Bombardier to pay Transnet R468m to settle dispute over State capture locomotive deal

7th September 2023 By: News24Wire

 Bombardier to pay Transnet R468m to settle dispute over State capture locomotive deal

Photo by: Creamer Media

Bombardier Transportation SA (BTSA) has agreed to pay Transnet a total of R468-million to settle a long-running legal dispute over a locomotive supply contract. 

Transnet, in turn, will release withheld penalties worth R92.4-million in favour of Bombardier, a subsidiary of French train giant Alstom.

The two parties are planning to file a joint affidavit motivating for the agreement to be accepted by a high court.

The settlement will cover how costs for the locomotives were calculated, advance payments, and manufacturing relocation costs.

The legal dispute relates to Transnet's scandal-plagued decision to upgrade its ageing locomotive fleet a decade ago. 

The locomotive supply contract featured prominently in the Zondo Inquiry into State Capture, which investigated how costs ballooned from R38.6-billion to R54.5-billion.

Bombardier was one of four locomotive manufacturers that shared a multibillion-rand contract to supply the State-owned enterprise with 1 064 new engines. It won a tender to deliver 240 locomotives. Of these, 149 are still outstanding. 

The other three groups that shared the contract were China North Rail, China South Rail and General Electric. The two Chinese companies have since merged into CRRC E-Loco, while WABTEC South Africa Technologies has taken over General Electric's order. 

CRRC E-Loco still has to deliver 309 locomotives, while WABTEC has supplied all of its 233 engines. 

Transnet is still trying to strike a deal with the Chinese rail giant, which suspended deliveries in 2019.  Earlier this week, Minister of Public Enterprises Pravin Gordhan said SA may be "very close to concluding the matter".