Final Report: Forensic Investigation into Various Allegations at Transnet – Procurement of Locomotives (Chapter I)

This is the final forensic investigation report commissioned by the National Treasury (Tender NT 022-2016 RFQ 026-2017) and conducted by Fundudzi Forensic Services. The report investigates allegations of irregularities in the procurement of locomotives at Transnet, focusing on the acquisition of 95, 100, and 1064 locomotives for Transnet Freight Rail's General Freight Business. Key findings include: irregular appointment of China South Rail (CSR) across all three locomotive tenders; procurement process manipulation including amendment of bid conditions after closing, communication between CSR and Transnet's GCE Brian Molefe during the bidding process, and emailing of tender documents to CSR before payment was confirmed; misrepresentation by Molefe and Singh to the Transnet Board regarding the ETC of R38.6 billion for the 1064 locomotives (which already included forex, escalation and contingency costs, contrary to what was represented); increase in ETC from R38.6 billion to R54.5 billion with at least R6.7 billion attributed to misrepresentation; evaluation scores amended in favour of CSR; inconsistent application of Best and Final Offer process; Minister Gigaba compromising the procurement process by signing the LSA as witness and advising Transnet to procure as if PPPFA exemption was in place; Transnet Board failing to notify the Shareholder before concluding contracts; late delivery of locomotives by CSR, Bombardier, CNR and GE with penalties either not levied or not collected; and the irregular appointment of Transnet security personnel to protect Minister Gigaba at Transnet's expense. The report covers the legislative framework (PFMA, Companies Act, PPPFA, PRECCA, Constitution) and includes detailed findings, conclusions and recommendations including referral to DPCI for criminal investigations.