An investigation by Amabhungane has revealed that a Chinese supplier allegedly paid a bribe to a Gupta linked firm to secure part of Transnet’s R50 billion deals, to buy over 1000 locomotives.

The report has revealed that the middle man was a front for Gupta associate, Salim Essa.

In 2014, China North Rail (CNR) was awarded a Transnet deal worth R10 billion to deliver 232 diesel locomotives.  A year later CNR paid a middleman to secure an additional deal worth R647 million from Transnet.

This was for a relocation project that was supposed to cost only R9 million.  The middleman, Business expansion structured product, BEX, was paid 66 million commission for the deal.

AmaBhungane’s Susan Comrie says Essa – a Gupta associate – is an architect of state capture, “What we are seeing is commission payments that do not seem to have been earned at all being paid to a dormant company and behind that company we have Salim Essa who is an architect of state capture.”

CNR locomotives were supposed to be partly built by Transnet at its Koedoespoort facility in Pretoria but this was later moved to Durban.  The relocation of both Bex and Bombardier manufacturers ultimately cost R1.2 billion and led to the project being delayed by months.

According to Comrie these figures were inflated, “There is certainly an indication that the fee was inflated.”

In 2017 CNR auditors, KPMG reported a R65 million payment to the Independent Regulatory Board of Auditors, as a so called reportable irregularity.

Transnet has initiated an internal auditing investigation regarding the deal and has promised to take action against those implicated in the saga.

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