Brian Molefe hiked locomotive price ‘without approval’

Brian Molefe hiked locomotive price ‘without approval’

The commission of inquiry into state capture has heard how former Transnet CEO Brain Molefe failed to get approval from former public enterprises minister Malusi Gigaba when the price of 1064 locomotives was increased.

State Capture inquiry

The managing director of MNS attorney's Tshiamo Sedumedi continued his testimony on Wednesday. 


The company was appointed to probe the locomotive transaction. 


The initial value of the locomotive was R38.9 billion but increased to R56 billion after Gupta-linkedChinese company China South Rail was irregularly awarded the tender. 


"When the minister approved this transaction it was on the basis that it's R38.9 billion, to an extent that the increase that occurred was way above that, it is our view that Transnet ought to have gone back to the minister to appraise him of the increase and obtain his approval in that regard. We don't have any record of any application made to the minister for this increase, so this aspect violated the rules," said Sedumedi. 


He said Molefe's memorandum to the board motivating for the increase was done when the agreement had already been concluded. However, the board went ahead and approved the increase despite the fact that the deal had already been signed. 

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Sedumedi said the firm was unable to raise the issue with Molefe during its investigation, as they were only allowed to interview people who were working at Transnet at the time. 


He said from the reports, it Molefe was of the opinion that an approval from the minister was unnecessary as it had already been obtained with the initial cost. 


Sedumedi told Deputy Chief Justice Raymond Zondo that when they asked the company's former CEO Siyabonga Gama about the increase, he said he did not know about it until the day the transaction was made public. 


"We then asked, should you not have as Transnet sought the approval of the minister, he agreed that Transnet was required to seek approval. But he said at that stage, he was not part of the negotiations, he only learned that morning and it was only a month later when Molefe presented the memorandum that he understood what had happened."


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