R5bn rip-off: Vavi slams CSR's exemption bid

2018-03-24 21:58
SAFTU general secretary Zwelinzima Vavi. (Gallo Images)

SAFTU general secretary Zwelinzima Vavi. (Gallo Images)

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The South African Federation of Trade Unions (SAFTU) expressed anger over alleged bribes of over R5bn, recorded as fees, apparently paid by China South Rail (CSR) to Gupta-linked companies after it clinched contracts worth R25bn from Transnet.

READ: EXCLUSIVE: Gupta-linked train company in R5bn rip-off

Now the company is apparently seeking an exemption from its local content obligations, worth R5.3bn, to continue to supply new locomotives to Transnet.

CSR claimed that it could not find local suppliers for certain components and that the technology licensing for these products were not available in South Africa.

The DTI later confirmed that these components were valued at R5bn.

“SAFTU demands that there must be no exemptions for CSR. Railway rolling stock and all its components can, and must, be awarded to South African companies employing local workers,” SAFTU general secretary Zwelinzima Vavi said in a statement on Saturday.

“It is one of those key manufacturing industries which was previously thriving, but which has needlessly been run down.”

Call for action

Vavi also called on the Hawks and NPA to investigate the allegation of the payments to Gupta companies, and if these were found to be bribes, both the companies who received them and CSR, which paid them, had to be prosecuted.

“This case provides further proof of the extent of the corruption scandal, extending far beyond Zuma, the Guptas and South Africa, to involve huge corporations like CSR. The whole monopoly capitalist system is rotten to the core,” said Vavi.

Last year amaBhungane revealed that CSR had allegedly entered into kickback agreements in relation to the Transnet tenders.

Documents from the #Guptleaks emails showed that Gupta-linked companies in the United Arab Emirates were set to receive R5.3bn in “fees” emanating from CSR’s Transnet contracts.

“It is surely not a coincidence that the value of the cost of the exemption from these local-content obligations is almost exactly the same as these fees” said Vavi.

'Jobs have been put in jeopardy'

“If true this is one of the worst examples of the huge impact that the criminal actions of the Guptas and their cronies have had on the country as a whole. Hundreds of local jobs have been put in jeopardy as a consequence of an allegedly corrupt bribe,” he said.

Vavi said SAFTU welcomed the decision by the Department of Trade and Industry (DTI) to reject the exemption request, but was concerned that the DTI reportedly lost hope that CSR could still achieve a local content score of 60%, as required by the Transnet contract.

“The first 166 of the 359 locomotives thus far delivered by CSR to Transnet, as part of the project, have a local content score of only 33%, according to figures supplied by the company itself, and granting this exemption request would make this percentage even lower,” he said.

Read more on:    saftu  |  transnet  |  china  |  gupta family

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