Omissions in Transnet locomotive deal 'deliberate misrepresentation'

Francis Callard was testifying at the state capture commission of inquiry on Monday about the procurement of 1,064 locomotives from China South Rail.

A screengrab of former Transnet strategy manager Francis Callard appearing at the Zondo commission of inquiry into state capture on 17 May 2019. Picture: YouTube

PRETORIA - A former Transnet electrical engineer says several omissions and misrepresentations in a multibillion-rand locomotive deal appeared to have been used to justify a significant escalation of costs for the project.

Francis Callard testified at the state capture commission of inquiry on Monday about the procurement of 1,064 locomotives from China South Rail.

Earlier, he revealed how technical specifications on another locomotive deal were unilaterally changed in order to benefit the Chinese manufacturer.

Callard said while the original business plan to buy 1,064 trains did include cost escalation calculations at a total cost of R38 billion, those calculations were edited out of the final plan adopted by the board.

“The altering of the final business case excluding the potential effects from forex hedging, forex escalation and other price escalations was a deliberate misrepresentation. This cannot have been an accident,” said Callard.

He said this may have been done because "when one excludes forex hedging and forex escalation from what is given to be an estimated total cost, it allows for increases to that estimated total cost which are undefined in the business case".

The cost of the project eventually escalated to nearly R50 billion.