State-owned freight logistics group Transnet announced on Monday that an in-principle agreement had been reached with Alstom in relation to a legal dispute arising from an electric locomotive contract concluded in 2015 with Bombardier Transportation, which was subsequently acquired by Alstom.

Bombardier Transportation was awarded a contract to supply 240 electric locomotives as part of the larger procurement of 1 064 locomotives, involving 465 diesel and 599 electric locomotives.

Bombardier Transportation has delivered 85 locomotives to date and, while the court has not  pronounced on the lawfulness of the contracts, the in-prinple agreement is geared towards settling the review.

Transnet has stated previously that it believes the procurement of the 1 064 locomotives to have been irregular and unlawful and the programme also featured at the recent Zondo Commission of inquiry into State capture.

The inquiry found that the increase in the price of the procurement of the electric and diesel locomotives from R38.6-billion to R54.5-billion was based on misrepresentations by senior executives and was to the detriment of Transnet.

The commission recommended that further investigations be conducted by law enforcement authorities with a view to possible prosecutions in relation to the contracts awarded under the programme, as well as to variation-order payments of R1.2-billion for the relocation to Durban of manufacturing and assembly lines for the Bombardier and China North Rail locomotives.

Transnet said in a statement that it was confident that the in-principle agreement with Alstom would assist in the conclusion of a binding agreement.

“A binding definitive agreement will resolve pending legal disputes and enable urgent completion of delivery of electric locomotives to enhance Transnet Freight Rail’s ability to serve customer demand,” the statement reads.

In August, Transnet and China’s CRRC E-Loco also announced an in-principle agreement in relation to legal disputes between the companies arising from the 1 064 locomotive programme, as well as earlier procurement programmes.

The announcement followed Transnet initiating a High Court application to seek an order compelling CRRC E-Loco to release spare parts and components required to return 120 locomotives to service.

Transnet said the parts and components had been imported to service and maintain the 95 20E and 100 21E locomotives acquired from CRRC in 2012 and 2014 respectively.

Access to the spare parts and components, the utility added, would allow it to bring back to service 53 Class 20E and 67 Class 21E locomotives, which were standing idle as a result of the inability to access the required spares.