what is contained in the RFP when evaluating. One could not understand on what basis people would just feel the need to change the rules.”(Edited by Zamangwane Shange)
Read More