Transnet exec did not raise alarm in locomotives deal for fear of 'insubordination'

Transnet decided to spend R54 billion in its acquistion of 1 064 locomotives in 2014.
Transnet decided to spend R54 billion in its acquistion of 1 064 locomotives in 2014.
Photo by Gallo Images / Foto24 / Deaan Vivier
  • The cost for 100 locomotives in a controversial deal at Transnet ballooned from an initial R3.8 billion to R4.4 billion.
  • Transnet executive Yousuf Laher told the state capture inquiry that he questioned former CFO Anoj Singh about the price, but fear of being insubordinate stopped him from pushing further.
  • Laher said he did not suspect any irregularity in the tender process. 

Fear of being perceived as insubordinate led to Transnet executive Yousuf Laher not further questioning the decision by the rail, logistics, port and pipeline company’s decision to pay R4.4 billion in the acquisition of 100 electric locomotives from China South Rail, instead of a lower price.

Laher, executive manager in Transnet’s Freight Rail’s finance department told the state capture inquiry on Thursday, that at the time in 2014, he had done all he could to raise his concerns to his principal former Transnet CFO Anoj Singh because he did not know how the much higher price had come to be. Laher was part of the negotiation and evaluation teams on Transnet's controversial acquisition of 1 064 locomotives and the extra 100 electric locomotives, which he was pulled into at the last minute.

He told the inquiry that the initial quote was R3.8 million per locomotive, totalling R3.8 billion, and was from suspended chief executive at Transnet Engineering, Thamsanqa Jiyane, but a reasonability calculation done by Laher put the price at R41 million per locomotive. Two days after the negotiations, he was told that then CEO Brian Molefe had settled on R44 million, a decision he made in separate meetings and without board approval.

The contract for the 100 locomotives was awarded to China South Rail, which had initially quoted Transnet R49 million per locomotive.

Evidence leader Advocate Anton Myburgh quizzed Laher on whether he had suspected that there was corruption in the award of the tenders for the 100 locomotives. 

"At that period of time no, I had no suspicion of anything untoward happening. Maybe it’s because we were so involved in the detail. It was a very pressurised environment. We were dealing with multiple issues at the same time," said Laher. 

He added that although he didn’t think there was any irregularity, he had questioned Singh, the bidders and other parties to the negotiation like Transnet’s legal team. But he didn’t push further than that because he feared being insubordinate. 

"I gave him my honest advice and we had a debate, to the extent that the debate became vigorous and if I continued along the line, it could have been insubordination but that was a very small fear in the back of my mind, the explanation he was giving me at that time seemed reasonable," Laher explained.

Singh was known to raise has voice and had an erratic temper and Laher did not want to get on his wrong side, the inquiry heard.

The explanation he was given on the increase was that the locomotives were not the same and they came with different specification which pushed the price higher. He said Singh also didn’t say that the decision on the increase was arrived at by the sub-committee that he, together with Molefe and former Transnet executive Siyabonga Gama, was part of.

Laher said he believed Molefe had made the final decision since he was the most senior member of the committee and he did not think that was strange. 

Former senior manager at Transnet Freight, Francis Callard, has previously told the commission that Laher had not been forthcoming with information about the tender process and his role in it. Laher has refuted his claims.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Yes, and I've gotten it.
21% - 384 votes
No, I did not.
52% - 949 votes
My landlord refused
27% - 501 votes