Controversial locomotive supplier Swifambo Rail Leasing has lost a Supreme Court of Appeal challenge to a High Court order that stripped it of a R3.5-billion tender with the Passenger Rail Agency of South Africa (PRASA).

Last year, Judge J Francis in the South Gauteng High Court in Johannesburg found that the contract entered into between PRASA and Swifambo was invalid.

This, after the PRASA board, then headed by Popo Molefe who is now the chairperson of Transnet, launched a court bid to have the contract declared invalid.

Molefe also led a move that sought to recoup R2.6-billion paid to Swifambo.

Swifambo did not supply the full complement of trains as required under the contract, having only delivered 13 of the 70 envisaged.

But the locomotives that were supplied were not suitable for PRASA's rail network.

The SCA in Bloemfontein heard arguments in the matter earlier this month and on Friday, dismissed the appeal with costs of two counsel.

In previous court papers, Molefe detailed how Swifambo – owned by former government official Auswell Mashaba – was formed specifically for the deal which was estimated to be worth around R5-billion, just four months before it went out to tender.

The ill-fated locomotives were supplied by Vossloh España, a Valencia-based rail company.

News24 revealed in January this year that Vossloh paid altogether R75-million to S-Investments, a company whose sole director is Makhensa Mabunda, a former government official and erstwhile colleague of Lucky Montana, PRASA's former CEO.

At the time, Mabunda did not want to discuss the payments S-Investments received from Vossloh España in any detail.

"My companies do a lot of work for international companies," said Mabunda.

He confirmed that he knew Montana from their days of working as Department of Public Enterprises officials.

"The media has been writing a lot of incorrect things about me and my companies, so I am not going to speak to the media any more. You guys can write what you want," he told News24 in January.