Public enterprises looking into terms of Transnet’s Chinese loan for locomotives


PARLIAMENT,  November 14 – The department of public enterprises is looking into the terms of a loan to Transnet from the Chinese Development Bank to buy new locomotives, the department’s acting director-general told MPs on Tuesday.

Thuto Shomang said the issue was whether there was any clause that allowed the CBD to seize assets should the freight rail company default on the R1.5 billion loan.

“We are still trying to understand. We will study the loan and revert back on that,” he said in reply to questions from the portfolio committee on public enterprises.

DPE officials were briefing the committee on its first and second quarter performance plan report.

Opposition MPs have pressed the government to make public the terms of the R33 billion loan the CDB has extended to Eskom. President Cyril Ramaphosa has given assurances to Parliament that Eskom could not be taken over if it were to default on the loan, which it took to fund the construction of the Kusile power station. He said further details of the loan, which was signed in July and is repayable in 20 instalments over 10 years, could not be divulged because of confidentiality clauses.

The loan to Transnet to fund locomotives goes back further and features among the many allegations of machinations around the company that it was to the benefit of the Gupta family and its business associates.

It enabled Transnet to buy 1,064 Chinese locomotives and it has been reported that Regiments Capital, Transnet’s erstwhile Gupta-linked advisors, pocketed R122 million for facilitation fees on the resulting deal.

Transnet reportedly rejected an initial loan offer to the amount of R2.5 billion but reconsidered and accepted a revised offer after intervention from Regiments.

Transnet could not comment immediately.

– African News Agency (ANA)