Chinese company pays R618m back to Transnet, more expected

State-owned freight rail company Transnet has been paid back R618m by a Chinese company that it concluded a maintenance deal with in 2016.

This as Transnet chairperson Popo Molefe said on Thursday that the state-owned entity was determined to recoup money from companies it overpaid in a past major locomotive deal which has been dogged by allegations of corruption and price inflation

At a media briefing Molefe also told reporters that Transnet had issued summonses to a number of former top executives who allegedly implicated in years of mismanagement.

The recuperation of the R618m fee was first reported by amaBhungane on Thursday afternoon.  

Molefe later told Fin24 that Chinese rail supplier CRRC E-Loco had agreed to return R700m it was paid as part of a locomotive maintenance deal in 2016.

"They have paid it already. What was still outstanding is the VAT on it. They have been paid R700m but they paid R618. We have a commitment from them that they will pay the VAT to Transnet, but they have paid Transnet," said Molefe.

The R618m was an advance fee for a much larger maintenance contract. 

Molefe said Transnet would arrange a meeting with another company, China South Rail, and would use that meeting with to begin substantive negotiations to recover further funds.

"They have to begin this month. But naturally we won’t be involved at a board level. We expect this to be handled at the level of management. The planning sessions have already taken place. The starting point is to agree on the framework under which these discussions take place," Molefe said.

Regarding McKinsey and Regiments, two companies also named in the saga which gripped state power utility Eskom, Molefe said talks to recover funds were continuing. McKinsey appeared to be more receptive than Regiments, he said. 

"McKinsey we are still talking to. The situation for us is different from what it is at Eskom. They indeed did work for us and we need to look at the aspects where they were overpaid. As far as Regiments, we have been discussing with them for a long time and they don’t seem to be serious," he said.

Asked to respond to remarks made Thursday by former Transnet CEO Brian Molefe that Transnet’s summons to him was "frivolous", Popo Molefe said Transnet was merely acting on allegations of impropriety as the public expected.

"All I can say is Brian Molefe has nothing to hide it’s fine. When he gets to court it will be up to him to demonstrate that. I am more than happy to check with our lawyers to see if anything has been received from his lawyers," said Popo Molefe.

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