Photo by: Creamer Media
State-owned logistics company Transnet reported on Monday that settlement talks were under way with all four original-equipment manufacturers (OEMs) supplying it with 1 064 new diesel and electric locomotives under contracts that had since been deemed “irregular and unlawful” by the group.
Under a R49-billion procurement programme concluded in 2015, General Electric and China North Rail (CNR) were awarded contracts to supply 233 and 232 diesel locomotives respectively, while China South Rail (CSR) and Bombardier Transportation had been contracted to supply 259 and 240 electricity locomotives respectively.
Speaking at the group’s results presentation, Transnet acting CEO Mohammed Mahomedy confirmed that General Electric had already completed delivery of its locomotives, while CSR had delivered 249 units, Bombardier Transportation 51 and CNR 21 to date.
He reiterated Transnet’s view that the contracts were unlawful and confirmed that “very confidential” discussions were under way with all OEMs, following some initial delays.
“We have had multiple discussions with the OEMs, as recently as last week and the next rounds of discussions . . . [are scheduled for] later this week and early next week. We believe that, before the year is out, you should actually be hearing of finalisation of some of the negotiations and discussions.”
Mahomedy would not be drawn on the nature of the settlements being sought, saying only that various matters were being considered, including delivery schedules, supplier development and the nature of the maintenance agreements.
“The production lines continue, and they will continue until an agreement is reached to act otherwise.”