February 20, 2018 / 9:51 AM / a year ago

UPDATE 1-S.African minister orders Transnet to report irregularities over locomotive contract

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JOHANNESBURG, Feb 20 (Reuters) - South African Public Enterprises Minister Lynne Brown on Tuesday ordered rail utility Transnet to report to law enforcement officials irregularities in the awarding of a 54 billion rand ($5 billion) contract to acquire locomotives in 2014.

Transnet, which operates nearly three-quarters of the African rail network, the bulk of which is in South Africa, has been investigating allegations of corruption in the procurement of 1,064 diesel and electric locomotives.

Brown, whose department also oversees state-owned power utility Eskom, said an investigation by Werksmans, an independent law firm, had found irregularities in the procurement process at Transnet.

"Eskom has been down this road of commissioning investigations only to claim they are indecisive or incomplete. It is an unsustainable strategy which adds to the weight of suspicion and negative sentiment about the company. Transnet must act on the Werksmans report," she said.

Transnet's spokeswoman was not immediately available for comment.

Citing leaked documents and emails, amaBhungane, a group of non-profit investigative journalists, reported last year the Gupta family and its associates influenced the awarding of the locomotive contract in return for 5.3 billion rand in kickbacks.

Allegations of corruption in state firms escalated last year after amaBhungane began reporting on more than 100,000 leaked emails and documents which they say show the Gupta family was using its links with the then-president Jacob Zuma to win state contracts.

Zuma and the Guptas have denied any wrongdoing. ($1 = 11.7258 rand) (Reporting by Tiisetso Motsoeneng; Editing by James Macharia)

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